Inspector Atkins v Network Production Personnel Pty Limited

PROSECUTOR Mr M P Cahill of counsel Solicitor: Mr T Plummer Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT Mr A Searle of counsel Solicitor: Ms M Cameron Turner Freeman

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J Thursday 25 March 2004

INSPECTOR TERRY ATKINS v NETWORK PRODUCTION PERSONNEL PTY LIMITED

Prosecution under section 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2004] NSWIRComm 71

1 Network Production Personnel Pty Ltd ("the defendant") was a labour hire company that supplied labour to Steggles Limited, whose parent corporation was Bartter Enterprises Pty Limited. Steggles operated a poultry farm at Luddenham in the State. The defendant employed Iv Try Kuoch who, under the arrangement between the defendant and Steggles, was provided by the defendant to work as a labourer at the poultry farm.

2 On 24 July 2000 Mr Kuoch was transporting eggs using a tractor. At about 4.30 pm that day Mr Kuoch was found by fellow workers pinned between the rear wheel of the tractor and a water tank stand. Mr Kuoch had sustained fatal injuries. There were no witnesses to the accident.

3 The defendant was prosecuted by Inspector Terry Atkins ("the prosecutor") of the WorkCover Authority of New South Wales under s 15(1) of the Occupational Health and Safety Act 1983. That section provides: 15 Employers to ensure health, safety and welfare of their employees (1) Every employer shall ensure the health, safety and welfare at work of all the employer's employees.

4 The charge in the amended application for order was that the defendant failed: contrary to Section 15(1) of the Occupational Health and Safety Act, 1983, to ensure the health safety and welfare at work of persons in its employ and in particular, Iv Try Kuoch ("the deceased worker"), in that the deceased worker sustained fatal injuries at work, on 24 July 2000, when he became trapped between the right rear wheel of an orange coloured Kubota Tractor type L3010D, Serial Number: 72605, ("the tractor") and a water tank stand, whilst operating the said tractor unassisted, by reason that the defendant failed: (a) to make adequate arrangements for ensuring safety and absence of risks to health in connection with the use of plant, by reason that the deceased worker operated the tractor, at the site, whilst not being sufficiently competent to operate the said tractor. (b) to provide or maintain a system of work that was safe and without risk to health by reason that: (i) there was not any, or any adequate, safe work method statement for the operation of the said tractor; and/or (ii) it failed to carry out any, or any adequate, risk assessment of the tasks to be performed by the worker. (c) to provide such information, instruction, training and supervision of the worker, as may be necessary, in operation of the said tractor, by reason that the defendant did not: (i) ensure that the deceased worker adequately understood instructions conveyed to him (ii) adequately assess the training of the worker, to ensure his competency to operate the said tractor; (iii) assess, or adequately assess, the content of the training to be provide to its employees by Steggles Limited at the site; (iv) adequately ensure the supervision of the worker, to ensure his competency to operate the said tractor (v) adequately ensure the supervision of the worker, such that should medical attention be required, it may be provided in a timely manner; (vi) make any, or any adequate, arrangements for the supervision of its employees at the site; (a) generally; and/or (b) in circumstances where medical assistance may be required, such that it could be rendered in a timely manner.

5 Steggles was charged under s 16(1) of the Act in relation to the same incident and pleaded guilty. A fine of $159,250 was imposed: Inspector Terry Atkins v Steggles Limited [2004] NSWIRComm 70.

6 The defendant in the present proceedings also pleaded guilty to the charge under s 15(1). Agreement was reached between the prosecutor and the defendant on a statement of facts. The statement contained the following facts: 3 At all material times, the defendant had entered into an arrangement with Steggles Limited ("Steggles") for the provision of labour at 2510-2590 Elizabeth Drive Luddenham, in the state of New South Wales ("the site").

4 At all material times, the defendant employed Iv Try Kuoch ("the deceased worker").

5 At all material times the deceased worker undertook his usual duties of employment at the site.

6 The deceased worker commenced work at the site on or about 19 June 2000.

7 At all material times, Bartter Enterprises Pty Limited ("Bartter"), the parent corporation of Steggles, and Network had in place an agreement in respect of the provision of labour to perform functions at sites in the Newcastle/Hunter region.

8 At the request of Bartter, and/or Steggles, the services provided under the contract for labour hire by Network, were extended to cover the Luddenham site.

9 As a consequence of the distance of the Luddenham site from Network's Newcastle operations, Network relied upon Steggles to assess the suitability of potential employees at the Luddenham site.

10 At all material times, Avtar Singh an employee of Steggles was the Supervisor of the deceased worker at the site.

At all material times no risk assessment specific to the site, and task to be performed by the worker, was conducted by either Steggles or Network.

At all material times, neither Steggles nor Network attempted to ascertain the level of comprehension of the deceased worker for the tasks the deceased worker was to perform, and in particular, little or no account was taken of the worker's written or spoken comprehension of the English language.

On or about 19 June 2000, the deceased worker commenced employment at the Luddenham site and in the course thereof, was provided with limited induction training, the extent of which was not documented. This training was provided by Mr Avtar Singh.

The deceased worker worked under supervision of experienced egg collectors on 20 June, 21 June and 22 June 2000.

On or about 3 July 2000, the deceased worker was first instructed and observed in the operation of an orange coloured Kubota Tractor type L3010D, Serial Number: 72605, ("the tractor"), by Mr Avtar Singh.

The deceased worker then again operated the tractor on 7 July, 18 July, 23 July and 24 July 2000. 17. During the above periods of operating the tractor, the deceased worker received no training in the use of the hand throttle on the tractor. 18. At no time was the deceased worker provided with a copy of the instruction and operation manual for the tractor. 19. At no time was the deceased worker provided with written instructions in how to operate the machine, in either English, or Cambodian being his first language. 20. At no time was the deceased worker provided with sufficient instruction in how to operate the tractor in conditions other than its normal manner of operation. 21. At no time was the deceased worker provided with instruction in how to operate the machine in an emergency. 22. At all material times, the deceased worker was not provided with any, or any adequate supervision whilst operating the tractor. 23. At all material times, the defendant failed to provide adequate training in the operation of the foot and hand throttles of the tractor. 24. At all material times, the defendant failed to have in place a system of work for the ongoing supervision of persons operating at the Luddenham site remote from the production sheds. 25. On or about 24 July 2000, the deceased worker was operating the said tractor to transport eggs from the production shed to the fumigation area. 26. The job of transporting eggs from the production sheds to the fumigation area necessitated the undertaking of the following process: (a) Transporting trays of eggs from the production shed to a dolly, or transportation platform, attached to the rear of the tractor; (b) Appropriately stacking the trays of eggs on the dolly; (c) Attaching the safety chain on the side of the dolly to prevent the load falling off; (d) Operating the tractor to lift and incline the dolly; (e) Driving the tractor at low speed to the fumigation area; (f) Unloading trays of eggs from the dolly. 27. It appears that at approximately 3.00pm, the deceased worker left the vicinity of shed 4 to take a load of eggs to the fumigation area. 28. It appears that at approximately 3.40pm, a fellow worker, Thi Thu Thao Le ("Le"), noticed that the deceased worker had not returned. 29. It appears that at approximately 4.00pm, Le stepped out of Shed 4 to ascertain the location of the worker. Le noticed the tractor and dolly on the side of the road adjacent to the water tank stand. 30. It appears that at 4.30pm, Le again left shed 4 to check on the worker. Le noticed the tractor and dolly in the same location as at approximately 4.00pm. 31. Le and a fellow worker could not see the deceased worker and they proceeded to move towards the tractor. There, they discovered the deceased worker pinned between the right rear wheel of the tractor and a water tank stand. 32. Mr Singh advised that the tractor was in first gear but the motor was not running. 33. The dolly safety chain was not in place and was dragging on the ground. 34. The deceased worker was deceased at that time. 35. There were no witnesses to the accident and the exact cause of the accident is not known. 36. The road travelled by the deceased worker from the production shed no 4 to the fumigation room was a dirt road. It is believed that the dolly chain was not secured and at a point of the road the dolly loaded with eggs became unbalanced and overturned. 37. The tractor was being driven in first gear at a slow speed. 38. Subsequent examination of the tractor by Inspector Atkins and Test Safe Australia did not reveal any defects with the tractor that may have contributed to the accident. 39. At the conclusion of his examination of the scene of the accident Constable Donald Brett McLennan, of the New South Wales Police formed the opinion that: "….the death was occasioned by the deceased jumping from the tractor…." 40. The deceased worker remained pinned between the right rear wheel of the tractor and the water tank stand for a period of in excess of 30 minutes before being discovered. 41. At all material times the defendant failed to have in place a system of supervision to ensure that should persons at the site be injured, medical assistance would be rendered promptly to them.

7 The prosecution also tendered into evidence the following:

· Inspector Atkin's factual report of the accident dated 9 August 2000. · A further report by Inspector Atkins dated 26 October 2000. · A bundle of 13 colour photographs taken by Inspector Atkins on 25 and 28 July 2000. · A certificate of prior convictions of Steggles showing there were seven prior convictions under the Occupational Health and Safety Act 1983. · A certificate of prior convictions of the defendant showing no prior convictions under the Occupational Health and Safety Act 1983.

8 The defendant tendered an affidavit of Matthew Johnston, a director of the defendant. Mr Johnston was required for cross-examination. Mr Johnston's evidence was that: s From 1998 until early 2001, his responsibilities in relation to the Defendant included attending meetings of the Board of Directors in a non-executive capacity.

s The defendant was, and remains, a wholly owned subsidiary of another entity called Network Staff Pty Limited ACN 069 856 104. Until early 2001, Network Staff was owned by two companies, Johnston Business Group and Warasea Pty Ltd. Each of those companies owned 50% of Network Staff.

s In about October 2000, the defendant lost its only client, Bartter Chickens trading as Steggles, when that organisation cancelled the contract to supply staff. Since about January 2001, the Defendant has not engaged in any trade or operations.

s The current directors of the defendant are Mr Johnston and his wife.

s There is no intention for the Defendant to ever engage in any form of commercial or trading activity again.

s The Defendant has no assets of any kind. Its only asset was the contract to supply labour to Bartter Chickens which it secured on 16 December 1999.

s In relation to providing workers for the Beresfield site, the Defendant undertook a strict and rigorous induction program for workers prior to them commencing duties. This included safety training and medical screening. It was also important to ensure that there were sufficient workers of particular heights, due to the operational requirements of the site. In some locations, workers needed to be of a particular height, while in others being more than a certain height could result in risks to safety due to moving machinery and so on.

s Developing the training for staff necessitated the Defendant conducting site visitations and site assessments and, to this end, the Defendant did send safety personnel to the Beresfield site for this purpose.

s The practice of the Defendant in recruiting staff was to provide an Occupational Health and Safety induction. The induction took the form of verbal instructions and a Power Point presentation. After this process, applicants were required to complete a questionnaire to verify that they had listened and understood the presentation.

s Mr Johnston had no direct knowledge of the process by which persons were selected to work at the Luddenham site.

s At the relevant time, Mr Johnston had no knowledge that the Defendant had workers engaged at the Luddenham site.

s With the exception of what occurred at the Luddenham site, the Defendant, when in operation, had a high commitment to occupational health & safety, demonstrated by the steps it took in relation to the provision of labour to the Beresfield site and the fact that the company has never before been prosecuted.

s From his application for employment with Bartter Chickens, it appears that Mr Kuoch had experience with the kind of work for which he was engaged. Furthermore, Mr Kuoch had a forklift driver's licence. 9 The cross-examination of Mr Johnston revealed that he retains an interest in Choice HR Parramatta Pty Limited, which continues to supply labour to Bartter. Choice was the corporation through which the defendant recruited Mr Kuoch.

10 Mr M Cahill of counsel appeared for the prosecutor. In his submissions Mr Cahill canvassed the evidence and the sentencing principles relating to the relevant objective and subjective factors to be taken into account. Further, in summary Mr Cahill submitted: · The defendant did not address itself to issues of occupational health and safety touching upon its placement of Kuoch at the Luddenham site prior to the subject incident. The defendant did not carry out an inspection of the site prior to Kuoch commencing work. Nor did the defendant carry out any on site inspection or supervision once Mr Kuoch commenced work. The defendant relied upon Steggles to provide Mr Kuoch with induction training, safe systems of work, safe work procedures, adequate training and supervision. And the defendant placed reliance on Steggles without performing any form of risk analysis; assessment of the occupational health and safety systems in place at the farm; and/or assessment of the farm's management.

· The defendant apparently sought to fulfil its obligations under the Occupational Health and Safety Act by the insertion of various terms into its labour hire contract that sought to transfer responsibility for the health and safety of its employees to the hirer. This approach has been the subject of express disapproval.

· The risks associated with the operation of farm machinery, including tractors, are manifest and the obligation to "ensure" imposed on the defendant by section 15(1) of the Act requires that the defendant provide safe work method statements and training designed to meet all foreseeable exigencies, particularly where workers are required to operate machinery without direct supervision.

· Similarly, the obligation to "ensure" also requires that the defendant take steps to effectively convey its work methods and safety systems to its workforce - including those for whom English is not their first language. Training is of no value if it is delivered in a manner or in a language that is not effectively comprehended by those being trained.

· Both general and specific deterrence are matters that should be taken into account in determining the appropriate penalty to be imposed in the context of the present case.

· The defendant entered its plea of guilty following upon the amendment of the Application for Order and, therefore, the defendant is entitled to have the benefit of its early plea reflected in the penalty to be imposed.

· The defendant is entitled to a discount with respect to its cooperation with the WorkCover Authority in the investigation of the subject incident. The defendant made its officers available to be interviewed by the WorkCover Authority and provided copies of all relevant investigation reports.

· The defendant is not relevantly recorded and is entitled to the benefit of its good industrial citizenship.

· The decision of the Full Bench of this Court in Warman International Ltd v WorkCover Authority (NSW) (1998) 80 IR 326 in relation to sentencing, as between a labour hire company and its client for respective breaches of the Occupational Health and Safety Act under ss 15 and 16, recognises a need for consistency in the sentencing of offenders for what can perhaps be best described as "related" offences.

· In fixing sentence the Court must have regard to the different maximum penalties applicable. The maximum in respect of Steggles was $825,000 whereas the maximum in the case of the defendant is $550,000.

· Where a defendant wishes to obtain the benefit of section 6 of the Fines Act 1996 (NSW) on the basis of impecuniosity, the onus is on the defendant to produce cogent evidence of its financial circumstances, in sufficient time to enable the Court an opportunity to properly assess the evidence.

· In any event, the proper course is for the Court to first assess the amount of the fine to be imposed by reference to the objective seriousness of the offence, together with any subjective factors the Court determines are to be taken into account in mitigation, and only then, if the Court is satisfied that the defendant's financial circumstances render it appropriate, reduce the fine to take into account the defendant's means.

· Even if the Court is satisfied that the defendant's financial circumstances warrant a reduction in the fine to be imposed, the primary factor in determining the penalty to be imposed must remain the objective seriousness of the offence.

· In this case the defendant has not provided sufficient and proper information for the Court to exercise its discretion in the defendant's favour in relation to the defendant's claim that it has no cash or assets. Submissions of defendant

11 Mr A Searle of counsel appeared for the defendant. Mr Searle also referred to the relevant sentencing principles. In relation to the particular circumstances of this case, Mr Searle's submissions may be summarised as follows: s The defendant sought and received assurances from Steggles that the workers hired to the host employer, including the deceased, would undertake a Company Safety Induction prior to commencing duties with the host employer at the Luddenham site where the death occurred.

s The Defendant did breach the Act as alleged, and relied on the host employer to do those things necessary to ensure health and safety at work, which established authority in this jurisdiction and in relation to this legislation says does not result in a reduction of penalty otherwise appropriate: WorkCover v Drake Personnel (No. 1) (1997) 89 IR 374 at 382; Drake Personnel v WorkCover (1999) 90 IR 432 at 455, 456.

s There are unusual aspects to the incident. The exact cause of the accident remains unknown. There were no defects in the machinery. The police report states the death was occasioned by the deceased jumping from the tractor, presumably while it was moving. If this is the case, then the accident resulted from the independent actions of the deceased and no amount of supervision would have prevented the accident. In such a situation, it is submitted that the breach by the Defendant was not one where there was every prospect of serious consequences . It is submitted that the consequences in this matter were quite unlikely.

s In relation to the main part of its operations, providing Bartter Enterprises with up to 40 workers at its Beresfield site working in the slaughter and processing of chickens, the Defendant took all proper and appropriate steps to identify, manage and reduce any hazards that may be present at the site and, as far as practicable ensure the health and safety of its employees there.

s There was a lapse of these standards in relation to the hiring of workers at the Luddenham site. No explanation can be offered in relation to this.

s Given the agreed Statement of Facts, the breach by the Defendant must be regarded as serious.

s The obligations of labour hire companies such as the present defendant under the OH&S legislation have been considered many times by the Commission: See Drake Personnel v WorkCover (1999) 90 IR 432 at 456.

s The Sentencing Guideline judgment of the Court of Criminal Appeal in R v Thompson; R v Houlton (2000) 49 NSWLR 383 at 419 is applicable to sentencing in the Commission in Court Session under the OH&S Act, including the utilitarian value of a plea of guilty generally to be assessed in the range of 10-25% discount on sentence, depending upon how early the plea of guilty is entered.

s The financial position of the defendant and how it is to be dealt with in the sentencing process is also a relevant consideration. Section 6 of the Fines Act 1996 requires that, in the exercise of a discretion to fix the amount of any fine, the court is required to consider, amongst other things, "such information regarding the means of the accused as is reasonably and practically available to the court for consideration".

s While it is accepted that in terms of general sentencing policy the means of a defendant are relevant, nevertheless, the imposition of a penalty which is out of step with the objective circumstances of the offence is considered to be inconsistent with the role of the Court and may represent a failure to impose a sentence with appropriate regard to the importance of deterrence in the sentencing process. However, courts are also reluctant to make decisions that are futile.

s Apart from the situation at the Luddenham site, the actions of the Defendant in relation to ensuring the health and safety of its employees are without blemish. Its industrial responsibility is shown by its conscientiousness as to safety in the workplace and the proper training of its employees engaged at the Beresfield site for Bartter.

s The Defendant is unaware of any other incident involving any failure to ensure the health and safety of its employees. The Defendant has never before been prosecuted for an offence under the OH&S Act or related legislation.

s The plea of guilty was entered at the earliest practical opportunity after the Defendant had all the relevant information necessary to determine the appropriate course of action. The Defendant has acknowledged its culpability.

s The Defendant has no cash or assets. This fact has been communicated to the prosecutor.

s This situation arose from the loss by the Defendant of its only client and contract for services in late 2000. This occurred as a result of a commercial decision taken by the client and for reasons unrelated to the accident or any liability under the OH&S Act.

s From his application for employment with Bartter Chickens, it appears that Mr Kuoch had experience with the kind of work for which he was engaged. Furthermore, Mr Kuoch had a forklift driver's licence.

s In combination with the other factors cited above, this should lead the court to impose a lower penalty than would be the case in the absence of the mitigating factors. Consideration

12 The obligations imposed on labour hire companies in relation to their responsibilities under the Occupational Health and Safety Act have been the subject of a number of important decisions in the Commission in Court Session and at least since the decision of the Full Bench in Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 there could have been no misconception about the nature of those obligations. It is worth repeating what the majority Wright J, President, Walton J, Vice President, Peterson J (not dissenting from the majority's approach) said in Drake Personnel about those obligations at 455-456: The obligations of a labour hire company under the OH&S Act have been considered on a number of previous occasions by this Commission and its predecessors. The judgment of Hungerford J in Petar Ankucic v Drake Personnel Ltd t/as Drake Industrial (unreported, Hungerford J, IRC96/6475, 6476, 6477 and 6479, 25 November 1997) concerned a prior prosecution of the appellant. That prosecution arose from an incident in which an employee of the appellant, Mr Douglas, sustained an injury whilst operating a woodworking machine at the premises of another company, Warman International Ltd. The appellant pleaded guilty in that case and was fined a total of $25,000. Considering the question of penalty, his Honour commented (at p13-14): The failure here to ensure the safety of Mr Douglas arose in a situation where he was directed by his employer, the defendant, to perform work for a third party, Warman, at that third party's premises. In such a situation, my view is that an employer has a special responsibility to ensure the health, safety and welfare of its employees at the other workplace for no reason other than that that workplace is removed form the employer's direct management and control and would usually be at a location foreign, or at least unfamiliar, to the employees concerned. The evidence established that the defendant did not satisfactorily attend to this aspect and it was not until Mr Davey was engaged that specially designed safety policies and procedures were implemented. But that was in July 1997, at least two years after the present offences were committed; Mr Douglas thereby suffered injury resulting in absence from employment for a period of at least two months and with a permanent deficit in the use of his right hand. It is no answer, in my view, in reduction of penalty otherwise considered appropriate for the defendant to plead reliance on Warman as the client to take appropriate steps to ensure safety in the workplace for all persons engaged at its premises. True it may be that Warman itself may have offended against the Occupational Health and Safety Act , but that does not, it seems to me, lessen the seriousness of the offences committed here by the defendant as the employer. It is that feature of this case which gives to the assessment of penalty such a degree of importance as will encourage employers in a business similar to that of the defendant to implement appropriate steps to ensure the safety of their employees whose labour is hired to third parties and at the same time to deter employers for failing to take such steps. See also Rodney Paul Dubois v Industry Staffing Services Pty Ltd t/as Action Workforce (unreported, Hungerford J, IRC97/6900, 8 February 1999). The observations of Hungerford J set out above were made in the context of determining the appropriate penalty to be imposed following a plea of guilty. However, we consider that they are equally applicable when considering the liability of a labour hire company under the OH&S Act. A labour hire company cannot escape liability merely because the client to whom an employee is hired out is also under a duty to ensure that persons working at their workplace are not exposed to risks to their health and safety or because of some alleged implied obligation to inform the labour hire company of the work to be performed. In our view, a labour hire company is required by the OH&S Act to take positive steps to ensure that the premises to which its employees are sent to work do not present risks to health and safety. This obligation would, in appropriate circumstances, require it to ensure that its employees are not instructed to, and do not, carry out work in a manner which is unsafe. In the present case, it seems to us that this would require, at the very least, that the appellant give an express instruction to the client and its employee that it be notified before the employee is instructed to work on a different machine. There was no error on the part of the Chief Industrial Magistrate in concluding that the appellant had "failed" to ensure the safety of its employee in not taking this step (although the mere taking of such a step may not, of itself, be sufficient to satisfy the requirements of s15(1) of the OH&S Act). Nor was there, in our view, any erroneous factual finding made in arriving at that conclusion. As a result, the appeal in relation to the liability of the appellant under s15(1) of the OH&S Act is not made out. We add that the labour hirer's obligation under s15 of the OH&S Act may not be met by a term inserted in a contract between that employer and a third party as to the engagement of an employee to do particular tasks to the effect that such employee will not be transferred to do other work without prior notice. The labour hirer has a positive obligation under s15(1) to directly supervise and monitor the work of the employee to ensure a safe working environment.

13 There was no evidence at all in the present case that the defendant regarded itself as having a "special responsibility" or, indeed, any responsibility, to Mr Kuoch. As Mr Cahill submitted, the defendant did not carry out an inspection of the site at Luddenham prior to Mr Kuoch commencing work; it did not carry out any on site inspection or supervision once Mr Kuoch commenced work; it performed no risk assessment of the work; and, it sought to transfer the whole of the responsibility for the safety of its employee to the host employer, Steggles. This was in circumstances where there was no evidence that the defendant had any knowledge of the site or the occupational health and safety policies and practices at that site. Moreover, it did nothing following the death of its employee, Mr Kuoch, that demonstrated any sort of contrition or remorse on its part, claiming it was in no position to do so because soon after the accident it lost its labour hire contract with Steggles and that contract was its only asset. In this respect I note that the accident occurred in July 2000 but the contract was not cancelled until at least October 2000. There was not even an expression of regret by Mr Johnston in his affidavit or in the course of his oral evidence. I cannot help but wonder, in this case, why none of the persons concerned in the management of the defendant were prosecuted.

14 Mr Searle for the defendant, frankly, and quite properly conceded that the offence was serious. As the amended charge indicates, the defendant failed to: 1. Provide or maintain a system of work that was safe and without risk to health. 2. Provide such information, instruction, training and supervision of Mr Kuoch as was necessary in the operation of the tractor.

15 It was readily foreseeable that in the absence of taking appropriate steps to provide a safe system of work and to provide the necessary training, information, instruction and supervision Mr Kuoch might be put at risk of injury in carrying out the work of tractor driving.

16 The seriousness of the offence is aggravated by the fact that the defendant made no effort to ascertain Mr Kuoch's level of comprehension of the work he was to perform and took little or no account of his written or spoken comprehension of the English language. The only minor consideration in the defendant's favour was that in a report prepared by the defendant after the accident it was said that the defendant informed Steggles that all new employees must undertake a safety induction program prior to commencement and that the defendant was assured this would occur. The defendant did follow up on this requirement and merely called Steggles after Mr Kuoch commenced at the Luddenham site to inquire about Mr Kuoch's performance.

17 The incidence of labour hire is now common and widespread. Any person engaged in hiring out their employees needs to understand that they have the same responsibilities as other employers in respect of occupational health and safety and if they fail in that regard they face very significant financial penalty. There is a strong case for including a significant element for general deterrence in sentencing the defendant: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, 99 IR 29. As to specific deterrence, the evidence was that "There was no intention for the Defendant to ever engage in any form of commercial or trading activity again." If that is the case, why hasn't the defendant simply been wound up or de-registered? I propose to include an element for specific deterrence in accordance with the Full Bench judgment in Capral.

18 The gravity of an injury resulting from a breach of the Act does not of itself dictate the amount of penalty. However, the occurrence of death or serious injury may manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected: Rodney Morrison v Powercoal Pty Limited [2003] NSWIRComm 416 at [32] and the cases referred to therein. In this case a death was the consequence of the defendant's breach. The defendant submitted, however, that: [T]he accident resulted from the independent actions of the deceased and no amount of supervision would have prevented the accident. In such a situation, it is submitted that the breach by the Defendant was not one where there was every prospect of serious consequences .

19 The defendant has approached the issue from the wrong perspective. It is not a matter of how the accident occurred but rather the question is whether circumstances were such that an employer's act or omission created a situation of potential danger to the health and safety of employees at work: Haynes v C I & D Manufacturing Pty Limited (1994) 60 IR 149 at 157. In this case the employer failed to provide or maintain any system of work or any information, instruction, training and supervision to Mr Kuoch so as to ensure that he could operate a tractor safely. This was in circumstances where the employer took little or no account of Mr Kuoch's written or spoken comprehension of the English language. It was said for the defendant that Mr Kuoch had a forklift driver's licence. Apart from a statement by Mr Johnston that Mr Kuoch had such a licence and a statement in the defendant's report following the accident that Mr Kuoch possessed a forklift driver's licence - both statements being second hand - there was no other evidence confirming this was the case. The evidence in this respect does not satisfy me that Mr Kuoch had the licence but even if he did, no evidence was adduced that possessing a forklift driver's licence was proof that Mr Kuoch was competent to operate a tractor.

20 The submission by the defendant that its breach was not one where there was "every prospect of serious consequences" is simply not sustainable. The fact is that the defendant would not have known what the consequences were for Mr Kuoch's health and safety because it made only a minimal attempt to ensure it. As it was said in WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 at 85: Employers are required to maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. They must adopt an approach to safety which is proactive and not merely reactive.

21 The maximum penalty in this case is $550,000. This amount indicates the gravity of the subject offence as perceived by both Parliament and the community.

22 There are subjective factors to be taken into account in mitigation. This includes the early plea of guilty and the defendant is entitled to a discount of its penalty for the utilitarian value of such a plea. The Court was informed that the defendant cooperated with the investigating authority and this should be taken into account in the defendant's favour.

23 The question of consistency in sentencing arises because of the conviction and sentencing of Steggles in relation to the same incident that gave rise to the charge against the defendant. Steggles was fined an amount of $159,250 under s 16(1) of the Occupational Health and Safety Act in circumstances where the maximum penalty was $825,000. The difference in the maximum penalty is to be taken into account but in doing so I consider that the objective seriousness of the offence committed by the defendant in this case was greater than that of Steggles for the reasons I have canvassed in this judgment. The defendant was the employer of Mr Kuoch; it took no reasonable precautions to ensure that in working at the Luddenham site Mr Kuoch's health and safety would not be put at risk. The defendant could offer no explanation for this failure.

24 The final matter for consideration is the defendant's capacity to pay any fine. The evidence of Mr Johnston was that the defendant has no assets of any kind. This was said to have arisen from the loss by the defendant of its only client and contract for services in late 2000. As Mr Searle submitted, s 6 of the Fines Act 1996 requires that, in the exercise of a discretion to fix the amount of any fine, the court is required to consider, amongst other things, "such information regarding the means of the accused as is reasonably and practically available to the court for consideration".

25 The evidence supporting the defendant's reliance on s 6 of the Fines Act consisted essentially of Mr Johnston's affidavit attached to which was a copy of the defendant's balance sheet for the twelve months ending June 2003. It showed net assets of $1,638.95.

26 It emerged in the cross-examination of Mr Johnston that whilst the defendant lost the contract with Bartter Enterprises Pty Ltd to supply labour, a related company, Choice HR, now supplies labour to Bartter. Moreover, no information was provided by the defendant as to how any assets held by the defendant at the time it lost its labour hire contract with Bartter were disbursed. There was no evidence of this, but for a defendant to plead impecuniosity on the basis of its latest balance sheet showing next to no assets, must inevitably raise in the mind of the Court whether there were any assets at the time of the incident and, if so, what happened to those assets and why. Adding to the Court's disquiet is the fact that a corporation related to the defendant now supplies labour to Bartter.

27 It may be inferred from the defendant's submissions that what was being put was that the imposition of a large penalty on the defendant would be futile given its financial circumstances. If one accepts the 2003 balance sheet as representing the defendant's means, what the defendant submitted regarding futility because of incapacity to pay might be so. However, in WorkCover Authority of New South Wales (Inspector Benbow) v Converquip Pty Ltd (2001) 106 IR 258 at 271-272 Wright J, President observed: 54 I accept that the financial situation of the defendant, at least when compared to many cases which come before the Court, is quite unusual. I accept that it has occurred independently of these proceedings or the defendant's culpability under the Act. That is, I accept that the situation of the defendant has arisen from commercial decisions taken bona fide by those controlling it on the basis that the steps were considered to be in the defendant's interests. Nevertheless, to impose a penalty entirely out of step with the objective circumstances of the offence, by having regard as the crucial consideration to the evidence before the Court as to the defendant's financial circumstances, would, I consider, be inconsistent with the role of the Court and would, in particular, represent a failure to impose a sentence with appropriate regard to the importance of deterrence in the sentencing process. In this case general deterrence has particular relevance.

28 In this case too, general deterrence has a particular relevance and so I do not consider that a penalty commensurate with the seriousness of the offence would be at all futile.

29 I have considered the information provided as to the defendant's means but I do not propose to place much weight on it.

30 I consider an appropriate penalty to be $300,000. However, this should be discounted by 25 per cent to take into account the utilitarian value of the early guilty plea and a further 2.5 per cent for the other subjective factors. This results in a penalty of $217,500.

1. The offence is proven and a verdict of guilty is entered.

2. The defendant is convicted of the offence as charged.

3. The defendant is fined an amount of $217,500 with a moiety thereof to the prosecutor. 4) The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs.

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