Consideration
14In a consideration as to penalty, the Court first assesses the objective seriousness of the offence as charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474):
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" ...
And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]:
In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ...
15In considering the objective seriousness of each offence in context, it is necessary to state the relationship between the two corporate defendants, each of which faces a separate charge brought under different provisions of the Occupational Health and Safety Act 2000.
16The corporate structure and governance of this manufacturer of pre-cast concrete products was revealed in an affidavit of Wrixon Frank Gasteen, the Consultant Chief Executive Officer of the BCP Group since July 2008. Mr Gasteen is the Chairman of the BCP Group Holdings company from September 2007. He is also a Director of "BCP Employees" since May 2008 and a Director of "BCP Precast" since June 2008.
17BCP Precast has been operating since 1982. In mid 2007 a private equity firm, NBC Capital Pty Ltd, purchased the major shareholding (75 percent) in BCP Precast. A corporate restructure followed whereby two additional entities were created: BCP Employees and BCP Group Holding Pty Ltd. The BCP Group has under its control three corporations but one of those corporations is not active. The first defendant, BCP Employees, has a contract to provide all labour services to BCP Precast. It, therefore, is the employer of all managers and provides for the group management services, resources and all the policies and procedures (for example, occupation, health and safety) for BCP Precast. Given the purpose of forming BCP Employees, it is ironic that these labour hire employees, affected by the breach of the Act, were hired by BCP Precast.
18BCP Precast owns all the plant on the relevant site and is the trading company for the group. The operations carried out by BCP Precast include the manufacture of pre-cast concrete products for the civil drainage industry. It operates two factories in New South Wales and one in Queensland. The factory where the incident occurred is located at the corner of the Pacific Highway and Chelmsford Road, Charmhaven, NSW. BCP Precast utilises approximately 150 employees, of which about half are permanent employees of BCP Employees, the first defendant.
19At the time of the incident there were 31 permanent employees, three casual employees and 24 labour hire employees at the Charmhaven factory. However, it was labour hire employees who were involved in this incident.
20Both defendants plead guilty to a charge, similarly, if not exactly, pleaded. The difference between the charges is essentially that each charge directs itself to the obligation carried by each corporation under the Act. BCP Employees, the first defendant, failed to ensure persons not in its employ were exposed to a risk from a dangerous machine, where a guard (a light curtain) was knowingly deactivated thereby exposing those persons to a known risk, namely: the risk where there was an unguarded nip point on a slat conveyer when the conveyer was moving (s 8(2)). The light protectors, which, if crossed, would have stopped the conveyor from moving, were disconnected. BCP Precast, the second defendant, owned the plant, a dry cast machine serviced by the slat conveyor, and it failed to ensure those same persons, working on its site, were not exposed to the same risk provided by its unguarded machine (s 10(2)).
21Both defendants failed to provide adequate information, instruction and training to the relevant two casual/temporary persons who had only been working on the defendants' worksite, in this dangerous job in heavy industry, for some few months. Both persons performing the task were exposed to the risk of coming into contact with the unguarded nip point on the conveyor in a circumstance where they were required to step into the conveyor (which had problems), which conveyor, as part of the dry cast machine cycle, began to move. The labour hire firm, the employer, faces no prosecution before this Court.
22The defendants, helpfully in submissions, explained the safety system in place. The conveyor had an inbuilt safety system as part of the design of the dry cast machine. It ensured the conveyor ceased operation on contact as follows:
12. The manner of guarding the machine to ensure safety that was provided by Colle SpA was by means of a system of photocell sensors that generated 'light beams' around the perimeter of the machine including the transverse conveyor. ... The system was designed so that if a person or object crossed the area where the 'light beam' was directed the machine would stop automatically. ... The light beams could not be turned off and on by the console operator, only reset. The only means by which the light beams could be turned off or on was by Colle SpA who could only do so remotely from Italy. ...
13. At the time of the incident the designed 'light beam' was operational for the left side of the machine and cart. The light beams on each side of the transverse conveyor and second conveyors had been turned off so that when Mr Flint and Mr Mant accessed the transverse conveyor the machine did not stop. ... A work practice was permitted whereby workers would access the transverse conveyor and second conveyors without having the machine stopped. ... Subsequent investigation established that the light beams for on each side of the transverse conveyor and second conveyors had not been operational since September 2006. ...
14. The position of the console in relation to the transverse conveyor meant that the operator Mr Anderson while standing at the console did not have a clear view of the transverse conveyor. ...
15. Emergency buttons were fitted on the console and on top of the light curtain tower adjacent to the dry cast machine about 50 meters from the cart conveyor in addition to cycle stop buttons located on either side of the dry cast machine. ...
The operator of the console (another labour hire employee) therefore could not see Mr Mant was on the conveyor when it went into the movement cycle.
23These men on site, Scott Mant and Aaron Flint, were required to investigate a production malfunction in the working of the dry cast machine and, at the time, the conveyor appeared to be inactive. However, while it was not moving, Mr Mant and Mr Flint climbed onto the conveyor at a point in the cycle of the operation of the dry cast machine when the conveyor began moving into operation mode. Mr Mant was standing on the conveyor investigating the whereabouts of the production problem. His feet were caught by the roller of the moving conveyor. He lost his left foot into the conveyor and his right foot suffered laceration and crush injuries. Mr Flint was able to get clear.
24The principle of foreseeability is a factor in determining the objective seriousness of an offence. This was considered and affirmed in the Full Bench decision of Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610. On the issue of foreseeability, the Full Bench in Capral stated at [82]:
The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209-210) in these terms:
... reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy.
25The Court is satisfied that, prior to the incident, BCP Precast had in place an occupational health and safety system, that was documented, which provided systems of work and training for its employees. Some changes had been implemented on the dry cast machine for safety reasons prior to the incident, for example: barriers were required to prevent access to the dry cast machine on 8 October 2006; signs and additional lighting were added on 10 August 2006 and 31 July 2006 respectively; the base plate was covered to remove risks of injury during cleaning on 26 September 2006; cables were shortened and secured on 13 September 2006; a cover was fitted to the console panel on 13 September 2006; and operators were to wear hearing protection while operating the machine.
26A further audit on the machine was conducted at the direction of the Board of the BCP Group, by its then OHS officer, in December 2007. That risk assessment was partly acted upon at the time of the incident, but the new management of the Group also challenged the audit as inadequate. Management was of the view the risk assessment did not properly identify the risk which could arise given persons accessed the conveyors of the dry cast machine while the machine was operating. The risk, therefore, had been identified by the management prior to this incident. However, while the risk was identified, no further steps were taken to address the known practices of persons standing on the conveyor until after the incident. These facts (honestly revealed by the defendants) strengthen the foreseeability of the offences. I, therefore, accept there is a foreseeable element to each offence which makes each offence more serious.
27The availability of simple and straightforward steps to remedy the defects in the system in place is also relevant to the consideration of the objective seriousness of the offence ( WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Limited, unreported decision of Schmidt J dated 25 February 1994). There were obvious steps which should have been adhered to by both management and the owner of the plant in this precast concrete production task. Those steps would have eliminated the risk. Safety failures, such as the reconnection of the light beams to stop the conveyor and fencing the conveyor from access, were simple and straightforward steps and not expensive. Such activity after the incident is indicative of the fact a safe system of work was readily available and practical.
28The gravity of the potential risk to safety flowing from a breach is relevant as a measure of gravity of the breach and the culpability of the defendants ( Lawrenson Diecasting (at 474)). The potential risk of significant injury or death was not a remote possibility. There was a high risk to the safety of any person at work being required to step onto a conveyor when it had a pre-programmed movement cycle. The words of Hill J, in Tyler v Sydney Electricity (1993) 47 IR 1 at (5), I find apposite:
The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from the breach and its foreseeability are clearly relevant ...
Mr Mant lost his left foot and has had 13 operations on his right leg. In this matter the potential risk became a reality with all its consequences. The gravity of this foreseeable risk to safety was most serious.
29The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71] - [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]:
... 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 Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43] ) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.
Both defendants continue to operate in the manufacturing of precast concrete products. There shall be an element of specific deterrence in the penalty with an acknowledgment there was, before the incident, an awareness of the necessity for safe working procedures which awareness is now rigorously implemented.
30The nature of the risk to which Mr Mant and Mr Flint were exposed is one that had been problematic in occupational health and safety terms since the inception of the industrial revolution and has been acknowledged by the legislature of New South Wales since the proclamation of the Factories and Shops Act in 1896. By 1912, that Act gave limited safety protection to employees and, a later legislative reform through the Factories, Shops and Industries Act 1962, made clear the employer's obligation to guard the machinery it used in its production. The risk was of a person coming into contact with an operating piece of machinery where the dangerous part of the machinery is not guarded. Apposite is the view expressed by the Full Bench in WorkCover Authority of NSW ( Inspector Lai ) v Rexma Pty Ltd [2008] NSWIRComm 78; (2008) 172 IR 210:
[49] The need for the application of the principle of deterrence in the sentencing process cannot be underestimated here. The offences reveal yet another serious incident involving unguarded machinery where the risk to safety, although obvious, was ignored. We adopt the observations of Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training) (2002) 112 IR 1 concerning the importance of the principle when considering the objective seriousness of offences involving unguarded machinery:
[41] . . . It scarcely needs to be said that the presence of unguarded machinery constitutes one of the most pernicious and infamous dangers to the health and safety of persons in the workplace. It is this very type of danger that prompted persistent and ongoing legislative attempts by governments to compel the correction of such obvious and serious faults in the systems and plant employed in the operations of employers: see WorkCover Authority (NSW) v Waugh (1995) 59 IR 89 at 100 and Department of Mineral Resources (NSW) (Chief Inspector Terry) v A M Hoipo & Sons Pty Ltd (1999) 99 IR 137 at par 53.
[42] The dangers presented by an unguarded saw are well known and management at all levels should be vigilant to ensure that unguarded machinery is not used . . .
31To require employees to perform work in close proximity to machinery that contains moving plant requires an emphasis by the employer on safe work systems. Where machinery is installed with appropriate guarding mechanisms, it is incumbent upon persons in the position of the defendants to ensure that such guarding mechanisms remain effective. Any change made to the designed safety features on plant requires a further risk assessment of the machine in operation. The new system adopted must have within it an acknowledgement of the existing risk and identify alternative safety features to ensure safe working. No such thought was given by either defendant when they determined the light beam guard be disconnected. A rigorous approach is needed by all employers conducting dangerous, but industrially necessary, operations and an element of both specific and general deterrence is necessary in the consideration of penalty in both charges, given both defendants continue to operate in this heavy industry.
32It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendants. As was said in R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168:
[56] ... it is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c)
Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 (at 228)).
33In Cahill v State of NSW (Department of Community Services) (No 4) [2008] NSWIRComm 201, Boland J (President of the Industrial Court of New South Wales) said at [62]:
A simple expression of contrition or remorse by a representative of a corporate offender, no matter how senior the representative, is not enough to enable the Court to find that the offender is remorseful: As Cummins J said in DPP v Esso Australia Pty Ltd [2001] VSC 263; (2001) 124 A Crim R 200, "personal expressions of remorse need to be translated into reality". See also see Regina v Heip Tan Nguyen [2004] NSWCCA 438 per Bell J (Hidden and James JJ agreeing) at [21]. There must be evidence that the offender has accepted responsibility for its actions and also that the offender has acknowledged any injury, loss or damage caused by its actions or that it has made reparation for such injury, loss or damage (or both).
Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 provides " remorse " may be taken into account as a mitigating fact if, and only if:
. . .
(i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and
(ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both)
(emphasis added)
. . .
34The Court accepts there was a pre-existing awareness of the necessity for safe working processes on site, but a known risk provided to persons when the conveyor was moving was not addressed. I accept immediately after the incident the light beams were made operational; wire mesh fences were erected around the conveyor; cameras were installed; and, work practice of standing on conveyers ceased. Importantly, the transverse conveyor was removed from the machine in 2009 and the precast product is now removed by forklift. The task was again risk assessed.
35A number of additional safety policies and procedures have also been implemented at the factory, including the following:
The systems used for hazard identification and control have bee refined and all staff are encouraged to report any hazard they may identify;
Near misses are reported and investigated;
Regular meetings of the OHS Committee are held;
Tool box meetings are held weekly and minuted. The meetings are conducted by the Operations Manager, production Engineer or WHS Coordinator. All workers are to attend.
Safety Operating Procedures have been reviewed.
A drug and alcohol screening program has been implemented.
Training programs have been extended to include external OHS training resources and staff are sent to external courses.
Pedestrian walkways and traffic management have been improved.
A new statistical reporting system has been developed that shows a significant reduction in lost time injury rates for the period 2008/2009 to 2011.
The company's approach to providing resources required for OHS matters is to conduct safety audits regularly and allocate capital to implement the recommendations flowing from the audits.
The corporations have demonstrated their commitment to safe working standards through their reviews and the redesign of all their systems for each task.
36I accept the corporations have demonstrated their contrition and remorse for their act in exposing these two persons to a risk to their safety, in that they have met the obligation to offer suitable employment to Mr Mant, have donated monies to assist Mr Mant's partner with travel expenses, have monitored the medical progress of Mr Mant and stayed in regular contact with him. Boland J in Inspector Patton v Western Freight Management Pty Ltd (No 2) [2009] NSWIRComm 124 stated at [76]:
The authorities establish that remorse and contrition can be demonstrated, particularly in the case of a corporation, by a variety, or combination, of factors. This can include, although not be limited to: the defendant entering a guilty plea ( WorkCover Authority (NSW) (Inspector Lai) v Rexma Pty Ltd [2008] NSWIRComm 78; 172 IR 210 at [29]); the assistance provided to the victim or the victim's family ( WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council [2000] NSWIRComm 57; 99 IR 284 at [35]); and an express statement of remorse or contrition by someone duly authorised to make such a statement on behalf of a defendant, although any statement must be assessed in light of the defendant's conduct ( WorkCover Authority of New South Wales v Hitchcock [2005] NSWIRComm 34; 139 IR 439 at [39]).
Both defendants have demonstrated their contrition, not only by the actions taken after the incident in relation to Mr Mant, but their contrition is also demonstrated in the actions taken to make this workplace safer. There has been a proper expression of that remorse by Mr Gasteen on behalf of both corporations.
37Both defendants entered early pleas to the offences as charged and will each be given a 25 percent discount for the utilitarian value of a plea ( R v Thomson; R v Houlton ). It is agreed both defendants co-operated with the investigation of the incident.
38The principle of parity in sentencing must be given consideration given these two prosecutions arise from the same incident. In Postiglione v The Queen (1997) 189 CLR 295, Dawson and Gaudron JJ stated the principle in the following terms (at 301 - 303):
The parity principle upon which the argument in this Court was mainly based is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. On some occasions, different sentences may indicate that one or other of them is infected with error. Ordinarily, correction of the error will result in there being a due proportion between the sentences and there will then be equal justice. However, the parity principle, as identified and expounded in Lowe v The Queen , recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to "a justifiable sense of grievance". If there is, the sentence in issue should be reduced, notwithstanding that it is otherwise appropriate and within the permissible range of sentencing options.
Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality. ...
39As well as the appreciation of the principle of parity, the defendants submit, given the inter-relationship between the operations of the two defendants, that, while the principle of totality may not strictly apply, both defendants operate as the one operation within BCP Group Holdings and, except for the corporate structure, the second defendant could have been solely liable for the offence. Reliance is placed in support of this proposition on the consideration in WorkCover Authority of NSW (Inspector Green) v Metropolitan Administrative Services Pty Ltd & Ors [2005] NSWIRComm 12 where Marks J stated at [30]:
It is a trite observation that the duty of the court is to impose such penalty which is appropriate in all the circumstances so as to reflect the intention of the legislature. There can be no doubt that if the shareholders, who are identical in both companies, had resolved to utilise the one corporate entity to operate the business of both defendants there would only be one prosecution before the Court, alleging a breach of s 15(1) of the Act and that there would be no prosecution brought under s 16. Whilst I acknowledge that the different approaches, which are to be found in the authorities to which I have referred, are available and can both be justified, it seems to me on balance that it is preferable to adopt an approach which ameliorates the aggregation of penalties which would otherwise have been imposed on two corporate entities which are closely related by way of identical shareholders and which share common overall management, especially where only one incident gives rise to the proceedings and there is a large degree of overlap in the factual circumstances which have created the breaches. ...
40In Inspector Sara Bestre v Jontari Pty Ltd; Inspector Sara Bestre v Tempo Services Pty Ltd; Inspector Jessica Doyle v Gignen Pty Ltd; Inspector Jessica Doyle v Tempo Services Pty Ltd [2007] NSWIRComm 190, Haylen J considered pleas where a corporation and two subsidiary companies (labour hire firms) pleaded guilty to breaches of the Act arising from the same incident. He found on the facts that because the labour hire companies exercised no control and played no part in the day to day employment of employment relationships and as a matter of fact the defendant corporation "stood in the shoes of the employer" that notwithstanding the subsidiaries could have exercised control, the seriousness of the offence of the labour hire companies could be ameliorated.
41In WorkCover Authority (NSW) (Inspector Green) v Big River Timbers Pty Ltd [2006] NSWIRComm 279; (2006) 156 IR 341, the Full Bench determined it was not permissible under the principle of totality to treat two related corporations as a single entity for the purpose of penalty.
42The evidence shows there is an identical majority shareholder and an identical management structure for these corporations. However, it is my view, the proper approach to this submission, while acknowledging there are a number of common features to each offence, is not to take any guidance from the totality principle (which, it is conceded, is not applicable), but rather, to consider the contribution to the risk by each defendant and to consider any distinguishing features put to the Court by each defendant in mitigation of penalty.
43As to the contribution to the risk, BCP Precast brought these casual/temporary persons to perform work on its unsafe plant. BCP Employees had managerial control of the manufacturing process those persons were performing. Both defendants knew of the deactivation of the light beams and the unsafe practice of requiring persons to climb onto the conveyor. Both defendants entered an early plea and have both been party to expressions of contrition and remorse. The real distinguishing feature is that the second defendant, BCP Precast, has two prior convictions and therefore faces a significant increase in the maximum penalty. The maximum penalty for the first defendant is $550,000 and the maximum penalty for the second defendant is $820,000.
44I find the contribution to the risk was equal between the parties as both knew of the removal of the light controls and both knew of the practice of persons climbing onto the conveyor. I accept the major emphasis in determining penalty must be on the objective seriousness of the offence. Each offence sits in the higher range of seriousness given both had prior knowledge of the removal of the beams and the practice of persons to climb onto the conveyor.
45However, BCP Precast does not have an unblemished industrial record.
46The fact that the corporations have the same majority shareholders I do not accept is a significant consideration. The directors of the holding company made a decision to form two companies and to put employment and management responsibilities into one corporation and the trading operation, including the ownership of plant, under another. The hiring of employees of a labour hire firm for short term work was also a policy and business decision. The decision to split the responsibilities into two corporate structures was made in the corporate restructure undertaken in 2007. There must have been an awareness by the Directors of the potential consequences of this business management decision. It would be impossible to believe such corporate decisions were made in 2007 without full knowledge by the group leadership, in making the decision to incorporate two companies, that each corporation would from thence carry individual obligations under the Occupational Health and Safety Act for the safe working of this machine at its worksite for both their employees and separately for persons brought onto its worksites. Equal justice between the parties requires they are equally liable in the circumstances. In such a circumstance, each defendant committed an offence under the Occupational Health and Safety Act 2000, within the high range, in their failures to ensure a machine was properly guarded, to properly instruct and train persons working at the site and to properly risk assess the task.
47I find the first defendant, BCP Employees, guilty of the offence as charged. The defendant is fined in the sum of $80,000.
48I find the second defendant, BCP Precast, guilty of the offence as charged. The defendant is fined in the sum of $120,000.
49There will be one order as to costs. Each defendant shall pay half of the costs of the prosecutor.
Orders
50The Court makes the following orders:
- In Matter No IRC 71 of 2010, I find the defendant guilty of the offence as charged.
- The defendant is fined in the sum of $80,000 with a moiety to WorkCover Authority of New South Wales.
- In Matter No IRC72 of 2010, I find the defendant guilty of the offence as charged.
- The defendant is fined in the sum of $120,000 with a moiety to WorkCover Authority of New South Wales.
- There shall be one order as to costs. Each defendant shall pay half the costs of the prosecutor. 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 re-list at short notice.
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Decision last updated: 18 May 2011