Inspector Maurice Vierow v Transfield Pty Ltd

JUDGMENT: - 8 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : Thur 6 November 2003

IRC1705 of 2002 INSPECTOR MAURICE VIEROW v TRANSFIELD PTY LTD Prosecution under s15(1) of the Occupational Health and Safety Act 1985 JUDGMENT [2003] NSWIRComm355

1 This prosecution is brought by Inspector Vierow of the WorkCover Authority of NSW against Transfield Pty Limited (now known as Transfield Construction Pty Limited). The prosecution issued under the Occupational Health and Safety Act 1983 (the Act) and the charge is brought under s15(1) of the Act.

2 It is alleged the defendant breached s15(1) of the Occupational Health and Safety Act 1983 in that: being an employer, on 10 April 2000, at Tunks Park in the State of New South Wales (it) FAILED TO ensure the health, safety and welfare at work of its employees, in particular MICHAEL TERENCE REYNOLDS . The particulars of the charge were as follows: (a) Failure to ensure a safe system of work for the performance of maintenance work on a conveyor system; (b) Failure to provide or maintain a system of communication between the driver of a locomotive and persons performing maintenance on the conveyor system; (c) Failure to provide an adequate work method statement for the operating or driving of a locomotive whilst performing maintenance work on the conveyor system; (d) Failure to provide adequate instructions, training and supervision to the driver of the locomotive and persons performing maintenance work on the conveyor system.

3 Ms J.L. Fredman of counsel appeared for the prosecutor. Ms P.E. McDonald of counsel appeared for the defendant. An Agreed Statement of Facts was relied upon. The prosecutor tendered a number of photographs of the site, Factual Inspection Report of 23 May 2000 and the industrial record of the defendant company. Ms McDonald relied upon the affidavits of John Herbert sworn 22 July 2003, Stephen Sasse sworn 21 July 2003 and John Cuttler sworn 21 July 2003.

4 The Agreed Statement of Facts relevantly states: 1. At all material times the Prosecutor was an Inspector appointed under Division 1 of Part 5 and empowered by section 106 of the Occupational Health & Safety Act 2000 to institute proceedings in this matter (or, in the alternative, an Inspector appointed under Division 4 of Part 3 and empowered by section 48 of the Occupational Health and Safety Act 1983 ( the Act ) to institute proceedings in this matter). 2. The Prosecutor conducted investigations into the circumstances surrounding an accident which occurred on 10 April 2000 at the Northside Storage Tunnel Project at Tunks Park, Northbridge in the State of New South Wales ( premises ) and from those investigations is able to state the following either from his own knowledge or on information and belief. 3. At all material times Transfield Pty Limited (ACN 000 854 688) ( the Defendant ) was a corporation with its registered office located at Level 28 Gateway, 1 Macquarie Place, Sydney 2000 in the State of New South Wales. 4. At all material times, the Defendant: (a) in amalgamation with the Sydney Water Corporation, Montgomery Watson Australia Pty Ltd and Connell Wagner Pty Ltd formed the Northside Storage Tunnel Alliance to construct a tunnel known as the Northside Storage Tunnel ( Tunnel ); (b) carried on the business of development and construction projects; (c) was carrying out construction work associated with the Northside Storage Tunnel Project at the Premises; and (d) employed Michael Terence Reynolds as a Tunneller Class 1 (Category 2). 5. At all material times, Shantfell Pty Ltd provided labour hire to the Defendant at the Premises. 6. At all material times Lyle Sheridan Palmer was employed by Shantfell Pty Ltd and was contracted to work at the Premises. 7. On 10 April 2000, Reynolds and Palmer were undertaking maintenance work on a conveyor system ( conveyor system ) at the Premises. 8. Reynolds and Palmer had been working as a team for approximately 5 weeks. 9. The maintenance work in the Tunnel involved operating a 5 tonne locomotive ( locomotive ) to which was attached a flatbed railcar. The flatbed railcar had a purpose-made viewing platform which was mounted on the flatbed. The purpose of the platform was to allow a person to stand and effect repairs to the Conveyor system. 10. At the relevant time, Palmer and Reynolds' supervisor, Russell Cowell, were being transported to the end of the Tunnel on the locomotive driven by Palmer. 11. On their way to the end of the Tunnel the locomotive stopped at a position known as No 3 Booster as it was noticed that the speed of the conveyor belt was erratic. Cowell gave Palmer and Reynolds instructions to inspect the Conveyor belt roller. 12. Reynolds pulled the stock lanyard which halted the conveyor and then Reynolds and Palmer attempted to perform maintenance work on the conveyor system. 13. After there was an attempt to perform maintenance work on the conveyor system, Reynolds informed Cowell that he was going to reset the 'bug' which was a switch to reset the conveyor system. 14. The 'bug' switch was located 30m ahead of the locomotive in an outbound direction. 15. Reynolds stood on the viewing platform of the flatbed railcar while Palmer operated the locomotive. Cowell was positioned at the control panel near the transformers. 16. Palmer moved the locomotive forward some metres but then stalled due to an amount of debris on the tracks. 17. Palmer attempted a few times to urge the locomotive forward but it would not move forward. Palmer then put the locomotive into reverse to get a run-up in the forward direction. 18. Palmer did not communicate his intention to reverse the locomotive to Reynolds and when the locomotive moved backwards Reynolds was crushed between the top of the rail on the viewing platform and the frame of the booster bed. Reynolds received severe injuries, requiring hospitalisation for 10 days. Reynolds' injuries included both lungs being punctured, broken ribs, bruising to the heart and back and shoulder injuries. 19. The locomotive stalled and another locomotive was required to push the railcar to free Reynolds.

6 In consideration of penalty the Commission in Court Session must first assess the nature and quality of the offence, that is, the objective seriousness of the offence. As was held in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 (at 474): . . . in our view it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the 'true measure of penalty lies in the nature and quality of the offence' . . .

7 The Full Bench in Lawrenson Diecasting Pty Limited cited with approval, the passage in the judgment of Fisher CJ in Haynes v James Glass and Aluminium Pty Limited (unreported, CT772-775 of 1991, 20 May 1994) where his Honour said: . . . While previous good industrial citizenship and the absence of prior convictions are proper considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce.

8 This incident occurred in the North Side Storage Tunnel Project. The relevant work was performed underground. The conveyor belts were located in the ceiling of the tunnel and maintenance on these conveyors was performed by a maintenance gang who gained access from a locomotive which ran below them along rail tracks underneath the conveyor belt.

9 The breach occurred when Mr Reynolds attempted to re-set a bug switch which was located above his head as he stood on the viewing platform of a flat bed railway car which car travelled through the tunnel. Mr Palmer moved the locomotive forward. However, it stalled because of debris on the tracks. He then put the locomotive in reverse without notifying Mr Cowell in the control panel or Mr Reynolds standing-up on the flat bed rail car. Mr Reynolds was crushed between the platform rail and the frame of the booster on the conveyor above level 2. Mr Reynolds suffered severe crushing injuries.

10 The defendant submitted in mitigation as to the gravity of the offence that no Work Method Statement could predict debris on the tracks. The obligation on the defendant however was to ensure when the rail carriage changed direction any employee affected, especially one standing on a platform, be given warning.

11 There was a failure to provide or maintain a system of communication between Mr Reynolds standing on the platform, Mr Palmer, the driver of the locomotive and Mr Cowell at the control panel. Further, Mr Palmer who was a new employee was not properly trained as a locomotive driver. He had been engaged as a sub-contractor and had on 31 January 2000 undertaken the company's initial contractor's induction training. He had not been trained to drive a locomotive nor had he been assessed for same. What the breach reveals is a lack of rigour being applied to the training and instruction of contract employees brought onto the site as well as a systemic communication problem for those working as a term underground.

12 Despite having new systems and procedures in place including the training of locomotive operators, Mr Palmer had not been fully trained to operate a locomotive in the circumstances.

13 Evidence revealed the defendant, having had a prior serious incident on 2 November 1998 which was a fatality, had elevated its awareness of Occupational Health and Safety at the North Side Project significantly. Before this incident, a safety audit had been conducted by the WorkCover Authority with two Independent Consultants as to Transfield's modus operandi on this site. As part of the review there had been developed thorough training programmes for the operation of all tunnel work. Indicative of the effect of this training programme is Mr Reynolds' record of instruction and training, namely: Induction training. Site specific training. Tag out training. Manual handling training. Locomotive operations training. Conveyor operations and maintenance training. A zero tolerance program.

14 Unfortunately, Mr Palmer was not so rigorously inducted nor specifically given the training for the work that was required of him, namely, locomotive driving underground. He had only been given the induction training course. While it may not have been foreseeable that the maintenance railcar would meet debris on track, as the defendant submits, I find there was a foreseeable element to this breach. A foreseeable risk of injury existed when the defendant determined, against its own procedures in place, to give responsibility for driving the locomotive moving the maintenance crew underground to an untrained employee (see Department of Mineral Resources of NSW (Chief Inspector Terrey) v A. M. Hoipo & Sons Pty Ltd (2000) 99 IR 137). There was in such circumstances I find a foreseeable risk of a detriment to safety.

15 There was a failure to provide a safe system of work, proper instruction and a viable system of communication between the employees performing the worksite task. Mr Russell John Cutler, Project Manager for the tunnel, accepted the responsibility for the accident and expressed contrition for the unsafe conduct of the defendant's business in this circumstance.

16 I find this was a serious breach of the Act. 17 In Lawrenson Diecasting Pty Limited, the Full Bench further stated (at 474): It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence. The defendant in submissions related to subjective elements of the offence places a number of matters before the court for its consideration.

18 In February 2000, Transfield underwent an organisational restructure. The restructure affected occupational health and safety within Transfield. The principal purpose of the restructure was to recognise that Transfield needed to move its occupational health and safety emphasis from a systems approach to a behavioural approach. All these changes occurred before this incident. In the 12 months up to December 2003 the injury rating was 30; whereas under the new scheme it was down to 20 by the month of January 2003. The focus of attention on the day-to-day behaviours exhibited by employees and supervisors at the site is the focus now and accounts for this significant safety rate improvement.

19 The shift to a focus on behavioural aspects in occupational health and safety management is not a replacement for the systems approach but is cumulative upon it. It is acknowledged by the defendant the cultural change that is required for long term success at the behavioural level cannot be sustained without a robust systems foundation. The company now commits significant additional expenditure for occupational health and safety planning and training. The expenditure has gone from $600,000 to $1.2 million. This is to be commended.

20 A level of deterrence must be factored into consideration as to penalty. In Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 (at 388), this principle was applied in the context of consideration of breaches under the Act where Hungerford J held: I . . . would only echo what I see to be the fundamental duty of the Court in this important area of public concern, that is, to ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace. At the same time, the Court has a corresponding duty insofar as a defendant is concerned not to impose such a penalty as would be oppressively high. Again, I echo Cullen J in Walco (at pp 15-16) in referring to what was observed by Smithers J in Trade Practices Commission v Stihl Chainsaws (Australia) Pty Limited [1978] ATPR 40-091 at 17,896 as adopted by Forster J in Trade Practices Commission v Lois (Australia) Pty Ltd [1986] ATPR at 47,225, as follows: The penalty should constitute a real punishment proportionate to the deliberation upon which the defendant contravenes the provisions of the Act. It should be sufficiently high to have a deterrent quality, and it should be kept in mind that the Act operates in a commercial environment where deterrents of those minded to contravene its provisions is not likely to be achieved by penalties which are not realistic. It should reflect the will of Parliament that the commercial standards laid down in the Act must be observed, but not be so high as to be oppressive. These principles were cited by the Full Bench of the Commission in Court Session with approval in Capral Aluminium Limited v WorkCover Authority of NSW (Insp Mayo-Ramsay ) (2000) 49 NSWLR 610; (1999-2000) 99 IR 29 [at 74] where it was said: the . . . Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Limited (No. 2) [2000] NSWIRComm 39 at 40-43) we would expect such cases to be very rare . . . 21 As to deterrence both specific and general, the defendant submits consideration should be given to the fact Transfield's construction business was acquired by the John Holland Group Pty Limited with effect from 1 February 2003. Transfield is now concentrating on project sponsorship, development services and investment. It has withdrawn from the construction industry other than the management of residual responsibilities in which it is involved in infrastructure projects.

22 However, the defendant still has employees performing heavy duty on construction sites while the company completes major structural works. While a company may choose to take a management role on a construction site, such a decision does not remove its responsibility to ensure safe working at its worksites not only for employees but for all persons on site. Whilever it has a presence on a construction site, it has specific occupational health and safety obligations. In the circumstances, given it still has workers completing projects, I find elements of both specific and general deterrence must be given weight.

23 In Inspector Olive v Transfield Pty Limited [2001] NSWIRComm295 [at 19] the court referred to Transfield's corporate activities in an assessment of the company's corporate character. The court in this prosecution takes into account the significant contribution the company makes even through its changed management structure to the community through its support of a multitude of community activities.

24 The company presents with an unsatisfactory industrial occupational health and safety history. This it acknowledges. As was said in Inspector Olive v Transfield, the defendant's industrial record is a matter of concern. However, the evidence of the defendant's revived work standards and practices and the priority it now gives to safety procedures must be acknowledged. Yet this breach occurred after the new procedures were in place. Rigorous implementation of the procedures will further improve the injury rate cited.

25 In the guideline judgment of R v Thomson; R v Houlton (1999-2000) 49 NSWLR 383; and (2000) 115 A Crim R 104, the Court of Criminal Appeal held there should be full benefit and discount for the utilitarian value of an early plea of guilty. In the circumstances, I find the defendant entered an early plea of guilty and allow a discount of 25 percent accordingly.

26 The maximum penalty prescribed by the Legislature for an offence under s15 of the Act for a corporation at the time of the incident is $550,000. However, the maximum penalty for this breach is $825,000 as the company has prior convictions which bring into effect the provision of s51A of the Act.

27 As was said by Kirby P in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (at 698): 1. While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the "public expression" by parliament of the seriousness of the offence: R v H (1980) 3 A Crim R 53 at 65. Here, the maximum penalty is $125,000. Such a large penalty indicates the gravity of the offence as perceived by the community: . . .. The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalty set by the legislature from zero to the maximum. 2. A maximum penalty is to be imposed where the case falls within the worst category of cases for which the penalty is prescribed. This is to be determined on the facts of the case. . . . However, "that does not mean that a lesser penalty must be imposed if it is possible to envisage a worse case; ingenuity can always conjure up a case of greater heinousness. A sentence which imposes the maximum penalty offends this principle only if the case is recognisably outside the worst category": Veen v The Queen (No 2) (1988) 164 CLR 465 at 478. (emphasis added)

28 In the circumstances in the context of the redesign of safety procedures but the neglect of an individual's specific task training and a lack of foresight as to workers communication, this offence while serious does not correlate to a worst case scenario.

29 I take into account the above relevant subjective features of the offence and the discount allowed for the utilitarian value of the plea. I accept the company co-operated with the WorkCover Authority in its investigation of the breach as charged under s15(1) of the Occupational Health and Safety Act 1983. However, the gravity of this offence must reflect in penalty.

31 The defendant in Matter No IRC1705 of 2002 is fined in the sum of $75,000.00. There will be a moiety to the WorkCover Authority.

32 There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to apply to the court for orders as to costs.

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