Inspector Webb v Namoi Cotton Co-op

HEARING DATES: 11/27/2002 DATE OF JUDGMENT: 02/17/2003

PROSECUTOR Ms P F Lowson of counsel Solicitor: Ms N Rouillon Moray & Agnew Solicitors LEGAL REPRESENTATIVES: DEFENDANT Mr M F Holmes QC with Mr R Crow of counsel Solicitor: Mr M Kellock Mallesons Stephen Jaques

JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: Boland J Date: 17 February, 2003

Matter No IRC 2012 of 2002 INSPECTOR RUSSELL WEBB v NAMOI COTTON CO-OPERATIVE

Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIRComm 29

1 Namoi Cotton Cooperative Limited (the defendant) owned and operated a cotton bale press at the Myall Vale Cotton Gin site in Wee Waa. On 29 April 2000, 19 year old Dana Kelley, an employee of the defendant, sustained fatal head injuries when his head became caught between a cotton bale and the top of the inside of a bale press while the bale press was in operation and the cotton bale was being moved in an upwards direction through the operation of the ram mechanism.

2 In an application for an order under s 4(1) of the Supreme Court (Summary Jurisdiction) Act 1967, the prosecutor, Inspector Russell Webb of the WorkCover Authority of New South Wales, alleged that the defendant failed to ensure the health, safety and welfare at work of all of its employees and in particular, Dana James Kelley contrary to s 15(1) of the Occupational Health and Safety Act 1983. Section 15(1) of the Act states: 15. Employers to ensure health, safety and welfare of their employees (1) Every employer shall ensure the health, safety and welfare at work of all the employer's employees.

3 The particulars of the charge were that the defendant: (a) failed to provide such information, instruction, training and/or supervision as was necessary to ensure the health and safety of its employees and in particular Mr Kelley in relation to the use and operation of a cotton bale press located at the site.

(b) failed to provide a system of work in the use and operation of the cotton bale press so as to ensure the health and safety of its employees and in particular Mr Kelley.

(c) failed to provide plant and equipment, namely the cotton bale press, in a condition that was safe and without risk to the health and safety of its employees, in particular Mr Kelley. (d) failed to maintain plant and equipment, namely the cotton bale press, in a condition that was safe and without risk to the health and safety of its employees, in particular Mr Kelley.

(e) failed to provide a place of work under its control, namely the site, in a condition that was safe and without risk to the health and safety of its employees and in particular, Mr Kelley.

(f) failed to conduct any, or any adequate, risk assessment in relation to the operation and use of the cotton bale press at the site.

5 The prosecutor tendered an agreed statement of facts. The statement described the circumstances surrounding the incident and the incident itself as follows: At all material times the defendant had control over the work site and the work performed there. The purpose of the bale press was to compress cotton into a bale. A machine called a Jenglo was attached to the press, the purpose of which was to tie, or fasten, six metal bands, or ties, around each cotton bale. The defendant had owned the press since approximately 1989. It is one of the older presses at the defendant's operations. The nature of the cotton industry is such that it is necessary for the defendant to employ workers on a seasonal and/or casual basis to perform work during the ginning season, which commences in or around April each year and continues for 3 to 4 months. Mr Kelley commenced employment with the defendant on 27 April 2000 on a casual basis at the defendant's Merah North gin, where he completed a night shift as a cleaner. This was the first time he had worked for the defendant. Mr Kelley had no prior experience in the cotton industry. Mr Kelley was born on 24 February 1981. Mr Kelley sustained fatal head injuries at approximately 11:30 a.m. on 29 April 2000 when his head became caught between the cotton bale and the top of the inside of the bale press while the bale press was in operation and the cotton bale was being moved in an upwards direction through the operation of the ram mechanism. Mr Kelley: · had not completed the two-day induction course for seasonal employees, which was held on 10 and 11 April 2000 at the work site and accordingly had not been shown the safety video which warns against a person putting their hand or part of their body near operating machinery. Mr Kelley had completed the assessable content of this course (as it existed in 1999) at the defendant's Merah North Gin site before commencing cleaner duties on 27 April 2000;

· had not received any training in the operation of the said bale press, or any other bale press, prior to attending at the work site on 29 April at approximately 7 a.m;

· was attending the work site for the first time on 29 April 2000. At the time of the incident Mr Kelley was working with Mitchell Kilby, a seasonal employee who had been told to train Mr Kelley in the use of the press. Mr Kilby had completed the two day seasonal induction course, and then returned to the work site when it commenced operations for the first time that season on 26 April 2000. Mr Kilby had operated the press for approximately one and a half days prior to 29 April. Mr Kilby had received instruction on how the bale press operated from Mr Barry Elford and other permanent ginning staff. Mr Kilby was not made aware of the documented Standard Working Practices ("SWPs") that applied to the bale press, namely MV-SWP-013 and MV-SWP-025. Mr Kelley had assisted in manually retying bale ties on approximately 10 to 15 occasions prior to the incident. At the time of the incident Mr Kelley was supervised by Sean Kelly, a member of the permanent staff of the defendant and a trainee cotton ginner with a TAFE qualification in cotton ginning. Mr Kelly was a trained workplace mentor. He had also been assessed as competent to operate the bale press at the work site, and the site manager, Joseph Juchnevics, had participated in the assessment of Mr Kelly. Mr Juchnevics was ultimately responsible for the supervision of Mr Kelley. Although Mr Kelly had suggested to Mr Juchnevics that both Mr Kilby and Mr Kelley should be shown the SWPs, Mr Juchnevics said that it could be done later. Mr Juchnevics became aware that, during the morning of 29 April, Mr Kelley was approaching the press too quickly after a bale had been tied, thus activating the safety mats and causing the press to stop operation before it had completed the process. Mr Juchnevics instructed Mr Kelley to slow down. Mr Juchnevics and Mr Kelly stated that Mr Kelley was being trained by each of them, by Mr Kilby, and by assistant ginner Barry Elford. Mr Elford was not familiar with the SWPs, but was familiar with the press procedures utilised at the worksite. The usual process involved one person operating the bale press with other persons (such as Mr Juchnevics, Mr Elford and Mr Kelly) located in the console room where they could monitor the cotton ginning and pressing process and operate machinery as necessary for the ongoing operation of the gin. During the morning of 29 April 2000, Mr Kelley was not left alone at the machine. Mr Juchnevics, Mr Elford, Mr Kelly and Mr Kilby had all been involved in showing Mr Kelley how the bale press worked. At the time of the band breaking that led to the retying operation during which Mr Kelley was killed, Mr Kilby and Mr Kelley were operating the bale press. Two people were present because Mr Kilby was training Mr Kelley. Mr Juchnevics, Mr Kelly and Mr Elford were in the console room. Mr Kelly observed that a band had broken and proceeded to the bale press to assist in the retying operation. Mr Elford operated other machinery to slow the flow of cotton to the bale press area. At the time of the incident Mr Kilby and Mr Kelley were involved in manually re-tying one of the six metal bands on a cotton bale. Other presses operated by the defendant: · had their doors closed while retying bands, thus preventing access to the press whilst in operation;

· were fitted with operational pressure mats. With the doors open a bale being re-tied occasionally wobbles on the ram on which it is balanced and may appear to an inexperienced observer as if it could fall out of the press. It was the practice of persons employed at the work site to the knowledge of Mr Juchnevics, to steady the bale on the ram with their foot. That practice had been followed on the morning of 29 April 2000 and may have been observed by Mr Kelley. Although not free from doubt, it is likely that Mr Kelley approached the bale in order to steady it but used his shoulder instead of his foot, thereby putting his head in the vicinity of the top of the bale and the top of the inside of the bale press. Mr Kelley and Mr Kilby had both prepared the bale for retying. They both stepped back from the press. Mr Kilby then motioned to Mr Kelly, who was operating the bale press console, that it was all clear to re-activate the press. Mr Kelly then indicated using a "thumbs up" signal to Mr Kilby that he was operating the press. It was necessary to use hand signals because of the noise from machinery at the work site. There was no formal training provided either to Mr Kilby or Mr Kelley in relation to the use of hand signals. The opening through which Mr Kelley accessed the bale was the side of the press out of which the bales came after tying. Once tied, the bales are ejected out of the press on to two chain conveyors. There were two pressure mats in front of this opening. The smaller of those mats was not working on 29 April 2000. The chains had been fitted in or about 1996. At the same time a pressure mat was fitted between the chains. If someone stepped on the pressure mat the press automatically ceased operation. Mr Juchnevics removed the pressure mat a short time after it was installed because the bales tended to activate the mat when being ejected from the press, causing the chains to cease operation. At no time after 1996 was a risk assessment carried out of the press specifically considering the safety of persons re-tying bands with the doors open. A mirror was fitted in front of the press operator console in or about 1997 after an employee had been put at risk of injury when the press was operated while the employee was still working with the bale. The purpose of the mirror was to enable the press console operator to see the area at the front opening of the press, however only some of the area in front of the press was able to be seen with the mirror. It is possible that Mr Kilby was blocking Mr Kelly's view through the mirror of Mr Kelley, at the time of the accident. The ordinary procedure for retying a bale involves one person at the bale. Two people are necessarily present when an employee is being shown, or trained in, the job. There were no procedures in place where more than one person operated the bale press.

6 At the outset of the proceedings the Court was shown a police video of the accident scene, which included a re-enactment of the accident and an interview by police of Mr Sean Kelly.

7 Additionally, the prosecutor tendered into evidence: (a) A factual inspection report in relation to the accident prepared by Inspector Webb and dated 12 March 2001. (b) A bundle of six colour photographs taken by Inspector Webb on 1 May 2000 and 8 June 2000 showing the bale press and other machinery and equipment at the Myall Vale cotton gin. (c) An employee sign on sheet dated 29 April 2000. (d) An extract from the New South Wales Industrial Gazette in relation to the Cotton Ginning, &c., Employees (State) Award. (e) The defendant's record of prior convictions which showed as follows: Date Act Section Court Penalty $ 23/07/68 FSI 27 Wee Waa 25 5/09/88 OHS 15(1) Moree 500 6/02/89 OHS 15(1) Narrabri 800 6/02/89 OHS 15(1) Narrabri 1500 13/11/95 OHS 15(1) Narrabri 1500 14/07/98 OHS 15(1) IRComm 15,000 3/10/00 OHS 15(1) CIM 15,000 18/4/01 OHS 15(1) CIM 30,000 15/03/02 OHS 15(1) IRComm 78,000

8 For the defendant the following was tendered into evidence in the proceedings: (a) Affidavit of Alan Cleve Cone, a cotton ginner employed by the defendant at its Yarraman cotton gin. (b) Affidavit of John Robert Fox, a supervisor employed by the defendant at its Merah North cotton gin. (c) Seven assessment questionnaires completed by Dana Kelley in relation to his employment with the defendant. (d) Affidavit of Stephen Mallinson, site manager employed by the defendant at its Merah North and Yarraman cotton gins. (e) National Safety Council of Australia Ltd 5-Star System - Version 2 Manual. (f) Affidavit of Peter John McCleary, general manager - corporate services, employed by the defendant. (g) Police video of interview with Sean Kelly and re-enactment of accident. Each of the deponents also gave oral evidence.

9 Mr Cone's evidence went to the fact that he was qualified as a workplace assessor and that part of his responsibilities were to assess certain employees of the defendant to determine whether or not they were competent to perform tasks in cotton gins. Mr Cone said in his evidence that he conducted a competency assessment of Sean Kelly in December 1998. December is in the off-season. The primary objective of the assessment was to determine whether or not Mr Kelly was competent in, and had sufficient knowledge about, the cotton ginning machines and the bale press machine. The satisfactory completion of the assessment would qualify Mr Kelly to conduct maintenance of these machines without supervision.

10 In relation to the bale press machine Mr Cone said that it was undergoing maintenance and so it was not operating when Mr Kelly undertook assessment in relation to that machine. Mr Cone said: The Ginning Presses document requires the assessor to assess the employee's performance of certain tasks, like starting the press. I could not do this because it was not working … I spoke to the gin manager, Joseph Juchnevics about Sean's familiarity with the operation of the bale press during the season. Joseph signed the parts of the assessment manual relating to press operation, to certify that Sean could operate a working bale press in accordance with SWPs. Joseph signed the document in my presence.

11 In cross examination Mr Cone was asked whether he had to rely on what Mr Juchnevics told him about a person's competency in the use of a machine and he replied in the affirmative unless there was supporting documentation. Mr Cone did not cite any supporting documentation in Mr Kelly's case.

12 Mr Cone said that Sean Kelly successfully completed the assessment requirements and that he certified his satisfactory performance.

13 Mr Fox was also a qualified workplace assessor. He gave evidence as to his induction of Dana Kelley when he arrived at the Merah North cotton gin for the first time to work night shift on 27 April 2000. Mr Fox said it was the mandatory practice of the defendant to induct new workers before they commenced work. The defendant did run a two day induction course but where employees commenced work after the induction course they were inducted by reading an induction manual and completing assessment sheets with questions relating to the material in the induction manual. This was the case with Mr Kelley.

14 Mr Kelley had already received a copy of the defendant's induction manual which covered a range of topics including safety procedures and rules. Mr Fox gave Mr Kelley a copy of a 1999 assessment manual to read through and the idea was for Mr Kelley to the answer the questions by circling the correct answer. Where questions were answered incorrectly Mr Fox explained the issue and pointed out why the answer was wrong. Mr Fox said the induction process took just over two hours after which Mr Kelley commenced work sweeping floors and cleaning the meal room. Mr Kelley did not operate any machinery during his shift.

15 In cross examination Mr Fox agreed that there was no system to ensure that employees undertook further induction training in circumstances where the employee was sent to another site. The induction training received by Mr Kelley was general training and not site specific.

16 Mr Mallinson was asked to take charge of the Myall Vale gin on 8 May 2000 after Mr Juchnevics had been suspended by the defendant pending an investigation into the accident. Mr Juchnevics' employment was terminated about one month later. Mr Mallinson explained in his evidence the steps he initiated to rectify and modify the operation of the bale press. This relevantly included: · Rectifying a switch mat that did not work. The switch mat was on the exit side of the bale press and when a person stands on it the mat switches of the Jenglo (a brand of automatic bale tying machinery) and deactivates all electrically powered machinery. This causes the ram on the press to stop and prevents the doors from opening.

· Testing all switch mats and re-siting mats where necessary.

· Reinstalling a switch mat between the bale chains next to the bale catcher. This mat had been removed on Mr Juchnevics' instructions because bales activated it when passing over it on the bale chains. Mr Mallinson overcame this problem.

· Erecting a cage around the exit side of the press.

· Re-positioning the control console in relation to the bale press.

· Installing a colour TV monitor mounted on the control console immediately in front of the operator so that the operator had a comprehensive view of the exit side of the bale press.

17 Mr Mallinson also arranged for the erection of a footbridge over the bail chains, caused ginners to check the state of assessments and audits of work competencies of Myall Vale employees, reinforced with employees the SWP procedure, modified the standard work procedure "MV-SWP-025" so that it required the press door to be closed before the ram was raised to re-press the bale, caused the defendant to inform site managers that they would face disciplinary action and may be dismissed if they failed to keep up to date with the assessment of employee's competencies in relevant SWP's and audited the operation of bale presses at all cotton gins.

18 Mr McCleary gave comprehensive evidence in relation to: · The defendant's operations and the fact that it employs 185 permanent staff and 550 seasonal staff at 15 gin sites three warehouses and a classing centre as well as headquarters in Wee Waa.

· Safety system improvements since 1996 including the implementation of the 5 star Health and Safety Program of the National Safety Council of Australia and job instruction manuals for each employee.

· The achievement of significant improvements in both safety and organisational performance as a direct result of implementing comprehensive competency-based training programs for seasonal employees including significant reductions in total incidents (36%), lost time injuries (46%), medical expense only claims (23%) and total lost days (90%). These improvements have had a "dramatic effect" on workers' compensation claims costs with these costs for 2002/03 presently 90% below the claims costs for 2000/01.

· Implementation of a training program across all operational gin sites, warehousing sites and the classing centre. Sites are able to tailor their site-specific OH&S training programs to meet their own identifiable needs while at the same time ensuring compliance with company-wide standards. All seasonal workers undertake the formal induction program. By 2002 the induction training program had been extended to five days. Day 5 is training on the job with the gin running. Assessment of employees' competencies occurs three times in the season. · One of the five core business values of the defendant is that workplace safety is more important than time and production.

19 Mr McCleary said in his evidence that on 27 April 2000 Merah North gin had a vacancy for a seasonal worker on night shift between 7.00 pm and 7.00am. An offer of casual employment was made to Mr Kelley and he accepted. Later, a message was left for Mr Kelley to commence work at the Myall Vale gin on 29 April and this was accepted.

20 Mr McCleary said in his evidence: As a result of reports I have read and enquiries I have made, I have formed the opinion that Mr Kelley was given no instruction at Myall Vale in any SWPs … He was told to work with another employee, Mr Mitchell Kilby, and to learn from him. Mr Kilby had been shown the bale press job for the first time the previous day. Mr Kilby had not been instructed in any SWPs. He was not a qualified trainer. He had not been assessed as competent to give training. … The manager of the Myall Vale gin on 29 April 2000 was Mr Joseph Juchnevics. Mr Juchnevics was a qualified workplace assessor. He had also obtained TAFE certificates in workplace training and mentoring in the workplace … … Immediately after the accident involving Mr Kelley, Mr Juchnevics' employment was suspended pending an investigation into the accident. On 1 June 2000, Mr Wright sent Mr Juchnevics a memo concerning breaches of policies and procedures which required him to show cause why his employment should not be terminated … Mr Juchnevics did not respond. I terminated his employment on 9 June 2000.

21 Mr McCleary referred to the fact that in 2000 the Myall Vale gin received four stars under the NSCA's rating system for its Key element score which is a grading of its safety systems. Mr McCleary said: This was an exceptionally good performance having regard to the maximum possible score of 5 stars … However, the overall grading of the gin was only one star due to its poor injury statistics …

22 Mr McCleary said he was concerned that the NSCA report had been misleading and had not exposed deficiencies identified in Mr Wright's memo to Mr Juchnevics of 1 June 2000. Mr McCleary said he discussed this issue with NSCA's New South Wales manager and NSCA "has since changed its procedure for auditing the gins of Namoi Cotton".

23 Mr McCleary said that in October 2002 the defendant was announced as the overall winner of the 2002 NSCA/Telstra National Safety Award of Excellence and declared winner of the National Safety Award of Excellence in the category for "Best Company-wide OH&S Training Program".

24 The memo referred to by Mr McCleary in his evidence from Mr Wright to Mr Juchnevics dated 1 June 2000 stated, inter alia: Following your absence from the Myall Vale Gin site for the last month I have become aware of a large number of apparent serious policy and procedural breaches, which I would now appreciate being explained.

25 The memo went on to identify the alleged breaches including failure to address issues relating to safety:

· Records not accessible to permanent staff when free access to and paper copies of those records is essential for the proper execution of their duties;

· No evidence appeared to exist of any seasonal worker being trained or any record of an assessment in the performance of any SWP of seasonal workers during the 1999 or 2000 ginning seasons;

· Previous formal warning for failure to wear appropriate PPE (personal protective equipment) in accordance with site policies;

· Apparent shortcomings in leadership and commitment to change;

· Apparent breaches of policy and directives on PC use and operation. 26 In a review of his performance in 1999/2000 Mr Juchnevics was found to have been deficient in site leadership and safety and it was said of him that he did not set a high enough standard in the safety area.

27 Ms P Lowson of counsel appeared for the prosecution. Ms Lowson's submissions may be summarised as follows: · The primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Subjective factors play a subsidiary role.

· In respect of the current matter there are a number of objective features that support a finding that the failure to ensure safety is of a serious nature and suggest the imposition of a substantial penalty. These include: (i) the maximum penalty (for corporations) prescribed by Parliament for the offence at the time it was committed was $550,000 for the first offence and $825,000 for subsequent offences; (ii) there were obvious and foreseeable risks to safety against which appropriate measures were not taken;

(iii) the nature of the offence and particularly the range of failures arising from the failure to train through to the failure to provide machinery in a safe condition;

(iv) notwithstanding the incidence of failures, there were simple steps available to remedy each failure;

(v) the nature of the offence and the fatality manifests the degree of seriousness of the relevant detriment to safety.

· The defendant's significant failures were: (i) the failure to ensure the employee attended a complete induction program including viewing the safety video (ii) having regard to the limitations of the substitute induction program utilised, the failure to ensure that the current induction assessment was used; (iii) the failure to ensure the employee was trained in the SWPs before being permitted to operate the cotton bale press; (iv) permitting a new employee who was not aware of the SWPs to train the employee; (v) the failure to train the employee in the use of hand signals in a noisy work environment, noting an absence of any system in that regard; (vi) providing inadequate supervision, particularly in circumstances where the employee had already demonstrated excessive enthusiasm in approaching the press; (vii) failing to provide a system of retying bales, specifically when more than one person were involved in the process, that ensured persons did not approach the press when in operation. (viii) the failure to provide a system of work in relation to re-pressing of bales that ensured: A. that the operator of the console was able to see all persons in the vicinity of the press; B. that all persons were a sufficient distance from the press so as to prevent access in a timeframe that precluded the console operator from stopping the press; C. that the press itself was closed before operating the ram. (ix) permitting a practice to occur that involved employees using their feet to steady the cotton bale on the ram while the ram was operating; (x) providing a press that did not have an operational stop mat directly in front of the press; (xi) failing to maintain one of the stop mats in an operational condition; (xii) failing to provide adequate equipment to ensure that the console operator had a clear view of the front of the press; (xiii) failing to conduct any risk assessment of the cotton press in circumstances where the stop mat in front of the press had not been in place for between three and four years. · In relation to foreseeability the risk to injury was not only foreseeable, it was foreseen: (i) there had been a stop mat at the front of the machine but it had been removed for reasons unconnected to safety issues; (ii) the mirror had been installed because an employee had nearly suffered an injury at the same press; (iii) other presses owned and operated by the defendant were fitted with operational stop mats, and were operated with their doors closed; (iv) the risk to seasonal workers had been explicitly recognised in the safety audit process; (v) to the extent that Mr Juchnevics had responsibility for the Myall Vale gin, the defendant was aware through performance reviews that Mr Juchnevics' safety record was unacceptable. It was also aware that the site had been downgraded in a safety audit because of lost time injuries, suggesting the defendant was on notice of occupational health and safety issues arising at the site; (vi) there had been a number of serious incidents at other sites in the years preceding April 2000 so as to put the defendant on express notice of the particular dangers of cotton bale presses. · The penalty should reflect both general and specific deterrence: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29 at pars [71] - [80]. Whilst the defendant has recognised the need for improved safety, to some degree it appears to have been motivated by the impact of work injuries on its productivity and bottom line.

· The existence of simple, straightforward remedial steps which could have been taken by the defendant to avoid the accident are relevant to assessing the seriousness of the offence. Here the risk was remedied within four weeks, in circumstances where the defendant has approximately eight months in every twelve- month period to undertake maintenance and repairs: Department of Mineral Resources of New South Wales (Chief Inspector McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27.

· The death of Mr Kelley manifests the degree of seriousness of the relevant detriment to safety: WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) v Rail Infrastructure Corporation [2002] NSWIRComm 217 at par [43].

· The record of prior convictions against the defendant is of particular significance given the incidence of injury involving machinery. The record greatly diminishes any weight that might otherwise have been given to the defendant's apparent success in reducing lost work time due to injuries.

· It is appropriate to have regard to the large number of employees and the nature of the work carried out by the defendant: WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales [2000] NSWIRComm 179; WorkCover Authority of New South Wales (Inspector Piggott) v Capral Aluminium Ltd (1998) 83 IR 211.

· The defendant is entitled to have taken into account its early plea of guilty and its cooperation with WorkCover noting, however, that the amount of any discount attributable to contrition is diminished in circumstances where the prosecution case is strong: R v Houlton ; R v Thompson (2000) 49 NSWLR 383; R v Carter [2001]NSWCCA 245.

· The duty to provide a risk free environment is a duty owed to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: WorkCover Authority of New South Wales v TRW [2001] NSWIRComm 52.

· The mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s 15 of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees: WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Australia) Pty Limited (unreported, Walton J Vice President, 19 October 1999). 28 Additionally, Ms Lowson submitted: · In relation to Mr Juchnevics he was a long term employee with known performance deficiencies specifically in relation to safety and yet no action was taken by anyone in management to review supervise, go on site or check any aspect of the Myall Vale site between the time of his performance review and the time of the incident in April 2000. Further, there was nothing to suggest Mr Juchnevics was provided with any assistance from the defendant to help him implement procedures and policies that were gradually being introduced in the late 1990s despite the fact the responsibility for many of these procedures and policies were devolved to the site manager.

· In relation to Mr Sean Kelly there was no evidence that Mr Kelly had received any supervisory training. In addition Mr Kelly had the disadvantage of being directly supervised by Mr Juchnevics a person whose own leadership qualities were identified as being deficient. · The Court will give little weight to the defendant's adoption of the NSCA process because notwithstanding the best intentions in adopting it the defendant still wholly failed to undertake simple steps which it was on notice needed to be taken to inspect every gin to ensure all machinery was safe.

· The defendant relied on paper evaluation systems and did not take the extra step of ensuring those systems operated in practice on site.

· There was no evidence of contrition by the defendant. It has provided no information about the assistance rendered to the family of Mr Kelley and the tone of the evidence, particularly of Mr McCleary, was reflective of a culture of blamelessness at corporate level and instead a preparedness to sheet the blame downwards to employees on the floor.

· The prosecution seeks a moiety of the fine and costs. 29 Mr M Holmes QC with Mr R Crow of counsel appeared for the defendant. The defendant's submissions may be summarised as follows: · The defendant admits it has committed a serious offence. However, the objective seriousness is less than it otherwise might have been because of the following matters: (i) the inherent dangers of the cotton ginning industry ( WorkCover Authority of New South Wales v Orica Australia Pty Ltd (2002) 116 IR 158 at par [78]; (ii) the size of the defendant's workforce during the cotton ginning season; (iii) the geographical dispersal and remoteness of the defendant's cotton gins; (iv) the low education and skill levels of the defendant's seasonal workforce; (v) the defendant's extensive and detailed policies for occupational health and safety: Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326; WorkCover Authority of New South Wales v BHP (1998) 83 IR 427; Kembla Coal and Coke at par [81]; (vi) the promulgation of the defendant's policies for occupational health and safety: Orica at par [81]; (vii) the NSCA audit six weeks before and policy directions to staff, management staff and site managers in December/January 1999/2000. · An early plea entitles a defendant to a discount of up to 30 per cent: Orica at par [90]. It is appropriate for the defendant to have the benefit of all of the discount on penalty for an early plea of guilty.

· The defendant has demonstrated its contrition by its cooperation with the investigation by WorkCover, its participation in the coronial inquest and its representation in these proceedings. The defendant's contrition is also demonstrated by its prompt assessment of, and completion of work on: (i) engineering measures for the prevention of a recurrence of a crushing injury in the bale press at the Myall Vale gin; (ii) the revision of the SWPs document for Myall Vale gin relating to re-pressing of a bale with a broken bale tie, and; (iii) safety improvements, authorised by the board of the defendant on cotton bale presses in the defendant's other gins. · The primary factor, in assessing the weight to be given to specific deterrence, is the propensity to re-offend ( WorkCover Authority of New South Wales v State Rail Authority of New South Wales (2002) 115 IR 130 at par [57]). The defendant has demonstrated by its introduction of new safety systems since 1996 that it is aware of its obligations under the Occupational Health and Safety Act. The defendant has received high awards for these systems. This contra-indicates a propensity to re-offend. The strident steps the defendant has taken to ensure health and safety significantly mitigate the penalty for the offence: Orica at par [70].

· The defendant's thorough and award-winning health and safety policies since 1996 and its ongoing annual NSCA audits of its gins demonstrate its proactive approach to the elimination of risks to health and safety in the workplace.

· The defendant has recent prior convictions and penalties. However, they do not indicate a propensity to re-offend. Most of the recent convictions are since the date of this offence. It cannot be said specific deterrence in those penalties was inadequate. The Verdict

30 After reviewing the agreed facts and in light of the charge and the particulars thereof, I am satisfied that the offence has been proven. The plea of guilty by the defendant was properly made and I enter a verdict accordingly.

31 Dana Kelley was a young man looking for a job. He was employed initially by the defendant at its Merah North gin for one night shift on simple tasks involving cleaning duties. He underwent an induction process but it was largely paper-based, involving him in answering a series of questions relevant to his employment. There was no training or worthwhile assessment of him in relation to his awareness of cotton ginning machinery or his knowledge of how to operate such machinery or the dangers it presented to him.

32 Two days after his shift at Merah North Mr Kelley was employed at the Myall Vale gin and he was being shown how to operate the bale press. The bale press is a formidable piece of machinery and the press area of a cotton gin was, according to the Press Review Report, considered to be one of the highest risk areas of operation. Mr Kelley was completely unfamiliar with a bale press and for all of the changes referred to by Mr McCleary in his evidence regarding the improvements to safety systems and procedures introduced by the defendant since 1996, Mr Kelley: (i) received no training whatsoever in standard working procedures prior to working with the bale press; (ii) was being trained in the use of the press by another seasonal employee who had only one and a half day's experience himself on the press and who had not received any training in standard working procedures relating to the press; (iii) was inadequately supervised in circumstances where it was obvious to the site manager that Mr Kelley was approaching the press too quickly after a bale had been tied. 33 In addition to these failures the defendant: (i) did not have a safe system in place in relation to the re-pressing of bales so that the console operator could see that it was safe to activate the press; (ii) allowed a practice to develop whereby employees used their feet to steady the cotton bale on the ram while the doors were open and the ram was operating; (iii) failed to provide and/or maintain devices (stop mats) that switched off the operation of the press if a person approached the press; (iv) failed to conduct any risk assessment of the cotton press in circumstances where the stop mat in front of the press had not been in place for three or four years.

34 It was in this environment that Mr Kelley suffered fatal head injuries when his head became caught between a cotton bale and the top of the inside of a bale press while the bale press was in operation and the cotton bale was being moved in an upwards direction through the operation of the ram mechanism. No one was completely sure how Mr Kelley came to have his head in the position it was when the fatal injury occurred. The speculation was that it was likely Mr Kelley approached the bale in order to steady it. But unlike what he had seen others do, that is use his foot to steady the bale, he used his shoulder, thereby putting his head in the vicinity of the top of the bale and the top of the inside of the bale press.

35 Mr Kelly, who was operating the control console at the time, either did not look in the mirror to check to see that the bale press was clear when he activated the ram or his view of Mr Kelley was obscured, probably by Mr Kilby. The preferred view of events, which I accept, is that Mr Kelly checked with Mr Kilby whether it was all clear to re-activate the press and Mr Kilby indicated this was so with a thumbs up signal. As Sean Kelly re-activated the press it was contended that Dana Kelley who was standing back from the press with Mr Kilby, moved back into the area of the press, probably to steady the bale, and it was then that he suffered the fatal injuries.

36 It is apparent that the work environment at the Myall Vale gin in the press area was, in terms of safety, grossly deficient. The gin's site manager's performance in relation to safety matters was most unsatisfactory especially given his removal of the stop mat and his approval of Mr Kelley working in an unsafe environment without any training or adequate supervision. But as the prosecution submitted, the defendant was on notice of the manager's shortcomings in relation to safety by virtue of his 1999/2000 performance review, the gin's poor injury statistics and the deterioration from the previous year in the NSCA's scores relating to training of managers and employees at the gin in its report of March 2000. Moreover, no action was taken to audit or check on Mr Juchnevics' safety performance in any meaningful way and insufficient assistance was provided to him to cope with the process of continuous safety improvements being implemented by the defendant throughout the late 1990's. It appears to me that in introducing these improvements there was too much emphasis on the paper system and not enough attention was given to ensuring the improvements were actually implemented on the floor.

37 As Walton J, Vice President explained in Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27: Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng , Matter No IRC 3064 of 1997, 12 August 1999 at 39), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and The University of Sydney (at 16).

38 In other words, where an informed and objective observer, having regard to all of the circumstances, would reasonably have foreseen that a particular state of affairs or set of circumstances represented a risk to safety which is likely to result in serious injury or death and the defendant has taken no available action or measure to eliminate that risk, the court will regard the nature and quality of the offence as more serious than if the risk was not reasonably foreseeable. 39 The work environment in the press area at the Myall Vale gin presented a serious risk to safety and the risk was reasonably foreseeable given: (i) a stop mat that had been positioned in front of the press for the obvious purpose of shutting down the machine if any person came dangerously close to the press while it was in operation had been removed some three or four years previously. Other presses operated by the defendant were fitted with stop mats in working order; (ii) the doors of the press were left open while the bale is being rammed up. Other presses operated by the defendant had their doors closed; (iii) a previous crush injury suffered by an employee in a cotton press at the defendant's Boggabri gin on 30 April 1995. See WorkCover Authority of New South Wales (Inspector Ankucic) v Namoi Cotton Cooperative Ltd (unreported, Hill J, Matter No. IRC97/2251, 14 July 1998). The remedial steps taken by the defendant in relation to that incident included repair to the pressure sensor mats at the rear of the press and protective fencing was installed at the front or bail eject side of the press. Access through this fencing is via an interlocked gate which stops the press when the gate is opened. In my opinion, this incident should have put the defendant on notice as to the prospect of similar risks at other presses operated by it and steps should have been taken to that such risks were eliminated; (iv) a further hand injury on 17 April 1998 to an employee of the defendant at the defendant's Yarraman mill where the employee had his right hand caught in a mote press: see WorkCover Authority v Namoi Cotton Cooperative Limited (unreported, Miller CIM, 3 October 2000). Again, this accident should have warned the defendant of the risks associated with presses and put it on notice as to the need for a risk assessment of machinery at its gins but no assessment was done; (v) the defendant's awareness of the Myall Vale site manager's unsatisfactory performance in the area of safety by virtue of his 1999/2000 performance review, the gin's poor injury statistics and the deterioration from the previous year in the NSCA's scores relating to training of managers and employees in its report of March 2000; (vi) the presence of a young, untrained and inexperienced employee working in proximity to a dangerous piece of machinery.

40 If the measures available to prevent a risk to safety are relatively simple and straightforward but the defendant fails to take such measures, the court again will regard the failure as relevant to assessing the seriousness of the offence: see Department of Mineral Resources of NSW (Chief Inspector McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27. In this respect, upon his secondment to the Myall Vale gin, Mr Mallinson identified and rectified the risks to safety in a few short weeks. There was nothing difficult or particularly challenging about the remedial steps he took.

41 The occurrence of death or serious injury may manifest the degree of seriousness of the risk to safety: Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 333; Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; Lawrenson Diecasting Pty Ltd v WorkCover Authority of NSW (Inspector Ch'ng) (1999) 90 IR 464 at 476; WorkCover Authority of NSW (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 428-428; WorkCover Authority of NSW (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163 at 185. In this case Mr Kelley suffered fatal injuries and in my opinion, in the circumstances of that occurring, his death manifested a most serious risk.

42 In Inspector Barnard v Rail Infrastructure Corporation (No 2) [2002] NSWIRComm 107, 20 May 2002 revised - 24/05/2002 at par [31] Haylen J observed: 31. Consistent with the principles expressed in Veen , the fact that an offender has a long record of previous convictions and prior offences of the same character does not justify the imposition of a sentence of greater length than the offence warrants: it merely disentitles the defendant to the measure of the leniency which would normally be given to a person of previous good character or a person without a prior criminal record ( R v Hall (1974) 1 Cr R App R (S) 27; R v Galloway (1979) 1 Cr App R (S) 311; R v Loosenoore (1980) 2 Cr App R (S) 72; R v The Queen (1981) 3 Cr App R (S) 245).

43 It was also said by the Full Bench in Lawrenson Diecasting at 477: It is well established that a judicial officer considering the appropriate sentence to impose is entitled to have regard to the antecedent criminal history of the offender. The criminal history of an offender should not lead to the imposition of a penalty which is disproportionate to the seriousness of the offence, but may be relevant to show that the instant offence is not an uncharacteristic aberration or whether the offender in the commission of the instant offence has manifested a continuing attitude of disobedience of the law: see Veen v R (No.2) (1988) 164 CLR 477-478; Mears (1991) 41 A Crim R 141 at 145; Inspector Haynes v James Glass and Aluminium Pty Limited (unreported, Fisher P CT91/772, 773, 774 and 775, 20 May 1994) at p6; R v Cassar (unreported, Court of Criminal Appeal, Barr J and McInerney AJ, 28 May 1999) at para [25]. In Camilleri's Stock Feeds Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683 at 700, Kirby P regarded evidence indicating that the offences were not uncharacteristic aberrations was a factor going toward the seriousness of those offences.

44 The defendant's record of prior convictions is set out earlier in this judgment. The defendant submitted that in considering its record consideration should be given to its large and diverse workforce. In WorkCover Authority of New South Wales v State Rail Authority of New South Wales (2002) 115 IR 130 at pars [71] and [72] Walton J considered this issue as follows: 71. I agree with the observations of Wright J, President in WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales (at [47]), and the submission of the defendant in this matter, that the defendant's criminal record must be examined in the context of the whole of the circumstances in which it finds itself. This should include the fact that the defendant previously employed a significantly larger workforce on a considerably broader range of operations than is now the case: WorkCover Authority of New South Wales (Inspector Gordon) v State Rail Authority (unreported, Marks J, 27 March 1997, at 6 - 7). 72. This is not to suggest that the size of the organisation is in some way to be considered justification for a failure by a defendant to meet its obligations or for having a lengthy record of convictions under the Act. Such a notion is untenable given that the abject purpose of the Act is to provide a safe work environment for the workforce of this State: see WorkCover Authority of New South Wales (Inspector Farrell) v Schrader [2002] NSWIRComm 25 and the cases cited therein. However, the Court will take into account the size and extent of the operations of the defendant when considering a prior record: WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales and WorkCover Authority of NSW (Insp Lyons) v Warman International Ltd (2001) 105 IR 236. The existence of a lengthy criminal history is an aggravating feature when considering the penalty to be imposed for a particular defendant. It is not that the nature and size of the organisation can permit the Court to disregard those prior convictions as aggravating features of an offence. In my view, the nature and size of the organisation ought reflect on the degree to which the defendant's criminal history can be considered an aggravating feature of an offence. The practical reality is that the larger and more diverse the workforce, the greater the opportunity for accidents.

45 I respectfully adopt the approach taken by Walton J, Vice President in WorkCover Authority of New South Wales v State Rail Authority of New South Wales. However, I have also taken into account that the more recent convictions for offences by the defendant involved injuries caused by machinery and that in at least two of those cases the machinery in question was a press. Notwithstanding those offences the defendant took no steps to assess the risks associated with other machinery, including presses at other locations.

46 The approach to be taken to the question of deterrence was dealt with comprehensively by the Full Bench in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at pars [73] to [77]. In adopting the approach to deterrence laid down in Capral, I note that in April 1998, June 1999 and July 1999 the defendant committed offences under s 15(1) of the Occupational Health and Safety Act. This is relevant to the question of specific deterrence but I do accept that the defendant has made strident, thoroughgoing efforts to improve its occupational health and safety systems and procedures right across the organisation and down to the grass roots level. In my opinion, these efforts diminish considerably the prospect of the defendant re-offending.

47 As I observed in Inspector Mayo-Ramsay v Rail Infrastructure Corporation [2002] NSWIRComm 217 at par [50]: In the absence of the fundamental and comprehensive changes initiated by the defendant to improve its occupational health and safety regime, the need for specific deterrence would have demanded higher penalties than those that I intend to impose on the defendant. But given the nature and extent of the changes, and what I regard as a genuine effort to improve the safety culture within its operations, any penalties imposed must recognise that effort. To do otherwise would be to discourage the defendant from doing all that was reasonably practicable to ensure the safety of persons in respect of whom it has a responsibility under the Occupational Health and Safety Act .

48 As to general deterrence, the Full Bench said in Capral at par [75] "The need for general deterrence in relation to serious offences under the Act is undeniable." In this respect, I consider the observation of Walton J Vice President in McDonald's at par [230] especially apposite: The defendants conduct a very large enterprise operating throughout New South Wales and a variety of potentially dangerous equipment is used in their restaurants. The defendants identified that their enterprise involved the employment of a large number of young persons, such as the deceased, with little or no previous work experience. In my view, the existence of a risk to safety in a business which engages a large number of young, inexperienced and vulnerable workers, particularly where the business utilises dangerous equipment, must enhance the seriousness of the offence. Such a circumstance compels the imposition of a sentence which will attract the attention of other persons or corporations operating enterprises with similar features to the necessity of vigilantly ensuring the safety of young and inexperienced workers.

49 The maximum penalty for this offence is $825,000. The maximum penalty for an offence reflects the 'public expression' by Parliament of the seriousness of the offence: R v H (1983) 3 A Crim R 53 at 65 and a large penalty indicates 'the gravity of the offence …': Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698. As Wright J, President said in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (No2) (2000) 99 IR 163 at 186: The task of the Court is thus 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 penalty scale of penalty set by the legislature from zero to the maximum.

50 Mr Holmes for the defendant conceded quite properly that the offence was serious. He submitted, however, that there were a number of factors that lessened the objective seriousness of the offence. I have already referred to these and I accept Mr Holmes' submission in this regard except in relation to the geographical dispersal and remoteness of the cotton gins and the low education and skill levels of its seasonal workforce. The fact that gins might be dispersed across wide and remote areas is not any basis to consider the seriousness of the offence is less than it otherwise might have been. Any difficulty associated with managing occupational health and safety in a dispersed and/or remote location is a matter that has to be factored in to the relevant management plan and policy of the employer to ensure that all of its workers, regardless of their location, are not exposed to risks to their health and safety.

51 The same comments may be made in respect of the education and skill levels of an employer's workforce; the employer's occupational health and safety systems and procedures have to be geared to ensuring that its employees, regardless of their education and skill levels, are protected against risk. The defendant has in fact recognised this in the structure and content of its induction and other training courses and assessment programs.

52 I find that the offence in this case was objectively serious, attracting a penalty in the mid range. I consider the offence attracts a penalty of $380,000. There are a number of subjective factors, however, that I am bound to take into account in mitigation. 53 I accept that the defendant has demonstrated contrition and has cooperated with WorkCover's investigation into the incident. The defendant also moved quickly in taking extensive and appropriate measures to remedy the deficiencies in its system for regulating occupational health and safety within its organisation. Further, I am satisfied that the defendant was and is aware of its obligations under the Act and has expended considerable effort and resources to comply with them.

54 As for the defendant's plea of guilty, I am satisfied that the plea was entered at an early opportunity and that the defendant should receive a discount of 25 per cent for the plea of guilty in accordance with the guideline judgment in R v Thomson; R v Houlton (2000) 49 NSWLR 383 as recently approved by the Court of Appeal in R v Sharma [2002] NSWCCA 142 and reaffirmed by the Full Bench of this Court in Ridge Consolidated Pty Ltd v Mauger [2002] NSWIRComm 108. For the other subjective factors mentioned, particularly the measures taken to improve occupational health and safety, I would allow a further reduction of 10 per cent. In the result, I consider an appropriate penalty in this case to be $247,000.

55 I make the following orders: 1. The offence is proven and a verdict of guilty entered. 2. The defendant is convicted of the offence charged. 3. The defendant is fined an amount of $247,000 with a moiety to the prosecutor. 4. The defendant is to pay the prosecutor's costs as agreed or, failing agreement, as assessed. - 1 -

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