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[2013] NSWIRComm 90
Industrial Relations Commission (NSW)
2013-09-27
Haylen J
Original judgment source is linked above.
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.
DELIBERATION 19It is against this background that the Court comes to consider the setting of an appropriate penalty for each defendant. It is necessary to initially consider the objective seriousness of each offence. Counsel for the prosecutor submitted that here the relevant aggravating factors were, firstly, that both defendants had a record of previous convictions and secondly, the injury, emotional harm, loss or damage caused by the offence was substantial with Mr Shields suffering amputation of his right little finger and crush injuries to the tips of his right ring and middle fingers. Mr Shiels had been hospitalised and underwent a number of medical procedures, including re-constructive surgery to his ring and middle fingers and skin grafts using skin from his upper thigh. In each case, the maximum penalty was $825,000. 20The prosecutor pointed out that the risk of harm was objectively foreseeable and the risk was serious. The defendants had failed to identify and assess the risk associated with having an unguarded nip point in the operation of the printing press. Foreseeability was a significant factor in assessing the level of culpability of the defendants. Here, it was readily foreseeable that workers such as Mr Shiels and Mr Skulski could suffer an injury when working on unguarded machinery: Mr Shiels had suffered a serious injury requiring hospitalisation and ongoing treatment. There were simple and straightforward remedial steps available that the defendant could have taken to avoid this risk to safety. After the accident the defendants were able to install a simple and uncomplicated guarding device. 21For the defendants, it was pointed out that the Varimat had been manufactured in 1995 and had been imported to Australia in 2004. A team of German technicians had been brought to Australia to install and commission the printer in the configuration in which it had previously operated. Mr Holzkamp had worked on the press over a long period of time and had travelled to Australia to provide training and instruction over three weeks. A consulting engineer had also been engaged to assist with the technical aspects of the printing press. The press thereafter had been regularly serviced and maintained by a local subsidiary of the manufacturer and there was a proper supervisory structure in operation concerning the use of the Varimat. The defendants had provided safety systems and had undertaken risk assessments that did not identify the nip point, or that a guard was missing. 22The defendants acknowledged that, pursuant to s 21A of the Crimes (Sentencing Procedure) Act 1999, the occurrence of a death might manifest the degree of seriousness of the relevant risk. It was pointed out that in the present case, however, the nature of the injuries sustained by Mr Shiels was to be assessed in the lower range of seriousness. Although there was no injury sustained by Mr Skulski on the day, it was acknowledged that he was at risk in the ways alleged. 23While the defendants accepted that the nip point was unguarded, they contested the proposition that the particular circumstances demonstrated that the lack of a guard was obvious. People well versed in the operation of this press had come to Australia to re-commission it and no guard had been supplied or fitted at that time. They did not suggest that a guard was necessary for this nip point. It was submitted that the position of the nip point was not obvious and that in its day-to-day operation, the press was guarded in the relevant position by a moveable guard: it was only in the process of changing plates on the cylinder that the nip point was exposed. The nip point would only therefore be a risk when the machine was "inching", but not while it was in full operation mode. It was accepted, however, that the operation manual provided by the manufacturer specified (unfortunately, by an incorrect reference) that a guard had to be fitted at the nip point. 24It was pointed out for the defendants that the injured worker had performed this task on numerous occasions in his relatively short experience with the printer. It was accepted, nevertheless, that the changing of the varnish plate was a regular part of the operation of the printer. In this task, both employees were being supervised in what was described as a two-person process, with one on each side of the press holding the varnish plate and attaching it to the cylinder. Mr Skulski was experienced in this work. 25Counsel for the prosecutor submitted that, while the printer was fully operational, the nip point was not exposed, but that was not the case every time a varnish plate had to be replaced. When that occurred, the applicator roller was constantly moving, being the roller above the varnish cylinder. The agreed statement of facts were that Mr Shiels had become entangled either in the nip point between the varnish cylinder and the applicator roller, or between the applicator roller and the plant clamps. There were two modes that operated the varnish cylinder used as part of the process to install the varnish plate, the inch mode and the crawl mode. The crawl mode operated at a slow continuous speed and in that mode the cylinder moved constantly. The Court accepts that submission. 26As to foreseeability, it was submitted for the defendants that there were a number of factors to be considered in assessing the degree of foreseeability. This was not a simple case of an obvious and foreseeable risk as demonstrated by the fact that experienced experts in the operation of the press, in the process of installing and commissioning it, did not notice that a guard was missing or that a guard was required. Risk assessments were conducted and this omission was not identified. There had been no near misses to act as a warning of the existence of the nip point risk. 27Counsel for the prosecutor submitted that every time a varnish plate was replaced, a risk of injury existed where the applicator roller was always moving and depending on which mode was used to move the cylinder, in these circumstances there was always a risk and it was "readily foreseeable." The photographs of the printer clearly showed the existence of the nip point. The Court understands the submissions for the defendant as setting out a number of factors that are relevant in considering the degree of foreseeability in this case. The defendants' submission in that context is accepted, but here the exposed nip point was in plain view. 28In relation to the nature of the injury the defendants submitted, on the material before the Court, it could not be said that there was a greater risk than that demonstrated by the accident involving Mr Shiels. It was submitted that, when using the buttons to inch or jog the cylinder, there was only a relatively small movement and it was highly unlikely that the whole hand would be taken in through the nip point because this was not a continuous dragging operation. There is force in those submissions. 29Having regard to these matters, the Court concludes that while these were serious breaches by each of the defendants, they fall towards the lower end of the scale. Nevertheless, very serious hand injuries were capable of being suffered while workers were engaged in changing the varnish plate. 30The Court accepts the prosecutor's submission that general deterrence plays an important role in the penalty to be imposed. Each penalty imposed by the Court should send a strong message to industry that participants must be vigilant in guarding moving parts of machinery. The recurrence of crush injuries due to unguarded machinery remains a common offence under occupational health and safety legislation, despite the comprehensive safety systems often adopted by employers. In this case, general deterrence will play a significant role in the setting of an appropriate penalty. In relation to specific deterrence, although the defendants submitted that having regard to the systems now in place, an accident of this nature is unlikely to occur again, the fact is they remain in business operating sophisticated printing equipment that nevertheless, carries with it a risk of injury. While the defendants should be given credit for their significant existing safety systems, this accident demonstrated that there was a gap in those safety systems. In those circumstances, specific deterrence will also play a role in the setting of an appropriate penalty. 31The prosecutor readily acknowledged that there were subjective factors to be taken into account in mitigating the penalty to be imposed. It was accepted that the defendants pleaded guilty at the first available opportunity following the amended application for order being filed in Court. In those circumstances, it was submitted that the utilitarian value of the pleas would be at the "higher" end of the scale of discount. The Court accepts the prosecutor's submission in this respect and the penalty in each matter will be discounted by 25 per cent in recognition of the early pleas. 32It was submitted for the defendants that the prior convictions, having regard to the number of employees engaged and the nature of the industry, nevertheless, represented a good safety record. While it can be acknowledged that, over a period of lengthy operation, the defendants have not demonstrated a flagrant disregard for safety, nevertheless, the number of convictions now recorded against Zac's Packs represents a worrying sign. The defendants did, however, act promptly to address the risk demonstrated by this accident and engaged external consultants to assist them in reviewing their safety practices and to make variations and undertake revision of those practices. The Court, in addition, accepts that there was co-operation with the WorkCover investigation and that the defendants have demonstrated contrition and remorse. The evidence also demonstrates that the defendants are good corporate citizens who give support to worthwhile charities. These matters will be taken into account in mitigating the penalties. 33Senior counsel for the defendants addressed the application of the parity principle in relation to these offences. It was noted that the parity principle was based on consistency and not disparity in justice between co-offenders and that the concept of "equal justice" required like offences to be treated alike, but recognised that if there were relevant differences between the co-offenders, then due allowance had to be made for the differences. In applying that principle in these matters, it was necessary to have regard to the respective roles of Zac's and J I T Offset. There was only one particular specified in the charge against J I T Offset and two particulars charged against Zac's. In oral submissions, the defendants accepted that the charges so framed represented a proper recognition of the real roles of the two companies in relation to the printer. It was conceded that, arguably, the more serious charge related to Zac's because the second particular identified the inadequacy of a risk assessment. 34In Postiglione v The Queen (1997) 189 CLR 295, Kirby J at 341 spoke of the parity principle requiring that normally, like cases should be treated alike. The judgments of Dawson and Gaudron JJ at 301-302 noted that the parity principle was an aspect of equal justice and that equal justice required that like should be treated alike but if there were relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. In these matters, it is to be noted that in the Agreed Statement of Facts there is a preponderance of references to Zac's role and Zac's actions in relation to the operation of this printing press. Those references are consistent with the submissions made by senior counsel on behalf of the defendants and the fact that the differently framed charges recognised the different level of responsibility for each of the defendants. The Court concurs with that submission: Zac's should therefore bear a higher level of responsibility and culpability for this risk and the accident that occurred as a result of the unguarded nip point. There is also a difference in the criminal history of both defendants. J I T Offset has only one prior conviction, while Zac's has four convictions arising out of three separate incidents. These differences require the imposition of different penalties in relation to each of the defendants.
ORDERS 35Having regard to the matters considered above, the Court makes the following orders: (a)In relation to Zac's Packs Pty Ltd: (i)the defendant, Zac's Packs Pty Ltd, is found guilty of a breach of s 8(2) of the Occupational Health and Safety Act 2000 as particularised in the amended application for order in Matter No IRC 1627 of 2011 to which the defendant entered a plea of guilty; (ii)the defendant is fined the sum of $115,000, with half that amount to be paid to the prosecutor by way of moiety; (iii)the defendant is to pay the costs of the prosecutor in a sum as agreed, or in the absence of agreement, as assessed pursuant to the provisions of the Legal Profession Act 2004. (b)In relation to J I T Offset Pty Ltd: (i)the defendant, J I T Offset Pty Ltd, is found guilty of a breach of s 8(1) of the of the Occupational Health and Safety Act 2000 as particularised in the amended application for order in Matter No IRC 1622 of 2011 to which the defendant entered a plea of guilty; (ii)the defendant is fined the sum of $90,000, with half that amount to be paid to the prosecutor by way of moiety; (iii)the defendant is to pay the costs of the prosecutor in a sum as agreed, or in the absence of agreement, as assessed pursuant to the provisions of the Legal Profession Act 2004.
Annexure 1 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 October 2013
Inspector Cooper
J I T Offset Pty Ltd
(1997) 189 CLR 295