Inspector Dieter Franke v Nelmac Pty Ltd

PROSECUTOR: Mr M Cahill of counsel SOLICITORS: Phillip Fox LEGAL REPRESENTATIVES:

DEFENDANT: Mr B Hodgkinson SC with Mr G Wilson of counsel SOLICITORS: Turks Legal

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HAYLEN J 21 February 2005

Matter No IRC 1109 of 2004 INSPECTOR DIETER FRANKE v NELMAC PTY LIMITED PROSECUTION UNDER s 8(1) OF THE OCCUPATIONAL HEALTH AND SAFETY ACT 2000 EX TEMPORE JUDGMENT [2005] NSWIRComm 44 The defendant Nelmac Pty limited has a long history of constructing bridges. On 18 March 2002, it employed Albert John Giffin as a labourer at a work site in which it was involved on the Princes Highway, Bodalla in this State. As a result of an accident that occurred on that day, Inspector Franke commenced a prosecution under s 8(1) of the Occupational Health and Safety Act 2000, to which the defendant has pleaded guilty. The proceedings that I have dealt with this morning attracted submissions as to the appropriate penalty to be imposed in the circumstances of this particular offence. The particulars to which the defendant has pleaded guilty are that it failed to ensure the safety and health at work of its employees at this work site, and in particular, Mr Giffin, in that there was: a failure to ensure that a system that was safe and without risk to health and safety to its employees was maintained at the site; there was a failure to ensure that a penetration at the site was adequately secured and in a manner which was safe and without risk to the health of its employees working at the site; there was a failure to ensure that the existence of the unsecured penetration at the site was adequately identified or marked; there was a failure to ensure that an adequate inspection of the work area and the site was undertaken before work commenced on 18 March 2002; there was a failure to adequately instruct and train its employees at the site to ensure that penetrations were adequately secured and maintained adequately secured; there was a failure to ensure supervision of its employees working at the site at all times to ensure that safe systems of work were followed by its employees in undertaking the work at the site; and, there was a failure to warn its employees working at the site about the risks of unsecured penetrations. For the prosecutor, and in its case, there was tendered an extensive Agreed Statement of Facts, a number of photographs which I have found of assistance in understanding the evidence, a factual report prepared by an inspector and also a record of prior convictions, to which I shall return. I do not wish to incorporate in the record every aspect of the Agreed Statement of Facts but it is sufficient to note these matters. At all material times the defendant was subcontracted by the Roads and Traffic Authority to undertake the construction of a concrete bridge. There were a number of employees on the bridge, including Mr Giffin: Mr Brian James McIntosh was the project manager and supervisor at the site. Mr Michael Smith was a labourer at the site. Mr Paul Glasson was a steel fixer at the site; and Craig Fairman was a concreter at the time of the accident. Mr Giffen was cutting open a bundle of steel, laying out the steel and cutting a piece of conduit to use as a measure for the steel. He took a length of conduit onto the formwork to check its length. He then stepped down from a plank onto a piece of plywood of the formwork flooring located at the site. That formwork was covering an opening in the deck, had not been properly nailed and secured, nor marked to indicate that there was an unsecured penetration, and as Mr Giffin stepped onto the plywood, it gave way from under him causing him to fall through the opening in the formwork. One of Mr Giffin's legs went through the penetration. The other one remained outside the penetration, resting on the plywood. Mr Giffin sustained injuries to his back and there is other evidence that gives some more detail as to that aspect. I have had by virtue of the agreed statement of facts, and by reference to photographs, significant assistance in understanding both the site and the nature of the work. In the agreed statement of facts it is said that the decking was approximately 1.5 metres above the water under the bridge. The water was approximately one metre deep, with a soft muddy bottom. As a result of his observations and investigations, the prosecutor made the following findings. Notwithstanding that the defendant's safe work method system provided that any penetrations must be covered, and that flooring and formwork must be securely fixed, the defendant failed to ensure the system was followed by its employees. Mr Smith, who was charged with the task of fitting and securing the plywood flooring over the opening of the penetration, did not follow the system of work, and left the site on 16 March 2002 without securing the plywood into position. Mr Giffin was not advised that the plywood was not secured. The defendant failed to ensure that safe systems of work were followed by its employees in undertaking the work at the site. The defendant's procedure for fixing the plywood formwork consisted of two stages. In the first stage the nails or screws used to fix the plywood were not to be nailed right through the wood. In the second stage, after the area that had to be finally fixed had been checked by the supervisor to correct and match the height, the nails or screws were then nailed or screwed home. The piece of plywood that Mr Giffin stepped on had been laid on 16 March, and at that time that piece of plywood was not secure in accordance with either stage of the defendant's work procedure. The inspector also found that there was no warning in the area around the penetration to indicate that there was an unsecured penetration of the area. The defendant's project site safety plan provided that the project manager, or in the absence of the project manager, the site supervisor was responsible for planning and safe execution of work on the site. There was no properly appointed site supervisor or project manager at the site on 16 March 2002, or on the morning of 18 March 2002, up to the time the accident happened. By agreement between Mr Smith and Mr McIntosh, Mr Smith considered he was the supervisor at the site on 16 March, but the other employees were not advised he was the supervisor. Mr McIntosh, the supervisor responsible for ensuring the plywood was nailed down, and secured in place on site, was not present at the site on 16 March, was not present at the time the men commenced work at 7 am on 18 March and was not present at the time of the accident at 7.30 am on 18 March. The supervisor was not on site until 10 am on the day of the accident. Following the accident, the defendant carried out training and induction with all employees; developed and provided to employees risk assessments and work instructions and provided supervision in compliance with Nelmac Pty Limited policy. In relation to the defendant's prior convictions, that record shows that in May of 1999 it was convicted by the Wright J, President of three breaches under section 15 (1) of the Occupational Health and Safety Act 1983. In relation to those matters, it was fined $80,000, $10,000 and $10,000, a total of $100,000. I will turn shortly to the judgment of Wright J, President. In relation to the matters in December 2000, the defendant was found guilty of a breach of sections 15(1) and 16(1) of the Occupational Health and Safety Act 1983 and on each charge was fined the sum of $40,000. There is a judgment in relation to that matter of Mark s J which I shall briefly refer to in due course. The defendant's evidence consisted primarily of an affidavit of Brian James McIntosh, a director of the defendant, and the person who was the project manager of this work. Annexed to that affidavit were a variety of work manuals, work statements and the like, indicating the approach taken by the defendant to its work. Mr McIntosh spoke of the company being a family owned and operated business in the bridge construction industry. He had been involved in the building and construction industry and primarily in the construction of bridges for more than 12 years, and in the last ten years in a supervisory role with the defendant, and had a variety of qualifications, including a rigger's certificate, crane driver's certificate, and he was also certified by TAFE to train small groups. As a director of Nelmac Pty Ltd, he had been asked to speak on its behalf in these proceedings, and he also spoke in his capacity as the project manager for the company working on a variety of bridge construction sites. He said that in his role as project manager he was responsible for the supervision of work crews, for occupational health and safety and general managerial issues on site.

He had been trained and supervised to develop the required skills of this role by his father, Mr Nelson McIntosh. He had a variety of other tasks that he set out in his affidavit which I do not need to specify further.

Mr McIntosh states that the company was incorporated in New South Wales in 1972. I will return later to the company's record, but that record has to be considered in the context of some longevity. Mr McIntosh described the nature of the work undertaken by the company, the involvement of various family members in the company, and stating that part of the work of the company involved being engaged as the principal contractor or subcontractor to the New South Wales Roads and Traffic Authority, or the Victorian Authority, known as VicRoads, as well as the ACT Roads Authority. Since 1972 the defendant had built more than 265 bridges, including 12 bridges on the Princes Highway between Sydney and Melbourne and had built 22 bridges on the Hume Highway between Sydney and Melbourne. There had also been a good deal of work involving strengthening of 168 earth bridges between Albury and Melbourne. The company, since approximately 1993, had built an average of nine bridges a year. This was said to represent something close to 58,000 man hours of bridge construction and more than 5,000 metres of overall lineal bridge construction. There was a 25 person permanent staff, including six staff in a small pre-cast concrete yard, located on the family farm. Mr McIntosh spoke with pride about his family connections, their involvement in this business, the way in which this business had come to operate in the industry, including as much as possible, performing the work with very little work being subcontracted to specialists, and in that context, spoke about the company's pre-cast yard as part of the company's attempt to perform the entirety of the work as best it was able to do. Mr McIntosh then dealt with the defendant's involvement in community projects. I do not stay to deal with the detail, but his affidavit clearly sets out the company's involvement in those types of undertakings. Mr McIntosh also spoke about the career opportunities offered by the company, its involvement in initiatives in relation to Aboriginal employment and that material was before the Commission in terms of its good corporate history. The affidavit of Mr McIntosh then deals at length with the induction procedures: again, without going to the handbooks, the manuals and the site work sheets, it is an appropriate summary to say that induction by the company prior to this accident involved induction at a number of levels, and involved everybody who was to work on a site. There was an amount of monitoring of the work of the defendant and audit in part by the National Safety Council of Australia, and also by the public sector utilities for which the defendant worked, such as VicRoads and the RTA. It is noted that in December 2004 the company safe system was assessed in accordance with the RTA pre-qualifications system, and as a result, the company maintained its pre-qualification status with the Authority. The specifics of this particular project were then dealt with. It was said that the defendant company put in place before the accident, documented procedures relating to work procedures, as well as weekly safety inspections, that were normally conducted by the site supervisor. Mr McIntosh personally conducted a site specific risk assessment of the layout and assessed what type of plant and equipment and safety measures were needed to address this locality. All employees, subcontractors and visitors attended general site induction of approximately 30 minutes before they were allowed on site. The crew on this site, on a daily basis, averaged no more than five company employees. There was something in the order of 100 people who had visited the site, included ancillary trades and contractors. Mr McIntosh then dealt with the work being performed by Mr Giffin and noted that he stepped down from the deck above, rather than accessing the area by the designated access way. He noted that the safe work method system set out the safety criteria for work crews to follow and required all the penetrations to be secure. These work method systems had been endorsed by employees working on the project. They had signed off on those requirements indicating that they had received induction in relation to the systems being utilised at this work site. There were regular inspections of this work site conducted by the RTA to ensure the defendant was following proper quality control procedures, including implementing and managing occupational health and safety. Mr McIntosh said that RTA official's inspected the project two to three times a week. As project manager, Mr McIntosh frequently worked alongside employees in the construction of the project, and attended meetings with those employees to discuss issues relating to progress, as well as safety issues. Mr McIntosh expressed the view: "I would not allow an employee who was not appropriately trained or qualified, to operate any plant or equipment on project work". In relation to Mr Giffin, it was noted that he had previous bridge building experience. He had worked for the company on other projects, over a period of four to five years. Again it was noted that the defendant's safe work method systems, risk assessments safety plans and induction processes, addressed the requirement for all penetrations to be covered and securely fixed. There was a reference to the scaffolding standard and a distance set by that standard in relation to formwork. Mr McIntosh explained his personal circumstances in not being able to be in attendance at the commencement of work, and in the circumstances he outlines that inability to attend is understandable. He did make contact to try to have the commencement of work on Monday delayed until he arrived, but after a discussion it was decided that the workmen were well enough inducted in the equipment and otherwise qualified for the work to continue. As it turns out, Mr McIntosh was not able to attend the site till some two and a half hours or so after the accident. He indicated that he took immediate action to ensure that Mr Giffin was provided with appropriate medical treatment. He then dealt with the defendant's involvement with Mr Giffin's rehabilitation, the way he was remunerated while he was incapacitated and the steps taken by the company in that regard. He also stated that the company safety plan identified the need for penetrations to be covered and nailed down; again being reinforced with all employees after this accident involving Mr Giffin. There were a number of measures taken following the accident. There was a further workplace risk assessment. There was consultation with employees about possible improvements and the introduction of modifications and reinforcement of the requirements to cover over the penetration to be nailed down, and secured. Those processes were in fact put into a safe work procedure. That procedure included taking preventative and reinforcement measures to ensure a similar accident did not occur in the future.

Employees were directly consulted during the review as to the proposed changes in procedures. The revised procedures highlighted in detail the safety measures to be adopted, including appropriate supervision, proper communication procedures and reinforcement of the importance of covering and securing penetrations. The work method statement was modified to ensure work is performed in a safe method, clear of work hazards including the removal of rubbish, loose concrete, et cetera. The new work procedures are being incorporated and implemented on subsequent bridge building projects. There was also evidence about the availability now to perform this work if there was a penetration that needed to be kept open for any particular reason. That is the evidence that was called in the proceedings. The first matter to consider is the objective seriousness of the offence. There are a number of issues, both as to the objective and subjective features that need to be considered in this case. I have earlier indicated the prior convictions of the defendant, and not surprisingly, some significant time was spent analysing those prior convictions and putting them in context. Can I say briefly about the 1996 incident which was dealt with by Wright J, President in May of 1999, that involved a bridge some 16 to 18 metres above the area over which it was being built. The opening through which an employee ultimately fell to his death measured 1420 mm by 750mm. A number of similarities and dissimilarities were pointed to in relation to this particular offence. In the 1996 incident, apart from the matters that are of significance that I have just mentioned, that is the height above the water, or the height at which the worker was put at risk of falling, was very much different to the current incident. In the 1996 incident, the area where the deceased employee was working was being used as a walkway. That person could not adequately see while carrying material along the walkway. There were obvious risks. There were no harnesses used nor were nets constructed underneath the work.

There appears to have been no direction or instruction. In relation to this particular incident, it is said that the differences are telling: this was not a general walkway, although it can be seen that it could be walked upon, and was walked upon by Mr Giffin. Its use as a walkway was significantly inhibited by the presence of rio bars at regular intervals. The width of the formwork involved was relatively narrow. Here, there was, unlike the 1996 incident, a thorough going work method and employees were inducted as well as being audited by external bodies, such as the RTA. The particular feature of this incident was the unknown reason for Mr Smith failing to secure the formwork, and the course taken by Mr Giffin to step down onto this formwork rather than go by another route.

It is said, taking these matters into account, these are two very different breaches, and there is substance in that submission. The overlap, of course, is what appeared to be in 1996 a requirement to secure formwork over penetrations so that it would not move. That was still the case in 2002, some six years later, but this particular piece of formwork was not secured. That system, although it had been altered, and apparently substantially altered between 1996 and 2002, still did not have the effect of ensuring that the penetration was covered by a secured piece of formwork. The second matter, dealt with in the year 2000 by Marks J, is substantially different, as were the surrounding circumstances. I do not stay to deal with the detail in that case, but his Honour in imposing two fines of $40,000 each noted that when dealing with the objective seriousness of the offence, the quantum of penalty should reflect the fact that there was a substantial degree of contribution by other parties. An issue arises here as to the proper approach to adopt in relation to a defendant with a prior record. This defendant in two proceedings has significant fines for a total of five breaches of occupational health and safety legislation.

The fact of prior breaches leads to the maximum penalty increasing for subsequent offences from $550,000 to $825,000. The existence of prior convictions does not necessarily indicate, automatically, a propensity for a defendant to re-offend. The Court needs to take into account the nature of the prior offences, and amongst other things, the steps taken to avoid a recurrence of the risk. There have been a number of authoritative statements adopted by this Court from other courts, including the High Court, in the Court of Criminal Appeal, as to the proper approach to sentencing, where there is a prior conviction. In Veen v The Queen ( No 2) (1980) 164 CLR at 465, the majority said, amongst other things: 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: The Director of Public Prosecutions v Ottewell (1970) AC 642 at 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 never has been the approach of the courts in this country and would be at odds with the community's understanding of what is relevant to the assessment of criminal penalty. (at 477-478).

In Weininger v The Queen (2003) 196 ALR 451 , Gleeson CJ, McHugh , Gummow and Hayne JJ said: 32 ... A person who has been convicted of, or admits to, the commission of other offences will, all other things being equal, ordinarily receive a heavier sentence than a person who has previously led a blameless life. Imposing a sentence heavier than otherwise would have been passed is not to sentence the first person again for offences of which he or she was earlier convicted or to sentence that offender for the offences admitted but not charged. It is to do no more than give effect to the well-established principle (in this case established by statute) that the character and antecedents of the offender are, to the extent that they are relevant and known to the sentencing court, to be taken into account in fixing the sentence to be passed. Taking all aspects, both positive and negative, of an offender's known character and antecedents into account in sentencing for an offence is not to punish the offender again for those earlier matters; it is to take proper account of matters which are relevant to fixing the sentence under consideration.

It might be thought that in some respects those two authorities are not necessarily in unison but I think they reflect the variety of considerations that a sentencing court has to take into account, and I propose to be guided in this task by those two statements.

As I have indicated, the maximum penalty here is $825,000. I am not able to say that the 1996 incident nor the other incident which was dealt with by the Court in 2000, is an indication here of some disregard for occupational health and safety legislation; nor is it an indication of a propensity or determination to re-offend. There are significant differences between those cases and the present case, sufficient in my view, to confine the consideration of the defendant's previous convictions to an association with the industry and the risks that it has been faced with in the past, the way in which it had responded to those risks and the particular circumstances surrounding the risk that was exposed by this particular accident.

In that respect, I am impressed by the evidence given by Mr McIntosh as to the steps taken by the defendant to take a variety of approaches to ensure a safe work system. Here, unfortunately, as in 1996, the failure to secure a piece of formwork is again at the centre of a breach of the Occupational Health and Safety Act. As in 1996, that was a requirement although it might be said applied with more vigour than had been laid down and enforced by the defendant prior to 1996. It is also a factor that both in 1996 as with this incident, in the year 2002, it was foreseeable that if the formwork was not secured in some way, so that a person could not fall through, there was clearly a risk to the health and safety of employees.

Day in day out, this Court sees comprehensive systems of work laid down by employers, only to find in the ultimate, those systems fail. It has been stated on a number of occasions by this Court that the system of work has to take into account not only the diligent worker but even the worker who is either careless or in fact negligent. It is not possible on the evidence here to make any determination about what precisely led this piece of formwork not to be secured, nor, for that matter, Mr Giffin to walk upon it. But an employer under this legislation cannot ignore the fact that those types of actions are likely to occur at their worksite, and they have to take steps to ensure that it does not put at risk people who are working on their sites.

Having said that, this is a serious offence. It is not however one at the worst end of the scale: had this opening been wider, had there been a real potential for Mr Giffin to fall through, the seriousness of the offence would have been grave. Even though the measurement of the penetration was modest, it is not unknown that in building work people fall in such a way that they lose consciousness. There was water below. If it was that type of accident it would indeed, especially in the light of the history of this defendant, have been a very serious offence, but I am not able to come to that conclusion, although I conclude that it is a serious offence.

The prosecutor rightly points to a number of matters as significant: the failure to secure the formwork, the failure to mark it, the failure to erect barriers or warning signs along the work, to commence work when there was a hidden trap on site, and the absence of any proper supervision. These matters are all weighed in setting an appropriate penalty for what I have already described as serious offences.

I next consider the issue of general and specific deterrence. There is no suggestion here that general deterrence is not applicable and the Court has made it clear on a number of occasions that in dealing with offences under Occupational Health and Safety legislation, a significant factor will be general deterrence, and so it is in this particular case.

In relation to specific deterrence, there are a number of considerations. I do, however, accept that there is a role for the deterrence, notwithstanding the fact that prior to this accident there appeared to be a comprehensive system of safe work in place, and that there were additional steps taken afterwards, and I have dealt with those earlier, and do not repeat them now. In those circumstances, and considering the history of the defendant, specific deterrence also features significantly in setting the penalty.

I then come to consider subjective factors. The record of the defendant is considered, and I have dealt at some length with that in relation to the objective seriousness of the offence. It should be noted that this company has been incorporated since 1972. Although it describes itself as a small company, it employs a permanent work force of some 25 or so, and over a long period of time (it might be said) in an inherently dangerous industry, the bridge construction part of the construction industry. Its record might be considered overall as not a bad record, and I take those matters into account in relation to its good industrial citizenship. The evidence of Mr McIntosh speaks of the company's involvement with the community and its generally good record. It also speaks of that matter notwithstanding in recent times two significant breaches. It has been conceded that there has been co-operation with the WorkCover Authority, an important consideration, as well as the contrition shown both by the plea of guilty, and the care taken of Mr Giffin after the accident, and the defendant's involvement in his rehabilitation. I also take into account as subjective factors the steps taken by the defendant to address the risk exposed by this particular accident. For those subjective factors, I would allow a discount on penalty of 10 percent. It is not contested that there was an early plea offered by the defendant. I see no reason why a full discount of 25 percent as referred to in R v Thomson and R v Houlton (2000) NSWLR 383 should not be provided to the defendant in the circumstances of this case. That brings the total discount to 35 per cent. Having considered all those matters, the Court makes the following orders: 1. The defendant is convicted of the offence to which it pleaded guilty in Matter IRC1109 of 2004. 2. The defendant is fined the sum of $156,000 with a moiety of that penalty payable to the prosecutor. 3. The defendant is to pay the costs of the prosecutor in a sum as agreed or in the absence of agreement as ordered by the Court. HODGKINSON: Can I ask one point of clarification - the $156,000 is imposed after the application of the discount?

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.