DPP v Resource Recovery Victoria Pty Ltd [2015] VCC 472

3 On site, there were four excavators ranging between five tonnes and sixteen tonnes, three front end loaders, a seven, a ten and 20 tonne machine and two street sweepers, one a large truck-type sweeper and a smaller one. The dumping, sorting, processing and carrying away of the materials created a lot of dust and the sweepers were in regular use. The smaller sweeper was used in the front yard and outskirts of the shed, and the larger one was used mainly in the rear shed.

4 Mr Thynne's job was to operate the small sweeper. Chris Zanella was the supervisor in the yard. It was his responsibility to oversee the workers, supervise the works, manage the trucks delivering and carrying away materials and manage the machinery operating on site. He also operated machinery himself and so was responsible for the safe use of any machinery he personally was operating.

5 On 4 October 2013, in addition to the front end loaders, excavators and sweepers, there were 10 heavy rigid trucks and three medium rigid trucks delivering empty bins to customers and bringing full bins to the site for sorting. There were also truck drivers from other companies who came in to use the dumping facilities.

6 At about 9 am on 4 October 2013, Mr Zanella was operating the largest front end loader, the 20 tonner. He picked up a load of sorted material from the floor of the shed and drove the loader up a ramp which gave access to a large hopper at the end of the shed. He tipped the bucket to empty the load and reversed down the ramp, then drove out of the shed. He did not lower his bucket sufficiently to allow him to see ahead of him. The lower leading edge was 1.2 m above the ground. He did not see Mr Thynne, who was driving the small sweeper at the front of the shed.

7 Mr Thynne was struck by the blade of the bucket of the front end loader. He suffered fatal injuries.

8 The brief of evidence and the summary provided by Mr Rose QC in the course of the plea revealed serious and systemic failures by Resource Recovery which resulted in Mr Thynne's death.

9 There was no formal induction at all for workers. There was no training or instruction for employees in relation to operating vehicles and moving plant. There was no traffic management plan. When asked, employees and management referred to learning on the job and the need to use common sense. Whilst some employees believed that trucks were not supposed to bring loads into the shed while workers were sorting in the shed, that did not appear to be a common understanding, let alone a rule that was enforced. There were no systems for keeping trucks or machinery at any distance from workers doing manual sorting. It was, it would appear, commonplace for workers to manually sort a pile of dumped material at the same time a machine operator was picking up and removing waste from the same pile. There were no signs or lines in the yard area defining where a truck or street sweeper operator was or was not to go. There were no alarms, no lights and no barriers. Although two-way radios had been introduced a few weeks prior to help with communication between those working in the yard, there were none in the vehicles.

10 Several Resource Recovery employees reported being involved in similar 'near misses' to that which led to Mr Thynne's death, that is near misses where employees had been in high risk situations involving the use of machinery. Some work site incidents had been recorded, however there was no requirement that the recording in fact took place, and no system whereby recorded incidents were followed up. The Worksafe investigation revealed that traffic management had in fact been identified by staff and management as an issue, but nothing had been done to implement any necessary systems.

11 A Worksafe inspector came to the site later on the day of Mr Thynne's death. He observed that there was no traffic management system in place, no proper instruction or induction provided to employees in relation to operating vehicles and plant and machinery. He issued an improvement notice requiring that these contraventions be remedied within three weeks, that is, by 25 October 2013.

12 When the Worksafe Inspector returned to the site on 28 October, Resource Recovery had introduced compliance measures in response to the improvement notice. In particular, it had implemented a traffic management plan and introduced training. Simple measures, painting lines on the pavement and erecting signs, were enough to direct all traffic entering the yard to go to a designated area. Mirrors had been erected on blind corners. All traffic was being directed by designated spotters, who had been trained in safely guiding all traffic flow, that is all vehicles and machinery entering, operating, loading, unloading, and leaving the yard. Where traffic was heavy or multidirectional, multiple spotters were used. Spotters, and office staff, were equipped with two way radios. All yard vehicles were fitted with radios, and external customers were urged to install radios in their trucks as well. Systems for back up communication, verbal and visual, were being used if there was no radio contact. A chain and a warning sign had been installed at the entrance to the shed. The chain was used to block entry to the shed by other vehicles and machinery while a loader was being used in the shed. Any person in the vicinity of a loader had to make their presence known to the loader operator, and loaders had to stop operations until traffic had passed. A 4 metre exclusion zone was introduced and had been enforced between workers sorting through a load by hand and machine operators. Monthly "tool box" meetings had been scheduled. A sign-in book had been introduced requiring all visitors to the site to sign in and out.

13 Some instructions had been documented. Written instructions had been produced requiring there to be 2 spotters in the yard at all times to manage traffic and pedestrians. Written instructions requiring the lower edge of loader buckets to be no higher than 500 mm from the ground when the loader was in motion had been produced. So too had written instructions stipulating that sweepers were not to be operated in front of the shed while other vehicles were in use and requiring a 4 metre exclusion zone when machinery was in use. A written requirement for clearance by radio before employees could pass operating machinery had been introduced and a written requirement for spotters and truck drivers to report all incidents had also been produced. Sign off sheets had been introduced which recorded when workers had been introduced to these written requirements so that they were familiar with the new processes and instructions.

14 The safety measures introduced within a space of three weeks of themselves demonstrate how comprehensive was the failure to provide and maintain a safe system of work and how woefully inadequate the information, instructions and training for employees had been. And that these simple steps could be identified, and implemented within 3 weeks of receipt of the improvement notice demonstrates how simply, quickly and cheaply a safe system of work, and induction, instruction and training could be done. They demonstrate how avoidable Mr Thynne's death was and how culpable was the failure of Resource Recovery to ensure the safety of its workers.

15 It is this then that has led Resource Recovery to plead guilty to two charges arising out of breaches of the Occupational Health and Safety Act 2004: a charge of failure to provide and maintain a safe system of work (Charge 1), and a failure to provide adequate information, instruction and training (Charge 2). The maximum penalty for each offence is $1,299,240. That is a significant signal of how seriously breaches of the failure to provide a safe system of work and to provide adequate information, instruction and training are regarded by Parliament and the community.

16 No amount of fine, justifiable criticism of the culpable failures of Resource Recovery to provide a safe workplace, or focus on the steps taken by Resource Recovery since Mr Thynne's death can bring him back to life, or provide a measure of the value of his life. His grieving family I hope will understand that the punishment meted out to the company for its failures to provide him with a safe workplace and to provide proper and adequate instruction are not a crude attempt to place a monetary value on his life.

17 It is clear, and it was acknowledged by Mr Waters for Resource Recovery that in such a case, denunciation, general deterrence and punishment are the significant sentencing considerations.

18 Employers simply cannot ignore their responsibility to provide safe workplaces for their employees, or to put profit over safety. Failures of this magnitude must be punished. The penalty must reflect the denunciation of a civilised and affluent society such as ours for such cavalier disregard for workers' safety. It must serve as a real deterrent to other employers, so they are not, by laziness, ignorance, or failure to properly value safety, failing to do what they ought to do to protect the safety of workers.

19 Acknowledging the importance of these sentencing considerations, Mr Waters relied on a number of factors which, he submitted, were mitigatory, or should otherwise operate so as to reduce the fine otherwise thought to be appropriate.

20 They centred around the acknowledgement by Resource Recovery of its failures, evidenced by its apology to the family, its plea of guilty and the steps taken by the company since the death of Mr Thynne to address the safety shortfalls; the absence of any history of like failures or other corporate wrongdoing; its reputation as a good corporate citizen; and the risk to the continued viability of the company were a substantial fine imposed.

21 There was an impressive body of evidence put before me as to the steps taken by Resource Recovery since Mr Thynne's death to address its manifold safety failures. In addition to the measures introduced in the 3 weeks following Mr Thynne's death, in response to the improvement notice, there was evidence of a continued commitment to safety thereafter. A systemic review of Resource Recovery's operations, its systems of work and its induction, instruction and training has resulted in what Ms Denise Zumpe of SafeSense Workplace Safety concluded in her report on Resource Recovery's 2014/5 Occupational Health and Safety activity, was a paradigm shift in its understanding and approach to health and safety. In Ms Zumpe's opinion, there is now genuine consultation and evidence that safety is a priority over productivity. In particular, she noted that the shed operation has changed, with a clear separation between workers and operating plant in place and enforced. She noted this had slowed down operations, but that was now accepted as the normal practice. She concluded:

Resource Recovery is well down the path of creating sustainable change around health and safety performance. The approach to safety has been extended to include human resource management through coaching, accountability and performance management. This holistic change is facilitating change to a positive safety culture. There is no doubt that with the current resources applied and improved understanding and knowledge of safety management, improvement will continue.

22 I was provided with a folder of materials which included a number of new manuals, training and induction documents which had been prepared by Ms Zumpe. I was also provided with evidence of regular tool box meeting attendance records. These materials flesh out the matters referred to by Ms Zumpe in her report, and provide concrete proof of the work that she has done since being retained by Resource Recovery. The manuals and instruction sheets are accompanied by photographs. Attention has been paid to the fact some workers may have poor literacy skills, or a limited understanding of English. The photos in the instruction sheets and manuals also show the physical changes to the worksite which were described: warning signs, concrete barriers marking safe zones, the chain which prevents access to the shed when machinery is operating in it, traffic and pedestrian markings, mirrors, two way radios, CCTV cameras and the like. I accept the evidence that Ms Zumpe's retainer by the company is continuing and that the commitment to address and continue to address safety measures is a genuine one by the company.

23 Shortly before Mr Thynne was killed, Resource Recovery had retained consultants to advise on process improvements. That led to a decision to purchase a new piece of plant, a purpose built hopper. Recommendations were also made about other process improvements and a Mr Paul O'Keeffe was engaged to carry that through. His recommendations included Occupational Health and Safety recommendations, some of which I was told had been accepted and were in the process of being introduced before Mr Thynne's death. The commissioning of the new hopper also led to further Occupational Health and Safety training and introduction of new measures relating to the safe operation of that hopper. Although these were operational matters, linked to improved productivity, they are also further evidence that the company is now accepting and implementing Occupational Health and Safety recommendations linked to those productivity measures.

24 I accept that this evidence, along with the plea of guilty, is evidence that the company accepts its responsibility and has shown a real commitment to implementing systemic change so such a wanton failure to protect workers' safety will not occur again. This counts significantly in its favour.

25 I accept also the evidence that Resource Recovery has prided itself on offering employment to people who might find it difficult otherwise to obtain employment: the long term unemployed, people with criminal records including those who have spent time in prison, people struggling with mental health issues or people with an intellectual disability. This is rightly a matter of pride for Resource Recovery, but it also highlights the need to ensure that people who, for various reasons may be vulnerable, or lack the sort of common sense which the company previously assumed was all employees needed to protect themselves, are properly and responsibly trained and operate within a safe system of work.

26 There was evidence which I accept that Resource Recovery regarded itself as a family workplace. It employed many of its employees over many years and often employed children or other relatives of existing employees. Mr Thynne, it would appear, had been employed by Resource Recovery or other companies in the group for over 20 years. The company has maintained contact and has continued to offer support to his widow and family. There is a real dissonance between that justifiable sense of pride in having a pool of long term employees and considering employees as like a family with the cavalier attitude to safety revealed in the aftermath of this terrible tragedy and of what, as Ms Zumpe described in her report, was an emphasis before these events on productivity over safety.

27 Mr Waters also placed considerable emphasis on the fact that Resource Recovery was a going concern and that a substantial fine would imperil its existence, and so imperil the continued employment of its own employees, and those employed by the other companies associated with Resource Recovery.

28 I was provided, amongst other things, with a spreadsheet setting out the moneys expended on Occupational Health and Safety measures since the death of Mr Thynne. A significant part of the expenditure in the spreadsheet relates to the productivity improvement assessment and the consequential purchase of the custom built hopper and a related conveyor. Whilst I accept on the evidence that the new hopper provides a safer system of work than the previous sorting and hopper system employed by Resource Recovery, this was in my view properly to be characterised as a productivity measure with incidental Occupational Health and Safety benefits. The costs associated with the new hopper, in my view, should not be counted as part of the cost of the remedial measures introduced following the death of Mr Thynne. The remedial measures are those which were brought about as a result of the shortcomings identified in the company's training and work practices and which had created such an unsafe workplace. So whilst I accept that there was substantial expenditure on remedial measures, not all of the items costed in the spreadsheet are properly attributable to that.

29 Whilst the commitment of the company to address its shortfalls is measured in part by its preparedness to spend on Occupational Health and Safety measures, it must be borne in mind that this is money it should have been spending all along to protect its employees' safety.

30 It is very much to the credit of Resource Recovery that it has introduced these new practices, and made the commitment it has to changing the culture to one of prioritising safety over productivity, to pick up again the phrase used by Ms Zumpe. It demonstrates an acceptance of responsibility and a capacity and commitment to change. It also demonstrates that such processes could and should have been in place before Mr Thynne's death and had they been he would not have been placed at risk. These measures graphically demonstrate that the company had the means to implement the appropriate safety measures. In one sense, it can be said that the more impressive the evidence of the steps taken to remedy the wrongs after the event, the more inexplicable and inexcusable the failure to have a traffic management system and to make provision for instruction of employees in a way that would have ensured a safe workplace. These steps that have now been introduced appear to reflect that what has now been done now is sadly no more than the reasonably practicable steps that should have been taken in the first place, steps which had they been in place at the time would most likely have meant that the death of Mr Thynne could have been avoided.

31 For these reasons, I do not consider the fines for these charges should be reduced by the amount already spent on Occupational Health and Safety measures: as I have said, it is in effect money which should have been spent on that all along.

32 Dealing then with the impact of the fines, in addition to the added expenditure on Occupational Health and Safety and on the new hopper, on the financial viability of Resource Recovery. Mr Waters placed emphasis on s.52(1) of the Sentencing Act 1991, which requires the court to take into account the financial circumstances of the offender. It is important to note the qualifications to that requirement. First, the court must take the offender's financial circumstances into account as far as practicable. Secondly, the consideration of the financial circumstances of the offender applies not only to the fine itself, but also to the method of payment. In a case such as this where denunciation, just punishment and general deterrence are the paramount sentencing considerations, and considerations personal to the offender are subordinate to those paramount considerations, the symbolic importance of the amount of the fine, as a reflection of the gravity of the conduct, must not be overlooked. The Sentencing Act makes provision for payment of a fine by instalments and that can ameliorate the impact of a significant fine by spreading the liability over a number of years. But, in my view, the punitive deterrent and denunciative elements of the amount of the fine must not be devalued. It is little deterrent or punishment if a fine is calculated so as to allow a company to absorb it as just another cost of doing business.

33 Mr Waters submitted that Resource Recovery could fold if a substantial fine were imposed, and that would mean all current employees would lose their jobs. In his submission, that would mean not only the 9 employees of Resource Recovery, but all 35 employees of Resource Recovery and its associated companies could lose their jobs.

34 From the material placed before me, it appears that Resource Recovery operates the waste recycling centre, and its associated companies, Moorabbin Bulk Bins and Combined Bulk Bins are the major suppliers of the waste material it processes. They pay tipping fees to Resource Recovery and I was told, in the additional materials, that those tipping fees charged by Resource Recovery are lower than the tipping fees charged by other transfer stations or recyclers to which Moorabbin Bulk Bins and Combined Bulk Bins would have to direct their work if Resource Recovery ceased operating. All three companies are linked or controlled, directly or indirectly, by Kerryn Haddon and Garry Haddon.

I was provided with financial statements of all 3 companies, budgets and some projections. On those materials I accept that a substantial fine would adversely affect Resource Recovery and possibly the other companies in the group, but nonetheless the evidence is clear that the companies are at present viable, and that Ms and Mr Haddon evidence an intention to continue to operate their businesses. I do not consider that the evidence of the financial circumstances of Resource Recovery and the associated companies is such as to demonstrate that a substantial fine, particularly if an instalment order were made, would inevitably lead to the demise of Resource Recovery. Indeed, in response to my invitation to Mr Waters to file the further financial information and make further written submissions about the company's financial position and capacity to pay a fine following the plea, the highest he put it in paragraph 1 of the further outline of submissions dated 9 April was, "a significant fine could put in doubt its ability to continue trading" .

35 I was also provided with a table of the outcome of cases where charges under s.21 had been laid. It shows a range of fines, some imposed in the Magistrates Court, that is in cases where it was decided the case was not of sufficient gravity to be dealt with in this court, and some in this court. Apart from a notation which indicates which cases involved a breach of s.21 which was causative of harm, and those which involved non causative breaches, there was scant information about the nature of the breach and none about the financial circumstances of the defendants. Save to demonstrate that courts have imposed a range of fines, and that each case must be considered on its own facts and circumstances, the table was of limited utility. I do note that the appeal in the case of City Circle Recycling, which was dealt with in the Magistrates Court and which at the time of the plea hearing was the subject of an appeal by the Director of Public Prosecutions on the ground that the sentence was manifestly inadequate has now been determined. The original fine of $225,000 imposed in the Magistrates Court was increased by a judge of this court last week to a fine of $445,000, that is just short of double the original fine.

36 In my view, although the indictment charges 2 separate offences, one of failing to provide a safe system of work, and one of failing to provide appropriate information, instruction and training, this is properly to be regarded as a case of systemic failure in training and instruction, and provision of a safe system of work, each one leading into the other, each one a product of the other. Little would be achieved in my view by attempting to apportion individual fines for each charge by reference to the failures attributable to the failure to provide a safe system of work and the failure to instruct and train. This is, in my view, a case where an aggregate fine would properly reflect the totality of the conduct of Resource Recovery.

37 Therefore I am going to impose an aggregate fine. Mr Haddon, as the authorised representative, can you please stand.

38 On the two charges to which the company has pleaded guilty it is convicted. It is fined an aggregate fine of $450,000. Can you take a seat again, please Mr Haddon.

39 There is an automatic stay in respect of that fine of one month. I gather from the submissions that have been put, both orally and in writing, and on the basis of the budgets and projections that have been provided, that it is proposed to seek an order for payment of the fine by instalments.

41 HER HONOUR: Are you in a position to make that application now or do you wish to consider that and come back later. I am anxious to save everybody a further trip to court.

42 MR WATERS: Yes, Your Honour. Could I just have a moment?

43 HER HONOUR: Yes, certainly. And I understand that the company has already properly considered that.

45 MR ROSE: You will also need to deal with s.6AAA.

47 MR WATERS: Your Honour, I am instructed to say that as the materials have pointed out, the company in effect have provided for the possibility of $10,000 per month and I would be submitting, Your Honour, that it ought be $10,000 per month, perhaps commencing in one month's time.

48 HER HONOUR: Well, there is that automatic stay of a month.

50 HER HONOUR: Mr Rose, what do you say to the proposed instalment quantum.

51 MR ROSE: I certainly have no difficulty with the instalment application, Your Honour. As to the quantum, it seems a bit light and it's going to take an awful long time but we will really leave it to Your Honour, I think.

52 HER HONOUR: Well, $120,000 a year, that's - - -

54 HER HONOUR: That's just shy of four years. The company can always pay more if it does better but - - -

55 MR ROSE: Yes, it can. I am not going to quibble with it, Your Honour.

56 HER HONOUR: I direct that the fine be paid by instalments of $10,000 per month. I don't need to make a direction in respect of the first instalment because that is covered by the automatic stay. And I declare, pursuant to s.6AAA of the Sentencing Act that but for the pleas of guilty, I would have imposed an aggregate fine of $750,000. Any further orders that are required to be made?