Inspector Barbosa v McDonalds Australia Limited

PROSECUTOR: Mr P Skinner of counsel SOLICITOR: Mr N Correy LEGAL REPRESENTATIVES: Moray & Agnew Solicitors

DEFENDANT: Mr M Harmer Harmers Workplace Lawyers

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: Walton J, Vice-President 23 June 2003

WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR JOSE FEIXEIRA BARBOSA) v McDONALD'S AUSTRALIA LIMITED

Prosecution under s15(1) of the Occupational Health and Safety Act 1983

1 This decision concerns a prosecution brought by Inspector Jose Feixeira Barbosa of the Workcover Authority of New South Wales ('the prosecutor') under s15(1) of the Occupational Health and Safety Act 1983 ('the Act') against McDonald's Australia Limited ('the defendant'), in which the defendant has entered a plea of guilty. 2 The charge resulted from an incident at the McDonald's Restaurant at 312 Canterbury Road, Hurlstone Park on 6 August 1998, which, it was agreed, led to Demetrios Kyriakidis, a fifteen-year old employee of the defendant ('the injured employee'), suffering burns to his head and upper body. The injuries were sustained after the injured employee's supervisor instructed the employee to dispose of some oil, which was hot, having only recently been emptied from a deep fryer into a bucket by the supervisor. Whilst engaged in the disposal of the oil into a large 'dumpster' bin at the rear of the defendant's premises, the injured employee lost his balance on a slippery floor, causing the oil to splash over his face, arms, neck and chest ('the accident'). This resulted in the injured employee being burnt on his face, forearms, biceps, neck, chest and left ear, and being unable to resume his normal work for more than seven days. The Charge 3 The amended charge was in the following terms:

I, Jose Feixeira Barbosa of the WorkCover Authority of New South Wales, 400 Kent Street, Sydney in the State of New South Wales, an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health & Safety Act. 1983 and empowered under section 48 of the said Act to institute proceedings in the within matter allege that McDonald's Australia Limited (ACN 000 697 763) a company incorporated in New South Wales with registered office at 21-29 Central Avenue, Thornleigh in the State of New South Wales ("the defendant"), on 6 August 1998 at the McDonalds Restaurant outlet at 312 Canterbury Road, Hurlstone Park in the state of New South Wales, the defendant being an employer, DID FAIL to ensure the health, safety and welfare at work of all its employees, and in particular Demetrios Kyriakidis, contrary to section 15(1) of the Occupational Health & Safety Act, 1983 in that it:

(a) Failed to provide plant for the disposal of hot cooking oil that was safe and without risks to health. (b) Failed to make arrangements for ensuring safety and absence of risks to the health of its employees, and in particular Demetrios Kyriakidis, in that contrary to the Occupational Health & Safety (Manual Handling Regulations), 1991 it contravened: (i) the National Standard for Manual Handling (1990), paragraph 3.1(a) in not taking all workable steps to make sure that a bucket used for carrying hot oil was designed and constructed and maintained to be as far as workable, safe and without risks to health and safety when manually handled; (ii) the National Standard for Manual Handling (1990), paragraph 4.1-4.3 requiring the defendant to examine and assess the risks in relation to manual handling. (c) Contravened the National Code of Practice for Manual Handling recommendation that young employees under the age of 18 years not be required to lift or carry objects weighing more than 16 kilograms without mechanical or other assistance. 4 The particulars of the charge were as follows: 1. The defendant at all material times employed Demetrios Kyriakidis ("the employee") as a casual crew person. 2. At all material times the defendant was the occupier of premises at 312 Canterbury Road, Hurlstone Park, New South Wales, which premises were being operated as a fast food restaurant ("the workplace"). 3. The employee had commenced employment with the defendant as a casual crew person on 12 January 1998 at a time when he was slightly less than 15 years of age having been born on 15 March 1983. 4. At all material times between 12 January 1998 and 6 August 1998 the employee's duties at the workplace involved cooking burgers, mopping and brooming the floor, cooking in hot oil, cleaning the car park, washing up all equipment and, after closing time, changing the hot cooking oil, filtering it and skimming it. 5. At around 10.50pm on 6 August 1998 the employee was instructed to carry hot cooking oil, which had been drained from the kitchen deep fryers into a stainless steel bucket ("the bucket"), to a dumpster located inside a garage at the rear of the main restaurant building, a distance of approximately 30 metres from the rear door of the main building. 6. The employee had carried the bucket and was lifting it to dispose of the hot oil into the dumpster, but the floor was slippery and caused him to lose his balance and drop the bucket onto the floor and in doing so hot oil was caused to splash over his face, forearms, neck, chest and left ear ("the incident"). 7. The incident resulted in injuries to the employee involving burns to his face, forearms, biceps, neck, chest and left ear. 8. Following the incident the employee was unable to resume his normal work for in excess of seven days. 9. At the time of the incident the bucket which was being carried by the employee had a capacity of 25 litres and was filled to approximately 80% capacity. 10. The bucket at all material times had no handles to enable it to be securely gripped. 11. At all material times the edges of the bucket were sharp rendering it difficult to grip. 12. The task of removal and disposal of the oil from the deep fryers was conducted by the defendant on a regular basis. 13. Shortly prior to the incident the task of removal of the oil from the deep fryers was being carried out by the crew trainer on duty at that time, Konstantinos Aslanidis ("the supervisor"). 14. The supervisor instructed the employee to dispose of the hot cooking oil in the dumpster after he had removed it from the deep fryers. 15. At all material times on and prior to the incident the defendant provided personal protective equipment ("PPE") which included gloves, face shield and apron. 16. The defendant's documented Station Observation Checklist stipulated that PPE equipment was to be worn during the performance of the work involving removal and disposal of hot cooking oil. 17. At the time the work was being carried out the supervisor was wearing a set of PPE equipment. 18. At all material times other sets of PPE equipment were available from the manager's office upon request. 19. The employee was not instructed by the supervisor or otherwise to wear PPE equipment at the time of the incident. 20. The employee was not instructed by the supervisor to obtain PPE equipment from the manager's office. 21. At all material times prior to 6 August 1998 the employee was not provided with information relating to the availability of PPE equipment and the requirement as to the wearing of such equipment during the performance of the work of removing and disposal of hot cooking oil. Statement of Agreed Facts 5 The prosecutor tendered a Statement of Agreed Facts, which was in the following terms: 1. The Informant is and was at all material times an Inspector duly appointed and empowered by Section 48 of the Occupational Health & Safety Act (NSW) 1983 to institute the within proceedings. 2. At all material times McDonald's Australia Limited (ACN 000 697 763) was a company incorporated in New South Wales with registered office at 21-29 Central Avenue, Thornleigh in the state of New South Wales ("the defendant"). 3. At all material times the defendant was an employer in New South Wales and throughout Australia. 4. The defendant at all material times employed Demetrios Kyriakidis ("the employee") as a casual crew person. 5. At all material times the defendant was the occupier of premises at 312 Canterbury Road, Hurlstone Park, New South Wales, which premises were being operated as a fast food restaurant ("the workplace"). The workplace operated (on 6 August 1998) and continues to operate the following trading hours: Sunday to Thursday (inclusive) - 6.00am to 11.00pm, Friday and Saturday - 6.00am to 12 midnight and employed (on 6 August 1998) 70 employees (crew and managers) and continues to employ approximately 90 employees (crew and managers). 6. The employee had commenced employment with the defendant as a casual crew person on 12 January 1998 approximately 7 months before the incident at a time when he was slightly less than 15 years of age having been born on 15 March 1983. The employee had been trained in the various tasks associated with the preparation of food for sale at the workplace. 7. At all material times between 12 January 1998 and 6 August 1998 the employee's duties at the workplace involved cooking burgers, mopping and brooming the floor, cooking in hot oil, cleaning the car park, washing up all equipment and, after closing time, changing the hot cooking oil, filtering it and skimming it. 8. Shortly prior to the incident the task of removal of the oil from the deep fryers was being carried out by the crew trainer on duty at that time, Konstantinos Aslanidis ("the supervisor"). The supervisor commenced employment at the workplace on 13 March 1995 as a casual crew person and had been employed by the defendant approximately 3 years and 5 months before the incident. At the time of the incident, the supervisor was employed as a crew trainer and had held that position for approximately 2 years. In this position the supervisor was responsible for the following: (a) training restaurant crew on the different areas and operations within the restaurant including workplace safety; (b) consistently following recommended procedures (c) being aware that crew need to know and being able to communicate with them (d) being leaders within the crew (e) consistently reinforcing McDonald's standards. 9. The supervisor would have been aware from his training that the defendant required that employees were only to perform tasks in which they had been trained and verified as competent. 10. At around 10.50pm on 6 August 1998, despite his training, the supervisor, Mr Aslanidis, instructed the employee to dispose of the hot cooking oil, which had been drained from the kitchen deep fryers into a stainless steel bucket ("the bucket"), to a dumpster located inside a garage at the rear of the main restaurant building, a distance of approximately 30 metres from the rear door of the main building. 11. The employee had carried the bucket and was lifting it to dispose of the hot oil into the dumpster, but the floor was slippery and caused him to lose his balance and drop the bucket onto the floor and in doing so hot oil was caused to splash over his face, forearms, neck, chest and left ear ("the incident"). 12. Following the incident the employee received first aid from staff at the restaurant. 13. The incident resulted in injuries to the employee involving first degree burns to his face, forearms, biceps, neck, chest and left ear. 14. Following the incident the employee was unable to resume his normal work for in excess of seven days. 15. At the time of the incident the bucket which was being carried by the employee had a capacity of 25 litres and was filled to approximately 80% capacity. 16. The bucket at all material times had no handles to enable it to be securely gripped. 17. At all material times the bottom edge of the bucket was sharp and the top edge of the bucket was thin rendering it difficult to grip. 18. The task of removal and disposal of the oil from the deep fryers was conducted by the defendant on approximately a weekly basis. 19. At all material times on and prior to the incident the defendant provided personal protective equipment ("PPE") which included gloves, face shield and apron for the performance of the task of filtering and disposing of hot oil. 20. The defendant's documented Station Observation Checklist stipulated that PPE was to be worn during the performance of the work involving removal and disposal of hot cooking oil. 21. At the time the work was being carried out the supervisor was wearing a set of PPE. 22. At all material times other sets of PPE were available from the manager's office upon request. 23. The employee was not instructed by the supervisor or otherwise to wear PPE equipment at the time of the incident. 24. The employee was not instructed by the supervisor to obtain PPE from the manager's office. 25. Immediately subsequent to the incident, pending the delivery of the new oil disposal cart, the defendant implemented a system of disposal of the hot oil which required the oil to be placed in sealable oil containers with appropriate handles for carrying and which were not to be emptied into the bulk oil disposal dumpster but were collected by the oil disposal company themselves. 26. On 9 October 1998 a McDonald's approved oil disposal cart was delivered to the workplace for the disposal of oil. 27. Additional training and re-enforcement has been provided to the defendant's crew and management at the workplace on all work practices including disposal of oil and occupational health and safety guidelines. 28. The defendant fully cooperated with WorkCover in relation to its investigation of this incident. This co-operation is demonstrated by: (i) Notifying WorkCover of the incident on 7 August 1998, being the first day after the incident when WorkCover's offices were open. (ii) The defendant's staff fully co-operating in interviews conducted by WorkCover in relation to the incident and providing additional details that were not able to be initially provided in the interviews. (iii) The defendant's National Workplace Safety Manager participating in a detailed interview with the informant in relation to the incident. (iv) The defendant providing WorkCover with all relevant documentation in relation to the incident. The Course of the Proceedings 6 Proceedings relating to the 1998 incident were commenced in August 2000 and originally involved three separate prosecutions of the defendant under the Act. Following discussions between the prosecutor and defendant, two prosecutions were withdrawn and the remaining charge (now before the Court) was amended. In these circumstances, the defendant entered a plea of guilty. The matter was listed for hearing on 29 October 2001 and following that hearing, judgment was reserved.

7 Subsequently, the parties by consent sought, and were granted, leave to re-open the proceedings to make further submissions addressing the appropriate treatment of the defendant's prior convictions. These further submissions were received in writing from the defendant on 15 February 2002, the prosecution on 21 March 2002 and the defendant in reply on 7 May 2002. The decision was again reserved.

8 However, on 5 August 2002 a judgment was delivered by Kavanagh J in another occupational health and safety prosecution of the defendant. It was commenced on 23 May 2000 by Inspector Louise May of the Workcover Authority of New South Wales in IRC Matter No. 2256 of 2000, in relation to an accident that occurred on 23 May 1998, to which the defendant also pleaded guilty. Following the filing of joint short minutes of order and a note in support, the parties were again granted leave to re-open proceedings to file further written submissions addressing the impact of her Honour's decision on the sentence in this case. These submissions were received on 24 September 2002 and 14 October 2002. Evidence of the Prosecutor 9 In addition to tendering the statement of agreed facts, Mr Skinner of counsel, who appeared for the prosecutor, called Mr Jose Feixeira Barbosa, the informant, to give evidence. Mr Skinner tendered through the Inspector a report titled "Factual Inspection Document", which consisted of a statement of evidence compiled by the Inspector following inspections of the Hurlstone Park site on 10 September 1998 and 26 March 1999. Ten photographs taken by the Inspector during his inspection of the worksite (with captions and an index) were also tendered. The defendant raised an issue as to the veracity of some of those captions and index entries. However, no formal objection was taken. The defendant pursued the issue by adducing its own evidence and making submissions as to the process for oil disposal that it implemented after the accident.

10 The prosecutor also tendered, without objection, two records of interview; one of each by the Inspector with the injured employee and the injured employee's supervisor. The defendant took issue with some of the contents of the record of interview between the injured employee and the Inspector. It did not require the persons making the statements for cross-examination. Rather the defendant tendered evidence to support its alternative account.

11 The following questions and answers formed part of the Record of Interview between the Inspector and the injured employee:

Q: Prior to your accident on 6 August 1998, what was the normal procedure to carry and dispose of the hot cooking oil? A: Wearing all the safety equipment, and only the person in charge of the job did it.

Q: Who was the person in charge for that job, on that particular day? A: Kon Aslanidis.

Q: Are you the only employee carrying and disposing of the hot cooking oil? A: No.

Q: What are the names of the other employees? A: Martin, Kon Aslanidis, Michael Juda, Andrew Juda and Charlie Hana.

Q: What were you told about carrying and disposing the hot cooking oil? A: I was just told to do it.

Q: Who told you to do it the way you did? A: Kon Aslanidis.

Q: Do you normally carry and dispose of the hot cooking oil the way you did on the day of your accident? A: Yes.

Q: Have you received any formal training on a safer way of doing that job? A: No.

Q: Did you receive any training as to how to do your job safely? A: No.

Q: How often do you have to carry and dispose of the hot cooking oil? A: Depends on who is working at the time but it has to [be] done every Thursday and I normally do it maybe once or twice a month.

Q: How long have you been doing it that way? A: Since I started there. 12 The following questions formed part of the record of interview between the Inspector and the injured employee's supervisor, Mr Kon Aslanidis: Q: Are you aware of the circumstances surrounding the accident to Demetrios Kyriakidis that occurred on the 6 August 1998? A: Yes. Q: Can you please describe those circumstances? A: I was cleaning the fryers and I was emptying the oil into the stainless steel buckets we were using at the time and Demetrios (Mitch) was helping me take them to the oil drum outside. No-one witnessed the accident. ... Q: Does McDonald's Australia Ltd own the stainless steel bucket that Mr Kyriakidis was using to carry the hot oil on the day of his accident? A: I'm pretty sure they were there since the first day I started there.

Q: Was Mr Kyriakidis required to perform the task of removing, carrying and disposing the hot cooking oil on a regular basis? A: Not that I know of, that was the first time I asked him to help. What went on when I wasn't there, I don't know.

Q: What training did Mr Kyriakidis receive prior to his accident on 6 August 1998 to perform his duties safely? A: I'm pretty sure that he was just Station Observation Checklist (SOC) verified. If he was or not I wasn't there 24 hours a day, therefore I am not sure. … Q: Was Mr Kyriakidis required to wear Personal Protective Equipment (PPE) while doing this type of activity on that particular day, 6 August 1998? A: Yes.

Q: Why was he not wearing PPE as per McDonald's Australia Ltd policy? A: We had one set and I was wearing them because I was the one actually doing the oil change.

Q: How many sets of PPE were available at the time of the incident to Demetrios Kyriakidis on 6 August 1998? A: We had access to one of each: gloves, apron and visor. There were spares kept downstairs in the office.

Q: Who has access to the office? A: The managers.

Q: What is the name of the Manager on site at the time of the accident to Demetrios Kyriakidis on 6 August 1998? A: Malina Aslanidis. … Q: Why wasn't another set of PPE provided to Demetrios Kyriakidis on that particular day? A: I don't know, I guess I should have asked for another set to be provided. 13 A copy of National Standard Manual Handling 1990 was also tendered. The Inspector gave evidence orally that the National Code of Practice for Manual Handling referred to in the application repeats the contents of that National Standard.

14 As to the defendant's prior convictions, the prosecutor tendered a document taken from the Workcover Authority prior convictions database showing one prior conviction of the defendant in the Chief Industrial Magistrates' Court. However, reference was also made by the prosecutor in submissions to a second conviction (not recorded on the Workcover Authority prior convictions database), relating to a 1996 incident, which was the subject of my decision in Workcover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Limited (1999) 95 IR 383 ('the 1996 incident'). Both of these convictions were conceded by the defendant as being relevant to sentencing in this matter. Later in the proceedings reference was made to a third conviction (in IRC Matter No. 2256 of 2000). There was an issue as to whether the Court should take that conviction into account in sentencing, which will be discussed later in this judgment.

Evidence of the Defendant 15 The Vice President, National Development Director of McDonald's Australia Limited, Ms Natalie Berney, gave evidence for the defendant. Ms Berney was one of twelve members of the McDonald's Top Management Team and had been appointed to her current position from prior roles within the company as Director of Design and National Workplace Safety Manager. 16 Ms Berney swore a lengthy and detailed affidavit, with extensive, voluminous annexures, providing a background not only to the incident, but also to the defendant's operations and occupational health and safety practices in general. In order to assist in following the evidence, the defendant tendered an outline of evidence setting out the areas addressed within the affidavit and the relevant factual material in the annexures relied upon by the defendant in support of the witness' statements. The broad areas addressed in the document were: · The defendant's contrition · The defendant's character as a corporate citizen · Overview and nature of the defendant's operations · The defendant's commitment to Occupational Health and Safety · Occupational Health and Safety prior to 1996 · Occupational Health and Safety from 1996 to 6 August 1998 (the date of the accident) · Background to the incident · Actions taken subsequent to the incident

17 I do not propose to summarise that evidence. I will refer to those components of the evidence which received emphasis in the defendant's submissions, or which otherwise assist me in reaching findings of fact and in my consideration of the appropriate penalty. I note that during the proceedings the defendant was requested to draw attention to particular components that it relied upon in its case. In particular it referred to the following evidence, all annexed to Ms Berney's affidavit: 1. Manual handling checklist 2. Health and Safety Package (containing health and safety policy and specifications for the role of crew trainer) 3. The contents of a filtering procedures video, demonstrating oil disposal using the 'Prince Castle' oil filtering machine 4. Workplace Safety Training Matrix - an overview of employee health and safety training October 1996 - October 1997 5. Safety Alert Register 1998 6. Various Station Observation Checklists for the injured employee 7. Station Observation Checklist S6F December 1997 8. Fried products - Operations and Training Manual 'filtering oil' (printed in America, 1992). 9. Equipment Update Newsletter - 3 March 1997 10. Memorandum from Natalie Berney regarding implementation of oil disposal cart requirements throughout McDonald's system - 14 July 1998 11. Health and Safety Training Manual - Oil disposal for stores with stairs (issued 3 March 1999); setting out alternative options for stores with stairs which make use of the oil disposal cart inappropriate. 12. (Revised) Fried Products - Operations and Training Manual (printed in Australia in 1999) 18 Ms Berney stated that she personally, and the management team, took the subject of workplace injury very seriously, took extensive steps to prevent workplace incidents and deeply regretted the injury to Mr Kyriakidis on 6 August 1998. This was evidenced by the defendant taking every available step after the incident to rectify the problem, such as by ensuring the injured employee's well-being (by immediately providing first-aid and later, a rehabilitation plan), co-operating fully with Workcover in its investigation, immediately changing the oil disposal system to ensure this accident could not occur again and by entering a plea of guilty as soon as appropriate charges had been settled.

19 As to the defendant's character as a corporate citizen, the witness' evidence referred to the defendant having been the recipient of five different awards or commendations for its conduct as an employer and making extensive community contributions outside this role, such as, operating ten Ronald McDonald houses for families of seriously ill children, operating a trust for seriously ill children and making substantial donations to children's units in various hospitals throughout Australia. The defendant also provides approximately five million dollars per annum in sponsorship programmes for education, the environment, the arts and sports.

20 An overview of the scope and nature of the defendant's operations was also provided, which included statistical information about the number of employees, turnover rates and geographical spread of operations, as well as typical ratios of management to crew. This information was complemented by different procedural and policy documents explaining the recruitment process, and identifying the characteristics the defendant looked for in its staff and supervisors and the experience they must accrue in order to progress from junior to more senior positions. In this context, Ms Berney described the inherent nature of the working environment that comprised the majority of the defendant's operations (that is, restaurant kitchens) as "requiring ongoing diligence to ensure that employees (and other persons) are not injured as a result of those operations".

McDonald's always has had, and continues to have, a strong commitment to the safety of all persons in its workplaces (including employees, franchise employees, contractors, suppliers and visitors) …Given the scope of McDonald's endeavours to ensure occupational health and safety in its workplaces, it [was] impossible… to completely outline what McDonald's had done to ensure that it complied with its obligations…not only because of the volume of materials that make up that occupational health and safety system, but also because it [was] so inherently integrated into every part of McDonald's operations.

22 Regarding the defendant's endeavours to ensure occupational health and safety prior to 1996 (when Ms Berney commenced employment as National Workplace Safety Manager), Ms Berney gave evidence that the defendant had earlier ensured workplace safety by adopting the standardised (American) McDonald's corporation Operations and Training Manual and other reference materials (which ensured restaurants were operated in the intended manner and therefore, safely). The defendant had also relied on the extensive steps taken by McDonald's corporation to ensure that the safest possible equipment was installed in the restaurants. 23 The witness also gave evidence, however, of the defendant having developed and implemented additional resources with a view to promoting health and safety. Its locally produced Procedures and Policies Manual, given to employees upon commencement with the company, referred to the Occupational Health and Safety Act 1983 and provided employees with an overview of their rights and responsibilities regarding health and safety. The 'New South Wales Health and Safety Package' contained excerpts from the Act and highlighted obligations applicable in this jurisdiction, including the requirement to establish occupational health and safety committees. It set out the procedures, functions and powers of the Committee, which included undertaking safety inspections. It provided that safety inspections were to be conducted in accordance with a standardised checklist. One of the items the checklist required was "crew completing stock up or involved in any other lifting are trained in safe lifting practices". The manual also included a checklist for manual handling and a procedure to be followed for the treatment of burns. 24 In addition to requiring safety committees to routinely undertake safety inspections, the defendant arranged for regular auditing of its restaurants by its Operations Consultants (which assessed individual restaurants against a number of operational criteria) and random auditing of restaurants by employee relations consultants. The random audits contained a section dedicated to occupational health and safety, compliance with which was a minimum standard for 'passing' the random audit. Notably, one of the required criteria in this section was the display of the "Manual Handling Checklist" near the stock area. 25 According to the witness, the critical part of the defendant's safety system was its integrated training for 'crew' employees. It involved:

breaking all of the work that was performed in McDonald's restaurant kitchens down into particular tasks. McDonald's then analysed the steps that were required to perform each of these tasks properly and safely and documented those tasks in what are referred to as Station Observation Checklists ('SOC's') ( therefore safety was integrally incorporated into how the tasks were performed ). (Emphasis added). 26 The "Manual Handling Checklist" was an example of such a 'task breakdown'. It was annexed to Ms Berney's affidavit and formed part of the Occupational Health and Safety Manual referred to above. This checklist specified ten steps for the safe lifting of loads, under the heading "save your back" and with pictorial cues. It was in the following terms:

1. Assess Load 2. Get close to the load 3. Feet apart for balance 4. Relax knees 5. Lower body and bend knees. Let your back bend if it wants to. 6. Lower your head 7. Get a firm grip 8. Now…Raise your head. 9. Straighten legs. 10. Lift and turn your feet before you walk - don't twist. 27 This document was not an SOC as such, but was part of the Policies and Procedures Manual. 28 The SOC's for each of the tasks performed by crew members in the defendant's stores were tendered in a bundle. Regarding the lifting of loads, the relevant checklist was SOC T5 "Orientation" which provided that "store policies" should be "covered", including: "safety; safety committee, requirement to report all incidents, use of safety equipment, explain safe lifting practices". Ms Berney stated that it would have been usual for the injured employee to have had these safe lifting techniques explained to him during his initial training, by reference to the Manual Handling Checklist. This component was ticked off on the SOC that was tendered by the defendant as part of the injured employee's training records, although the record produced was not entirely clear. 29 The defendant drew particular attention to SOC S6F relating to oil filtration as applicable to the work occurring during the incident. Its stated objective was: "Filter oil using correct safety procedures resulting in extended shortening life and finished product quality". It contained the instruction "put on protective gear" and the warning "Caution! Hot shortening can cause severe burns. Put on protective gloves, face shield and apron." There were two versions tendered by the defendant dated July 1994, one for built in filtration and one for portable filtration. Both related to the re-use of oil. Neither referred to an oil disposal procedure. SOC HS1 regarding Health and Safety and 'trash' handling carried the objective: "To take simple precautions to ensure a safe working environment" and the instruction to "put on protective gloves and apron". The defendant did not, however, make specific reference to it. Although there was a checklist for 'Pre-Close/Close Grill Area' (SOC S6), which also referred to oil filtration, there was no SOC specifically directed towards oil disposal and none of these SOCs contained a general criterion regarding safety awareness or safe performance. 30 This was corrected in a later version of S6F from December 1997, which did establish a specific procedure for oil disposal. It utilised stark, visual prompts to warn against and emphasise hazardous steps within the checklist. In addition to the requirement to wear personal protective equipment, it now specified the following hazards to be controlled by the procedure: "hot oil splashes, hot surfaces, manual handling". A new section "Discarding Oil" had been added. It was in the following terms:

CAUTION! Hot oil is dangerous and will cause severe skin burns. Handle with extreme caution. When discarding old oil, the oil should be drained from the fryer into an oil removal cart. ( Do not use a bucket to transfer oil to the bulk waste shortening container). The cart should then be taken to the waste shortening container and the oil pumped into the waste shortening container. 31 This version set out a common procedure for built-in and portable systems. It was entitled "Filtering Procedures: Built-In and Portable Systems". It established that when discarding old oil, an oil removal cart should be used and a bucket must not be used. 32 This policy reiterated the provisions in the (American) Operations and Training Manual from 1992, which used similar language to warn of the hazard constituted by hot oil as follows:

CAUTION: Hot oil is dangerous and will cause severe skin burns. Handle with extreme caution . When discarding old oil, the oil should be drained or pumped from the fryer into an oil removal cart. The cart should then be taken to a grease barrel and the oil pumped into the grease barrel. The instructions included steps to minimise the risk of splashed oil and other hazards, such as slippery floors. They also referred to the requirement to wear personal protective equipment: gloves, apron and face shield. 33 Further evidence regarding training was also provided. This included evidence going to the qualifications and characteristics of crew trainers. Ms Berney also described the contents of audio-visual aides used to assist in training staff in the SOC's. Specific reference was made to a video entitled "Step-by-Step Filtering Procedures". By agreement of the parties the contents were not viewed by the Court; the defendant relied on the explanation of them by the witness. Ms Berney's evidence was that:

This video was made, I think, in late 1980. It is a US video and it clearly states that personal protective equipment must be used, when it must be used, and gives a sample of a person doing filtering processes with personal protective equipment on and it goes through step by step what is involved in filtering oil using the Prince Castle machine.

34 As to the period between the 1996 incident and the accident, Ms Berney gave evidence that the 1996 incident "triggered [the defendant] to increase its focus on health and safety throughout its operations". A number of steps were taken. In particular:

· The witness was appointed to the position of McDonald's National Workplace Safety Manager and given wide powers to improve the management of occupational health and safety within the McDonald's system. · A core group of senior managers was appointed to be the 'Systems Review Group' to assist Ms Berney in the assessment of systems and implementation of changes. · Upon commencement the witness personally undertook a full review of the defendant's occupational health and safety systems "against the Australian Standard for OH&S Management systems and in consultation with personnel at all levels", leading to the creation of the Health and Safety Strategic Plan 1996-1997. 35 Regarding the use and disposal of hot oil Ms Berney gave evidence of having identified that it posed a risk to employees shortly after commencing employment with the defendant. It had come to her attention that although the (McDonald's Corporation) Operations and Training Manual required the use of a task-specific oil disposal cart, this was not reflected in SOC S6F, nor in the plant required for each store. That is, individual stores had not previously been required to purchase that purpose-built cart. Ms Berney gave evidence that while the cart was a compulsory item in the start-up pack for new stores, older stores had not been required to purchase one. Rectification of this problem had been incorporated into an overall plan being overseen by the Systems Review Group, but it had been ranked as less pressing than other risks because the group had decided that the risk was adequately addressed through existing processes (including the requirement to wear personal protective equipment and the work generally being performed late at night and by more experienced crew). Although investigations had been carried out into the local manufacture of a purpose-built cart, these proved fruitless - no appropriate supplier having been found. Only the following steps were taken at that time:

1. Stores were encouraged to purchase a removal cart in an 'equipment update' in March 1997, and 2) SOC S6F was amended in 1997 (to the above form referring to 'oil removal cart'). 36 Ms Berney stated that in keeping with the defendant's risk management approach, immediately after the Wollongong incident a report was commissioned from a firm of external consultants. They were engaged to "identify and analyse the range of occupational health and safety risks associated with the operations of a McDonald's restaurant". Their findings, presented to the company in May 1996, were annexed to Ms Berney's affidavit. 37 The audit methodology established risk scores (out of 25) and risk levels (low, medium, high), where a score of 1-5 represented a low risk level, 6-12 a medium risk and 13-25 a high risk level. Amongst numerous others, were the following relevant risks, scores and levels. The report also set out the likelihood and consequence of the risk. Risk Description Likelihood Consequence Score Level Filtering Splashes, burns, electrocution, manual handling, solidification of shortening Moderate Moderate 9 Medium Filtering and cleaning vat Burns, tripping - use of portable machine (problem only in old stores) Likely Minor 8 Medium Changing oil Decanting into bucket for transport to waste storage area Likely Minor 8 Medium Manual Handling Moving boxes > 12 kg, assembling equipment up to 680kg Unlikely Moderate 6 Medium

38 In relation to the risk posed by the use of buckets in oil disposal, the witness confirmed under cross-examination that the risk had been identified as a medium risk by the external auditors. It had been scored at '8'. The risk relating to electrical cabling, highlighted by the 1996 incident, scored '10' and was also identified as a medium risk. No high risks were identified by the external audit. The risk scored 10 was the highest risk identified by the external auditors. 39 Ms Berney gave evidence of a number of risks having been identified in consequence of the audit and other steps outlined above. Ms Berney's evidence was that, if a serious risk was identified, it was dealt with as quickly as possible regardless of how difficult it was to manage. 40 Specific action involving extensive expenditure was taken to address the risk identified in consequence of the 1996 incident in Wollongong. This involved an electrical review and upgrade throughout all the defendant's stores. 41 A hierarchy of controls was adopted to address the manual handling risk (identified as a 'medium risk' by the external consultants), although this did not deal specifically with procedures relating to the handling of oil. This involved working with suppliers to decrease the weight of individual 'pre-mix' drink containers, thereby eliminating much of the risk in relation to them. It should also be noted that these were industry standard containers, and therefore potentially had a significant beneficial flow-on effect. 42 The Systems Review Group reviewed the risk arising from the use of buckets in changing oil, also identified as a medium risk by the external consultants. Ms Berney's testimony was that in the first place the risk was managed by her having ascertained from the external consultants the stores that had been using buckets and then ensuring that these stores were individually contacted about this risk. When asked about this decision in the prosecutor's cross-examination, the witness reiterated that the use of buckets was considered an unusual practice. Given other procedures were in place (and the fact that the practice was not an approved one), the defendant contacted the individual stores that the auditors identified as having used that procedure, but did not issue a Safety Alert (which are sent to all stores) regarding that practice at that time. The Hurlstone Park store was not one of the stores individually identified by the auditors and therefore was not included in that process. Having found the practice to be both an unusual practice and already adequately addressed by existing procedures the Systems Review Group decided that the bucket risk should be addressed "on an individual store basis through the hazard management system". The "controls" to which the group had regard in deciding to leave the risk to the individual restaurant's hazard management programmes were: 1) Relevant procedures and policies were available in all stores and precluded the use of buckets; 2) Personal protective equipment was required to be worn; 3) The work was restricted to staff who had been trained in it 4) The work was generally performed by more experienced staff, who were also older; 5) The disposal of oil had historically involved draining oil into the portable machine and then into containers which were wheeled to the fryer. "On a practical level", oil was "likely to be transported" using the disposal cart or "at worst" using "the portable oil filtering machine" given this historical background.

43 Ms Berney gave evidence of broader strategies having been devised and enacted to address identified risks. These included:

· The institution of Health and Safety Strategic Plans (those for 1996-1997 and 1998 were tendered) · Extensive training for managers and crew throughout the organisation in the risk management approach. In particular, the defendant referred to a workplace safety training matrix that set out the different levels of training required for different groups of employees and available training resources. In particular, several training videos and the SOC's T5 "Orientation" and S6F "Filtering" were listed as "general training tools" for "all employees". · Communicating to individual restaurants through the "ER News" publication, in relation to employment relations issues. · Communicating to individual restaurants through "Safety Alert" bulletins. These were first implemented in late 1996. A register of bulletins annexed to Ms Berney's affidavit showed two bulletins issued in July 1998 in relation to the disposal of waste oil. · The development of a hazard management 'pilot programme' and hazard log in 1996, substantially based on Workcover's 1994 Hazpak and the relevant legislation. This was subsequently 'rolled out' throughout the defendant's stores in May 1997. It required all new employees to undergo some hazard management training as part of their initial orientation, which also included training in a 'hazard log' reporting process. It required all staff to take up the responsibility for hazard identification and rectification and charged shift supervisors, store safety managers and safety committees with specific duties, such as taking immediate steps, or reviewing the log at regular intervals. (It was this store-based hazard management process that Ms Berney said the Systems Review Group had decided would address the risk posed by the use of buckets in oil disposal). · The development of a new "Employee Health and Safety - Policies and Procedures Manual" to supplement formal training. Ms Berney stated this was "very brief" and designed to emphasise matters already covered by other training and improve the coverage of matters that did not fit into other training. Occupational health and safety training was still incorporated into training for specific tasks, in keeping with the integrated risk management approach. 44 Following receipt of a Workcover press release (dated 10 June 1998) about a judgment against KFC regarding injuries sustained by one of its employees involving hot oil, Ms Berney sought approval from "senior management" to have the disposal carts made mandatory in all stores. A Safety Alert was issued once the proposal had received assent. The Safety Alert "Workplace Safety - Disposal of Waste Oil" was dated 20 July 1998 and was in the following terms:

The purpose of this safety alert is to bring to your attention the potential hazards of hot waste oil. The hazards include:

· Contact with hot oil resulting in severe burns · Slippery floors from spills resulting in a range of injuries

One of our competitors in NSW was fined $20,000 recently after a young worker was severely burned when attempting to dispose of waste oil. A copy of the content of the Press Release from Workcover NSW concerning the incident can be found on the reverse of this page.

This incident has highlighted the need for all restaurants to ensure they are following a safe system of wast oil disposal. The minimum requirements include:

· McDonald's approved Oil Disposal Cart…is used to transport waste oil. Please note we are anticipating some delays due to the volume of units to be ordered so place your order as soon as possible to take advantage of volume related discounts. · Plastic buckets (such as pickle buckets) are not to be used to transport waste oil · Other types of open-top containers are not used to transport waste oil (old re-run buckets and ice buckets are not suitable because they are not sealed, become hot and are awkward to move). · Crew and managers are trained in correct procedures using relevant materials such as the Filtering Procedures SOC S6F

Note: The Oil Disposal Cart is not suitable for use on one or more stairs . If there are stairs between the vats in your restaurant and the bulk oil waste container contact one of the people noted below to discuss an alternative procedure.

Note: The Prince Castle (old style) filtering machine is not suitable for transporting waste oil. The Oil Disposal Cart is the only approved piece of equipment for this task.

This Safety Alert must be brought to the attention of the Management Team and the Safety Committee and all employees must receive appropriate instructions on this issue. After taking all necessary actions and communicating the contents of this Safety Alert file it in your store Health and Safety Toolbox. ( Bold and underlined text appears in the document in evidence). 45 Ms Berney stated that the Safety Alert changed the plant required in those stores that used older equipment; that is, the stores that had not previously been required to purchase the disposal cart. Those stores had used the older Prince Castle unit up until this time. However, it was stated by Ms Berney that this Alert did not change the policy regarding use of buckets, as this had never been an agreed procedure. 46 Ms Berney's evidence in this regard was apparently a reference to the 1997 version of SOC S6F. It should be noted that whilst the 'revised' 1997 version set out the filtering process (both built-in and mobile), banned the use of buckets and required the use of an oil removal cart, it did not stipulate how oil should be disposed in stores that did not have such a cart. This was an omission in the amended standard procedure. It did not require those stores without the oil disposal unit to adopt a new process to minimise risks while awaiting the arrival of their new disposal cart. 47 Ms Berney also gave evidence that due to absences on leave of management staff, the Safety Alert was not "actioned" at the Hurlstone Park store prior to the incident. It was implemented by an "operations consultant" of the defendant immediately after the incident. 48 As for the training that the injured employee had received, Ms Berney annexed training records to her affidavit indicating that the injured employee had received training in the following SOC's:

· SOC T5 "Orientation"; initial/induction training, which included separate sections on risk management and the defendant's 'open-door' management policy and instruction on manual handling/safe lifting techniques. · SOC T2/A "Appearance" · SOC G7 "Pies/Chicken McNuggets/Fillet of Fish" (for which there were eight separate completed checklists) · SOC GC9 "Buns/Dress/Grill (Clamshell Grill) · SOC GC10 "Buns/Dress/Grill (Clamshell Grill)" (for which there were four separate completed checklists) · SOC C6 "Production caller/wrapper" The annexed training records indicated, and the defendant conceded in its submissions, that the injured employee did not receive training in SOC S6F. Examination of the training records for the SOC's in which the injured employee was verified, reveals that in several instances the employee's performance was monitored against the checklist multiple times. SOC's filled out by crew trainers show no additional follow-up action to have been arranged when the employee was found to be departing from set procedures. 49 Ms Berney stated that it would have been "usual" for the employee only to have been performing tasks for which he had completed appropriate SOC training. The training was provided by a crew trainer - for whom there was a dedicated selection process (details of which were also tendered). The supervisor of the injured employee, Kon Aslanidis, was a crew trainer of some experience, having been employed by the defendant for 3 years and 5 months prior to the incident. Ms Berney stated in accordance with the promotion guidelines, he would have been verified as competent in a range of the SOC's including SOC S6F, before promotion to the position of Crew Trainer and should have been aware that employees were only to perform tasks in which they had been trained and assessed competent. 50 Ms Berney could not say whether the bucket contained in the photographs taken by the Inspector (and tendered by the prosecutor) had no handles as a consequence of damage to it, or poor design. Whilst the defendant had been aware of isolated instances of buckets being used between 1996 and 1998, Ms Berney had not seen the type of bucket used in this accident before; its use was unauthorised. 51 When questioned by the prosecutor in cross-examination as to the departure from the authorised system on the day of the accident, Ms Berney conceded that this was the "sort of thing that [could] happen in disparate cases with thousands of employees". Asked what the defendant had done to prevent this kind of unchecked departure from its systems giving rise to risks (not just arising from use of unauthorised buckets) in the future, Ms Berney stated that the defendant had a comprehensive system in place to address this. She referred to the Safety Alerts and the training system with SOCs as creating a safer environment. It was her evidence that the training empowered people to say no to management if they disagreed, and that the open-door management policy would 'cut across' an unsafe instruction from a 'boss'. Ms Berney also described the training of managers and supervisors such as the injured employee's supervisor as "extensive". She reiterated that the authorised system at the time of the accident at the Hurlstone Park store involved the use of the prince castle unit (with open grate top and pump) but not a bucket. 52 After the accident, an oil disposal cart was immediately ordered for Hurlstone Park in compliance with the July 20 Safety Alert. In the interim, by virtue of the distance between the oil vats to be emptied and the oil disposal drum, it was deemed inappropriate to continue to use the prince castle unit to transport the hot oil (because of the risk of splashes), and another system was devised whereby oil would be pumped from the prince castle unit into smaller 20L containers, with appropriate handles, which were then collected by a waste contractor. 53 Ms Berney also gave evidence as to other remedial measures taken by the defendant after the accident. These measures included:

1. Ensuring the injured employee received all necessary medical attention in relation to his injuries (including first aid on the night) and providing appropriate assistance to return to work (including a rehabilitation plan which provided for return to work on different duties). 2) Notifying Workcover immediately, and co-operating fully with its investigation 3) Instructing its solicitors to enter a plea of guilty as soon as appropriate charges were laid 4) Providing additional training to crew and management at the Hurlstone Park site regarding occupational health and safety guidelines generally and oil disposal specifically, and assessment of staff against the SOCs to ensure they understood the procedures. 54 Changes of a more general nature by the defendant after the accident included:

1. Revising the Orientation SOC to emphasise safety concerns and including a new segment in relation to disposal of oil in its Crew Orientation video, which also included the 'Safety is No Accident' video. 2) Creating (and updating over time) a new workplace safety SOC "WS-T6" that emphasised hazard management. The original version (introduced after the accident) in June 1999 was annexed to Ms Berney's affidavit, along with subsequent versions dated December 1999 and November 2000. It was a detailed document covering such topics as: employee and manager responsibilities; safety rules; hazard management (finding, checking and fixing hazards); following SOC's to control hazards; robbery guidelines; fire and evacuation procedures; the use of electrical equipment; the use of portable ladders; manual handling; handling of syringes and body fluids and store specific guidelines. It referred to some of the risks in McDonald's restaurants and specifically to the hazard of hot oil exposure, albeit in the following, limited terms: "Hot shortening - can cause burns so avoid contact and splashing." 3) Requiring all crew employees to be verified on that new workplace safety SOC annually. 4) Again reviewing SOC S6F and amending it slightly to include a step to ensure other staff know how to avoid coming into proximity to filtering/oil splashes, repeated warnings about contact with hot surfaces and the risk of splashes and a step to require cleaning of personal protective equipment, but not so as to change the procedure relating to hot oil disposal. 5) Continuing investigations into safer procedures for oil disposal in stores with stairs (having already devised a new section in the Workplace Safety Manual in relation to this, entitled "Oil Disposal - Stores with Stairs"). 6) Revising, updating and implementing new, detailed procedures in its Operations and Training Manual, for manual handling and for fried products and filtering. 7) Monitoring the implementation of the disposal cart system, which was completed in or around March 1999, at a cost of $155,000-$500,000. 8) Implementing a new, detailed "Manual Handling - Managing Risks" procedure manual in February 1999 "to assist stores in the ongoing management of manual handling risks". This included a risk assessment form directing attention to the weight of loads to be carried, specifically asking whether they were over 16kg (the mass specified in the National Standard). 9) Issuing another Safety Alert in relation to hot oil in April 2000 to reiterate the importance of correctly following procedure in relation to tasks involving oil. 10) Maintaining awareness of the risks of hot oil throughout its operational units by featuring them in its quarterly "Safety Theme" for April 2001. 11) Issuing a fax about manual handling and 20L drums in October 2001 to 13 affected stores. 12) Continuing to implement the Health and Safety Strategic Plans. These strategic plans included: a) The development of new "Crew Orientation", "Workplace Safety Critical Incident Investigation" and "Workplace Safety Policies and Procedures" manuals, and new supplier and contractor management systems. b) The expansion of the Workplace Safety Team to three members. c) The continued use of Safety Alerts to highlight important safety issues. d) The implementation in 2001 of an Australian version of the Operations and Training Manual. e) The defendant commissioning an independent quality assurance auditor to review its occupational health and safety management system using 'SafetyMap', prior to it seeking Workcover accreditation. f) The defendant seeking, and obtaining on its second audit, Workcover accreditation for Self Insurance. g) The defendant participating in follow-up audits to maintain its accreditation. 55 No specific evidence was led as to the nature of the risk going to the temperature of the oil, its potential to do harm, standard temperatures in the vat and so on. Nor was evidence adduced as to the severity of the injuries sustained by the employee. It was agreed by the parties that the matter should be treated simply as one in which the employee suffered burns as a consequence of the accident and these were at the lower end of the spectrum of possible burns.

Submissions of the Prosecutor 56 The prosecutor commenced his submissions by highlighting that, notwithstanding the thorough and comprehensive systems of the defendant, and the fact that the defendant was a world leader in systems management, the bucket used by the injured employee was not used at the instigation of the injured employee, but rather in consequence of an instruction given to that fifteen-year old employee by his trained supervisor. Moreover, it was submitted, it was hard to imagine a less suitable receptacle for hot oil than that bucket. It was too large and awkward, having a thin rim at the top and sharp edges at the bottom and no handles. It was a 25-litre bucket filled to approximately 80% capacity, of indeterminate weight, but certainly weighing over 18 kilograms. It was submitted that the risks inherent to its use were plainly foreseeable, and to some extent, were in fact foreseen, in the report produced for the defendant by the independent auditors in 1996. Moreover, the risks were serious. These contentions were advanced in reference to the sentencing authorities submitted to be relevant by the prosecutor: Lawrenson Diecasting Pty Ltd v Workcover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464; Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610. 57 It was submitted that the power of general deterrence was no better illustrated than by the facts in this case - evidence having been adduced to show that a penalty imposed upon a competitor of the defendant had prompted the defendant to take immediate steps to change its policy and issue a Safety Alert to all stores regarding oil disposal. 58 As to specific deterrence, the prosecutor submitted that its power was demonstrated by the steps, which the evidence showed the defendant had taken, in an effort to obviate similar risks and a similar event in the future. 59 The prosecutor conceded that, having regard to size of the defendant's workforce, the defendant was a good corporate citizen. However, while Mr Skinner accepted that it was "difficult to control such a large workforce", this matter was essentially about unsafe plant; the bucket provided for the employee's use (which the employee was instructed to use). It was submitted that this constituted a failure to comply with a well recognised standard, in force since 1990, namely the National Standard for Manual Handling [NOHSC:1001(1990)], and ignored the limited lifting capacities of persons under the age of eighteen, such as the injured employee. This was all the more significant given the defendant was an employer of so many such young persons. 60 The prosecutor sought a moiety of any fine and costs.

Submissions of the defendant 61 The defendant conceded that, in light of its prior convictions, the maximum penalty for this offence was $825,000. It submitted that the principles relevant to the assessment of the penalty could be found in the following authorities: Lawrenson Diecasting at 474; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 427-433; Capral Aluminium; Workcover Authority of New South Wales (Inspector Lyons) v Warman International Pty Ltd (unreported, Walton J, Matter No. IRC 773 of 2000, 9 May 2001). 62 Mr Harmer, solicitor, who appeared for the defendant, tendered a detailed case outline helpfully setting out its submissions. These were supplemented by the defendant's oral submissions, in which some important further refinements to its position were made. As to primary factors relating to the nature and quality of the offence, the defendant made the following key submissions: 1. The defendant had an extensive safety system in place prior to 1996, based on the integrated operations procedures developed by its US parent and certain Australian initiatives. That safety system was enhanced following the 1996 fatality at the Wollongong franchise restaurant. One way it was enhanced was through the engagement of external consultants to conduct a safety audit. This (1996) audit identified: i. Use of buckets in changing oil in fryers as a 'medium' risk ii. Manual handling was also a 'medium' risk. 2. Prior to the accident on 6 August 1998, the defendant had: · Encouraged all stores to purchase a Shortening Removal Cart. · Issued in late 1997 a new SOC S6F relating to "discarding old oil" that specifically precluded the use of buckets to transfer oil to the bulk waste container and continued the requirement that personal protective equipment was worn. · Made the use of oil disposal carts mandatory in July 1998 and issued a Safety Alert that also precluded the use of open top containers in the transfer of hot oil (as was used in the 6 August 1998 incident) and further required that all crew and managers be properly trained in SOC S6F. · Failed to implement that Safety Alert at the Hurlstone Park restaurant prior to the incident on 6 August 1998 due to leave absences. 3. The risk posed by use of buckets, identified by the auditors, had been responded to on a store-by-store basis. This was because a team of senior managers considered the use of buckets in changing oil to be unusual. They therefore decided that the hazard management process that the defendant was developing as a pilot and was shortly to 'roll out' through all of its stores (and which was 'rolled out' in May 1997) would adequately address it. The manual handling risk identified by the auditors was addressed via a "hierarchy of controls", involving the "designing out" of the risk. 4. Increased priority had not been allocated to improvement of the oil disposal process due to the existence of documented procedures requiring personal protective equipment to be utilised; the conduct of the filtering and disposal operations by senior regular crew or managers properly trained in SOC S6F; and the disposal of oil generally using either the oil disposal cart or the portable oil filtering machine at restaurants. 5. It was the responsibility of Mr Aslanidis, the supervisor on 6 August 1998 to: · Ensure that employees only perform tasks in which they had been trained and verified as competent; and · Ensure that relevant procedures, such as SOC S6F were followed (which, as at the date of the incident, required the use of personal protective equipment and precluded the use of buckets in the transfer of oil). The supervisor was at fault in directing the conduct of the process in the way in which he did on 6 August 1998. 6. Mr Kyriakidis was trained and verified in a number of tasks and had received training in safe lifting techniques and was aware prior to the accident that the "normal procedure" involved "wearing all the safety equipment, and only the person in charge of a job did it".

63 The defendant acknowledged that appropriate removal equipment was not available at the Hurlstone Park restaurant on 6 August 1998 due to the late introduction of the mandatory requirement to purchase the oil disposal cart, and that the risks associated with hot oil, absent compliance with procedures and use of personal protective equipment, were serious. It also acknowledged that the injured employee suffered psychological trauma from the incident such that he was unable to return to work.

64 The defendant conceded various aspects of the incident. That is, the defendant conceded that: the lack of adequate oil removal equipment; the oil splash dangers; the length the oil was to be transported; the weight of the container; the height the container was to be lifted; and, the slippery condition of the floor, were all relevant to the determination of the nature and quality of the offence. Mr Harmer accepted that, in the circumstances of this matter, the Court should impose a sentence reflecting both general and specific deterrence (the latter being reduced given the defendant's extensive and improved OH&S management). 65 The defendant further submitted, however, that despite the lack of appropriate oil transport equipment at the Hurlstone Park restaurant on 6 August 1998, compliance with existing procedures and requirements specified by the defendant would have significantly reduced the risk of serious injury. Whilst hot oil splash injuries and manual handling issues associated with the incident were foreseeable - they were addressed, in part, by the existing procedures. The use of personal protective equipment would have minimised or avoided the injury. Compliance with a "general McDonald's approach" to manual handling would have eliminated the age/weight non-compliance. In its oral submissions, it was highlighted by the defendant that the non-compliance with the manual handling standard arose in consequence of the unauthorised use of a bucket that was not designed for the purpose to which it was put. That breach would not have occurred had procedures been followed properly. However, the defendant conceded that, notwithstanding that historically the open-topped, 'prince castle', unit had been used not only in the filtering process but also for disposal (and was, therefore, likely to be used), at no point did its policies or procedures stipulate that the mobile filtering unit was to be used to discard oil. Rather than amounting to a concession that the defendant's system of work was wholly inadequate in this respect, however, in light of the evidence provided by Ms Berney about the contents of the training videos and the rest of the defendant's submissions, I consider it more appropriate to understand this concession to mean that the defendant admitted that it had not specifically required the use of the prince castle unit as an oil removal device, and explained this as based on the view, that it had long held, that the custom-built disposal cart was the preferable device for disposing oil. 66 It was submitted that the subjective factors relevant to assessment of penalty that the defendant was entitled to have taken into account were: 1. Steps taken subsequent to 6 August 1998 to remedy deficiencies, including specific remedial steps and the ongoing implementation of high standards of safety including auditing and accreditation. 2. Cooperation with WorkCover 3. Entering a plea of guilty at an early stage. The defendant submitted that its plea was an "early plea, in circumstances where conviction was likely, but only following careful negotiations to remove two alleged offences". It referred to Warman (pp. 23-25) as authority for the proposition. This cooperation saved the time and cost otherwise involved in a trial. 4. Prior record. It was submitted that the defendant's two prior convictions must be placed in the context of the nature and size of McDonald's operations. 5. Nature and size of Operations. The defendant's evidence was that it had been operating in New South Wales for 27 years and at the Hurlstone Park restaurant for 26 years. It directly employed 7680 persons at 112 outlets in NSW and the ACT, but along with its franchise restaurants engaged approximately 55000 persons at 707 outlets. Approximately 70 employees worked at the Hurlstone Park restaurant at the time of the accident. It had long hours of operation and was a casual workplace with high employee turnover. The defendant submitted that its prior record must be considered in this context. 6. McDonald's Character as a Corporate Citizen. It was submitted that the defendant's awards and community contributions evidenced its good citizenship, as did its general safety measures. 7. Assistance provided to the Injured Employee, in the provision of first-aid and the rehabilitation plan devised for the injured employee. 8. Contrition and remorse. It was submitted that Ms Berney's statement of remorse should be considered. Apart from Ms Berney, a number of the defendant's senior corporate officers were present in court and the defendant submitted that their presence evidenced the defendant's contrition and remorse. 67 The defendant noted that that the assessment of penalty necessitated the balancing of primary and subjective factors. It further submitted that this offence was less serious than the Wollongong offence. It submitted that consistency with the KFC precedents (Inspector Robert Stobo v Kentucky Fried Chicken Pty Ltd [1998] CIMC 144 (16 December 1998) and Workcover Authority of New South Wales v Kentucky Fried Chicken Pty Ltd [1998] NSW IRComm 251 must be maintained. It conceded that this offence was compounded by manual handling issues, but submitted that a discount should be applied for the co-operation given by the defendant and the plea.

68 As to relevant precedents, the defendant highlighted that in the earlier KFC cases each case involved three separate charges going to adequacy of systems of work, training and supervision. In the earlier case a penalty of $20,000 was imposed, where the maximum penalty was $200,000, after a twenty-one year old employee who had been engaged for about five weeks received severe burns from exploding hot oil and was off work for over four weeks. In the second KFC case, a penalty of $12,500 was imposed, relatively "high in the range" where the maximum penalty was $50,000. This second sentence concerned a 15 year-old employee, who was burnt when a solid block of oil reacted with hot oil causing an eruption. The defendant submitted that this was explained by the fact that this was KFC's second conviction in relation to a narrow issue.

69 The defendant also referred to the charge laid in this case and noted that, had its two manual handling components (b) and (c) been laid as separate charges, they would have attracted a lower maximum penalty of $11,000. Supplementary Submissions 70 Further written submissions were received, going to the appropriate treatment of the defendant's prior convictions.

71 The defendant did not dispute that it had twice been convicted of offences against the Act, nor that the maximum penalty that could be imposed by this Court under s51A was $825,000. It submitted that it was now well settled that in sentencing a defendant to which s51A applies, the Court will adopt a one, rather than a two step approach: Capral Aluminium. The issue it now agitated was the appropriate treatment of prior convictions under s51A. 72 The defendant submitted, that although the use of the word "previously" in s51A indicated a clear legislative intention for that section to apply to both prior convictions and 'antecedents' as previously known at common law, this different language did not affect the applicability of common law principles in relation to the treatment of "prior convictions" and "interim convictions". 73 It was submitted by the defendant that the approach to be adopted by the Court to interim convictions differed from that applicable to prior convictions. It submitted that, in this case, prior convictions were those prior to 6 August 1998 (the date of the offence). Other convictions, recorded against the defendant after that date but prior to the sentence in this case, were interim convictions. That is, the conviction recorded against the defendant in the Chief Industrial Magistrate's Court in 1993 was a prior conviction. The conviction recorded by me in 1999 concerning a 1996 offence (a prior offence) and the conviction recorded by Kavanagh, J in 2002 in relation to a May 1998 offence (another prior offence) were both interim convictions. 74 It was submitted that the prior conviction in the Chief Industrial Magistrate's Court removed any doubt as to the applicable maximum penalty and that as a prior conviction it should be considered in assessing the objective seriousness of the offence, (although not so at to impose a second penalty for the initial offence): Lawrenson Diecasting. A different approach applied to an 'interim' conviction. It was submitted that, whilst the interim conviction must be considered to the extent that it negated leniency otherwise to be granted to the defendant based on subjective factors, it should not be taken into account in assessing the objective seriousness of the offence. 75 The defendant argued that a different approach was warranted for prior and interim convictions. Whilst prior convictions were plainly relevant to the extent that they may demonstrate the necessity for a greater sanction, one of the reasons this was so was because the subsequent commission of an offence demonstrated that the prior conviction had failed to deter further criminal conduct. This could not be said for interim convictions: whilst they might be indicative of a pattern of criminal behaviour, even if they concerned prior offences (as in this case both interim convictions did) they did not of themselves signify willful disregard of the law, which may further aggravate the instant sentence (because of the role of penalty in specific deterrence). Whilst prior convictions contained some element of deterrence that could be said to have failed, this argument did not apply to interim convictions because for interim convictions the defendant had not yet had a chance to prove itself deterred from further breaches. Therefore, it was the defendant's submission that the approach that should be taken to interim convictions should differ from that taken to prior convictions - they should not be considered to aggravate sentence, or in the alternative, they should not aggravate sentence so much as prior convictions. 76 In support of this approach, the defendant referred to the application of it by Schmidt, J in Workcover v Capral Aluminium Ltd (1998) 82 IR 468, 473-475 & 479, adopting the comments of the Full Bench of the Court of Criminal Appeal in R v Boney (Unreported, Court of Criminal Appeal, Mahoney JA, Grove and Newmann JJ, 22 July 1991), applying R v Withers (1789( 3 TR 428 and R v Hutchins (1957) 75 WN (NSW) 75. Her Honour found (at 479): I accept that the proper approach to be adopted to a consideration of antecedents is that described by the Court of Criminal Appeal in Boney . I take the view however that the defendant's antecedents in this case are relevant in determining leniency to be afforded to the defendant… 77 The defendant noted that her Honour's approach was adopted by Hill, J in Workcover Authority of New South Wales v Capral Aluminium Ltd (1998) 93 IR 211, 222-223 and Cahill, J in Workcover Authority of New South Wales v Capral Aluminium Limited (Unreported, Industrial Relations Commission of New South Wales in Court Session, Cahill VP, 5 August 1998). 78 However, the defendant also noted the consideration of the approach by Boland J in Inspector Low v Capral Aluminium Ltd [2002] NSWIRComm 12 and his Honour's concern that the approach may be inconsistent with the operation of s51A of the Act. It was submitted that in light of the Full Bench decision in Capral Aluminium that, whilst s51A has the effect of increasing the maximum penalty available where another conviction of the defendant has been recorded prior to the date of conviction for the current offence, the section "merely makes the additional penalty available to the Court". The approach contended by the defendant, which it said the principles in the decisions of the Commission in Court Session pointed to, did not alter the maximum penalty but rather went to the appropriate exercise of the Court's discretion within the penalty range.

79 To adopt common law principles would not derogate from the legislative intention of implementing higher penalties in respect of offenders with previous convictions, but would rather: 1) In the case of prior convictions, potentially result in a higher level of "objective" offence being assessed within the increased range afforded by s51A (subject to judicial discretion). 2) In the case of interim convictions, potentially result in a lower degree of lenience being afforded to a defendant within the increased range afforded by s51A (subject to judicial discretion). 80 The defendant conceded that, whilst the application of relevant principles established by the Court of Criminal Appeal (in R v Boney) had been considered elsewhere and in various matters before the Commission in Court Session (matters separately before Schmidt J, Hill J, Cahill J), the approach to be adopted to interim, as opposed to, prior convictions, had not been finally determined by the Commission in Court Session. The defendant submitted, however, that even if the approach it proposed was not justified by decisions of the Court of Criminal Appeal, it was partially warranted by what was said in relation to the role of general and specific deterrence by the Full Bench in Capral Aluminium. 81 The prosecutor contended that this approach was incorrect. Mr Skinner drew a distinction between interim offences and interim convictions and noted that R v Boney was directed to interim offences and not interim convictions. In this instance it was an interim conviction that required consideration. As to interim convictions being relevant to consideration of leniency and not the appropriate punishment for the offence per se, it was submitted that Boland J was correct in his identification of inconsistency between the Boney principle and s51A of the Act. His Honour was also correct to identify a distinction between absolute offences and offences with a mens rea requirement. Further, following Veen v The Queen [No 2] (1988) 164 CLR 465 at, as quoted by his Honour in Capral at [41], an antecedent criminal history may enliven considerations of retribution, deterrence and protection of society, warranting the imposition of a more severe penalty for the offence being sentenced - even though it was not a fresh or second penalty for the antecedent offence. The Boney principle is over-ridden by the principles in Veen where applicable. 82 The prosecutor "did not wish to be heard against the proposition", conceded by the defendant, that prior convictions may be considered by the Court as an aggravating circumstance, increasing the penalty to be imposed. Nevertheless, it was submitted by the prosecutor that any question of aggravation in this respect was more correctly assessed, together with other considerations, in terms of the subjective factors relevant to sentencing. The defendant's submissions that prior convictions were relevant to consideration of the "objective seriousness" of the offence were mistaken. The prosecutor noted "ongoing jurisprudential controversy" regarding the two-stage approach to sentencing.

83 In reply, the defendant highlighted the risk of a further (that is, a third) penalty being imposed against the defendant in respect of its antecedent history. It referred to the Full Bench decision in Capral Aluminium at [51]: Nevertheless, the fact of an earlier conviction means that the maximum penalty for this offence is $750,000 rather than the usual $500,000 and it is necessary for the Court to ensure that there is no "double counting" of either culpability or penalty by failing to recognise a previous conviction of itself has an impact on sentencing. A prior conviction cannot be taken into account twice in relation to the assessment of penalty. 84 Particularly in light of the effect of s51A of the Act, it was submitted by the defendant that the antecedent history of an offender should only be considered in the circumstances described by Mason CJ, Brennan, Dawson and Toohey JJ in Veen v The Queen (No 2): The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in the commission of the instant offence a continuing attitude of disobedience to the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take into account the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows a need to impose a condign punishment to deter the offender and other offenders from committing further offences of a like kind. 85 It was submitted by the defendant given the broad spectrum of offences under the Act, the Commission should only conclude that an offender has demonstrated an attitude of continuing disobedience where there is clear similarity between the instant offence and previous offences. The defendant submitted that no such similarity existed between the instant offence and either of its two prior convictions. In any event, the prosecutor had not demonstrated such a similarity. Not only did the defendant not have an antecedent history suggesting a continuing attitude of disobedience to the law, it was contended, on the contrary its conduct was demonstrative of its commitment to the law. On this basis, it was submitted that the defendant's antecedent history should not be the source of further aggravation of the penalty to be imposed on the defendant (beyond that imposed statutorily by the operation of s51A). Alternatively, if aggravation was considered appropriate, it should only be minor. Further Supplementary Submissions 86 The parties addressed the decision of Kavanagh J in Inspector May v McDonald's Australia Limited [2002] NSWIRComm 179, 5 August 2002 in further supplementary submissions. That judgment related to an offence committed on 23 May 1998 (that is, prior to the instant offence), and concerned a failure by the defendant to provide safe plant and systems of work, and adequate information, training and instruction. That matter concerned an accident in which a twenty-two year old truck driver for the travelling Ronald McDonald show was injured while setting up the stage for the performance. He had unlocked a latch that was holding the stage vertical to the side of the truck and was struck by the stage on his neck and back, when it fell unrestrained from the side of the truck where it had been suspended. He sustained injuries resulting in fractures and dislocation of his vertebrae and permanent paraplegia. 87 The prosecutor submitted that the fact and circumstances of this prior offence should be taken into account in the assessment of the appropriate penalty in this case; that offence was an aggravation of the criminality of the defendant for the instant offence, or was at least a basis for extending less leniency to the defendant than otherwise might have been considered appropriate.

88 In its submissions, the defendant reiterated its earlier position. That is, it was contended that this additional, interim conviction against the defendant should not lead the Court to conclude that the defendant had an attitude of continuing disobedience to the law that would warrant consideration of the antecedent history of the offender, in the manner suggested by the High Court in Veen v R (No 2).

Consideration 89 At the outset, I should recognise the laudable attempts by this defendant to ensure the health and safety of its workforce and in particular its adoption of a generally sophisticated occupational health and safety system. By virtue of its risk management approach this system was continually developing and evolving, as is demonstrated by the evolving process for the disposal of waste oil.

90 It is well settled, however, that the primary determinant of penalty in proceedings for an offence under the Act is the objective seriousness of the offence. As was stated by the Full Bench in Lawrenson Diecasting Pty Ltd v Workcover (at 474), one of the more frequently cited contemporary authorities reinforcing this approach to sentencing: [T]he primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the Occupational Health and Safety Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence"…It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to a consideration of the nature and quality of the offence.

91 Moreover, as was emphasised by the Full Bench in Ridge Consolidated Pty Ltd v Mauger (2002) 115 IR 78 at [28] - [30], "the penalty imposed must be determined by reference to the offence"; that is, the offence to which the defendant has pleaded guilty. This is of particular significance in this case, having regard to the limited nature of the charges alleged for the handling of oil.

92 The offence particularised in the summons, in substance charges the defendant with a failure to provide adequate plant and a failure to properly assess, and provide for, manual handling activities - in particular, manual handling activities involving the transport of hot cooking oil. I note the charge does not allege a broad failure to provide a safe system of work.

93 Turning firstly then to those matters bearing on the nature and seriousness of the offence, I note, having regard to the defendant's prior convictions, the maximum penalty for the offence in these proceedings is $825,000: see s 51A of the Act and the Full Bench judgment in Capral Aluminium, noting in particular the references in that decision to the judgment of Kirby P in Camilleri's Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 where his Honour observed that the maximum penalty for an offence "reflects the 'public expression' by parliament of the seriousness of the offence ... a large penalty indicates the gravity of the offence as perceived by the community".

94 As for the nature of the risk posed by the transportation of the hot oil utilising the methods disclosed in the evidence, whilst I am satisfied that there would be little potential for a fatality to have arisen from the risk posed by these activities, that such an activity creates the potential for very serious injury is self-evident. Manual handling tasks are notorious for posing a risk of injury to employees who engage in such activities. Whilst the exact weight of the full oil buckets was not disclosed in evidence, the agreed statement of facts identified the buckets as being of at least 18 kilograms. This fact, coupled with the shape of the bucket and absence of appropriate handles or other means of grasping the bucket, clearly posed a risk to persons attempting to handle such an item. These risks were compounded in this case by the fact that the material being handled was "hot" (although I again note that the temperature of the oil was not disclosed in evidence), by the fact that the activity was one regularly engaged in by the defendant and by the fact that the individual engaged in the task was slightly less than fifteen years of age.

95 The incident which gave rise to the investigation and subsequent prosecution in this case resulted in the employee suffering burns to his face, forearms, biceps, neck, chest and left ear. The parties were ad idem in their submissions that the burns suffered as a result of this incident were properly seen as being of a lesser degree of seriousness. It should be emphasised, however, that the gravity of the consequences of an accident do not, of themselves, dictate the seriousness of the offence. Whilst the consequences of an accident that flows from a breach of the Act may be relevant as a manifestation of the gravity or otherwise of the potential risk to safety flowing from the breach and the culpability of the defendant I would reiterate what was stated by the Full Bench in Inspector Hannah v Wonar Pty Limited (at 9), "a breach that was quite unlikely to lead to serious consequences, might be assessed on a different basis to a breach where there was every prospect of serious consequences". In my view, the risk created by the failure to provide appropriate plant and the failure to properly assess and otherwise provide for manual handling activities, the subject of prosecution in this case, had the potential to result in "serious consequences". Likewise, the accident which flowed from the breach of the Act manifested the gravity of the risk to safety flowing from the breach and the culpability of the defendant.

96 Further, I am satisfied that the risks to safety created by the use of a bucket for the transportation of hot oil and the failure to turn sufficient attention to the development of, and adherence to, safe methods for the manual handling of hot oil was not only readily foreseeable, but was actually foreseen by the defendant.

97 The defendant had identified at least as early as 1992 that the use and disposal of hot oil posed a risk of burn injuries. A report by external auditors in 1996 led to specific identification of the risks relevant in this case. These were identified as: (i) "Filtering and cleaning vat: burns, tripping - use of portable machine (problem only in old stores)", and; (ii) "Changing oil - decanting into bucket for transport to waste storage area."

98 From 1997 the defendant's relevant training documents identified the risks involved in filtering and disposal of oil as being: "hot oil splashes, hot surfaces, manual handling". It cautioned that "Hot oil is dangerous and will cause severe skin burns."

99 Indeed, the evidence of Ms Berney demonstrated that the defendant was both aware of the risk posed by the transporting of hot oil using an unsealed bucket and the fact that its procedures as found in SF6 prior to December 1997 did not adequately guard against these risks. Whilst the defendant did produce an updated version of this procedure in December 1997, specifically directing employees to refrain from using a bucket to transfer hot waste oil, this directive failed to couple that prohibition with any specific, unambiguous direction as to an appropriate method for transporting hot oil (I do note that directive recommended the use of an oil removal cart).

100 In 1998 the judgment against KFC and the subsequent alert issued by the Workcover Authority on 10 June 1998, caused the defendant to take steps to ensure that it had "a safe system of oil disposal in all stores". Ms Berney caused this alert to come to the attention of senior management with a proposal which led to further action on the part of the defendant in the form of a Safety Alert dated 20 July 1998. That directive from management required the purchase and use of a task designed oil cart for the purposes of transporting waste oil, and that employees be appropriately trained in the transport of such material using that equipment. This was the first occasion on which the defendant explicitly directed its employees on the appropriate method to properly carry out the task of disposing of waste oil (including the specific cart to be employed).

101 As conceded by the defendant, the Safety Alert of 20 July 1998 had not been implemented at the Hurlstone Park store prior to the accident. Moreover, the process at Hurlstone Park would seem to have differed from the defendant's 'formal' system for oil disposal. The process at Hurlstone Park involved oil being decanted into a bucket by an employee wearing personal protective equipment and the bucket then being carried a considerable distance to the waste oil bin. This was contrary to the defendant's "formal system" which, put at its highest, required the use of the price-castle filtering unit. 102 At the time of the incident that ultimately gave rise to these proceedings, an employee not trained in the process was called upon to assist a trained employee in the performance of the task. I note the disparity between the injured employee's account of having received no training in safe work practices and the defendant's evidence that he was trained in safe procedures for the performance of some tasks. It was not disputed, however, that the employee was not trained to perform the task in question. As for the training provided to the supervisor, it is unclear just what training that employee had received. As he had been employed by the defendant for some time, it is also unclear which version of SOC S6F he was trained and verified in. 103 I accept the evidence of the injured employee that he had been performing the task in this way 'since he started'. Although the frequency with which he was required to perform the task is unclear, I do not consider this to be in issue since no evidence was led to rebut the injured employee's evidence. It was not contradicted directly or indirectly by the supervisor's evidence, which, going as it did only to his work with the injured employee, did not indicate that the injured employee's evidence was anything other than truthful. Further, the defendant did not seek to challenge the employee's account in the evidence that it led in the proceedings. I am satisfied that the injured employee did not receive any instruction on how to undertake the manual handling task associated with the disposal of the waste oil, and that the employee was directed to undertake this task by his immediate supervisor on more than one occasion. 104 Although both the injured employee and supervisor were aware that they should both have been wearing personal protective equipment, at the time of the accident only the supervisor was wearing such equipment. I accept the evidence of the supervisor that another set could have been obtained from the Manager, but was not obtained. 105 Following the accident, a change to the system of work was implemented in accordance with the Safety Alert, which had been dispatched to the store prior to the accident. Although delays in its arrival were expected, a disposal cart was immediately ordered. In the meantime, the open-topped prince-castle filtering unit was used (instead of buckets) to wheel the hot oil to the disposal bin (some 30-40m away), where the oil was pumped into the bin. Shortly thereafter, however, the system was again changed. The portable filtering unit was used to pump oil into smaller 20L containers with 'appropriate' handles, which were then removed by a waste contractor. This removed the requirement to transport oil in an open container over any significant distance and reduced the manual handling risk because the 20L containers were not to be completely filled. 106 Whilst the defendant did take some steps to address the risk of use of buckets in 1996 and 1997 (contacting individual stores it knew to be using buckets for oil disposal and reissuing SOC S6F), it did not issue a Safety Alert to all stores or ascertain those stores that did not possess the custom-built disposal cart. This removed the opportunity to identify aggravating hazards at individual restaurants, such as the 30m distance between the oil vats and bulk disposal bin at the Hurlstone Park store.

107 The defendant did have voluminous corporate policy and training documents. These were also in different media. (I refer specifically to the step-by-step filtering video which the defendant tendered). It had laudably attempted to integrate its safety training into its work systems. Yet, the training document relevant to oil disposal (the oil filtering checklist) 'SOC S6F', which was used to verify the competence of staff, did not refer to oil disposal processes from 1994-1997. I note this was the era in which the supervisor was recruited and progressed to the position of crew trainer. Although this was changed in 1997, the new document, in referring to an oil 'removal' cart, left some ambiguity in its terms - leading directly to the risk that 'unauthorised' equipment would be used. In any event, the use of the prince-castle unit was itself a dangerous system of work, particularly at Hurlstone Park - it was, in itself, a failure to provide appropriate plant for the task at hand.

108 The risk of oil splashing was considerable. While a decision was made by the defendant's executives prior to the accident to change and improve this aspect of the system, this change was not effectively communicated to the Hurlstone Park store, nor was it properly implemented. Significantly though, even had it been communicated, and this may have led to the suspension of the use of the bucket, it did not introduce an altogether safe system. Whilst a safer system using sealable 20L drums was later introduced at the Hurlstone Park store, it was not introduced system-wide (to other stores for which the cart method was inappropriate, specifically stores with stairs) for some months (approximately a further 6 months). It should be noted that it was not clear from the evidence what system was used in stores with stairs prior to 1998. 109 It is well settled that the existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature (see Capral Aluminium (2000) 99 IR 29 at [81] - [82]). The fact that the risk to safety as particularised in a given prosecution has actually been foreseen by a defendant will, in my view, have the effect of further aggravating the nature and seriousness of an offence under the Act. This observation must, of course, be tempered by a recognition of all the circumstances of the particular case. Mitigating what would otherwise have been a substantial aggravating feature of the offence alleged in this case is the fact that the defendant did in fact take steps to avoid the risks to safety foreseen by the use of a bucket for transporting hot oil and for the risks otherwise associated with manual handling and in particular the manual handling of oil. Moreover, these risks had been identified and remedial measures (although inadequate in the result), had been taken prior to the accident. To this extent, the defendant's actions were proactive in detecting and preventing risks to safety.

110 In requiring stores to purchase task-designed oil disposal carts the defendant was responding to a risk of splashing oil related to the older 'prince castle' units. That risk arose by virtue of the relatively wide, open tops of those units. They were fitted with a grate that stopped workers from accidentally placing their hands inside the cart, but the grating obviously did not stop liquid oil from splashing out of the cart. Whilst this did not pose a substantial risk when used for the purposes of filtering, when used to transport oil from cooking vats to bulk oil disposal bins a risk to safety arose. 111 Having regard to the hierarchy of risks identified by its external consultants and the "hierarchy of controls" that were already in place to minimise this risk, the defendant chose to approach some individual stores but otherwise to leave risks to safety such as this one to be addressed through the hazard management programmes of the relevant individual restaurants, rather than by centrally managing the removal of an unsafe condition in all stores.

112 The significance of these matters in the sentencing process may be simply stated. The defendant had analysed in significant detail the tasks undertaken by its employees, had identified a number of risks to safety posed by its workplace, turned its mind to assessing the urgency of remedying those risks and taken steps (although ultimately inadequate) to remedy the risks so identified and assessed. This specifically included the identification and use of appropriately designed plant and equipment. This is far from being a case in which the defendant had effectively done little or nothing to ensure the safety of its workplace. The evidence in this case makes it clear that the defendant was not only aware of its obligations, but had expended considerable resources in developing appropriate systems of work, utilising specifically designed items of plant and appropriately training its employees. The existence of settled safety procedures and instructions is a factor which may mitigate the seriousness of an offence under the Act: see Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 342; WorkCover Authority of New South Wales (Inspector Riley) v Broken Hill Proprietary Co Ltd (1998) 83 IR 427 at 429; Department of Mineral Resources (Inspector McKensey) v Kembla Coal (1999) 92 IR 8 at 25 and WorkCover Authority of New South Wales (Inspector Penfold) v Fernz Construction Materials Limited (2000) 100 IR 23 at [34].

113 The next matter which I would consider of particular significance to an assessment of the objective nature and seriousness of an offence under the Act is the way in which the relevant risks to safety and the foreseeability of such risks, interact with the nature of the defendant's business and its workforce. The defendant operates what may properly, in my view, be identified as a potentially hazardous environment - that is, a restaurant kitchen. As was noted by the Full Bench in Bultitude v Grice Constructions Pty Limited (No 2) [2002] NSWIRComm 234 (at [4]) and Inspector Patton v Fletcher Construction Australia Limited (No 2) [2003] NSWIRComm 94 (at [4]), the fact that a defendant operates in an inherently dangerous industry may require greater emphasis when notions of deterrence are considered in relation to penalty. Further, the defendant's workforce has a relatively high rate of turnover and involves a substantial body of casual staff, many of whom are particularly young and inexperienced. In this latter regard I reiterate what I said in WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Limited (at [230]): In my view, the existence of a risk to safety in a business which engages a large number of young, inexperienced and vulnerable workers, particularly where the business utilises dangerous equipment, must enhance the seriousness of the offence.

114 Turning then to the issue of deterrence, I adopt the principles, both as to general and specific deterrence, stated by the Full Bench in Capral Aluminium at [71] - [80]. As was submitted by Mr Skinner, the significance of general deterrence is exemplified by the evidence in this case and the actions of the defendant following the conviction of KFC in 1998. General deterrence will feature in the assessment of penalty in this matter.

115 This leads to a consideration of the use to which the defendant's criminal record may be put in the sentencing process. The defendant's submissions have been examined earlier in this judgment and need not be set out in detail again, it being sufficient to note that the submission referred primarily to two decisions of this Court: that of Schmidt J in Workcover v Capral Aluminium Limited at 473-475 and 479 and that of Boland J in Workcover Authority of New South Wales (Inspector Low) v Capral Aluminium Limited [2002] NSWIRComm 12, both of which discussed the judgment of the Court of Criminal Appeal in R v Boney (unreported, Mahoney JA, Grove and Newman JJ, Matter No. 60342 of 1991, 22 July 1991). The submissions asserted that there was inconsistency between the two decisions of this Court and that the approach of Schmidt J was to be preferred.

116 However, in its later written submissions, the defendant contended that it was "unnecessary and imprudent for the Commission to remark on the apparent differences between the judgments" as nothing turned on the determination of the issues raised in these proceedings.

117 I note that, since the decision in this matter was initially reserved, I have had occasion to reflect on similar submissions in Workcover Authority of New South Wales (Insp Robert Stobo) v State Rail Authority of New South Wales (2002) 115 IR 130 (at [62] - [72]). Having observed that "it is well settled that the antecedent criminal history of a defendant may be relevant to the determination of an appropriate sentence, provided it does not result in a penalty that is otherwise disproportionate to the objective seriousness of the offence" and having referred to the judgment of the Full Bench of this Court in Lawrenson Diecasting (at 477), the New South Wales Court of Criminal Appeal in R v Boney, the judgment of the Court of Appeal in Charara v New South Wales Director of Public Prosecutions [2001] NSWCA 140 and the text of Mr Ivan Potas entitled "Sentencing Manual: Law, Principles and Practice in New South Wales" (Judicial Commission of New South Wales, Lawbook Co. 2001), the Court stated (at [69] - [72]):

69 Whilst it may arguably be thought there exists some tension in the position stated in the authorities cited, as indeed the submissions here of Mr Agius may have suggested, it is strictly unnecessary for present purposes to definitely resolve the issue. If one has regard to the table of previous convictions set out at paragraph [15] of this judgment, it can be seen that the defendant had a not inconsiderable number of convictions for offences under s15 of the Act prior to the occurrence of the present offence. At least one of those would appear to have been a substantial offence warranting a fine of $40,000 which reflected a significant percentage of the maximum penalty for such an offence at the relevant time. In any case, the relevance in the sentencing process of convictions for offences committed after the subject offence must be seen as long settled: see Boney as citing The King v Withers (1789) 3 TR 428 and Reg v Hutchens (1957) 75 WN (NSW) 75. I consider no reason exists to depart from the approach so laid down for offences under the Act. In the result, all of the convictions against the defendant, as set out above (at [15]) may permissibly be taken into account in sentencing the defendant for the present offence by tempering the leniency or mitigation which the defendant might otherwise attract in subjective terms, but not so as to increase the appropriate penalty based on the objective seriousness of the instant offence. … 71 I agree with the observations of Wright J, President in WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales (at [47]), and the submission of the defendant in this matter, that the defendant's criminal record must be examined in the context of the whole of the circumstances in which it finds itself. This should include the fact that the defendant previously employed a significantly larger workforce on a considerably broader range of operations than is now the case: WorkCover Authority of New South Wales (Inspector Gordon) v State Rail Authority (unreported, Marks J, 27 March 1997, at 6 - 7). 72 This is not to suggest that the size of the organisation is in some way to be considered justification for a failure by a defendant to meet its obligations or for having a lengthy record of convictions under the Act. Such a notion is untenable given that the abject purpose of the Act is to provide a safe work environment for the workforce of this State: see WorkCover Authority of New South Wales (Inspector Farrell) v Schrader [2002] NSWIRComm 25 and the cases cited therein. However, the Court will take into account the size and extent of the operations of the defendant when considering a prior record: WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales and WorkCover Authority of NSW (Insp Lyons) v Warman International Ltd (2001) 105 IR 236. The existence of a lengthy criminal history is an aggravating feature when considering the penalty to be imposed for a particular defendant. It is not that the nature and size of the organisation can permit the Court to disregard those prior convictions as aggravating features of an offence. In my view, the nature and size of the organisation ought reflect on the degree to which the defendant's criminal history can be considered an aggravating feature of an offence. The practical reality is that the larger and more diverse the workforce, the greater the opportunity for accidents.

118 I adopt those observations for the purposes of this decision. It is again unnecessary for me to examine at length the distinction between "interim" and "prior" convictions. I should also note, for completeness, that Boland J has adopted the above passage as the appropriate manner with which to treat an offender's criminal antecedents in Inspector Webb v Namoi Cotton Co-op [2003] NSWIRComm 29 at [45].

119 I consider these observations entirely consistent with the observations from the majority reasons in Veen (No.2) where, having discussed what was referred to as "the principle of proportionality", the Court discussed two "subsidiary principles", as follows: 14. There are two subsidiary principles which should be mentioned. The first is that the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell (1970) AC 642, at p 650. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties . (Emphasis added)

120 As I attempted to emphasise in Workcover Authority of New South Wales (Insp Robert Stobo) v State Rail Authority of New South Wales, the significance of criminal antecedents when determining penalty for an offence under the Act arises from the reflection that such a criminal history may have on the need for deterrence to feature in any penalty ultimately imposed and on the protection of the public from a repeat offender. Whilst "sentencing is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision" (per McHugh J in Pearce v The Queen (1998) 194 CLR 610 at 624), in my view, in taking "appropriate regard" (see Capral Aluminium at [86]) of a defendant's antecedent convictions a substantial criminal history may have the effect of aggravating an offence, and in particular that aspect of penalty that can be seen as a reflection of a need for specific deterrence. I would note my agreement with what was stated by Hulme J in Regina v Gardener [2003] NSWCCA 2 that "to recognise [the defendant] is a recidivist is not, of course, to punish [the defendant] again for past offending".

121 In any event, having made those observations, and noting the obviously significant effect that any prior conviction will have on the identification of maximum penalty having regard to s 51A, I agree with the submission of the defendant that its criminal antecedents are of little moment in the assessment of penalty in these proceedings. Even were I to entirely disregard any distinction between "interim" and "prior" convictions, there was nothing in this case that would lead to the conclusion (to apply the various expressions used in Veen (No.2)) that the defendant's criminal antecedents manifested a "continuing attitude of disobedience of the law", or warranted "condign punishment" emphasising "retribution", "deterrence" or the "protection of society" in the determination of penalty.

122 The defendant corporation has been operating in New South Wales for a number of years in what I have described as an inherently hazardous industry. It engages a substantial workforce, many of whom are very young and inexperienced. Whilst it must be emphasised that the size and nature of a company's workforce is in no way to be seen as an excuse for a failure to comply with the Act (see: Workcover Authority of New South Wales (Insp Robert Stobo) v State Rail Authority of New South Wales at [72]), it can hardly be said in this case that the defendant's record of prior convictions is such as to substantially aggravate the nature of this offence. The defendant's record, combined with the other evidence, demonstrates a generally conscientious and serious approach to achieve the safety of its employees and other persons at its premises. I also observe that the defendant has further refined its safety procedures since the accident, altering the relevant standard procedures and the requisite training and requiring that a specifically designed item of plant be used in the transport of oil on its premises. Those actions are commendable and in accordance with the defendant's obligations under the Act; they should receive due recognition in mitigation of penalty.

123 However, and in accordance with the decision of the Full Bench in Capral Aluminium, those same features do not permit, in my view, specific deterrence being put out of account in the assessment of penalty. It still remains necessary to encourage a sufficient level of diligence to eliminate occupational health and safety risks at the workplace (see also Warman at [75] - [79]).

124 Turning then to the subjective considerations relevant to this defendant, the evidence in these proceedings demonstrated that the defendant had expended extensive effort so as to afford its workforce a safe place of work. I am satisfied that the defendant is conscious of its obligations under the Act and has expended considerable resources in order to ensure the safety of its workforce. I also note that I have had regard to the assistance afforded the injured employee following the accident.

125 As for the remaining subjective factors, I am satisfied the defendant entered its plea of guilty at the earliest available time, that the defendant has afforded appropriate assistance to the prosecutor and that the defendant has expressed contrition, both in the evidence of Ms Berney and in its conduct following the accident, such as to warrant a significant mitigation of penalty in accordance with the principles expressed in the judgment of Spigelman CJ in R v Thomson; R v Houlton (2000) 49 NSWLR 383 (see also R v Sharma [2002] NSWCCA 142 and Ridge Consolidated Pty Ltd v Mauger at [37]).

126 The defendant has pleaded guilty. Having regard to the agreed statement of facts and the evidence otherwise tendered in the proceedings, I consider that the plea was properly entered. For the foregoing reasons and having regard to the maximum penalty, the nature and seriousness of the offence as particularised and taking account of the relevant features of deterrence as discussed above, I consider an appropriate penalty in these proceedings to be $115,500. After affording a 'discount' of 25% for the early plea of guilty and a further 10% so as to reflect the remaining subjective considerations, I consider an appropriate penalty to be $75,075. The prosecutor should have a moiety of the fine.

127 The Commission makes the following orders: 1. The defendant is fined an amount of $75,075 with a moiety thereof to the prosecutor;

2. The defendant is to pay the prosecutor's costs in an amount as agreed between the parties or, failing agreement, as assessed by the Court. The parties are to file agreed short minutes setting out the appropriate order for the Court in relation to the quantum of costs in these proceedings within 21 days.

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