Inspector Cooper v J I T Offset Pty Ltd

Judgment 1The two defendants before the Court have entered pleas of guilty to breaches of the Occupational Health and Safety Act 2000 ("the Act"). J I T Offset Pty Ltd ("J I T Offset") has entered its plea of guilty in relation to a breach of s 8(1) of the Act, while Zac's Packs Pty Ltd ("Zac's") has entered a plea of guilty in relation to a breach of s 8(2) of the Act. In 2009, both defendants operated out of the same premises in Ingelburn, New South Wales. J I T Offsett was engaged in the business of lithographic box printing and manufacture and employed approximately 35 persons at the premises. Zac's was engaged in the business of paper and corrugated cardboard box manufacturing and printing and at the time employed approximately 20 people. A third entity, J I T Box Pty Ltd ("J I T Box"), was affiliated with J I T Offset and Zac's by performing the managerial and administrative functions for those two enterprises. Zac's was the ultimate holding company of both J I T Offset and J I T Box. 2In late October 2009, J I T Offset employed Mr Alexander Skulski at the premises. Mr Lance Shiels was also working at the premises, but was not an employee of either J I T Offset or Zac's. 3On the day in question Mr Skulski and Mr Shiels, together with another person (Mr Paul Skulski, a qualified printer machinist), were operating a Varimat printing press ("Varimat"). The Varimat was a large format commercial offset printing press producing a range of printed paper card finishes used in the manufacture of paper box products. The Varimat printed external box decals and signage. During the course of the morning, Mr Skulski and Mr Shiels were loading a varnish plate on to the varnish cylinder of the Varimat in preparation for the next print run. A difficultly was encountered in correctly fitting the varnish plate and Mr Skulski rotated the cylinder to which the plate was being attached and during that process, Mr Shiels' hand became entangled in the rollers. In this accident, Mr Shiels' right little finger was exposed to the bone and the tip of his middle and ring fingers were crushed. Following an investigation of the accident, Inspector Cooper commenced these proceedings in late October 2011. 4These two matters were then, by consent, joined with four related matters. Not guilty pleas were entered in the four joined matters and the original five-day hearing for the present two matters was vacated. All matters were then listed for hearing. By May 2013, however, both defendants had entered guilty pleas to an amended application for order filed in each matter. In each matter, the risk was identified as the risk of employees or non-employees being injured by coming into contact with an unguarded nip point on the KBA 142 Varimat printing press and it was alleged that the defendants failed to ensure that all moving parts of the Varimat were guarded so as to prevent persons coming into contact with its moving parts. In relation to Zac's, there was an additional particular, namely, that the defendant failed to ensure that an adequate risk assessment was undertaken of the Varimat which identified the risk posed by the moving parts and the means by which it could be controlled, in particular, by the installation of a guard. In relation to J I T Offset, it was alleged that, by its acts and omissions as particularised, it had failed to ensure the health, safety and welfare at work of all its employees and in particular, Mr Alexander Skulski. Zac's was charged with a failure to ensure that people other than its employees and in particular Mr Lance Shiels and Mr Alexander Skulski, were not exposed to risk to their health and safety arising from the conduct of its undertaking while they were at its place of work. 5The evidence for the prosecutor in both matters was comprised of an extensive agreed statement of facts and a tender bundle of documents. The tender bundle included: safety equipment and safety instructions for the Varimat; a factual inspection report prepared by Inspector Young in October 2009 and a further report prepared in November 2009; a variety of photographs; a Zac's Packs job description for process workers; company searches for each of the defendants; and; prior conviction reports for both defendants. The prior convictions report for J I T Offset disclosed a 2011 conviction in the Industrial Court for a breach of s 8(1) of the Act with a penalty of $60,000 being imposed. In relation to Zac's, there were three separate incidents involving four separate breaches of the Act. There were two separate breaches of s 15 of the previous Act in 1995 resulting in the Chief Industrial Magistrate imposing a penalty of $1500 and the Industrial Court imposing a penalty of $40,000. In 2011, there were two breaches involving a breach of s 8(1) and s 8(2) of the present Act and the Industrial Court imposed penalties of $80,000 and $50,000, respectively. The Agreed Statement of Facts appears as an annexure to this judgment. 6The evidence for the defendants was contained in the affidavit of Mr Tee On Ngoh who was employed as the financial controller by Zac's Packs Australasia Pty Ltd, the successor to J I T Box and the two defendants. 7Mr Ngoh dealt with the corporate structure relating to the defendants and noted that J I T Box provided management and administration staff to the defendants with Zac's Packs Pty Ltd being a registered business name that, at the time of the accident, was used by Zac's and J I T Offset and the related company J I T Box. Zac's was the parent company for J I T Offset and J I T Box. Mr Edward Zacaropoulos and his son, Mr John Zacaropoulos, founded each of the companies. The companies were operated as a family business with Mr Edward Zacaropoulos occupying the position of managing director of each corporation. While Mr Edward Zacaropoulos attended the site on a regular basis, he had delegated the day-to-day operation of the business to his two grandsons. He, nevertheless, retained control over higher-level decisions affecting the business. 8It was stated that the defendants produced corrugated cardboard, litho and litho laminated products and were the only business entity in Australia to produce both corrugated and litho products under the same roof. Currently, Zac's employed approximately 80 staff and 10 contractors with more than 60 per cent of staff being long-term employees. The defendants operated two shifts each day at the site. The business had a long-term certificate of recognition under ISO 9001, Quality Management Systems. 9The defendants had a supervisory structure in place for the operation of the Varimat. The production supervisor (Mr Doherty) was responsible for supervising the operations of the Varimat and the operators of the printer reported to him. There were two qualified trades level printer machinists who were primarily responsible for the day-to-day operation of the Varimat and Mr Alexander Skulski was apprenticed as a printer machinist. A qualified tradesman had for many years provided on-the-job training and supervision for apprentice printer machinists and Mr Alexander Skulski and Mr Lance Shiels were under that supervision at the time of the accident as they were being considered for potential apprenticeships. 10Mr Ngoh dealt with the purchase and installation of the Varimat printer. The printer had been manufactured in Germany in 1995 and was purchased second hand. It was imported to Australia in mid-2004 and Zac's arranged for a team of German technicians to come to the Ingleburn premises to install and commission the Varimat. The printer was re-assembled in the same configuration as it had operated in Germany. The supplier of the printer had also provided a manufacturer's operating manual, but it was written in German. An English version was obtained after the purchase of the machine. 11Mr Holzkamp had been an employee of the previous owner of the Varimat press and had worked on the press since it was new, a period of nine years. Mr Holzkamp came to Australia and spent three weeks providing training and instruction on the press to employees at Zac's factory. The Varimat was installed and commissioned under the direction of Mr Holzkamp. Zac's had also engaged a consulting engineer, Mr Hueffel, to assist in the operation of the Varimat. Mr Hueffel spoke English and German and was available to ensure communication with Mr Holzkamp and if required, to assist in translation of technical language. He also assisted in any communication difficulties that arose in the training provided to persons operating the Varimat under the guidance of Mr Holzkamp. At no time during this period did Mr Hozkamp inform Zac's that a guard was missing, or that a guard ought to have been installed on the varnish cylinder. 12Following installation of the Varimat, Zac's arranged for two risk assessments to be conducted. The first assessment occurred in mid-January 2007 and the second took place in February 2008. The second assessment was carried out by a safety representative and reviewed by Mr Doherty. Those risk assessments did not identify that a guard for the cylinder roller was missing, or ought to have been fitted. In addition, the press was regularly serviced by a local subsidiary or branch of the German manufacturer. At no time did the service provider indicate that a guard for the cylinder roller was missing, or ought to have been fitted. 13Prior to the accident, Zac's had safe work instructions in operation and in June 2009 a work instruction was issued relating to the operation of the Varimat. In terms, that document did not give any warning about working in the area of the nip point of the varnish cylinder. A further work instruction was issued in August 2009 concerning the Varimat interface instructions. 14Mr Ngoh stated that, from the time of its purchase, installation and first operation in 2004 until the accident in October 2009, no prior incident or near miss had arisen regarding the operation of the press, or indicating that there was a risk of the type that emerged on the day of the accident. Shortly before the accident, revised safe work instructions for the Varimat were being drafted and those instructions were quickly finalised following the accident and were issued on 28 October 2009. In addition, Zac's engaged an external company to carry out a full risk assessment of the Varimat press. Following that risk assessment, the October 2009 Varimat operating procedure was revised and re-issued in May 2010. In November 2009 the same company provided training to the people operating the Varimat. A copy of the training presentation was annexed to Mr Ngoh's affidavit. 15Mr Shiels had been employed by a labour hire company to work as a factory process worker. Initially his work involved stacking boxes on pallets but he demonstrated competency and enthusiasm and after discussion with Mr Doherty, it was agreed that Mr Shiels would be transferred to work with Mr Paul Skulski on the Varimat. Mr Shiels was informed that if he was interested there might be an opportunity for him to take up an apprenticeship as a printer machinist after he obtained experience on the printer. After commencing work on the Varimat, Mr Shiels worked exclusively on the printer and did so under the supervision of two trades qualified printer machinists. Prior to commencing this work, Mr Shiels had undertaken induction training, firstly, with Mr Doherty and then with a safety consultant engaged by Zac's. 16Prior to the accident, the defendants had in operation a safety committee who were trained in risk assessment, consultation, emergency evacuation and first aid matters. Health and safety policies and procedure manuals were placed in evidence. The safety manual had been developed with the assistance of a consultant and the safety committee. The safety manual was reviewed approximately on an annual basis. The policies and procedures addressed a variety of matters by way of safe work instructions, but there were also monthly risk assessments conducted by members of the safety committee, induction training for all new employees and contractors, regular management meetings held to consider incident reports and safety issues and workplace inspections were conducted. Emergency procedures were provided and audited and there was a near miss and hazard reporting system in operation. An industry specialist conducted quality audits twice a year. Mr Ngoh also gave evidence of consultants' training services. 17Mr Ngoh spoke of the immediate response and assistance by way of first aid and otherwise provided to Mr Shiels after the accident and the steps taken by the defendants to address the risk demonstrated by this accident. Mr Doherty visited Mr Shiels approximately twice a day for nearly three weeks while he was in hospital and then at home to ensure that his needs were met and provided support. Mr Ngoh spoke of the defendants and management's "deep regret of the accident in which Mr Shiels was injured as a consequence of the defendant's breaches." He spoke of the defendants' contrition and remorse being shown by the measures taken after the accident and actions taken in relation to Mr Shiels. He stated that the defendants accepted their respective responsibilities in relation to the incident and pointed to their pleas of guilty. 18The defendants are active participants in the local community and have supported a number of worthwhile causes as outlined in Mr Ngoh's affidavit. Mr Ngoh also spoke of the defendants fully co-operating with the investigation conducted by the WorkCover Authority.