Wholesale Joinery Pty Ltd (the offender) has pleaded guilty to an offence that being a person who had a health and safety duty pursuant to section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Colin Ferguson to a risk of death or serious injury contrary to section 32 of the Act.
The maximum penalty for the offence is a fine of $1.5 million.
[2]
Facts
The parties presented an Agreed Statement of Facts that can be summarised as follows.
The offender operates a business manufacturing kitchen cabinets from premises in Somersby (the premises). The offender has operated that business from 1981.
In early 2016 the offender decided to disassemble and remove a disused cool room. The cool room was constructed of approximately 200 interlocking tongue and groove refrigeration panels, which lined the walls and made up the ceiling. The ceiling panels were suspended from the roof of the factory by wire cables. The ceiling panels slotted into an aluminium track on the rear wall of the factory and were interlocked and riveted together. Each panel was approximately 6.2m long, 1.2m wide and 85mm thick. Several of the panels had stickers on them stating that the load rating capacity was 150kg per square metre. Air conditioning ducting was located on top of the ceiling panels.
On 17 March 2016 the offender received a quote from a third party for the dismantling of the cool room and associated air conditioning systems and wiring in the sum of $35,706 (the quote). The quote did not include the removal and disposal of the materials.
The offender considered the quote to be too high and it considered that its employees were appropriately qualified and experienced to complete the work.
The Factory Manager, the Factory Maintenance Supervisor and a Maintenance Fitter inspected the cool room. They did not discuss the safety requirements for the work and the Factory Manager did not ensure that they had developed a safe method to complete the work.
The dismantling of the cool room took place in several stages. The first stage involved removing the electrical fittings, pipework, brackets and air conditioning units. That work was completed by contractors including air conditioning mechanics and electricians over several weeks. The contractors accessed the ceiling from the mezzanine floor and walked on the ceiling panels.
Mr Ferguson was employed by the offender as a Maintenance Fitter. He was employed by the offender on 10 April 2012 and had 35 years' experience. Mr Ferguson believed that the ceiling panels had a safe working load of 150kg per square metre. He had seen a sticker on a panel to that effect. Mark Hastings, another employed maintenance fitter believed that the loading was 150kg and that the panels were safe to walk on temporarily.
On or about 4 April 2016 Mr Ferguson and Mr Hastings with the assistance of Tony Thornton, a labourer, commenced the dismantling of the cool room panels and the air conditioning ducts.
A method of performing the dismantling work was discussed between Wulf Leichsenring (the Factory Maintenance Supervisor), Mr Hastings and Mr Ferguson. The discussions involved risk identification and the use of relevant control measures including scissor lifts and fall protection. The methods were not developed systematically. There was no Safe Work Method Statement (SWMS) developed and no formal risk assessment was documented.
The offender had no SWMS for working at height, however there was a practice that included risk identification, control and provision of relevant equipment. At the time of the incident the offender did not use fall protection measures such as the use of harnesses from an anchor point on the ceiling.
The dismantling work required the removal of air conditioning ducting that was mounted on the ceiling panels and affixed by silicone sealant. The ducting needed to be separated from the ceiling panels by removing screws and cutting the silicone. The ducting then had to be cut into pieces that could be removed using a forklift. This work was performed by a worker standing on the ceiling panels or from the basket of a scissor lift.
On 13 April 2016 approximately 15 panels remained to be removed. Mr Leichsenring was assisting Mr Ferguson, because Mr Hastings was on sick leave. At about 10.00am Mr Ferguson was working on the ceiling panels, cutting the air conditioning ducting to be removed with the forklift. He was not wearing fall arrest equipment such as a safety harness or lanyard. Mr Leichsenring was operating the forklift. Mr Ferguson tried to tell Mr Leichsenring that the ducting was ready to remove, but Mr Leichsenring could not hear him. In an attempt to attract Mr Leichsenring's attention, Mr Ferguson walked towards the unprotected edge. The last suspended ceiling panel titled and gave way causing Mr Ferguson to fall to the floor.
An ambulance was called and Mr Ferguson was airlifted to Royal North Shore Hospital. Mr Ferguson sustained a fractured right wrist, a fractured left elbow and a fractured left patella. Mr Ferguson returned to work on suitable duties on 10 August 2016. As at 1 October 2016 Mr Ferguson was working 3 days per week for 8 hours a day on suitable duties.
The work was "high risk construction work" as defined in clause 299 Work Health and Safety Regulation 2011 (the Regulation) because it involved a risk of a fall of more than 2 metres. The offender was required to have a SWMS in place for that work.
SafeWork Australia had issued guidance materials relating to the management of risks arising from falls and demolition work. SafeWork NSW had also published a Code of Practice concerning the management of the risk of falls in the work place.
After the incident, the offender had a structural engineer assess the ceiling panels. The engineer concluded that the ceiling panels did not pose a risk to workers. On 12 and 13 May 2016 the offender prepared an SWMS in consultation with an engineer for the remainder of the dismantling work. On 1 July 2016 the offender engaged a contractor to finish the work in accordance with the SWMS.
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The Offender's Case on Sentence
The offender relied on an affidavit of Douglas John McEwen, the sole director of the offender, sworn 27 March 2018. Mr McEwen was present in Court and not required for cross-examination. His evidence can be summarised as follows.
Mr McEwen is involved in the day to day running of the offender and visits the premises once or twice a week on average.
Mr McEwen, on behalf of the offender apologised to the Court and Mr Ferguson for the incident. The offender accepts that Mr Ferguson suffered serious injuries as a result of its failure to ensure his safety. Mr Ferguson returned to his pre-injury duties on 3 May 2017.
The offender is a wholly owned subsidiary of Enstrom Pty Ltd and one of a group of companies known as the "Kitchen Group". The Kitchen Group manufactures kitchens and the premises for sale and/or installation by others.
The offender was incorporated on 26 June 1981. It currently employs approximately 88 people at the premises and is a reasonably large employer on the Central Coast. The majority of staff are employed operating machinery.
The premises were purchased in 2011 and the manufacture of kitchens commenced in 2012. The cool room was part of the original infrastructure at the premises. When the offender purchased the premises it took on a number of the previous owner's staff, including Mr Ferguson. Prior to the incident Mr Ferguson and worked at the premises for about 18 years.
Mr Leichsenring was the head of the maintenance team. The maintenance team's role was to keep the machinery at the premises operating by undertaking routine maintenance and repair. The maintenance team also ensured that the infrastructure at the premises was maintained, including the air-conditioning and dust extraction systems. The maintenance of this equipment required members of the maintenance team to work at heights, usually from an elevated work platform (EWP).
The offender is actively involved in community. It is donated kitchens and money to various charitable causes. By way of example the value of those donations in the period 2016 to 2018 was approximately $250,000.
At the time of the incident the offender had in place a Work Health and Safety Policy (WHS policy) dated 24 January 2013 that covered all employees and contractors that came to the premises. It had also implemented a WHS Management Responsibility Policy dated 14 February 2013.
WHS matters were discussed regularly at Leadership Team Meetings including Mr McEwen, the Chief Financial Officer, the Factory Manager, the Sales and Operation Director and the Marketing Director.
The primary safety risks at the premises that related to the safe operation of machinery used to manufacture kitchens. A risk assessment had been undertaken for each machine and a Safe Operating Procedure (SOP) developed and implemented for each item of manufacturing plant. Operators were inducted and trained in the SOP and were supervised by team leaders to ensure that the SOPs were being followed. The offender developed and implemented pre-start checks for all plant on-site. All plant and mobile plant was serviced by qualified technicians.
Mr Ferguson had been inducted into the offender's WHS policies at the commencement of his employment.
Toolbox meetings and pre-start meetings were held to discuss any hazards arising from particular aspects of the work. These meetings we usually only undertaking for work that was not routine in nature.
There was a dedicated WHS Noticeboard to inform workers of any changes to company procedures or other WHS matters. The offender had a WHS Committee that met on a monthly basis. The Factory Manager and other team leaders undertook weekly inspections to identify hazards and discuss remedial action.
The offender undertook audits to measure its WHS compliance. The last audit before the incident was undertaken on 29 October 2014 by an external provider.
The offender did not place any budgetary restraints on WHS matters, including the purchase of safety equipment or the use of external contractors to perform tasks considered to be outside the skill or experience of its workers.
The first stage of dismantling of the cool room completed by external contractors was completed by them, without the use of fall arrest systems, such as harnesses and lanyards.
After the incident the offender kept in contact with Mr Ferguson and his wife to check on his condition and recovery. Mr Leichsenring visited Mr Ferguson in hospital and at home. The offender purchased aids to assist Mr Ferguson's recovery.
The incident has caused the offender to refocus on WHS risks that are not regularly encountered at the premises. The offender has made a commitment not to undertake any "high risk construction work" and informed its workers of this decision at toolbox meeting on 23 May 2017, instructing them not to carry out such work. That work is to be carried out by a contractor with an appropriate SWMS in place.
The offender has employed a full-time WHS Officer at a salary of $80,000 per annum. The duties of that employee include conducting safety inspections and liaising with workers to identify issues as well as having the offender's safety systems certified under ISO:9001. The WHS Officer reports to Mr McEwen.
The offender has purchased and implemented a web based WHS compliance system. The offender has arranged for the maintenance team to receive external training for working at heights with an external provider.
The offender has arranged for training of the members of the WHS Committee with an external provider. The member of the WHS Committee now undertake monthly safety walks at the premises to identify hazards. Weekly safety inspections are conducted by different teams with in the offender. The offender also conducts Site Hazard Assessments to identify any areas of non-conformance or areas that can be improved.
The offender has arranged for further training of its First Aid Officers.
The offender has developed and implemented a SWMS for working at heights. The SMWS required workers to obtain a Permit to perform the necessary weork before undertaking the work. The offender has also purchased additional safety equipment for working at heights at a cost of approximately $2,000.
The offender has reviewed its Contractor Management Procedure and its Contractor Induction Information Pack.
The offender is presently increasing the automation of its manufacturing system. Mr McEwen deposed that this will have a significant impact on safety at the premises because it will remove many of the risks posed by the operation of machinery and the manual handling of product. The new equipment is expected to be fully installed by December 2018.
Consideration
I have had regard to the objects of the Act set out in section 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999.
Objective Seriousness
The risk of falling from height was obvious. It was a risk of death or serious injury. The failure to prevent falls by taking adequate precautions is a notorious and serious risk in workplaces. Also, the risk posed to workers of an unusual task is often not adequately addressed.
The workers were exposed to the risk posed by an unprotected edge as well as the risk posed by the possible instability of the ceiling panels as the work progressed because the structural integrity of the cool room was decreased as more of its components were removed.
The work was high risk construction work for which there should have been an SMWS in place. The development and implementation of a SWMS would have required a systematic analysis of the hazards involved in the task and the control measures required to eliminate or minimise those risks.
The work could have been done from EWPs, as was done after the incident, or with the use of fall arrest systems. The offender already had EWPs available and the workers were trained on their use. The offender purchased fall arrest systems after the incident at a cost of approximately $2,000 and it has also paid for the workers to receive working at heights training. Each of these precautions was well known in the industry, readily available and simple to implement with minimal cost to the offender.
Mr Ferguson received serious injuries. He has recovered well and returned to full-time duties. He has told the Court in his Victim Impact Statement that the offender was 'fully supportive' of him during his recovery.
The offence is approaching the mid-range of objective seriousness.
Deterrence
The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180].
There is also a need for specific deterrence because the offender continues to operate in an industry that presents significant risks to the health and safety of its workers. However, the need for specific deterrence is reduced. Prior to the incident the offender had in place significant systems to provide for the health and safety of persons engaged on its sites. It has taken significant steps after the incident to improve its safety systems. The offender is also undertaking a significant upgrade of its manufacturing processes to automate many of the processes that would involve a risk of injury to its workers.
Aggravating factors
The injury harm and loss caused by the offence was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the aggravating factor to be established I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The offence does not require an injury to be sustained but only the creation of a risk. The Victim Impact Statement (VIS) was not objected to or called into question and in my view it is proper to take it into account in consideration of the establishment of the aggravating factor: R v Tuala [2015] NSWCCA 8. The injuries suffered by Mr Ferguson were significant. He has required extensive rehabilitation lasting longer than 9 months. He has returned to his preinjury duties. I am satisfied beyond reasonable doubt that the injury harm and loss caused by the offence was substantial.
Mitigating factors
The offender does not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has been in operation since 1981 in an industry that is hazardous to its workers without prior incident.
The offender was a person of good character: section 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The evidence demonstrates that the offender had both before and after the incident a serious commitment to workplace safety. It does not have any prior convictions. The offender is also an exemplary corporate citizen by reference to its support of charitable causes and its provision of employment in the local area.
The offenders has good prospects of rehabilitation : section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken considerable steps to improve its safety systems since the incident. This is supported by Mr Ferguson, who describes the work place as a very different one in regards to safety matters. I am satisfied on the balance of probabilities that the offender has demonstrated good prospects of rehabilitation.
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender expressed remorse through the affidavit Mr McEwen. I am satisfied on the balance of probabilities that the offender has accepted responsibility for its actions and demonstrated genuine remorse and contrition.
The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. The offender is entitled to a discount on penalty that reflects the utilitarian value of that plea. The primary consideration in determining where in the range a particular case should fall is the timing of the plea, so that the earlier the plea the greater the discount: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%.
The offender co-operated with the Safe Work investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
Penalty
The offender is convicted.
I have taken into account the VIS. I note that Mr Ferguson was present in Court and was supportive of his employer.
The appropriate fine is one of $160,000 that will be discounted by 25% to take into account the plea of guilty.
I impose a fine of $120,000.
I order that pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
I order that the offender pay the prosecutors costs as agreed in the sum of $25,000.
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Amendments
18 April 2018 - Renumbering of paragraphs from [29]
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Decision last updated: 18 April 2018