Inspector Howett v K T Regal Pty Ltd

Industrial Relations Commission (NSW)|2012-11-26|Before: Boland J

WorkCover Authority of New South Wales (Prosecutor) Gilbert & Tobin (Defendants) File Number(s): IRC 1826 and 1827 of 2011

Judgment 1K T Regal Pty Ltd ("the corporate defendant") was in the business of leasing premises and equipment located at Londonderry ("the premises") in connection with the growing of mushrooms. Mr Kevin Tolson ("the personal defendant") was the Managing Director of the corporate defendant and its sole director, company secretary and sole shareholder. He was ultimately responsible for the financial and operational management of the business of the corporate defendant. 2Mr Robert Konrad was an employee of the corporate defendant. His duties included unloading trucks, cleaning machinery, loading trucks, operating a forklift, emptying out the growing rooms, and operating what was referred to as a Five Tier Winch. On 4 May 2010, whilst working with the Winch, Mr Konrad's right arm became entangled in the machine. The damage to Mr Konrad's arm was such that on 15 May 2010 he underwent a right elbow amputation. 3Arising out of the incident on 4 May 2010, the corporate defendant was charged with an offence under s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). The personal defendant was charged with an offence under s 8(1) by virtue of s 26(1) of the Act. At the relevant time s 8(1) and s 26(1) were in the following terms: (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. ... 26 Offences by corporations-liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation.

The charges 4In relation to the corporate defendant it was alleged it failed: by its acts and omissions as particularised below, to ensure the health safety and welfare at work of all its employees, and in particular Robert Konrad ("Mr Konrad") contrary to section 8(1) of Act. 5The particulars of the amended charge were as follows: Risk The risk alleged is of suffering crush injuries from the unguarded in-running nip points and moving parts of a piece of plant known as a Five Tier Winch ("the Winch"), and in particular the unguarded rotating roller of the Winch at the Premises. Work The work referred to is the performance of duties as a General Hand in the defendant's Works Team including assisting with the operation of the Winch while undertaking the task of removing spent compost from the shelving of a mushroom growing room at the Premises ("the Work"). Acts and Omissions 1. The defendant failed to ensure that the Winch was safe and without risk to health and safety when properly used, in that it failed to undertake the following measures: a. the installation of guarding of all crush points and in-running nip points and in particular the moving parts including the rollers on the Winch; b. ensuring that the safety devices on the Winch, in particular the 'emergency stop button' and 'emergency stop chain device' fitted to right hand side of the Winch, were adequately maintained, tested and operable; c. having in place a formal, documented system of assessment for the Winch to ensure that there was a record of the maintenance, testing and inspections conducted to ensure that it was adequately maintained, tested and operable prior to the Work being commenced; d. undertaking an audit of the guarding of the Winch. 2. The defendant failed to provide a safe system of work for the work in that it failed to undertake the following measures: a. undertaking a risk assessment of the Winch, to identify any risks to employees operating the Winch and putting in place the control measures by which the identified risks could be eliminated or minimised, before permitting employees to commence the Work; b. providing a task specific Safe Work Method Statement or Safe Operating Procedure for the use and operation of the Winch; c. having in place a formal, documented system of competency assessment for all employees, including Mr Konrad, who were required to use and operate the Winch; 3. The defendant failed to provide adequate information, instruction and training to its employees in that it failed to undertake the following measures: a. providing appropriate safety training to every employee required to operate the Winch, as to its proper, safe operation and the risks and the control measures required for its safe operation and keeping a record of all training provided; b. providing its employees with information, instruction and training in the Safe Work Method Statement or Safe Operating Procedure for performing the Work and the use and operation of the Winch before permitting employees to commence the Work; c. providing specific information, instruction and training to its employees, including Mr Konrad that they were not to undertake the task of 'feeding layers of plastic film on to the roller of the Winch' whilst the Winch was operating; d. providing specific information and training to its employees, including Mr Konrad, not to operate the Winch in circumstances where the 'emergency stop button' and 'emergency stop chain device' fitted to the right hand side of the Winch, were not operable. As a result of the acts and omissions of the defendant, its employees were placed at risk of injury. As a result of the acts and omissions of the defendant, Mr Konrad suffered serious injury. 6The charge against the personal defendant was in similar terms. Both defendants pleaded guilty to the amended charges.

Agreed statement of facts 7The prosecutor tendered an Agreed Statement of Facts ("ASF"). Annexed thereto was the following documentation: (a) colour photographs of the incident scene taken by the prosecutor on 9 December 2010; (b) a factual inspection report into the incident by the prosecutor dated 14 December 2010; (c) a risk assessment carried out on the Five Tier Winch by representatives of the corporate defendant dated 10 May 2010; and a further risk assessment carried out by representatives of the corporate defendant dated 19 May 2010; (d) Australian Standard, Safety of machinery, Part 1601: "Design of controls, interlocks and guarding - Guards - General requirements for the design and construction of fixed and movable guards"; (e) record of convictions for the defendants, indicating no prior convictions; (f) colour photographs of the incident scene taken by Inspector Webb on 4 May 2010; (g) factual inspection report of Inspector Webb dated 4 May 2010. 8The ASF indicated that the corporate defendant was the landlord of the premises and owned the plant and equipment used in the production of mushrooms. The corporate defendant also supplied substrate (i.e. growing material) for the production of mushrooms to Sovereign Mushrooms Pty Ltd and Imperial Mushrooms Pty Ltd, two companies that undertook the growing of mushrooms at the premises and the sales operations. These two companies leased, pursuant to a commercial lease with the corporate defendant, certain rooms and equipment at the premises. 9The corporate defendant managed administrative issues at the premises. It also had a maintenance team and a works team. The corporate defendant employed persons to undertake these roles. At the time of the incident, the defendant company employed 11 staff. 10The corporate defendant employed the workers responsible for filling and emptying the compost in the growing rooms, who are referred to as the 'Works Team'. The workers prepare the compost and casing mixes to grow the mushrooms. At the time of the incident, the members of the 'Works Team' received instructions from Mr Michael Hardman, who was employed by Imperial Mushrooms as its grower/manager, and who was the sole director of Imperial Mushrooms, Mr Simon Wilson who was employed by Sovereign Mushrooms as the grower/manager and the leading hand, Mr Hesham Arab who was employed by the corporate defendant. 11The growing rooms were emptied of spent compost using the Winch. The Winch had been purchased second hand in or around 2000 from a Victorian Mushroom farmer. The ASF indicated no manufacturer's manual or operating manual was provided at the time of purchase. No modifications were made to the Winch between purchase and the day of the incident and the Winch had no guards at the time of the purchase. The corporate defendant was the owner of the Winch, which was exclusively operated by its employees who were members of the Works Team of which Mr Konrad was a member. 12The ASF described the use of the Winch: The mushrooms are grown on the shelves of various five tier shelving units located in the various growing rooms of the farm. At the commencement of each 40 day growing cycle, each shelf was lined with a layer of plastic and netting and the compost was deposited on top. At the conclusion of each growing cycle, after the mushrooms have been grown and picked, the spent compost was removed from each shelf onto a mobile conveyor. The spent compost then travels up the mobile conveyor to a tipper truck. The winch was used to empty growing rooms on the Sunday, Tuesday and Thursday of each week. The Five Tier Winch was used to remove the spent compost from each shelf onto the mobile conveyor. The Winch was wheeled to one end of the shelving unit and operates to wind the separate layers of netting and plastic that line each shelf onto a roller, causing the spent compost to drop from the end of each shelf onto the mobile conveyor at the foot of the Winch. There was a roller on each tier of the Winch. The rollers are driven by an electric motor. The speed and direction of rotation of the motor was controlled electronically. Each roller was engaged separately so that the spent compost was removed from one shelf at a time. The Winch has a two-speed operation. The operation of the Winch may be performed by one worker but the defendant company's system required two workers for its operation. One worker would operate the control panel of the Winch. The other worker was to engage the rollers into the Winch and to monitor the process and make adjustments to stop the plastic sheeting from falling and travelling up the conveyor. This was done by a worker placing their hand underneath the roller, grabbing the plastic and working it around the roller in the direction the roller was turning. According to the members of the Works Team, the machine would either be stopped or slowed down when there was a need to wrap the plastic around a roller as part of the work process. 13The ASF explained the role of various employees. Mr Tolson, as Managing Director of the corporate defendant, was ultimately responsible for the management of the Works Team. Mr Wilson managed the daily activities of the Works Team. He reported to Mr Tolson. 14Mr Danny Zammit was employed by the corporate defendant and was responsible for maintenance and repairs of plant and equipment at the premises. Mr Zammit had worked at KT Regal for about nine years and held the position of Maintenance Manager. He was responsible for maintenance on the machinery and repairing breakdowns. Mr Zammit was a metal fabricator by trade and a welder. He also held a restricted electrical license to connect and disconnect equipment as long as he did not alter the wiring. 15Mr David Cameron, an employee of the corporate defendant, reported directly to Mr Zammit and had worked with him for the past seven years. Mr Zammit would schedule the maintenance work to be done at the beginning of each week. That schedule would be interrupted to attend to breakdowns where necessary. Ms Lyn Dickson was employed by the corporate defendant as the Human Resources Manager performing those duties for KT Regal, Sovereign Mushrooms and Imperial Mushrooms, including responsibility for occupational health and safety matters. 16The ASF described the incident in which Mr Konrad's arm became entangled in the Winch: On 4 May 2010, Mr Konrad, commenced work at about 6:00am. Mr Konrad and co-worker Mr Peter Cogan were working on the Five Tier Winch and were undertaking the task of removing spent compost from the shelving of growing room 6. Mr Hesham Arab, who was the site supervisor of the Works Team, had instructed Mr Konrad and Mr Cogan to undertake this task. No direct supervision was provided whilst the task was being undertaken. Mr Arab was working close to the area where the Winch was being operated. Mr Cogan was operating the control panel on the Winch whilst Mr Konrad was engaging the rollers and monitoring the process. Mr Konrad placed his right hand in a gap underneath one of rollers of the winch whilst it was running to grab the plastic, pull it through and feed it back into the nylon netting, to stop the plastic from falling onto the conveyor. He then proceeded to tuck the plastic into the netting, as he did so, the glove he was wearing became caught and Mr Konrad felt his hand starting to be pulled around a roller. Mr Konrad shouted to Mr Cogan to stop the Winch and put it in reverse. By the time Mr Cogan had pressed the stop button, Mr Konrad's right arm had become entangled in the machine. Once Mr Cogan had stopped the machine, he ran out of growing room 6 and shouted out to his colleagues. Mr Arab was working outside the growing rooms with Mr Benjamin Lloyd, Works Team member and second in charge to Mr Arab. Mr Arab saw Mr Cogan running out of growing room 6 and heard him screaming out. Mr Arab proceeded immediately to the growing room and the area where Mr Konrad's arm was entrapped in the Winch. Mr Arab started up the Winch and put the machine into reverse, which in turn released Mr Konrad's arm from the machine. Mr Konrad walked out to the hallway located in the inside of the building. Mr Arab followed and placed a t-shirt over Mr Konrad's arm and they both walked to the gazebo towards the front of the site. Mr Konrad sat on a bench in the gazebo and rested his arm on the table. An ambulance was called. Mr Arab cut off Mr Konrad's sleeve while Mr Wilson, who was a nominated first-aider, was asked questions by the ambulance service operator with regard to the state of the injury. An ambulance arrived at the site shortly thereafter, and ambulance officers transported Mr Konrad to Westmead hospital, where he presented with an incomplete traumatic right forearm amputation. Between 4 and 14 May 2010 inclusive, the medical procedures performed on Mr Konrad during his admission included multiple blood transfusions, wound debridement, open reduction and internal fixation right radius and ulnar, vein grafts, multiple embolectomy and multiple surgeries in an attempt to save his right arm. Ultimately, a right elbow amputation was performed on 15 May 2010. The surgeries appear to have resulted in cellulitis and exacerbated pre-existing deep vein thrombosis of both his legs. He was discharged on 7 July 2010. Mr Konrad returned to work for the defendant company in December 2010 on suitable duties for four hours a week operating a ride-on mower until 16 March 2011. Mr Konrad was admitted to Hawkesbury Hospital on 17 March 2011 for surgery to his right side shoulder relating to the injury sustained on the day of the incident. He was discharged on 21 March 2011 and was certified unfit for work for one month. As at 12 October 2011, Mr Konrad had undergone further surgery and was having further treatment to his shoulders and legs. He has returned to suitable duties with the defendant company working two days a week for six hours a day. 17The ASF gave details of the system of work at the premises prior to the incident. Those details may be summarised as follows: (a) the corporate defendant had documented Occupational Health and Safety (OHS) policies and procedures. These included: OHS Policy; Workplace Procedure and Inspection Policy; Maintenance Policy. (b) the OHS Policy provided a statement in relation to the commitment of the defendant company in relation to OHS and meeting their responsibilities. Additionally, it outlined the responsibilities of managers, supervisors and employees. The policy was displayed in the staff amenities and discussed at Tool Box talks; (c) a checklist titled 'Regal Mushrooms Site - OHS Inspection Checklist' had been developed by the corporate defendant to be used to record these inspections. On the checklist was a section on plant and equipment, which included checks for adequate guarding, safe operating and instructions and risk assessments being available for all plant. The defendant company was unable to provide documentary evidence of inspections having been completed for the period 1 January 2008 to 4 May 2010; (d) regular inspections were carried out by Mr Wilson, Mr Hardman and Ms Dickson of the growing room. However, these were done during a growing process, not when the rooms were being emptied; (e) the Maintenance Policy dated 18 October 2004 was a one page document that outlined the defendant company's commitment to provide properly maintained equipment by employing suitably qualified and competent operators, carrying out regular checks and undertaking maintenance in accordance with manufacturer's requirements; (f) the corporate defendant had in place systems that required the Winch to be regularly inspected and maintained by Mr Zammit. Any work required on the equipment at the premises was done by Mr Zammit or if he was not able to do the work required he would arrange an external tradesperson to attend; (g) the corporate defendant's system of plant maintenance in addition to the regular inspections carried out by Mr Zammit, relied upon employees to check that safety devices were in working order, and report any faults using the Corrective Action Report ("CAR"). They could in addition report the problem directly to Mr Zammit or write on a whiteboard located near his workshop; (h) the system for reporting faults was computerised in February 2010 replacing a paper based reporting system. Maintenance of all of the equipment on site was conducted by the Maintenance Team, who were all employees of the defendant company. To ensure equipment was maintained regularly, machines were looked at once a week. Issues considered urgent by the person making the report, were reported by going to the workshop and telling Mr Zammit or a member of the Maintenance Team directly. Evidence gathered during the WorkCover investigation only elicited the corrective actions summary sheet, which detailed the faults reported, not the work undertaken to fix the faults. Records detailing the work undertaken by the Maintenance Team to fix the issues were not available according to Mr Zammit; (i) management meetings were held on site at regular intervals where OHS was a standard agenda item. Mr Tolson attended those meetings; (j) the corporate defendant's system in relation to servicing the Winch was not documented other than Mr Zammit recording on the manual CAR report that the work was completed. According to Mr Zammit, servicing on the Winch would be conducted weekly on a Friday. This would consist of lubricating the Winch, undertaking visual checks and checking the emergency stop buttons. Machines would be taken to the workshop every six months for major maintenance work or as required. The records for the maintenance work carried out were kept by Mr Zammit. The corporate defendant was unable to provide records of this maintenance work carried out on the Winch; (k) while there was no scheduled maintenance undertaken on the Winch it was inspected weekly by Mr Zammit. There was no manufacturer's manual or operating manual available for employees who used or maintained the Winch; (l) all employees in the Works Team had completed an induction/orientation when they commenced employment. This included how to report faulty equipment and hazards, an overview of policies, first aid and accident reporting. However, this induction did not include an assessment or understanding of what was covered in the induction/orientation with the exception of Mr Arab; (m) gloves were supplied by the defendant company to employees in the Works Team. According to one employee Mr Lloyd, he had been told not to wear gloves when operating the Winch, in case the fingertips became caught in the Winch; (n) training was the only system in place in relation to preventing someone from placing their hands in between the rollers on the Winch (guarding was not). The training provided to employees on the operation of the Winch had been on the job training whereby they observed existing employees undertaking the task. According to Mr Arab, employees were assessed as being competent from observations done on the job whilst being supervised; (o) the Winch did not have installed guarding which complied with the requirements of Australian Standards AS 4024. 1601-2006 - Safety of Machinery, Part 1601 Design of Controls, Interlocks and Guarding - Guards - General requirements for the design and construction of fixed and movable guards at all crush points and in-running nip points and in particular the moving parts including the rollers on the Winch; (p) there were three emergency stop buttons located on the Winch, namely one on the centre panel and one on each side of the Winch. The emergency stop button was located on the right hand side of the Winch. At the time of the incident this stop button had been damaged and was not present on the Winch. The wires underneath where the emergency stop button would normally have been located had been taped together, which according to Mr Morley, bypassed the broken button so that the Winch would continue to operate. No reports had been raised in relation to any faults or hazards associated with the emergency stop located on the righthand side of the Winch by the Works Team, Mr Wilson, Mr Hardman or Mr Zammit; (q) no safe operating procedures were developed and implemented for the safe operation of the Winch. No risk assessments were conducted in relation to the safe use and operation of the Winch. 18The ASF provided details of the system of work after the incident: (a) on 4 May 2010, Inspector David Webb issued a prohibition notice to the defendant company that focused on risks of injury due to unguarded moving parts on the Winch. This notice was lifted on 5 May 2010 as a result of guarding being fitted to the Five Tier Winch and repair to the emergency stop button; (b) on 6 May 2010, Inspector David Webb issued four Improvement Notices to the defendant company all of which were complied with, namely, notices that focused on: risks of entanglement due to the inadequate assessment of hazards whilst operating the Winch; risks of entanglement due to lack of a safe system of work whilst operating the Winch; a requirement for prescribed consultative arrangements to be followed; and risks to health and safety due to inappropriate storage of personal protective equipment used for chemical handling; (c) as a result of the incident, and notices issued, the corporate defendant undertook a number of actions: Fence guards fitted with interlocked gates were fitted to the Five Tier Winch. The guarding was fabricated and installed by Mr Zammit. The broken emergency stop button located on the opposite side of the control panel was replaced by Mr Morley, a licensed electrical contractor engaged by KT Regal. Mr Morley also installed interlock switches, so that when the gates were open to access the rollers, the Winch would come to an immediate stop, which stops the rollers from turning. He also installed an interlock between the Winch and the mobile conveyor so that the Winch would not run without the conveyor being in place. The defendant company also undertook a risk assessment on the task of emptying the compost from the growing rooms. The risk assessment resulted in the identification of hazards including manual handling, electricity, entanglement associated with the mobile conveyor and suggested remedial actions to control those hazards. The remedial actions identified various training requirements for employees. At this stage, it is unknown whether this training has been undertaken. A safe work procedure for the emptying of compost from the growing rooms has been developed and implemented. The defendant company has trained the employees who undertake this task in the safe work method procedure. This training was conducted by members of the Safety Committee including Lyn Dickson and Michael Hardman and involved running through to the documented safe work procedure. Employees were shown the safety features including the guards, the emergency stop button and the interlock between the Winch and the mobile conveyor. They were also told that they should not try and climb over the conveyor or make the machine work without the guards. The defendant company has formalised their consultation arrangements. A Safety Committee has been formed and meetings are conducted and minuted.

Evidence for the defendants 19The defendants' evidence consisted of the affidavit of Kevin Tolson. Mr Tolson was not required for cross-examination. Relevant matters addressed on Mr Tolson's affidavit and not dealt with in the ASF included the following: (a) it would appear that the Winch is manufactured by a Dutch company (Thilot Limbraco) and in its original condition is sold without any guarding; (b) before the incident Mr Tolson had never seen a Winch with guarding used on a mushroom farm in Australia or overseas, nor were winches with guards ever displayed at trade shows which he attended in Australia or overseas before the incident. To his knowledge, KT Regal produced the first Five Tier Winch ever used with guarding in the industry; (c) whilst the Winch may be operated at variable speeds, in practice, the maximum speed used by the Works Team when operating the Winch is "45", which means that the Winch takes about 10 or 11 seconds to wind one metre of plastic around the roller; (d) Simon Wilson's resumè shows that he had undertaken OHS training before joining Sovereign, such as working at heights, first aid, health and safety in the dairy industry, protecting health and safety in the workplace, safe handling of chemicals in the dairy industry and an emergency care course; (e) the Winch was modified as described in the ASF; (f) Mr Tolson contacted the Australian Mushroom Growers Association (AMGA). AMGA was told about the incident and encouraged to warn other farms that may be using a winch without guarding. On 24 May 2010, AMGA sent an email along with the photos Mr Tolson had sent of the modified Winch to approximately 30 AMGA members, alerting them to the safety measures recommended for the winches; (g) Mr Tolson described the assistance he sought to provide to Mr Konrad: Since the incident, I have tried my best to assist Mr Konrad. I am concerned for his welfare and want to help him. Mr Konrad has been employed by KT Regal since 2008. When Mr Konrad was in Westmead Hospital after the incident, I arranged for flowers to be sent to him and KT Regal paid for television in his hospital room. I visited Bob while he was in hospital, as did other staff members.... They also visited him when he returned home. In the months following, Lyn Dickson drove Mr Konrad to doctors' appointments, to do shopping, to the RTA and to other errands he needed to attend. Mr Konrad...lives alone. KT Regal engaged a psychologist who attended the farm and spoke to members of the works team and the maintenance team about the incident. They were offered additional sessions with the psychologist if they required it. I approved the purchase of personal items for Mr Konrad, including new shoes and clothes, and also organised for KT Regal to pay for the modification of Mr Konrad's vehicle and fees for a disabled drivers licence. KT Regal provided Mr Konrad with supermarket gift cards to assist him with groceries and offered to pay for delivery of a pre-prepared meal program which he did not accept. In June 2012, KT Regal paid $945 for a new fridge for Mr Konrad. On 6 December 2010, Mr Konrad returned to work after the incident. He initially worked for 2 hours per day, 2 days per week. He was unfit to return to his old job in the works team. I suggested to Mr Konrad that he cut the grass and other gardening duties at the farm. Mr Konrad has performed these duties over varying periods between December 2010 and May 2012 I have told Mr Konrad that he may keep working for KT Regal on alternative duties for as long as he wants to remain with the business and if he is able to do the job. Apart from the periods referred to in the previous paragraph, Mr Konrad has been unfit for work. He is currently employed by KT Regal but he is off work until late November 2012 due to medical issues with his arm and legs. In August 2011, I considered the possibility of Mr Konrad doing some hosing/cleaning to help in works team or with the waterers. KT Regal bought special stop-cocks/nozzles for the hoses so that he could operate them one-handed if required, and a stool for him to sit on while he hosed. However, Mr Konrad was fully occupied with his gardening work. In August 2011, Mr Konrad asked Ms Dickson if I could give him a loan to cover a personal loan and credit card debt which he owned to Westpac. Westpac had agreed to suspend interest on the credit card and the personal loan for 12 months but were due to start charging interest again in September 2011. I offered instead for KT Regal to pay for them outright. KT Regal paid $17,963.498 in four instalments, with the first 3 instalments each of $5,000.... (h) The following OHS policies (copies of which were tendered) are currently in place: (i) the occupational health and safety policy; (ii) OHS workplace procedure and inspection policy; (iii) a risk assessment form; (iv) a first aid policy. (i) the OHS committee has held 17 meetings so far in 2012; (j) since May 2010, KT Regal has implemented 31 safe work procedures for plant and machinery at the mushroom farm. The safe work procedures include the operation of the compost hopper, bagging machine, and operation of 3 phase switches. The procedures have been developed in conjunction with an employee, their supervisor and a management representative assessing the operation of plant and equipment. Each safe work procedure statement is then signed by a member of the OHS Committee; (k) after the incident, KT Regal used a computer program developed in-house for the reporting and repair of hazards and faulty equipment. In March 2012, KT Regal purchased a software program called "My Maintenance" developed by Arborsafe Australia Pty Limited. The software cost $3,250 plus an ongoing fee of $220 per month. "My Maintenance" allows the Maintenance Manager to click on the corrective action report on his screen and see the details of the report, including the assessment of the safety risk by the person who made the report. The Maintenance Manager then allocates the work to a member of the maintenance team; (l) every piece of plant and equipment at the farm has been entered into "My Maintenance" and has been scheduled for regular maintenance. Each morning, "My Maintenance" automatically sends an email to the phone of a maintenance team member with details of the corrective action reports which have been assigned to them and any scheduled maintenance tasks assigned to them by Mr Zammit to complete during the day. The system allows the Maintenance Manager to view the status of each task and who is responsible for completing the task; (m) Mr Tolson described difficult personal and family circumstances he has had to deal with particularly since 2007, including separation and divorce. Mr Tolson said: I was emotionally, physically and mentally drained by these events in my personal life. The time and energy I had available to dedicate to the business significantly diminished and I became increasingly reliant on other employees of the Company in my absence. (n) Mr Tolson said: I relied too heavily on the management team to carry out the safety obligations in the business, but due to my personal circumstances, I had no choice other than place my trust in the management team. I thought this was the only way that KT Regal could meet these obligations. Mr Tolson described steps he subsequently took to put in place a better business and management structure. (o) Mr Tolson described his close involvement with and contributions to the mushroom farming industry, his advice to machinery producers about the incident and the need for appropriate guarding to be fitted to any machinery supplied to KT Regal and other farms, and his community activities including charity work.

Consideration 20The sentencing of an offender involves a consideration of both objective and subjective factors: Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117 at [13]. However, the primary factor to consider in sentencing under occupational health and safety legislation is the objective seriousness of an offence: Lawrenson Diecasting Pty Ltd v Workcover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 475; Fletcher Construction Australia Ltd v Workcover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 78; Morrison v Powercoal at [13]. 21The objective seriousness of the offence involves an objective assessment of the nature and quality of the offence: Morrison v Powercoal at [13]. This will involve a consideration of the nature of the risk and what the defendant did or omitted to do in relation to the risk. 22The risk in these matters was the all to familiar risk of a person being injured by exposure to unguarded nip points and moving parts of machinery. The amended charges identified a number of ways in which the defendants failed to ensure the safety of Mr Konrad. The corporate defendant failed to undertake the following measures: (a) to guard all crush points and in-running nip points and in particular the moving parts including the rollers on the Winch; (b) to ensure that the safety devices on the Winch, in particular the 'emergency stop button' and 'emergency stop chain device' fitted to right hand side of the Winch, were adequately maintained, tested and operable; (c) to have in place a formal, documented system of assessment for the Winch to ensure that there was a record of the maintenance, testing and inspections conducted to ensure that it was adequately maintained, tested and operable prior to the Work being commenced; (d) to undertake an audit of the guarding of the Winch; (e) to undertake a risk assessment of the Winch, to identify any risks to employees operating the Winch and putting in place the control measures by which the identified risks could be eliminated or minimised, before permitting employees to commence the Work; (f) to provide a task specific Safe Work Method Statement or Safe Operating Procedure for the use and operation of the Winch; (g) to have in place a formal, documented system of competency assessment for all employees, including Mr Konrad, who were required to use and operate the Winch; (h) to provide appropriate safety training to every employee required to operate the Winch, as to its proper, safe operation and the risks and the control measures required for its safe operation and keeping a record of all training provided; (i) to provide its employees with information, instruction and training in the Safe Work Method Statement or Safe Operating Procedure for performing the Work and the use and operation of the Winch before permitting employees to commence the Work; (j) to provide specific information, instruction and training to its employees, including Mr Konrad that they were not to undertake the task of 'feeding layers of plastic film on to the roller of the Winch' whilst the Winch was operating; (k) to provide specific information and training to its employees, including Mr Konrad, not to operate the Winch in circumstances where the 'emergency stop button' and 'emergency stop chain device' fitted to the right hand side of the Winch, were not operable. 23As a consequence of the failures, Mr Konrad's right hand was caught in an unguarded rotating roller of the Winch and his hand and arm were pulled around a roller and his right arm became entangled in the machine. He suffered an incomplete traumatic right forearm amputation. Despite a number of surgical procedures, ultimately, a right elbow amputation was performed on 15 May 2010. 24The degree of foreseeability of a risk to safety is a significant factor to be taken into account when assessing the level of culpability of the defendant Department of Mineral Resources (NSW) (Chief Inspector McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27 Workcover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (2000) 95 IR 383 at 450. Hence, the existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a relevant factor in the assessment of the gravity of the offence. In Capral Aluminium Ltd v Workcover Authority of New South Wales (2000) 49 NSWLR 610; (2000) 99 IR 29 at [82] it was held that the existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. 25It seems to me the risk of serious injury in this case was not only foreseeable, but also glaringly obvious. Apparently, the practice was that one worker would operate the control panel of the Winch whilst the other worker engaged the rollers into the Winch and made adjustments to stop the plastic sheeting from falling and travelling up the conveyor. A worker did this by placing their hand underneath the roller, grabbing the plastic, and working it around the roller in the direction the roller was turning. This was the practice followed by Mr Konrad; he placed his right hand in a gap underneath one of rollers of the Winch whilst it was running to grab the plastic, pull it through and feed it back into the nylon netting, to stop the plastic from falling onto the conveyor. He then proceeded to tuck the plastic into the netting, as he did so, the glove he was wearing became caught and Mr Konrad felt his hand being pulled around a roller. I note the defendants' suggestion that the rollers may have been turning relatively slowly. I also note, however, that despite Mr Cogan operating the control panel on the Winch, by the time he had pressed the stop button Mr Konrad's right arm had become entangled in the machine. 26There was every possibility a worker's fingers or hand would be drawn into the gap underneath the roller, especially where gloves were worn. That particular risk was exacerbated in this case by the failure to ensure that the safety devices on the Winch, in particular the 'emergency stop button' and 'emergency stop chain device' fitted to right hand side of the Winch, were adequately maintained, tested and operable. 27It was an agreed fact that Mr Zammit said servicing on the Winch would be conducted weekly on a Friday. He said this consisted of lubricating the Winch, undertaking visual checks and checking the emergency stop buttons. Either what Mr Zammit said occurred every Friday did not in fact occur or if it did, it was done negligently or, alternatively, the stop button and emergency stop chain had only very recently become inoperable before the Friday round of inspections. I doubt the last alternative, but even if it was so, the Winch should not have been used whilst those two safety devices were out of commission. 28A further factor in assessing the gravity of an offence is whether there was available, at the time of an incident, simple and straightforward remedial measures to avoid or minimise the relevant risk to safety. In this case such measures were available. As the prosecutor submitted, this is evident from the fact that after the incident the corporate defendant took steps to implement measures that in my opinion were quite straightforward and relatively inexpensive, including: (a) the fitting of fence guards with interlocked gates to the Winch; (b) the replacement of the broken emergency stop button located on the Winch; (c) the installation of interlock switches on the access gates to the rollers; and (d) the installation of an interlock between the Winch and the mobile conveyor. 29A further matter relevant to the objective seriousness of the offence is the maximum penalty: Morrison v Powercoal (No 3) at [16] and [17]; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [30] and [31]. In respect of the corporate defendant that maximum is $550,000 and for the personal defendant it is $55,000. 30General and specific deterrence are also relevant considerations in the sentencing process. In Capral the Full Bench held that both aspects of deterrence should normally be given weight of some substance, "and although there may be exceptional cases... we would expect such cases to be very rare...." (at [74]). 31Prosecutions for failure to guard machinery continue to be dealt with by the Court. A case exists for including in the penalty an appropriate element for general deterrence. In considering what weight is to be attached for specific deterrence, the Court is to consider a defendant's propensity to re-offend. In my opinion, given the commendable steps taken by the defendants to improve the occupational health and safety systems and processes, the chances of them re-offending is slight. However, as pointed out in Capral at [77], it is unlikely that the weight which may be attached to specific deterrence could be reduced to zero in the cases of offences under occupational health and safety legislation. The corporate defendant "continues to be an employer" and the personal defendant the sole director of the corporate defendant. An element in the penalty for specific deterrence will encourage future diligence in respect of occupational health and safety. 32The objective seriousness of the offences is mitigated to some degree by the fact that the corporate defendant did have in place systems and procedures regarding occupational health and safety. It included requirements for the management team to complete inspections of the workplace and to undertake checks for adequate guarding, safe operating and instructions and risk assessments being available for all plant. Whilst regular checks were conducted it appears, however, they were only carried out during a growing process, not when the rooms were being emptied. 33The corporate defendant also had in place systems that required the Winch to be regularly inspected and maintained by Mr Danny Zammit. Clearly though, those systems were inadequate. To have an emergency stop button rendered inoperative, and deliberately so given it was wired to ensure the Winch continued to operate, and to have the emergency stop chain missing on a piece of machinery that was completely unguarded and an obvious risk, demonstrates a serious lack of regard for safety by the corporate defendant. 34The defendants referred to the fact that it was virtually unknown in the mushroom growing industry for winches of the type used by the corporate defendant to be guarded. That may have lulled the corporate defendant into a false sense that guarding was unnecessary. But, of course, industry practice is not the benchmark for determining standards of safety nor is it a mitigating factor: Abigroup Contractors Pty Ltd v WorkCover Authority of New South Wales [2004] NSWIRComm 270; (2004) 135 IR 317 at [93]. 35As for Mr Tolson's role, it is relevant to have regard to the fact that he was the managing director of the corporate defendant and its sole director, company secretary and sole shareholder. However, he had also appointed persons who appear to have had the relevant qualifications to assume responsibility for occupational health and safety and for maintenance and repair of machinery. Mr Tolson was also responsible for implementing within the corporate defendant the systems and policies regarding occupational health and safety before the incident and for the significant upgrades following the incident. I would regard Mr Tolson as less culpable than the corporate defendant.

Subjective factors 36In so far as the subjective factors are concerned, the prosecutor accepted there had been early pleas of guilty to the amended charges. I propose to discount the penalties by 25 per cent for the utilitarian value of the guilty pleas. 37As for contrition and remorse, it has been amply demonstrated and the prosecutor accepted this was so. The defendants' concern for Mr Konrad and the steps they have taken and are taking to make amends for the loss they have caused is commendable, as are the steps taken to improve the corporate defendant's safety systems. 38The defendants co-operated fully with the WorkCover Authority throughout its investigation and the Court accepts the corporate defendant is a good corporate citizen and Mr Tolson a person of good character. 39The Court accepts the defendants' guilty pleas and the defendants are convicted of the offences charged.

Victim Impact Statement 40If it considers it appropriate to do so, the Court may receive and consider a victim impact statement at any time after it convicts, but before it sentences, an offender: s 28(1) of the Crimes (Sentencing Procedure) Act 1999. 41A "victim impact statement" is defined in s 26 of the Crimes (Sentencing Procedure) Act as: a statement containing particulars of: (a) in the case of a primary victim, any personal harm suffered by the victim as a direct result of the offence, or (b) in the case of a family victim, the impact of the primary victim's death on the members of the primary victim's immediate family. 42Section 30 of that Act sets out the formal requirements for victim impact statements. Section 26 defines "primary victim" in relation to an offence as a person against whom the offence is committed; or a person who was a witness to "the act of actual or threatened violence, the death or the infliction of the physical bodily harm concerned", being a person who has suffered personal harm as a direct result of the offence. 43The Court received a five-page victim impact statement by Mr Konrad. The statement detailed the impact of the incident on his health and the medical treatment he has received. He continues to feel discomfort, his mobility has been affected, he requires a carer morning and nights, he is on extensive medication including pain medication and medication for blood pressure, both his legs have been injured due to blood clotting. Mr Konrad described the emotional impact and the effect on his wellbeing. His sleep is quite disturbed, he is frustrated and finds it difficult to deal with his injury emotionally and he has gained weight. Mr Konrad attends a psychologist fortnightly. He finds himself becoming angry and bored. 44Mr Konrad described the changes the incident has wrought on skills he regarded once as normal and natural including dressing, showering, cooking, playing sport, driving his motor vehicle, fishing and walking. Mr Konrad's social life has been affected and he does not go out much anymore. His friendships and family relationships have suffered. 45The loss of his forearm has also affected him in terms of his financial situation and his capacity to be employed. 46Mr Konrad stated: Emotionally this accident has affected me and my life on many levels. My life is completely different now. I do not have the same mobility like I once did. It has affected me physically, mentally and psychologically. I was previously a hard worker and had two jobs. I was a very mobile person who enjoyed life. I would attend the gym, play football, go fishing and now I don't attend these activities anymore. I have had to sell my fishing boat and all the equipment. I use to train with friends and now do not train with them any more as I now have only one arm. They do not ask me anymore as they don't want to cause any further pain or injury to me. I do not have the same relationships that I once used to. Nowadays, I do not socialise like I did before... I am now seeing a psychologist to deal with the emotional side, the physical pain and numbness and ways of handling my pain and managing it. I have had to adjust my care to learn to drive with a knob on the steering wheel and now I can only drive an automatic motor vehicle. This has affected my life permanently forever. I have had to make huge living adjustments and modifications to my house, my motor vehicle and my life in general. People often ask me what has happened and I find it difficult to explain to them what has happened. I feel that this has brought on my depression as I am constantly stressed. My whole life has had to be adjusted due to the workplace accident. I have been severely traumatised by this injury. 47It is well settled that a sentencing judge is entitled to take into account on the question of sentence the impact of a crime on victims generally: R v Henry (1999) 46 NSWLR 346 at 380, 381; R v Ponfield (1999) 48 NSWLR 327 at 338; R v Sanderson [2000] NSWCCA 512; R v Kessey [2001] NSWCCA 469; R v Totten [2003] NSWCCA 207; R v Newman, R v Simpson [2004] NSWCCA 102. 48Mr Konrad's victim impact statement indicates that he suffered a substantial emotional harm. That he suffered a substantial injury was established by the agreed statements of facts and the Court has had regard to that as an aggravating factor. The question is whether the Court should accept that the victim impact statement establishes substantial emotional harm as an aggravating factor under s 21A(2)(g) of the Crimes (Sentencing Procedure) Act. 49It has been accepted that a matter of aggravation, can be proved by a victim impact statement. In R v Thomas [2007] NSWCCA 269 Basten JA, (with whom Latham and Rothman JJ agreed) said at [37]: In R v Slack [2004] NSWCCA 128 at [60] Sperling J noted there is further implicit recognition of the entitlement of a sentencing judge to rely upon a victim impact statement in s 28(4), dealing with the use of a victim impact statement given by a family victim "in connection with the determination of the punishment of the offender". It is unfortunate that the Act gives no greater guidance as to the appropriate use of such a statement, especially where untested, for the purposes of determining sentence. However, it will often be appropriate to give weight to a victim impact statement where the conduct of the offender is otherwise established beyond reasonable doubt and the statement is restricted to subsequent effects on the victim. There is some doubt in the present case as to what weight the sentencing judge gave either to the physical effects of the assault or its psychological sequelae. 50In R v Wilson [2005] NSWCCA 219 Simpson J (with whom the other members of the Court relevantly agreed), stated at [28]: It may be, in an appropriate case, that a sentencing judge would decline to accept a victim impact statement or attribute to it less weight than otherwise might be the case. This could arise where (as, arguably, happened here) the Crown sought, by way of a victim impact statement, to establish matters seriously going to the assessment of the objective gravity of the offence that were either in issue or not conceded. That really provides the answer to the issue taken here. The victim impact statements were tendered without objection. No argument was addressed to whether their contents should be attributed weight or not. Experienced counsel who appeared for the applicant on sentencing made no attempt to limit the use his Honour was to make of the quite substantial matters contained in the statements, particularly that relating to Mr Gresham. 51In the present proceedings, the prosecutor without objection tendered Mr Konrad's victim impact statement. However, counsel for the defendants did submit that the Court's approach to the statement should be guided by the decision in R v Previtera (1997) 94 A Crim R 76. Previtera was a different class of case to the one presently before the Court. Previtera stands for the proposition that where the crime involves the death of the victim, a victim impact statement by a member of the family of the deceased which deals only with the effect of the death on the family is not relevant to the quantum of the sentence. The present case concerns a statement by the primary victim as to the harm caused to him by the offence. 52There was no submission made by the prosecutor that the Court should find that victim impact statement established substantial emotional harm as an aggravating factor, so I am unaware of whether that was the prosecutor's intention. To assume it was would be unfair to the defendants because they had no notice of such an intention. The situation is different to R v Wilson. There the Crown sought to rely on a victim impact statement in respect of the extent of injuries suffered by the victim for the purpose of establishing an aggravating factor. Here I am unsure whether that was the prosecutor's purpose in relying on the statement or whether the purpose was simply to explain to the Court the extent of the impact the crime has had on the victim's life. I have decided that I should not find substantial emotional harm as an aggravating factor based on the victim impact statement.

Conclusion 53Having regard to all of the matters considered in this judgment I have decided that the appropriate level of penalty to be imposed on the corporate defendant is $200,000. For the personal defendant I intend to impose a penalty of 15,000.

Orders 54The Court makes the following orders: Matter No 1826 of 2011 (corporate defendant) (1) The defendant, K T Regal Pty Ltd, is convicted of an offence under s 8(1) of the Occupational Health and Safety Act 2000. (2) The defendant is fined an amount of $200,000. (3) Under s 122(2) of the Fines Act 1996 the defendant shall pay to the prosecutor one-half of any fine imposed by the Court. (4) The defendant shall pay the costs of the prosecutor as agreed or, in the absence of agreement, as assessed. Matter No IRC 1827 of 2011 (personal defendant) (1) The defendant, Kevin Tolson, is convicted of an offence under s 8(1) of the Occupational Health and Safety Act 2000 by virtue of s 26(1) of that Act. (2) The defendant is fined an amount of $15,000. (3) Under s 122(2) of the Fines Act 1996 the defendant shall pay to the prosecutor one-half of any fine imposed by the Court. (4) The defendant shall pay the costs of the prosecutor as agreed or, in the absence of agreement, as assessed.

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: 12 December 2012

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (11 paragraphs)

Parties

Cases Cited (20)