The prosecutor accepted that the defendant had no prior convictions under the Occupational Health and Safety Act or related legislation.
10 Counsel for the defendant relied on evidence in the form of statements from David Francis Christie, Henry Hatze and Colin George Whicker as background to the defendant's plea.
11 Mr Christie is the Managing Director of the defendant which has an annual turnover of approximately $8 million. The defendant has eight permanent employees and engages approximately 29 sub-contractors who are provided by labour hire companies (in light of the terms of paragraph 8 of the agreed facts, it is assumed that this term is used in a very broad sense). He sets out in some detail his prior experience from 1981 and says that neither he nor any of the companies with which he has been associated have had a conviction for a work safety offence. The premises at Silverwater have been occupied by the defendant since March 1997. After referring to the way in which various inflammable materials were kept at the defendant's premises (in a manner consistent with that set out in the Statement of Facts) he says that he was not aware that a licence under the Dangerous Goods Act was required to keep more than 100 litres of flammable liquids and that during the course of his business career he had many discussions with representatives of paint manufacturers and insurers but had never been advised of this fact.
12 He also indicated that the factory did not have a "no smoking" policy for the whole of the factory but did have a policy for the area which was called the "boat finishing area". He indicated that whenever a new employee was employed (and by this I assume he includes reference to independent contractors), he deposes that he advised such persons of the "no smoking" rule and also instructed his work manager, Mr Hatze, to advise all employees accordingly. In particular he says that he told the employee involved in the accident, Mr Shepherd, when he commenced employment that smoking was banned in the boat finishing area.
13 As to the layout of the factory he puts in issue a statement by Mr Shepherd made for the purpose of the proceedings that the area outside the paint room was a "mess". He deposes that there was only a narrow entrance to the main part of the factory because of the presence of boat trailers situated there. As to this situation he says that this was a deliberate policy intended to stop workers unnecessarily entering the boat finishing area. Further, that because of the three large roller doors this policy did not create difficulties in persons leaving the factory building in the event of an emergency.
14 He also refers in some detail to the decision he made early in 1998 to arrange a formal safety training program for employees and to the meetings he arranged with Mr Colin Whicker who had been recommended to him as a workplace safety expert. There were two meetings with Mr Whicker prior to 1 April 1998.
15 As to the incident on 1 April 1998 he said that when he and Mr Whicker heard the explosion and ran out into the yard adjacent to the factory and saw Mr Shepherd "running around" Mr Whicker and Mr Christie went to Mr Shepherd's assistance and Mr Shepherd was heard to say "I am sorry. I was stupid" or words to that effect. He also says that when he and Mr Whicker visited Mr Shepherd at Westmead Hospital on the evening of the incident he recalls Mr Shepherd saying words to the effect "I am sorry. I was stupid. It was my fault".
16 He also details the measures taken and the work carried out at the factory since the date of the accident (see paragraph 31 of the Statement of Facts) and deposes that the costs to the defendant of carrying out these improvements was approximately $48,000.
17 Mr Hatze's evidence was limited to the circumstances of the employment of Mr Shepherd and the situation as to smoking in the work place. For example, he indicates that when Shepherd was employed Mr Hatze told him "smoking is not permitted in the finishing bays" and that on two subsequent occasions Shepherd was found smoking there and was reprimanded by Mr Hatze on each occasion. Further, that he (Mr Hatze) at no time smoked in that area. He always carried his own cigarette lighter and therefore did not need to and did not in fact use the lighter kept in the paint room. Finally, that he spoke to Shepherd in the factory yard immediately after the accident and in substance corroborates the evidence of Mr Christie as to what was said at the time.
18 Mr Whicker's evidence deals with the course of dealing with the defendant, including the meetings with Mr Christie prior to 1 April 1998. He also corroborates Mr Christie's evidence as to the statements made by the injured worker after the explosion. An important part of his evidence is his attendance at a meeting with the management of the defendant and a number of the defendant's employees on 16 April 1998 and on a subsequent occasion at a local RSL Club. He states that on each occasion he addressed the meeting at length, took the workers through the accredited safety induction program (which took a number of hours) and lectured them on the regulations under the Occupational Health and Safety Act with reference to their own responsibilities and the significance of various hazards. He also set out in detail his recommendations to the defendant as to improvements in safety and the knowledge of workers at the defendant's premises as to safety procedures and requirements. He concludes by stating that arrangements have been made with the defendant to carry out annual reviews of the safety situation at its premises and to advise as to how safety matters should be dealt with.
Prosecution submissions
19 Counsel for the prosecutor emphasised in his submissions that the primary factor to be considered when determining the appropriate sentence is the objective seriousness of the offence charged. This proposition has been referred to in prosecutions under the Occupational Health and Safety Act as the "true measure of penalty lies in the nature and quality of the offence": Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474 - 475. In that respect, it was submitted that the offences were substantial offences. The defendant's premises constituted a dangerous workplace and the lack of proper systems resulted in a very dangerous situation. There was not a great deal that could be said in the defendant's favour as to the objective circumstances of the offence. Such matters as the defendant might rely on in mitigation of the penalty would largely be limited to subjective considerations.
20 The objective circumstances relied upon by the prosecutor included the considerations referred to in paragraphs 21 and 22 of the agreed facts as to, respectively, the s 15 and s 16 offences. Although the first of these matters (the failure to enforce a total ban on smoking within the factory premises and paint room) was the matter which related particularly to the accident which occurred on the relevant date, the three failures were such that any single one of them could have led to a serious accident. It was submitted that this is demonstrated by consideration of the other circumstances in existence at the time. These circumstances included the systems failure illustrated in paragraphs 15 and 16 of the agreed facts. The failure to keep a spillage tray in place under the 200 litre drum led to spillages of thinners collecting at a point near the entrance to the paint room door. The failures were also to be considered in the context of the material before the Court as to the dangerous inflammable nature of the materials stored at the premises, details of which were set out extensively in the Material Safety Data Sheets referred to in paragraph 33 of the agreed facts and summarised in paragraphs 23 to 26 of the same document. The substances referred to included substances which were, or had the potential to be, highly explosive. Further, the relevant data sheets required that spillages were to be cleaned up immediately and deposited in appropriate flammable waste containers. That did not occur at the subject premises and was a factor in the accident which occurred.
21 As to the nature of the defendant, although it was a small business it was not "a tiny business". It had turnover of approximately $8 million per annum and at the relevant time there were eight permanent employees and 29 independent or sub-contractors on site. Because of the products made at the premises, it was necessary to store and handle hazardous chemicals. It was submitted that, on any view of the situation, the premises should have been a strict non-smoking factory. The only evidence of a system preventing workers smoking were the signs and the evidence as to the supposed "non-smoking rule". If the evidence is accepted, it did not amount to an adequate system in place to prevent smoking near the flammable substances on site. Further, the defendant had been operating at the Silverwater site for over a year when the incident occurred and it had not yet established a safe workplace. Another important objective consideration was that the maximum penalty for each offence was $550,000.
22 As to available subjective considerations, the prosecutor conceded that the defendant had entered an early plea and had co-operated with the prosecution. The defendant was entitled to a discount for those matters. Reference was made to the consideration in the judgment in WorkCover Authority of New South Wales (Inspector Sheppard) v The State Rail Authority of New South Wales [2000] NSWIRComm 179 including that as to the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton (2000) 49 NSWLR 383. The utilitarian considerations involved in providing a discount for an early plea were emphasised as was the consideration that the WorkCover Authority, the major prosecutor in the jurisdiction, would not wish to be seen as discouraging early pleas of guilt. It was conceded that the defendant could also rely on the absence of earlier convictions.
23 Finally, the principle of totality applied and distinct offences had been committed in that both employees and non-employees were at risk as access by both categories of persons to the particularly dangerous paint room area appeared to be equal. There was therefore no distinction to be drawn between the respective seriousness of the offences. In particular, in terms of the considerations of proportionality, the offences should be seen as being of equal significance. It was accepted that the Court would adopt the approach laid down by the High Court in Pearce v The Queen and that courts must be vigilant to ensure that a penalty is not imposed twice for factors which are relevant to both offences.
Submissions for the defendant
24 Counsel for the defendant conceded that the "the ultimate requirement of the legislation is that employers be pro-active rather than reactive [and] the defendant cannot shrink from that" However, an important consideration was the evidence as to the approach or attitude of the defendant which, even before the day of the accident was taking steps towards ensuring that there was a safe workplace.
25 As to the objective circumstances of the offences, it was submitted that this was a situation where the defendant became responsible for the reckless actions of the injured worker because it had not done enough in terms of education of employees and was not doing enough to enforce its limited non-smoking policy. It was accepted, however, that the employee would not have been injured if the defendant company had complied with the requirements of the Statute. Its acceptance of its breaches was implicit in the plea but in assessing the objective seriousness of the offence it must be accepted that the employee in question was acting contrary to the defendant's policies as to non-smoking areas and clear signage in those areas. Further, the accident occurred in circumstances where the employee attempted to extinguish the cigarette butt in the paint room area, an area which was clearly signed as non-smoking and the subject of the company's policy. This had to be seen in the context of the defendant's non-smoking policy in the paint room area and that it would have been self evident to any person working at the site that it was dangerous to smoke in that area. It was also pertinent that the element of the offence relating to the failure to have the paint room area properly ventilated and the element relating to electrical equipment did not cause the accident. Further, although the defendant did not resile from its acceptance that there should have been better cross-ventilation in the paint room area, nevertheless there was relatively reasonable means of egress from that area in situations of accident or the like.
26 As to subjective considerations, the defendant also relied on the judgment in the State Rail Authority case and emphasised that the plea was entered at the earliest possible opportunity. In the light of that consideration, and the other relevant factors, the reduction of one third which occurred in the State Rail Authority case should be considered so that at least that level of reduction would be granted in these proceedings. It was also submitted the evidence showed that the defendant, and its managing director, had demonstrated real and appropriate concern for all employees. This was shown not only by the steps taken to remedy the safety deficiencies on site immediately after the accident but also by the steps taken prior to the accident. Concern was also manifested in the visits by senior company personnel to the injured employee in hospital immediately after the accident and the fact that he returned to work with the defendant and continued in its employ for some period before he decided to leave employment on his own initiative and he was provided with a reference by the defendant.
27 Emphasis was placed on the commissioning by the defendant of an expert to assist with rectification of the defects in safety and that this engagement had occurred well before the date of the accident. Reliance was also placed on the amount spent on rectification which was in the order of $50,000 and the Court was asked to accept that the actual costs to the defendant would have well exceeded that amount because of the indirect costs involved additional to the expenditure on external sources of assistance. This was not a situation of a defendant which could be said to have taken no steps at all in relation to relevant issues of safety. Rather it was a situation where the company had not gone far enough by the relevant time and more advanced steps or better steps were in train and about to be undertaken to remedy risks to safety.
28 The defendant relied on the adoption by the defendant of the recommendations of the expert it had engaged (Mr Whicker) and his evidence that the defendant had implemented measures beyond those recommended. These included the issue of brochures and other detailed documentation to employees and contractors as to safety matters including the responsibilities for safety of not only the employer but also the responsibilities of employees and contractors. It was emphasised that the company's ability to attend to those matters was facilitated because there were already in train steps to receive and act on the advice from an expert in the area. This was important, it was submitted, because the improvements in safety which were of benefit to the employees occurred more expeditiously and there was a more prompt adherence to requirements because of what had been put in train.
29 It was also said to be relevant that the managing director of the company was not aware of some of the safety requirements such as that relating to registration under the Dangerous Goods Act when quantities of certain substances were held in excess of the relevant defined limits. This had occurred notwithstanding his experience in the industry and in circumstances where the relevant regulations had not been drawn to his attention by representatives of suppliers who had attended the premises. Mr Christie had not only reduced the relevant quantities of dangerous goods kept on the premises but he has made it his business to advise everyone he deals with in the industries of boat building and general engineering of their obligations. It was submitted that this demonstrated the defendant's approach to and concern about safety.
30 Reliance was placed on the fact that the defendant had no prior convictions. It was submitted that this was to be seen as an important consideration particularly as the managing director had not been involved in any earlier prosecution proceedings notwithstanding his long experience in the industry. In all the circumstances, the Court should find that the co-operation of the defendant was at the highest level and that there were very powerful subjective factors which should operate its favour. As to its financial situation, it was accepted that the nature of the business had been fairly put by the prosecutor. It was a small company as exemplified by its size and turnover. The subjective factors, it was submitted, militated strongly towards placing the offences, and thus the penalty, towards the bottom end of the range, although it was to be acknowledged that the maximum penalties were extremely high, any penalties imposed should be at the lower end of those available.
Consideration and conclusions
31 There was no issue between the parties as to the principles to be applied as to sentencing for offences under the Occupational Health and Safety Act which are now well settled: see, for example, Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales at 472 - 476 and WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163 at [21] - [27]. It is necessary, for example, to have regard to the maximum penalty for these offences of $550,000 and the need to give effect to the intention of the legislature that the previous sentencing patterns are to move in a sharply upward manner because of the various significant increases in penalties under the statute. I will approach this matter in accordance with those principles which are now modified in some respects by the guideline judgment in R v Thomson; R v Houlton which, as the parties observed, was considered in the judgment of this Court in WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales.
32 The plea of guilty in these matters should be seen as resulting from, inter alia, "a recognition of the inevitable": R v Winchester (1992) 58 A Crim R 345 at 350. However, that consideration is of much less importance in the light of the guideline judgment and the emphasis there on the ultitarian value of an early plea so that the primary consideration in determining where in the range of discounts a particular case should fall is the timing of the plea. I consider that this is a case where, in terms of the consideration in paragraph [160] of the guideline judgment, it is appropriate to deal with the matter by a single combined quantification of relevant factors.
33 As to the objective seriousness of the offences, the only conclusion available is that they were of significant gravity. At the time relevant to the charges, the defendant's premises were a very dangerous place to work. This is demonstrated by the nature and quantity of dangerous goods kept at the premises and the way in which they were kept (see paragraphs 9, 10, 11, 15 and 16 of the agreed facts); the characteristics of those substances (paragraphs 23 to 27); the steps taken since the time when the offences occurred in order to rectify or remedy the risks to safety manifested at the time (paragraph 31); and the breaches of elementary safety requirements which the defendant has admitted (paragraphs 21 and 22). It is difficult to comprehend how, in 1998, any employer could consider its safety obligations were being observed by permitting smoking in the workplace. But to do so in an industrial or factory environment and particularly in premises of the kind used by the defendant represented an abdication of its responsibilities under the Occupational Health and Safety Act and the general law both to its employees and any other person who might attend or work at the site.
34 Accepting, as the Court must, in the light of the only evidence tendered on the issue, that there was a non-smoking policy as to the paint room area and that instructions and admonitions were given to employees (and apparently to other persons working on site) in this regard, it was a policy which, as now admitted by the defendant, was not adequately enforced. Indeed, the evidence as to the role of the injured employee and his failure to heed the warnings or instructions to him is not of great value to the defendant in diminishing the objective seriousness of the offence. The significance of that evidence is to show the artificiality of a policy which purported to preclude smoking in one particular area, and to allow smoking otherwise. The evidence demonstrates that, as a matter of practice, the defendant did not have an effective policy as to smoking in the more dangerous areas of the premises and failed to have an appropriate policy as to smoking generally.
35 As Maidment J observed in Callaghan v Saunders Constructions Pty Limited (unreported, CT93/1062, 26 November 1993 at p. 7):
Commendable though it is to introduce appropriate occupational health and safety measures after the event it needs to be remembered that the legislation is not directed at ex post facto measures, it requires positive preventative steps being taken to ensure that workers are afforded safe working environments irrespective of their own laxities.