Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector McGrath v McDougall [2012] NSWIRComm 41 Hearing dates: 30 April and 4 May 2012 Decision date: 14 May 2012 Jurisdiction: Industrial Court of NSW Before: Marks J Decision: (1) A monetary penalty is imposed on the defendant of $10,000 with a moiety to the prosecutor. (2) The defendant is to pay the costs of the prosecutor in an amount assessed in default of agreement. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - defendant deemed guilty of s 8(2) of the Occupational Health and Safety Act 2000 by virtue of s 26(1) - early guilty plea after amendment of proceedings - appropriate penalty - failure to undertake risk assessment - failure to have in place protocols to prevent someone who is not skilled, trained or qualified in the safe use of forklifts from driving a forklift -objective seriousness - serious offence - strict duty and proactive obligation on employer - mitigating circumstances including actions of other persons - enhanced commitment to occupational health and safety following incident - general and specific deterrence - no prior convictions - contrition and remorse - good character - Victim Impact Statement - application under section 10 of the Crimes (Sentencing Procedure) Act 1999 rejected - penalties imposed Legislation Cited: Crimes (Sentencing Procedure) Act 1999 - s 10 Occupational Health and Safety Act 2000 - s 8(2), s 26(1) Category: Principal judgment Parties: Inspector Cherie McGrath of WorkCover Authority of New South Wales (Prosecutor) Grahamme Douglas McDougall (Defendant) Representation: Mr R Reitano of counsel (Prosecutor) Mr P Skinner of counsel (Defendant) Legal Group, WorkCover Authority of New South Wales (Prosecutor) Acclaim Legal (Defendant) File Number(s): IRC 537 of 2009 Judgment 1These proceedings are constituted by a further amended application for order. The defendant, Grahamme Douglas McDougall, is charged by the prosecutor, Inspector Cherie McGrath of the WorkCover Authority of New South Wales, with a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). The defendant is so charged by virtue of s 26(1) of the Act because, he being a person concerned in the management of Personalised Freight Management (NSW) Pty Ltd ("PFM"), and that company having contravened s 8(2) of the Act, he is taken, by virtue of s 26(1), to have contravened the same provision. 2Sections 8(2) and 26(1) were, at the time of the offence, in the following terms: 8 Duties of employers ... (2) Others at workplace An employer must, so far as is reasonably practicable, ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 26 Offences by corporations-liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 3In essence, the charge is that PFM: being an employer, on 20 April 2007, at 82 Marple Avenue, Villawood, in the State of New South Wales ('the site') FAILED TO ensure, by its acts or omissions as particularised below, that persons other than its employees and, in particular, Michael Scott Annetts, were not exposed to risks to their health or safety arising from the conduct of the corporation's undertaking while they were at the corporation's place of work, contrary to section 8(2) of the Act. 4The particulars of the charge are as follows: a.At all material times the defendant was a director, or alternatively, a person concerned in the management of, the corporation. b.The 'risk' was the risk of plant tipping over onto people and crushing people while in use at the site. c.The corporation failed to ensure that persons other than the corporation's employees, in particular Michael Annetts, was not exposed to risks to his health and safety arising from the conduct of the corporation's undertaking while he was at the corporation's place of work because of the acts or omissions set out in particular (d) below. d.The corporation failed to ensure that people who used forklifts at the site had skills, training and qualifications in the safe use of forklifts. As a result of the corporation's failures Michael Scott Annetts was exposed to the risk. 5The defendant, through his counsel, Mr P Skinner, indicated that he would plead guilty to the charge upon the amendment of the proceedings to reflect the further amended application for order. The defendant confirmed that he pleaded guilty to the charge at the commencement of the sentencing hearing. Accordingly, these reasons for judgment are concerned only with the question of penalty. 6I should add for completeness that at the completion of the sentencing hearing, I proceeded to formally find the defendant guilty of the offence and convict him. This allowed the Court to receive a Victim Impact Statement of Karen Annetts, the mother of Michael Scott Annetts, who was fatally injured in the incident that gave rise to these proceedings. The Court acknowledges receipt of that Statement, extends its sympathy to Mrs Annetts and her family for their loss and will consider the Statement in the manner required by the Crimes (Sentencing Procedure) Act 1999. 7The evidence in the proceedings consisted of a statement of agreed facts and some documentation concerning the operation of forklift vehicles and the training, instruction and qualifications associated with the use of those vehicles. I should add for completeness that annexed to the statement of agreed facts were a series of photographs, a factual inspection report and a prior convictions statement recording the fact that the defendant has no prior convictions under the Act or, presumably, under any associated legislation. 8For the defendant, there was tendered into evidence an affidavit of the defendant, which was supplemented by oral evidence, a sketch plan of the warehouse where the incident occurred and two character references. 9The facts surrounding the incident itself are not complex, however there is a complex corporate structure that operated at the warehouse through which the various warehouse operations were conducted. I shall endeavour to summarise this situation in a manner that will allow me to focus on the primary factual matters for consideration in determining an appropriate penalty. 10A quantity of glass soft drink bottles were stored at the premises on pallets. Some of the bottles were broken and they needed to be taken off the pallets, disposed of and the remaining bottles placed on different pallets. This work was generally referred to as "repalletising". 11The repalletising work was effectively undertaken by DMP Container Labour Pty Ltd ("DMP"). That company used contractors to carry out the work, including Michael Scott Annetts and Stephen Mamuti. The work was mainly carried out under an awning at the front northeast corner of the warehouse, which is adjacent to a roadway that ran along its front. 12In general terms, the overall management of the warehouse complex was undertaken by employees of PFM. These included Mr Phillip Humphrey, the warehouse manager, an accounts manager, operation manager and a qualified forklift driver. 13At all relevant times, the defendant was a person concerned in the management of PFM and, indeed, on the evidence, was the person with overall principal managerial authority. 14It was no part of the work to be performed by DMP and its contractors that there would be any use of a forklift. A forklift vehicle was necessary to move the pallets of glass bottles, including the repalletised bottles. The arrangement between DMP and PFM was that if a forklift was required to perform this work, PFM personnel were to be approached and a forklift and driver would be provided for this purpose. The DMP contractors were advised by PFM that Mr Humphrey would supervise their work whilst they were performing it at the warehouse premises. 15On the evidence, no risk assessment was undertaken in relation to the repalletisation work either by DMP or PFM. 16The incident that gave rise to these proceedings occurred on 20 April 2007. The gates to the premises were opened by PFM personnel at about 6.30am. At about 6.45am Mr Annetts and Mr Mamuti arrived at the premises. Together they went to the lunchroom, which was inside the warehouse immediately behind the office. (At [37] of statement of agreed facts.) 17The statement of agreed facts, in describing the events of 20 April 2007 said: [38]Mr Annetts and Mr Mamuti worked unsupervised from the time they commenced work at the site to the time of the incident. On or about 16 April 2007 Mr Humphrey, reasoning that a prospective forklift user required supervised practice, consented to Mr Annetts' request to practice use of a forklift as he intended to apply for a forklift certificate. Among Mr Humphrey's conditions were that Mr Annetts use of the forklift be restricted to working out under the awning, bringing the finished pallets inside the warehouse to where they were being put inside the door, which was about 20 metres away, and to ask before using the forklift. On the day of the incident Mr Annetts did not ask for Mr Humphrey's consent. Nor was Mr Humphrey aware that Mr Annetts was using the forklift at the time of the incident. [39]At about 7.00am Mr Humphrey arrived at the premises. Shortly after he arrived Mr Humphrey saw Mr Annetts and Mr Mamuti in the area of the warehouse where DMP were undertaking the repalletisation work. [40]Mr Humphrey saw that various pieces of equipment had been taken out for the purpose of doing the work. Mr Humphrey went to the office. Mr Annetts and Mr Mamuti left the lunch room and walked past the office. [41]Mr Annetts and Mr Mamuti each went to a forklift. They went to the forklifts with the intention of operating them. [42]The forklifts were in the warehouse and the keys had been left in the ignition. Mr Annetts and Mr Mamuti each drove a forklift to the area where they were to commence working. Shortly after 6.50 am Mr Annetts and Mr Mamuti drove the forklifts out of the warehouse roller door which was adjacent to where the work was being undertaken. The forklifts had on them pallets with the equipment the DMP contract labourers were using for undertaking the repalletisation work. They were seen by Mr Tobin at this time. Shortly after 7.00am Mr Annetts was driving the forklift. He was seen by Mr Doyle taking the pallets out of the warehouse area and also going around the side of the warehouse. Mr Doyle had a conversation with Mr Mamuti. Mr Mamuti then followed Mr Annetts. [43]As the forklift that Mr Mamuti was driving went around the corner of the warehouse he saw the forklift driven by Mr Annetts at the end of the roadway roll over and land on top of Mr Annetts. There was no load in the vicinity of where the forklift over turned. The tynes of the forklift were fully extended. [44]Mr Mamuti called out to Mr Annetts but he did not respond. Mr Mamuti then returned to the warehouse and sought help. Mr Tobin and Mr Doyle went to Mr Annetts' assistance. Mr Annetts was pinned underneath the forklift he was operating when it tipped onto its left side. Mr Humphreys arrived a short time later and saw that Mr Annetts had no pulse, was cold and was blue. Mr Humphreys was told over the phone by the emergency service to lift the forklift off Mr Annetts. He did so as an ambulance arrived and a paramedic confirmed that Mr Annetts was deceased. [45]Upon examination there was no mechanical defect or failure detected such that would have caused the forklift to overturn. The forklift overturned and crushed Mr Annetts as a result of Mr Annetts lack of training and experience in driving forklifts. 18There is a reference in [42] to Messrs Tobin and Doyle. These were other contractors working for DMP. There is no evidence before the Court that Mr Humphrey was aware of the use of the forklift by Mr Annetts on the day of the incident or at any other time and in any other circumstances which were contrary to the understanding that Mr Humphreys had with Mr Annetts as set out in [38] above. 19There was also contained within the statement of agreed facts some material concerning the training, information and instruction given to DMP contractors. I set out below an extract from the statement of agreed facts. [48]Mr Annetts and the other DMP contract labourers were not provided with any instructions or information about safe work systems at the premises of PFM and for the use of forklifts. PFM had no system of work developed and/or implemented to provide OHS induction information, instruction or training to other persons working on the premises of PFM. ... Dangers Concerning The Work [50]There was a Standard Operating Procedure prepared for the repalletisation work. It was provided to all of the DMP contract labourers by Mr Roncone on 13 April 2007. A copy of the Standard Operating Procedure was kept on site with the DMP equipment. [51]The Standard Operating Procedure did not contain any direction or procedure for how the pallets were to be moved in and out of the DMP work area. The movement of the pallets was essential for the performance of the repalletisation work. The repalletised goods were to be taken away by an employee of PFM. The DMP contracted labourers were expected to contact Mr Humphrey or another of PFM's employees when it was necessary to move the pallets and ask them to undertake the task of moving the pallets. The Standard Operating Procedure did not proscribe DMP contract labourers from doing that work. The Standard Operating Procedure did not deal with how the repalletised goods were to be taken away if PFM did not undertake that task. [52]The Standard Operating Procedure referred to the need to discard broken glass and the layer of the pallet containing the broken glass. However it did not contain any procedure at all for how this was to be done. The procedure that was to be applied involved discarding by hand damaged bottles into large cardboard boxes supplied by PFM, or by leaving them on a damaged pallet in the 'damaged row'. PFM was expected to move the cardboard box or damaged pallet to the perimeter fence at the premises using a forklift. It did not contain anything that proscribed DMP contract labourers from doing that work or say anything about how the work was to be done if PFM did not undertake that task. [53]The Standard Operating Procedure did not proscribe the DMP contract labourers from undertaking the task of discarding the cardboard box or the pallets themselves. The Standard Operating Procedure did not lay down any procedure or system that was to be followed in contacting PFM for the purpose of moving the cardboard boxes or the pallets. [54]Mr Roncone spoke to Mr Humphrey and told him that the DMP contract labourers would store the equipment on a pallet and that Mr Humphrey or another of PFM's employees would need to bring it to the DMP contract labourers at the beginning of each day. [55]The Standard Operating Procedure did not contain anything about the use or non-use of forklifts by the DMP contract labourers. It did not proscribe the use of forklifts by the DMP contract labourers. It did not lay down a procedure to be followed when contacting PFM or anyone else in order to have the pallets moved. [56]Neither DMP nor PFM put in place any system or procedure to make sure that Mr Humphrey or one of PFM's employees who was trained or competent in the operation of forklifts undertook that task. Mr Humphrey permitted the DMP contract labourers to use forklifts. DMP did not prevent Mr Humphrey from giving DMP contract labourers permission to use forklifts. [57]DMP and PFM did not ensure all persons carrying out work on forklifts held an appropriate Certificate of Competency, or recognised qualification for operating forklifts. DMP did not ensure that only people with those qualifications worked on forklifts. [58]DMP and PFM did not have any procedures or systems in place at the premises so as to restrict people who were unqualified and untrained from using forklifts. [59]The practise at the premises was that the keys were left in forklifts when they were parked during working hours and when stored over night in the warehouse. There was no key register and the keys were not labelled. [60]Neither Mr Humphrey nor any other employee of PFM or DMP gave any of the DMP contract labourers any instruction or information about the operation of forklifts and in particular about the risks associated with a forklift overturning and how to reduce or eliminate that risk. 20It was the evidence of Mr McDougall that at the time of the incident PFM had in place a Code of Conduct. This document was annexed to his affidavit. There is brief reference in it to "safety responsibilities" and "workplace health and safety" and a further reference to a workplace health and safety manual and policy. That document and the policy, to the extent that they existed and applied at the warehouse site as at the date of the incident, are not in evidence. 21After the incident, PFM engaged an occupational health and safety consultant and instituted retraining of managerial and other staff as well as new safe work procedures dealing in particular with the use of forklifts. 22After the incident, Mr McDougall was told by Mr Humphrey that he had allowed Mr Annetts to practise using a forklift so that he could obtain a forklift ticket. He was told by Mr Humphrey that Mr Annetts was instructed not to use the forklift without his permission and the use was to be confined to a restricted area under cover. Furthermore, Mr Annetts had not sought Mr Humphrey's permission to use the vehicle on the day of the accident and he did not know it was being used by Mr Annetts at that time. Mr McDougall later terminated Mr Humphrey's employment and restructured the management of PFM and other companies within his family group. 23Mr McDougall expressed regret at the death of Mr Annetts, which he said had affected everyone in his business. He said that it had been a source of daily stress to him, his family and employees and had affected his family relationships. Mr McDougall also gave evidence of tangible support that he had given to Mr Annetts' mother by contributing towards the cost of funeral expenses. 24The starting point for the assessment of penalty is a consideration of the objective seriousness of the offence. The consideration that must be given to this aspect needs to be informed, firstly, by the evidence given in the proceedings and, secondly, by the particulars of the charge. 25I have previously set out particulars (a) to (d) of the charge. Particulars (a) and (b) are uncontroversial. In making this comment I repeat the agreed fact that "the forklift overturned and crushed Mr Annetts as a result of Mr Annetts' lack of training and experience in driving forklifts." (At [45] of the statement of agreed facts.) 26Particular (c) directs attention in turn to particular (d). That is expressed as a failure to ensure that people who did use a forklift at the site had skills, training and qualifications in its safe use. There can be no doubt that Mr Annetts lacked training and experience and, on the basis of an agreed fact, this is what caused the forklift to overturn and crush him, whether as the sole reason or a contributing cause. 27On this basis alone, the breach of the Act must be regarded as a most serious one. However, all of the circumstances need to be taken into account in determining the objective seriousness of the offence. It is not known why Mr Annetts was driving the forklift at the time and at the place that the incident occurred. On the evidence, such permission as was given to him by Mr Humphrey was confined to the area around the awning and inside the warehouse itself. The incident occurred a long way from this area. Furthermore, there was no evidence of any load having been carried by the forklift in the vicinity, or any evidence of any load in the vicinity that was required to be uplifted by the forklift. There was certainly no evidence as to why the tines had to be fully extended vertically at the time of the incident, which would obviously have shifted the centre of the gravity of the forklift and rendered it much more liable to tip over. Clearly, Mr Annetts had breached the understanding that, on the evidence, was conveyed by Mr Humphrey that he had to ask permission on each occasion that he used a forklift. 28The strict duty that is created by the Act demands a high level of conduct on the part of an employer in order to ensure compliance. As has been said on many occasions, an employer must act proactively in minimising or eradicating risks to the health and safety of persons in and about its workplace. This proactive obligation extends to the circumstances of persons who might conduct themselves inattentively, carelessly and in disregard of instructions given to them from time to time. Obviously, the culpability of an employer will lessen to the extent that the conduct of a person becomes less foreseeable and more blatantly in disregard for that person's own safety. 29In assessing the objective seriousness of the offence committed by PFM, as conceded by the defendant by his plea of guilty, I shall take these additional matters into account. They will have the effect of mitigating the culpability of PFM in all the circumstances. The culpability of this defendant equates under the Act with that of PFM. 30I should add that in considering the objective seriousness of the offence I will also take into account the fact that PFM did not have any protocols in place to prevent someone who was not skilled, trained or qualified in the safe use of forklifts from driving a forklift. 31In determining the appropriate penalty, I shall also take into account both the general and specific deterrent effect that such a penalty will provide. Even though the defendant has ensured that businesses with which he is associated have enhanced compliance with their occupational health and safety obligations, nevertheless there remains a need to take into account both aspects of deterrence. 32There are a number of subjective matters that, on the evidence, the Court can take into account in mitigating the penalty that would otherwise apply. The defendant entered an early plea of guilty immediately after the proceedings were amended in a substantial manner. Furthermore, the defendant has a good record with no prior convictions and, on the basis of the references given, is a person of good character. He has also expressed contrition and remorse for the incident. 33It was submitted on behalf of the defendant that the Court should apply the provisions of s 10 of the Crimes (Sentencing Procedure) Act 1999. Section 10 is in the following terms: 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. (2) An order referred to in subsection (1) (b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. (2A) An order referred to in subsection (1) (c) may be made if the court is satisfied that it would reduce the likelihood of the person committing further offences by promoting the treatment or rehabilitation of the person. (2B) Subsection (1) (c) is subject to Part 8C. (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. (4) An order under this section has the same effect as a conviction: (a) for the purposes of any law with respect to the revesting or restoring of stolen property, and (b) for the purpose of enabling a court to give directions for compensation under Part 4 of the Victims Compensation Act 1996, and (c) for the purpose of enabling a court to give orders with respect to the restitution or delivery of property or the payment of money in connection with the restitution or delivery of property. (5) A person with respect to whom an order under this section is made has the same right to appeal on the ground that the person is not guilty of the offence as the person would have had if the person had been convicted of the offence. 34The reason advanced for the application of the Court's discretion was that the incident arose solely because of the fact that it was Mr Humphrey, the manager of PFM, who allowed Mr Annetts to use the forklift under conditions that were breached by Mr Annetts when he took the forklift on the day without permission and drove it in an area and in a manner that was outside the arrangement with Mr Humphrey. 35Notwithstanding these facts, the offence is nevertheless a serious one. The conduct of PFM is that of its manager, Mr Humphrey. The culpability of this defendant is that of PFM. I do not regard the fact that PFM's manager acted in the manner in which he did as creating circumstances that would warrant the culpability of this defendant as being regarded as trivial or as introducing any other circumstance which would warrant the application of the Court's discretion under s 10. I reject this submission accordingly. 36The prosecutor sought orders for the payment of a moiety and costs, which were not opposed. 37Having regard to all of the matters to which I have referred, including the objective seriousness of the offence as I have described it, the need for deterrence and the subjective matters to which I have referred, I am of the opinion that an appropriate penalty is the sum of $10,000. This sum is fixed in the context of a maximum penalty of $55,000. Orders 38I make the following orders: (1) I impose a monetary penalty on the defendant of $10,000 with a moiety to the prosecutor. (2) The defendant is to pay the costs of the prosecutor in an amount assessed in default of agreement. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 May 2012