Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Cooper v Chung [2012] NSWIRComm 79 Hearing dates: 16 July 2012 Decision date: 23 July 2012 Jurisdiction: Industrial Court of NSW Before: Boland J, President Decision: The Court makes the following orders: (1) The defendant, Byung Man Chung, is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 by operation of s (1) of that Act, as particularised in Matter No IRC 766 of 2011, and is convicted of the offence. (2) The defendant is to pay a penalty of $25,000 with half that sum to be paid to the prosecutor by way of moiety. (3) The defendant is to pay the costs of the prosecutor. (4) Orders 2 and 3 are suspended and shall become operative on 1 July 2014 at which time the fine and costs will become payable. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - Prosecution of person concerned in the management of a corporation for contravention of s 8(1) of the Occupational Health and Safety Act 2000 by virtue of s 26(1) of that Act - Failure to guard machine - Employee's fingers and thumb of left hand amputated - Prior conviction for similar offence involving amputation in 2006 - Undischarged bankrupt - Capacity to pay - Fine imposed - Payment of fine and costs postponed for 24 months Legislation Cited: Fines Act 1996 Occupational Health and Safety Act 2000 Cases Cited: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Inspector Ian Batty v Brian John Goldsmith [2009] NSWIRComm 72 WorkCover Authority of NSW (Inspector Lai) v Rexma Pty Ltd [2008] NSWIRComm 78; (2008) 172 IR 210 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd [2000] NSWIRComm 1123; (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Limited, (Schmidt J, 25 February 1994, unreported) Category: Principal judgment Parties: Inspector Stephen Cooper (Prosecutor) Byung Man Chung (Defendant) Representation: Mr P Ginters of counsel (Prosecutor) Crown Solicitor's Office (Prosecutor) Byung Man Chung (Defendant - in person) File Number(s): IRC 766 of 2011 Judgment 1Byung Man Chung (also known as James Chung) has been charged with a contravention of s 8(1) and in the alternative s 8(2) of the Occupational Health and Safety Act 2000 ("the Act") by virtue of s 26(1) of that Act. Mr Chung was a person concerned in the management of Royal Plastic Pty Ltd ("the corporation"). The corporation conducted a plastic recycling and processing business at 8 Daisy Street, Revesby. 2The charge relates to an incident on 5 June 2009. On that date, Shounan Shang, an employee of the corporation, was using a knife to attempt to clear a blockage in an unguarded and un-isolated plastic pelletising machine. Mr Shang's gloved left hand was drawn into the pelletising machine's chain and sprocket drive. As a consequence, the fingers and thumb of Mr Shang's left hand were amputated. 3The defendant pleaded guilty to the s 8(1) charge. 4Section 8(1) and s 26(1) of the Act provide respectively: 8 Duties of employers (1) Employees An employer must, so far as is reasonably practicable, ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following, so far as is reasonably practicable,: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 26 Officers of corporations required to exercise due diligence (1) If a corporation has a duty or obligation under a relevant provision, an officer of the corporation must exercise due diligence to ensure that the corporation complies with that duty or obligation. 5The s 8(1) charge was in the following terms, namely, that the defendant: being a person concerned in the management of a corporation, Royal Plastic Pty Ltd (ACN 128 422 980) whose registered address is 8 Daisy Street, Revesby, in the State of New South Wales ("the corporation"), being an employer FAILED TO ensure by its acts or omissions as particularised below, the health, safety and welfare at work of all its employees and in particular, Shounan Shang (also known as Jung Chul Park), contrary to section 8(1) of the Occupational Health and Safety Act 2000. The particulars of the charge are: (a) At all material times the defendant was a person concerned in the management of the corporation. The particulars of the risk are: (b) There was a risk that the hand or hands of the corporation's employees and in particular, Shounan Shang, who used a plastic pelletising machine, serial no. 78 ("the plant") at work at the premises would become entangled in the plant's moving chain and sprocket drive resulting in crush or amputation injuries. The particulars of the acts or omissions in failing to eliminate the risk are: (c) The corporation failed to ensure that the moving parts of the plant used by its employees and in particular, Shounan Shang, at work at the premises: (i) were adequately guarded by means of a locked guard that ensured that access to the plant's moving chain and sprocket drive was prevented whilst the plant was operating; and/or (ii) had other appropriate controls in place such as cut out micro-switching or an interlock that would have cut power to the plant's moving chain and sprocket drive if the guard covering the plant's chain and sprocket drive was removed, so as to prevent contact by employees with moving parts of the plant. (d) The corporation failed to ensure that, whilst maintenance work was being undertaken on the plant by its employees and in particular, Shounan Shang, power to the plant was isolated so as to prevent contact by its employees with moving parts of the plant. 6This judgment deals with sentencing. It is to be noted that Mr Chung was self represented and required the assistance of an interpreter fluent in the Korean language. Mr Chung is an undischarged bankrupt. Agreed facts 7The prosecutor tendered an agreed statement of facts. Annexed to the agreed statement was: (a) an Improvement Notice issued to the corporation on 4 September 2008 relating to guarding of the pelletising machine; (b) fifteen colour photographs of the corporation's premises and various machinery including the pelletising machine showing the chain and sprocket drive and blue metal cover that constituted the guard over the chain and sprocket drive; (c) an Employer Injury Claim Report lodged with GIO in connection with the injury to Mr Shang; (d) an Improvement Notice issued on 5 June 2009 regarding an extrusion machine; (e) Improvement Notices issued on 5 June 2009 regarding access to fire fighting equipment, housekeeping, electrical equipment and an electrically driven band saw; (f) the decision of the Full Bench in WorkCover Authority of (NSW) (Inspector Lai) v Rexma Pty Ltd [2008] NSWIRComm 78; (2008) 172 IR 210; (g) copies of letters purportedly signed by James Chung, Managing Director of the corporation, to "Glen/Accounting Division" (dated 23 November 2007) and CBC Australia Pty Ltd (dated 2 June 2006) regarding the change of name from Rexma Pty Ltd to Royal Plastic Pty Ltd. 8The Court is satisfied that Mr Chung understood what was contained in the statement of facts and that he agreed with what was there stated. 9The agreed statement identified the manner in which Mr Chung was concerned in the management of the corporation: The defendant: (a) Managed the operations of the corporation at the premises. (b) Signed off on correspondence from the corporation as the corporation's "Managing Director". (c) Provided details of hours worked by persons working for the corporation to an employee of the corporation. (d) Instructed an employee of the corporation to prepare wages for persons working for the corporation. (e) Provided payslips to persons who worked for the corporation. (f) Had responsibility for making payments on behalf of the corporation. (g) Provided instruction to persons who worked for the corporation. (h) Developed work procedures for the work undertaken by persons working for the corporation. (i) Signed off on workers compensation documentation prepared on behalf of the corporation. 10The pelletising machine that amputated Mr Shang's fingers and thumb had been the subject of an Improvement Notice issued to the corporation on 5September 2008 by Inspector McKay of the WorkCover Authority. The Improvement Notice required the Corporation to "securely guard the ... machine ... to prevent access to the dangerous parts including but not limited to: Chain drive; Rollers ..." and to "develop implement and maintain safe system of work to ensure that all plant used at work is securely guarded at all times." 11At a follow up inspection on 22 October 2008 Inspector McKay observed that a chain guard for the machine had been fitted over the machine's chain drive. 12The injured worker, Mr Shang had commenced employment with the corporation on or about 15 April 2009. He had no prior experience with the type of work that was performed at the corporation's premises. 13The agreed statement of facts described the incident: 34. On 5 June 2009 Mr Shang commenced work with the corporation at the premises at about 6.15am. 35. At about 8.00am on 5 June 2009 Mr Shang was carrying out work using the pelletising machine. 36. At the time of the incident there was no guard in place on the pelletising machine covering its moving chain and sprocket drive. 37. At the time of the incident Mr Shang was attempting to clear a blockage in the pelletising machine that occurred when noodles had wrapped themselves around the roller or wheel on the pelletising machine. 38. Mr Shang did not isolate the pelletising machine prior to attempting to clean the noodles from its mechanisms. 39. In attempting to clear the noodles from the pelletising machine Mr Shang used his right hand to hold a knife to try to cut the entangled noodles on the roller. He then attempted to remove noodles that were located in the pelletising machine's chain and sprocket drive. 40. Whilst attempting this task Mr Shang's gloved left hand was drawn into the pelletising machine's chain and sprocket mechanism. As a consequence the thumb and four fingers of Mr Shang's left hand were amputated. 41. There were no witnesses to the incident other than Mr Shang. 42. Mr Shang's screams for assistance attracted the attention of other workers at the corporation's premises. 43. Mr Dong Sang Kim ("Mr Kim"), one of the workers at the corporation's premises, heard Mr Shang's screams and rendered assistance. 44. Mr Kim then contacted the defendant, who instructed him (Mr Kim) to go to the business next door to the premises and have them call an ambulance. 45. The part owner of the business next door (Online Body Works), Mr Bashear Dakwer ("Mr Dakwer"), called 000 and requested that an ambulance attend the corporation's premises. 46. Mr Dakwer and Mr Kim then returned to the corporation's premises where Mr Kim showed Mr Dakwer the pelletising machine. 47. The metal guard was not in place over the chain and sprocket drive of the pelletising machine when Mr Dakwer inspected it. 48. In the course of inspecting the pelletising machine's chain and sprocket drive Mr Dakwer saw Mr Shang's severed fingers still entangled in the chain and sprocket mechanism. The fingers were inside the fingerlets of Mr Shang's left hand glove. 49. At Mr Dakwer's request Mr Kim manually rotated a "V" belt pulley on the pelletising machine which turned the chain and sprocket drive. As a consequence Mr Dakwer was able to pull the glove fingerlets free from the chain and sprocket mechanism and place Mr Shang's fingers into a plastic bag. 50. Shortly thereafter an ambulance arrived and conveyed Mr Shang to Liverpool Hospital where he underwent a number of surgical procedures resulting in his thumb and three of the fingers on his left hand being reattached. Mr Shang remained in Liverpool Hospital for approximately 6 weeks until he was discharged on about 22 July 2009. 51. Later on 5 June 2009 Mr Dakwer returned to the corporation's premises with two police officers. Mr Dakwer showed the police officers the pelletising machine where he had retrieved Mr Shang's amputated fingers. At this time Mr Dakwer observed that a guard had been placed over the pelletising machine's chain and sprocket drive, however the guard was able to be lifted to expose the pelletising machine's chain and sprocket drive. 14The agreed statement of facts identified the corporation's acts or omissions: 54. At the time of the incident the guard that was intended to cover and enclose the pelletising machine's chain and sprocket drive guard was not in place. 55. At the time of the incident the pelletising machine was not adequately guarded by means of a locked guard that ensured that access to the pelletising machine's moving chain and sprocket drive was prevented whilst the pelletising machine was operating. 56. At the time of the incident the pelletising machine did not have appropriate controls in place, such as cut out micro-switching or an interlock, that would have cut power to the pelletising machine's moving chain and sprocket drive if the guard covering its chain and sprocket drive was removed. 57. At the time of the incident the corporation failed to ensure that, whilst maintenance work was being undertaken on the pelletising machine, power to the pelletising machine was isolated so as to prevent contact by workers with moving parts of the pelletising machine. 58. Mr Shang has stated that he did not isolate the pelletising machine before trying to clear the noodles from its mechanisms because he had observed other workers at the premises clear blockages to the pelletising machine in the way he did and because he felt the blockage could be fixed very quickly. 15Following the incident on 5 June 2009, the corporation was issued with several Improvement Notices. These related to guarding of an extrusion machine, guarding of the pelletising machine, blocked and restricted access to the fire fighting equipment, inadequate housekeeping and unsafe access to work areas, inadequate isolation procedures, electrical equipment that was not inspected/tested/tagged and guarding of a band saw blade on an electrically driven band saw. Subsequent inspections by Inspector Prokopenko of the WorkCover Authority revealed that not all of the Improvement Notices had been complied with at the time of those inspections and full compliance was not achieved until 23 June 2009. 16The agreed statement of facts indicated that following the incident the corporation introduced workplace toolbox talks and occupational health and safety induction lockout procedures. 17Mr Chung has a prior conviction under the Act. The circumstances in which that conviction came about was explained in the agreed statement of facts: 68. On 28 March 2003 Rexma Pty Ltd was registered with the Australian Securities and Investments Commission ("Rexma"). 69. Rexma was engaged in a plastic recycling business. It employed workers at its factory located at 8 Daisy Street, Revesby, in the State of New South Wales, the premises from which the corporation conducts its business. 70. In 2006 Mr Chung was the sole director of Rexma and was actively involved in all aspects of Rexma's operations. 71. On 19 May 2006 Jin Woog Kim, a process worker at Rexma's factory, was working alone in the plastic recycling area, feeding plastic material into the feed chute of a single screw extrusion machine. This machine was regularly operated at the factory to recycle plastic waste material into a string form which was then cut into pellets by another machine. At some stage, Mr Kim attempted to cut the plastic with a knife held in his right hand. As he did so his left hand was drawn into the feed chute, the interior of which housed a single screw mechanism, or auger. Mr Kim's left hand came into contact with the auger which amputated all the fingers of that hand. 72. As a consequence of the above, Rexma and Mr Chung were, amongst other things, convicted and fined for offences against the Act.... 73. On 23 November 2007 and 2 June 2008 Mr [James] Chung (the defendant), as "Managing Director" of the corporation sent correspondence to "Thomas Thoms" and "CBC Australia Pty Ltd - NSW Div" advising of a "company restructure" in which Rexma changed its name to the corporation.... Consideration 18This is a guarding offence and, it must be said, a serious one. Employees could easily remove the guard and Mr Shang had stated that he cleared blockages in the absence of the guard because he had seen other employees do so. If the guard was so easily removed there was an obligation on the employer to have a control device in place on the machine that automatically cut power to it whenever the guard was removed. Mr Chung said he told employees to turn off the power before removing the guard. That is not an adequate safety precaution. It is the experience of the Court that employees will persistently search for short cuts in operating machinery and in effecting running maintenance on them. Too often that places employees in danger of serious injury. Employers have a responsibility to anticipate such short cuts and eliminate the risk they present. 19The risk to which Mr Shang was subjected, and which the corporation failed to ensure against, was the risk that the hand or hands of employees, and in particular Mr Shang, would become entangled in the pelletising machine's moving chain and sprocket drive resulting in crush or amputation injuries. As a consequence of being exposed to the risk, Mr Shang suffered traumatic injuries to his left hand. 20The degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of a defendant. The existence of a foreseeable risk to safety which is likely to result in serious injury or death is a factor that will be relevant to the assessment of the gravity of the offence: Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27. 21The risk in this case was not only obvious and reasonably foreseeable, it was foreseen. The Improvement Notice issued on 5 September 2008 identified the risk. Following the issuance of the Improvement Notice a guard was fitted over the chain drive. The guard appeared to have been bolted to the floor, but the bolts were obviously easy to undo as the photographs show. The corporation should have realised this and taken additional measures to ensure either the guard could not be removed without the power being cut off or if it was removed that the power would automatically cut off. Once the guard was removed it was obvious any person operating the machine was at serious risk. 22What is more, the defendant was prosecuted in relation to an earlier failure to ensure safety in circumstances not dissimilar to the present case: WorkCover Authority of (NSW) (Inspector Lai) v Rexma Pty Ltd [2008] NSWIRComm 78; (2008) 172 IR 210. Rexma Pty Ltd was the predecessor corporation to Royal Plastic Pty Ltd, a name change having been effected in 2007. Mr Chung was charged with contravention of s 8(1) by virtue of s 26(1) as a person concerned in the management of Rexma. 23The decision in Rexma at [3] explained the circumstances of the incident that gave rise to the prosecution in that case. In May 2006, a process worker was working alone in the plastic recycling area, feeding plastic material into the feed chute of a single screw extrusion machine that was inadequately guarded. At some stage, the worker attempted to cut the plastic with a knife held in his right hand. As he did so his left hand was drawn into the feed chute, the interior of which housed a single screw mechanism, or auger. The worker's left hand came into contact with the auger that amputated all the fingers of that hand. Mr Chung was fined an amount of $8,800 for the s 8(1) breach. Mr Chung should have been acutely aware of the risks associated with failing to adequately guard machinery. The machine involved in that incident was still located at the corporation's premises on 5 June 2009. 24In assessing the seriousness of the offence, the existence of simple and straightforward remedial steps that could have been taken by the corporation is relevant: see WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Limited, (Schmidt J, 25 February 1994, unreported) at 12. It does not seem to me there was anything particularly complicated or costly about fitting the machine with a mechanism that cut the power if the guard was removed. 25A breach where there is every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences: see Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17]-[18], Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [94] and [95], Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd [2000] NSWIRComm 1123; (2000) 95 IR 383 at 90-91; and WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at 22. In the present case, all four fingers and the thumb on Mr Shang's' left hand were amputated. Surgical procedures resulted on Mr Shang's thumb and three of his fingers being re-attached. This was a serious consequence. 26Both general deterrence and specific deterrence have a role to play in fixing the penalty. It is extraordinary in this day and age that those responsible for workers' safety continue to fail to provide adequate guarding of machinery, a fundamental safety measure in any Australian factory. Ordinarily, the penalty in this case should be fixed at a level that will compel the attention of others to the necessity of ensuring machinery is adequately guarded. However, a question of the offender's capacity to pay arises, which shall be addressed shortly. 27The defendant is an undischarged bankrupt and in those circumstances cannot be a director of a company or be involved in its management without the permission of the court. Whether the defendant is operating or is able to continue to operate a business while bankrupt is something the Court was not advised about. Ordinarily, given the defendant's prior record a significant element in the penalty for specific deterrence would have been appropriate. 28The conclusion must be that the offence was objectively serious and that, subject to the defendant's capacity to pay the fine it should attract a penalty towards the upper range where the maximum is $82,500. 29There are some subjective considerations. The defendant pleaded guilty, although he did so in circumstances where the case against him was strong. The guilty plea was not at the earliest opportunity but it, nevertheless, has a reasonably significant utilitarian value and I would discount any penalty by 17.5 per cent. 30Mr Chung said he took responsibility for what occurred and given his guilty plea I am satisfied Mr Chung is remorseful. 31In my opinion, having regard to the objective and subjective factors relevant in this case, the appropriate level of fine is $50,000. 32However, as I have indicated, because of the defendant's status as an undischarged bankrupt, his capacity to pay any fine is an issue in the proceedings. Section 6 of the Fines Act 1996 provides: 6 Consideration of accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount. 33In Inspector Ian Batty v Brian John Goldsmith [2009] NSWIRComm 72, Haylen J considered the capacity of an undischarged bankrupt to pay a fine imposed for contravening s 8(1) of the Act. I respectfully intend to take a similar approach to his Honour, namely, to impose a fine having regard to the defendant's status as a bankrupt, to take into account the defendant has to pay the prosecutor's costs and to defer the obligation to pay the fine and costs until 1 July 2014, by which time the defendant will no longer be bankrupt and may be in a better position to pay the fine. Depending upon the defendant's circumstances, if he is unable to pay the fine and costs in total on 1 July 2014 he may seek to negotiate with the prosecutor a scheme for the payment of the fine and costs or, in the alternative, apply to the Registrar of this Court for time to pay. Orders 34The Court makes the following orders: (1) The defendant, Byung Man Chung, is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 by operation of s 26(1) of that Act, as particularised in Matter No IRC 766 of 2011, and is convicted of the offence. (2) The defendant is to pay a penalty of $25,000 with half that sum to be paid to the prosecutor by way of moiety. (3) The defendant is to pay the costs of the prosecutor. (4) Orders 2 and 3 are suspended and shall become operative on 1 July 2014 at which time the fine and costs will become payable. ********** 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: 30 July 2012