Inspector Colin Price v Hunter Galvanizing Pty Limited; Inspector Colin Price v Kerry Bartholomew

CATCHWORDS: Occupational health and safety - sentencing of corporate defendant and individual defendant under s 8(1) and ss 8(1) and 26(1) of the Occupational Health and Safety Act 2000 - pleas of guilty - objective seriousness of offences considered by reference to youth and inexperience of two workers injured in a workplace accident - reasonable foreseeability of risk to safety - deterrence - availability of simple remedial steps - likely consequences of breach as indicative of objective seriousness - existence of safe systems prior to offences - maximum penalty - respective culpabilities - absence of prior convictions - early pleas of guilty - contrition and remorse - cooperation - post-offence measures - commitment to the two injured workers - second defendant's capacity to pay a fine - penalty - orders

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Occupational Health and Safety Act 2000

Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Inspector Stephen Charles v Port Kembla Copper [2005] NSWIRComm 54 Maddaford v CSR Limited and Mulgoa Quarries [2004] NSWIRComm 337 Manpac Industries Pty Ltd formerly (t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) (2001) 106 IR 435 Morrison v Powercoal Pty Ltd (2003) 130 IR 364 CASES CITED: R v Thompson R v Houlton (2000) 49 NSWLR 383 115 A Crim R 104 Winchester (1992) 50 A Crim R 345 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australian Limited and Another (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Page) v Hoist Rentals Pty Limited (No 2) (2000) 99 IR 163

Prosecutor: Mr D. Chin, of counsel Solicitor Phillis Fox Lawyers LEGAL REPRESENTATIVES:

Defendants: Ms K. Nomchong, of counsel Solicitor Hunt & Hunt Lawyers

Inspector Colin Price v Hunter Galvanizing Pty Limited (ACN 097 401 575)

Prosecution pursuant to s 8(1) of the Occupational Health and Safety Act 2000

Prosecution pursuant to s 8(1) of the Occupational Health and Safety Act 2000 by operation of s 26(1) of the Act

1 Hunter Galvanizing Pty Ltd (the first defendant) has pleaded guilty to an application for order which alleges that an offence was committed under s 8(1) of the Occupational Health and Safety Act 2000. The offence is particularised in the application for order in the following way:

On 24 March 2004 the defendant Hunter Galvanizing Pty Ltd contravened s 8(1) of the Occupation Health and Safety Act 2000 in that on 24 March 2004 at its premises located at 13 Old Punt Road, Tomago in the State of New South Wales the defendant being an employer failed to ensure the health, safety and welfare at work of all its employees in particular Mr Watters and Mr Rutkay-Pevy.

Particulars of the first defendant's contraventions are as follows:

1. Failed to provide adequate information and training in relation to safe method of loading a head-frame at the premises.

2. Failed to provide adequate supervision in relation to inexperienced employees undertaking the task of loading a head-frame at the premises.

3. Failed to take adequate steps to ensure the safety of head-frames provided for use by employees at the premises in particular that the head-frames did not present a safety risk in the event of incorrect loading. 2 Kerry Bartholomew (the second defendant) has pleaded guilty to an offence under ss 8(1) and 26(1) of the Occupational Health and Safety Act 2000. The offence arises out of the same facts and circumstances alleged against the first defendant. The second defendant's plea proceeds upon the basis that under s 26(1) of the Act he was at the time of the offence a director of the first defendant. 3 The evidence tendered on sentence suggests that the head-frame in question was a steel beam that weighed approximately one tonne. It was located about 2.3 metres above floor level and was supported at either end by steel columns. A cradle was positioned at the top of each column, and functioned as a support for each end of the head-frame. An extra piece of steel was welded to either side of the beam. This consisted of a "box" section measuring 300mm high x 230mm wide x 200mm deep. The beam also had two steel loops welded along its top section to allow it to be moved by an overhead crane. In addition there were twenty four arms on angle shaped pieces of steel placed evenly along and welded at right angles on the underside of the steel beam. The steel pieces were about 1.5 metres long x 100mm x 75mm x 6mm. There were also about twelve oval shaped steel loops welded along each angle piece of steel. Three reinforcement bars approximately 9 metres long and 30mm in diameter were fastened to the angle pieces and ran parallel to the steel beam. Up to three hundred wires approximately 300mm long were hooked through the loops over the reinforcement bars.

4 At the time of the offence the first defendant was engaged in the business of chemically preparing steel products for galvanizing and galvanizing at its premises. It employed a number of employees in the factory area of the premises including Mr Watters, who was 20 years of age and Mr Rutkay-Pevy, who was 17 years of age. Both were employed as factory workers. The second defendant at the time of the offence was a director and plant manager of the first defendant. 5 On 24 March 2004 at about 7am Mr Watters and Mr Rutkay-Pevy commenced work. It was their first day of employment with the first defendant. Shortly after arriving for work they each received about thirty minutes induction from the first defendant's production manager, Peter Hales. This included showing them around the factory and warning them about dangerous areas. They were initially assigned a cleaning task by Mr Hales and then at about 8am they were instructed by the second defendant to load the head-frame with metal bars. This process is called "jigging". The metal bars were on a pallet positioned on the floor adjacent to the head-frame. They weighed approximately 4.3 kilograms each. A hole at the end of each bar allowed it to be hooked onto the head-frame. After some instruction from the second defendant Mr Watters and Mr Rutkay-Pevy commenced to load the metal bars onto the head-frame. They loaded the bars predominantly down one side of the head-frame. At about 8:30am the head-frame rotated out of the supporting cradles and fell to the floor striking both Mr Watters and Mr Rutkay-Pevy. Mr Watters suffered a fractured skull requiring the insertion of a plate in order to repair it. He also suffered a groin injury and spent two days in hospital. Mr Rutkay-Pevy was struck in the leg by the head-frame and suffered bruising and swelling to the back of his calf muscle on his right leg. 6 On the same day the prosecutor attended the premises and made a number of observations concerning the head-frame. It was lying on the concrete floor at the rear of the factory in the south-east corner. It appeared to the prosecutor that about sixty one flat steel pieces, some still attached to the hooks of the head-frame and others lying on the concrete floor, had been loaded along one side of the head-frame. Several photos were also taken by the prosecutor during the course of his investigation. A number of those photographs depict the head-frame in the position where it fell following the incident showing that it had rotated into an upside down position. 7 According to an agreed statement of facts which was tendered during the sentence proceedings the incident was caused by the head-frame rolling out of the support cradles because of incorrect loading. The head-frame rotated with the weight of the sixty one flat metal plates placed on one side of the frame. The first defendant had manufactured the head-frame utilising a design adopted from other galvanizing plants in Australia and overseas. Following the incident the second defendant commissioned a report from D Hunt & Associates Pty Ltd for the purpose of inspecting the head-frame involved in the incident. A report prepared by that company dated 16 April 2004 concluded that the head-frame could become unstable if used with a smaller sized cradle and loaded down on one side only. This was because the sides of the smaller sized cradle were not sufficiently high to prevent the head-frame from rotating out of the cradle. The report records a visit by the authors to the first defendant's premises on 6 April 2004. During that visit the authors observed that the cradles involved in the incident had been altered to increase their height and the head-frame had been modified to prevent it sliding off the cradles. The view expressed in the report was that those modifications were sufficiently adequate to prevent the head-frame from rotating. 8 The second defendant in an affidavit sworn on 9 February 2006 provided some further insights into the circumstances of the offence. On 24 March 2004 the second defendant recalls that the regular supervisor, Mervyn Aunger was on sick leave that day. Had Mr Aunger been present at work he would have supervised Mr Watters and Mr Rutkay-Pevy while they were loading the head-frame. Instead, the second defendant took on the role of supervisor. He moved the head-frame to an area where three other employees were working and directed those employees to "keep an eye on..." Mr Watters and Mr Rutkay-Pevy because "they are only new starters...". According to the second defendant all three nodded in response to his direction. He did not designate the role of supervisor specifically to one of the three. He believed that Mr Watters and Mr Rutkay-Pevy would be effectively supervised because the three employees would be working only one to two metres away. He also instructed Mr Watters and Mr Rutkay-Pevy on how to perform the task. One instruction he gave was to load the head-frames from one end to the other. He says he, "...gesticulated to indicate that the loading should be performed from the western end to the eastern end". He then observed the two of them for a short time after they commenced loading the first batch of bars. He then left the workshop in order to obtain more bars for loading intending to return within three to four minutes. Consideration 9 In my view these are serious offences. Mr Watters and Mr Rutkay-Pevy were both very young and without experience working with heavy equipment and heavy machinery in a factory environment. It was their first day at work. They had been at work no more than a few hours before the head-frame dropped out of the support cradles. Given their youth and inexperience it was of critical importance that they be closely supervised and receive detailed instructions and information about tasks that they were directed to perform. Instead, on the day of the offence the regular supervisor was absent from work. The second defendant issued an instruction in the general direction of the three workers working nearby which consisted of telling them to "keep an eye on..." Mr Watters and Mr Rutkay-Pevy. The second defendant attempted to take on the role of supervisor but his supervision and instruction were deficient. He gave the new workers some directions on how to load the head-frame but failed to instruct them to load it evenly to ensure it was evenly weighted on both sides. The risk to the workers' safety which arose because of the inadequacy of these instructions was compounded by the action of the second defendant in utilising the short sided support cradles for the head-frame, rendering it inherently unstable. The head-frame weighed about one tonne and was about 2.3 metres above floor level. From its description in the agreed statement of facts and from photographs it appears to be a heavy and cumbersome object likely to cause serious damage and injury in the event it became unstable and toppled over. Failure to instruct the two workers on the importance of loading the head-frame evenly resulted in the weight of the load being unevenly distributed and this together with the use of the shorter sided cradles as support increased the prospect of an accident. Certainly the risk to the safety of Mr Watters and Mr Rutkay-Pevy in these circumstances was obvious. Risk to safety was reasonably foreseeable 10 The defendants represented by Ms Nomchong of counsel contended that the risk (to safety) was neither obvious nor foreseeable. Reliance for this contention was based on comments made by the Full Bench in Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [33]:

On the other hand, another employer may have had a good safety record, a safe system of work in place, provided a high level of training, instruction and supervision but through a combination of inadvertence on the part of an employee and a momentary lapse in supervision, a fatality occurs. The assessment of the objective seriousness of the offence could conceivably be at a level lower than that applied to the first employer and, having regard also to subjective considerations, might attract a lower penalty.

The comments were made in the context of the principle that the seriousness of actual injuries will not necessarily result in a severe penalty. Apart from a good safety record which I will discuss in more detail below none of the other criteria which the Full Bench discusses in the above paragraph have any relevance in my view to the circumstances which have given rise to the present offence. Mr Watters and Mr Rutkay-Pevy received cursory and inadequate instruction and minimal supervision. No inadvertence can be attributed to either of them. Neither employee was the beneficiary of a safe procedure for the loading of the head-frame. 11 I have found that the risk to safety in the circumstances was obvious. I also find that it was reasonably foreseeable. First, the head-frame was mounted on the shorter sided cradle making it unstable. Secondly, an assumption was made by the second defendant without any investigation that the head-frame supported in this way presented no danger. Thirdly there was a critical failure to instruct the two workers to load the bars evenly so that the weight would be evenly distributed on both sides. Given the youth and lack of experience of both workers it was of the utmost importance that they were properly instructed and closely supervised while performing the task. 12 The obviousness and foreseeability of the risk to safety contributes to the overall seriousness of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [87-92].

13 The youth and inexperience of the two workers also assumes significance in the sentencing process insofar as they are considerations relevant to the application of general deterrence. This is especially so where the work environment in which the two workers commenced on 24 March 2004 utilised large machinery and equipment which were potentially dangerous. In such circumstances the principle of general deterrence is relevant in order to compel the attention of other employers operating in similar industries to the importance of ensuring the safety of young and inexperienced workers who are performing dangerous tasks: see for example WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australian Limited and Another (2000) 95 IR 383 at 452. 14 Specific deterrence is also relevant to the circumstances of each defendant. The first defendant continues to operate in an industry which utilises heavy machinery and equipment. The second defendant continues to work in the industry as a director of the first defendant and in a senior management role. Availability of simple remedial steps 15 A further factor which adds to the objective seriousness of the offence is the availability of simple remedial steps which could have obviated the risk to safety. An express instruction to the two workers to load the flat beams evenly on both sides of the head-frame would have significantly diminished the prospect of the structure becoming unstable and toppling over. Utilising the appropriate sized cradles to support the head-frame would have diminished the prospect even further. Ensuring adequate supervision throughout to the two workers would have been another simple and obvious measure. The potential risk to safety 16 Mr Watters and Mr Rutkay-Pevy sustained serious injuries following the accident. Given the weight and height of the head-frame those injuries could have been far more serious, even fatal. These matters serve to emphasise the objective seriousness of the offences: see Maddaford v CSR Limited and Mulgoa Quarries [2004] NSWIRComm 337 at [23].

Safety systems, workplace practice and procedures in place at the time of the offences

17 In relation to the head-frame involved in the accident the evidence suggests that it was normally used with support cradles whose sides were larger than the shorter-sided support cradles utilised on the day. The reason for this departure from usual practice was so that Mr Watters and Mr Rutkay-Pevy would be working in an area where they could be supervised. At the time of the offences the first defendant also had in place a system for inducting its workers although it would appear that the inductions were of relatively short duration and general in scope. Part of the first defendant's system prevailing at the time of the accident was referred to in the second defendant's affidavit as a "buddy system" whereby a new employee would be assigned to work with a more experienced employee. It was the second defendant's intention to assign Mr Watters and Mr Rutkay-Pevy to the general supervisor Mr Aunger but he was absent that day on sick leave. In addition to the measures representative of a general system in relation to new employees the first defendant had also employed (on 5 January 2004) Ms Heidi Clifton as a technical adviser. According to the second defendant at the time of the accident Ms Clifton had only just commenced a review of work procedures at the plant. A number of documents annexed to the second defendant's affidavit suggest that the first defendant had in place prior to the offence a documented system of safety policies, practice and procedures. It is not entirely clear how extensive the system was since the documentation annexed to the affidavit consists mainly of documents which purport to be revisions or updates of earlier material all of which post-date the offences. Nevertheless it is clear that the first defendant did have in place a number of documented safety procedures. The prosecutor did not take issue with the fact that some safety measures were in place prior to the accident. The existence of such measures and the implementation of those measures up to, and at the time of the offences shows that the defendants took their occupational health and safety obligations seriously and are deserving of some mitigation of the otherwise objective seriousness of the offence: Inspector Stephen Charles v Port Kembla Copper [2005] NSWIRComm 54 at [66-69]. Maximum penalty 18 Neither defendant has any prior convictions under the occupational health and safety legislation. The maximum penalty therefore for the first defendant, a corporation, is $550,000 and the penalty for the second defendant, an individual, $55,000. Respective culpabilities 19 The evidence concerning the relationship between the first and second defendants is that the second defendant holds 10% of the shares in the first defendant with the remaining 90% being held by other directors of the first defendant. The second defendant has had sole responsibility from the time the plant was commissioned in 2002 as plant manager for the day to day operation of the plant. The other directors have never had any control of the day to day operations of the plant although another director, Alan Morton was kept informed by the second defendant on a consistent basis of the plant's operation. Over the years from the time the plant was first commissioned the second defendant's role as plant manager has expanded such that the role now encompasses responsibility for production, finance, human resources and occupational health and safety compliance. 20 It can be seen from this brief summary that the second defendant although only a 10% shareholder nevertheless had the bulk of the responsibility for operational matters including occupational health and safety matters at the plant. The second defendant says in his affidavit that he employed Ms Clifton as a technical advisor on 5 January 2004. Although the second defendant was one of several directors it is apparent that the responsibilities and level of control of the day to day operations of the second defendant was and is of a high degree. Nevertheless I do not characterise the second defendant's level of control of the first defendant is akin to being its alter ego. He was not the sole director and in fact liaised and liaises consistently and regularly with another director concerning the first defendant's operations. Taking all these matters into consideration I assess the second defendant's culpability as slightly less than that of the corporate defendant: see WorkCover Authority of New South Wales (Inspector Page) v Hoist Rentals Pty Limited (No 2) (2000) 99 IR 163 at [38]. No prior convictions 21 I have also taken into account on sentence the fact that neither defendant has prior convictions. This entitles them to leniency normally extended to an offender who is not otherwise adversely recorded. Early pleas of guilty 22 The defendants submit, and the prosecutor concedes that guilty pleas were entered by both of them at an early stage. Guilty pleas to the offences were in fact entered before Staff J on 29 July 2005. Although at that time there was some dispute about some of the particulars, in view of the prosecutor's concession and the timing of the plea I am prepared to accept that the pleas were entered at an early stage. Both defendants are therefore entitled to a discount of their sentences in accordance with the principles outlined in R v Thompson; R v Houlton (2000) 49 NSWLR 383; 115 A Crim R 104. 23 I consider that in the circumstances here an appropriate discount for the utilitarian value of the pleas is 25 percent. Contrition and remorse 24 The defendants are also entitled to a measure of leniency by virtue of their expressions of contrition and remorse. The second defendant has been personally affected by the accident and its consequences and feels guilt and sincere regret about his role in the accident. He also worked hard to ensure Mr Watters and Mr Rutkay-Pevy returned to work following the accident as expeditiously as possible. Although the expressions of guilt and regret do not of themselves warrant the extension of leniency on the grounds of contrition and remorse, entering the pleas of guilty at an early stage is a reflection of contrition which attracts leniency: Winchester (1992) 50 A Crim R 345 at 350. Cooperation

25 The defendants are also entitled to have taken into account on sentence the extent of their cooperation with the prosecuting authority, WorkCover. WorkCover was contacted immediately after the accident and the accident site was cordoned off until WorkCover completed its investigation. The second defendant ensured that all employees of the first defendant cooperated fully with the investigation. Post-offence measures

26 The defendants have also revised and implemented a number of post-accident safety measures which I will take into account on sentence in favour of both defendants. 27 In brief Ms Clifton has revised an occupational health and safety management system and procedures and induction process. She has also revised risk assessment procedures, safe work method statements, a safe work instruction register and a contractor safety checklist. The buddy system has been reinforced through the updated policies and procedures, and, induction processes ensure full and proper supervision at all times. Commitment to the two injured workers

28 The recovery and rehabilitation process of the two injured workers was overseen closely by the second defendant. Both workers have since returned to work for the first defendant. Both were re-inducted and re-trained upon their return to work. These are also matters I take into account in both defendants' favour.

29 The second defendant in a second affidavit sworn on 8 February 2006 states that the imposition of any financial penalty will have a significant impact on his financial resources. According to the second defendant he has recently been divorced and is recovering financially from the impact of that divorce. He presently earns an annual salary of $100,000 from the first defendant. He owns no real property. Extracts of a savings account pay book and statement savings account from Newcastle Permanent Building Society Ltd show regular deposits in various sums, predominantly amounts in the sum of $250 from the first defendant between the period September 2005 until the end of November 2005. I conclude from the material that the second defendant is capable of paying a modest fine. I propose therefore to impose a fine which appropriately reflects the objective seriousness of the offence but at the same time takes into account the second defendant's capacity to pay a modest fine: Manpac Industries Pty Ltd formerly (t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) (2001) 106 IR 435 at 467. 30 In relation to the first defendant no submissions were made that it lacked capacity to pay a fine. Penalty

31 In determining penalties against both defendants I have taken into account the objective seriousness of the offences, the personal factors described above and the absence of prior convictions. All of these factors have been considered by reference to the Crimes (Sentencing Procedure) Act 1999 in particular s 21A. I have also taken into account the respective culpabilities of both defendants and the second defendant's capacity to pay a fine.

32 In Matter No IRC 1431 of 2005 I make the following orders:

1. The defendant Hunter Galvanizing Pty Limited (ACN 097 401 575) is convicted of the offence.

2. The defendant Hunter Galvanizing Pty Limited (ACN 097 401 575) is fined $100,000 with a moiety to the prosecutor.

3. The defendant Hunter Galvanizing Pty Limited (ACN 097 401 575) is to pay the costs of the prosecutor as agreed or, in the absence of agreement, as assessed. 33 In Matter No IRC 1435 of 2005 I make the following orders:

1. The defendant Kerry Bartholomew is convicted of the offence.

2. The defendant Kerry Bartholomew is fined $7,000 with a moiety to the prosecutor.

3. The defendant Kerry Bartholomew is to pay the costs of the prosecutor as agreed or, in the absence of agreement as assessed.

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