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.