SafeWork NSW v B & E Foods Pty Ltd & Ors

District Court of NSW|2023-11-29

Background

B & E was a corporation with its registered premises at 25 Bessemer Street in Blacktown, New South Wales ('premises') from which it carried on a business or undertaking involving the supply of wholesale food and meat products.
Mr Dong was the sole director and secretary of B & E.
E & J was a corporation with its registered premises at 25 Bessemer Street in Blacktown, New South Wales. E & J carried on a business or undertaking involving the importation and supply of packaging material.
NL was a corporation with registered premises in Bungarribbee, New South Wales. NL carried on a business or undertaking that provided labour hire services to B & E.
Ms Yang was employed by NL and hired out to B & E as a production worker to operate machinery and pack finished goods at its premises. Ms Yang was literate only in Mandarin. She was not literate in English.

The plant

B & E negotiated directly with a Chinese company, Zhongshan Jialu Import and Export Trade Co Ltd ('Zhongshan'), in relation to the purchase of three roll meat slicing machines ('the machines'). Following the negotiation, E & J purchased the machines from Zhongshan on B & E's behalf and imported them between May 2019 and July 2019.
The machines were designed to slice up four rolls of frozen meat at a time using a guillotine blade. The frozen meat rolls were fed into the rear of the machine where an automatic 'pusher' would feed the machine through an opening 520mm wide and 130mm high to the blade. The meat would travel through the blade and sliced before being ejected at the front of the machine for packing by workers.

Guidance material

At the time that the machines were imported by E & J and supplied to B & E, the following guidance material was available: 1. SafeWork NSW Code of Practice: Managing the risks of plant in the workplace (July 2014) ('COP'), which deals with guarding of machinery and outlines the guarding hierarchy. Relevantly, the COP includes guarding as a specific control measure for risks of plant, including permanently fixed physical barriers and interlocked physical barriers. 2. Australian Standard, AS 4024 (Series) Safety of Machinery ('the Standard'), which provides guidance on reducing the risks to health and safety associated with machinery, including guarding design. Part 1601 of the Standard provides specific requirements as to the design and construction of guarding. The Standard underscores the importance of conducting risk assessments in order to select the appropriate guards for particular machinery. 3. SafeWork Australia, Guide to supplying and importing safe plant (July 2014). 4. SafeWork Australia, Labour hire: duties of persons conducting a business or undertaking ('Labour Hire Guide'), which provides information and guidance to persons conducting a business or undertaking ('PCBU') involving labour hire, as well as PCBUs hosting labour hire workers, on complying with their health and safety duties under the WHS Act. Relevantly, the guide states that before workers are placed at the host site, labour hire PCBUs should assess the workplace for any risks to health and safety including by gathering necessary information from the host PCBU and/or by arranging a workplace visit.

Prior incident and inspections

On 8 January 2020, a female worker assigned by NL to work at B & E's premises had her right thumb amputated after it came into contact with a blade of one of the machines in the Hot Pot Slice Room. Following that incident, SafeWork NSW issued the following prohibition notices to B & E: 1. Prohibition Notice 7-317VKUQTP 2. Prohibition Notice 7-317-EJ8UWC 3. Prohibition Notice 7-317-NJ7YX8
The Prohibition Notices directed B & E to eliminate or minimise so far as was reasonably practicable the risks associated with the machines by adequately guarding the dangerous parts of the slicer such as the guillotine blade. In response, B & E installed tunnel guards at the front of each of the three machines. The front tunnel guards prevented workers from accessing the guillotine blade. The front tunnel guards were locked with padlocks that could only be unlocked with a padlock key and code, which were in the exclusive possession of B & E's in-house mechanics. B & E also provided a pull stick to be used by the workers to remove any meat caught in the blades of the machines.
On 23 January 2020, B & E sent a photo of the front tunnel guard installed on one of the machines to SafeWork NSW Inspector Samuel Becke ('Inspector Becke'). In an email response, Inspector Becke approved of these as temporary control measures and lifted Prohibition Notice 7-317-VKUQTP. Inspector Becke also stated in his email: 'Prior to recommencing operation, workers are to be given clear instructions about the use of the pull stick. If access is needed to the blade area (this includes access to any area covered by the guard), the machine must be switched off and deenergised prior to that occurring.'
The remaining two prohibition notices were lifted on 28 January 2020 following the installation of front tunnel guards on the machines.
On 4 February 2020, Inspector Becke attended B & E's premises. During that visit, Inspector Becke requested that the front tunnel guards be extended and that guards be installed over moving parts at the back of the machines. Inspector Becke formalised these requests by issuing the following improvement notices: 1. Improvement Notice 7-369712 2. Improvement Notice 7-369713 3. Improvement Notice 7-369714
The improvement notices recommended (for each of the three machines) that B & E: 1. Extend the front tunnel guard to the end of the tray and interlock the guard so as to render the machine safe when a worker opens the guard; and 2. Fix a guard to the rear area to cover the moving parts.
In response, B & E arranged to extend the front tunnel guards and install a fixed plate at the back of each of the three machines. On 19 March 2020, B & E were deemed by SafeWork NSW to have complied with the improvement notices.
As at 19 March 2020, no guards were installed on the rear of the machines such that the blades at the rear were still exposed and accessible.

The incident

On 6 August 2020, Ms Yang commenced her shift at B & E's premises at 7:00am. She was instructed by her supervisor, Bruce Ye ('Mr Ye') to operate one of the machines in the Hot Pot Slice Room.
Ms Yang had only commenced working at the premises the day before.
Ms Yang started to feed rolls of frozen meat into the rear of one of the machines. After approximately 15 minutes, Ms Yang was attempting to remove the ends of the rolls from the rear of the machine when the blade descended, partially amputating two of her fingers on her right hand.
Two inspectors from SafeWork NSW attended the premises at 11:00am that day. The inspectors observed a safety sign located to the left of the machine that Ms Yang had been using when she was injured. The sign contained a symbol of a hand coming into contact with a large knife and the following text written in English only: 'Think Safety Stop the machine when not in use Do not clean the machine while in operation Do not use the machine if unsafe to do so'

Injuries

Following the incident, Ms Yang was conveyed by ambulance to Westmead Hospital.
Ms Yang suffered amputations of her right hand ring and middle fingers distal phalanges.
Ms Yang was aged 58 years at the time of the incident and was right hand dominant.

B & E

At the time of the incident, there was no guarding installed at the rear of the machine that Ms Yang was using. Although a fixed plate had been positioned at the rear of the machine, it did not prevent access to the blade.
As an alternative to rear guarding, B & E relied on administrative controls to control the risk. Workers including Ms Yang, were instructed to use a metal 'puller' to remove meat ends that remained at the rear of the machine and to switch off machine when reloading meat rolls. Workers including Ms Yang were instructed not to use their hands to remove the meat and a warning sign was displayed in the Hot Pot Slice Room reminding workers of this requirement. The sign was in English. Ms Yang was literate only in Mandarin.
As part of B & E's induction process, workers including Ms Yang were trained in the 'Hot Pot Slice Machine Operation Manual' ('Operation Manual'). The Operation Manual was a one-page document which summarised the operation of the machine and the required training of the operator, including the requirement to use the 'puller' to remove meat ends. The Operation Manual was written in English and did not identify the risk of injury from the exposed blade at the rear of the machine. Ms Yang signed a copy of this document on her first day at the premises being 5 August 2020, one day prior to the incident.
In a s 155 Notice provided to SafeWork NSW that she completed with the assistance of her adult son, Ms Yang stated:

that what she was told to do when she loaded or removed the meat from the back of the machine was to 'switch off the machine, use the metal stick to take meat. Must not use hand';
that the dangers she was told about relating to the machine were 'must not use hand to take meat';
that Mr Ye was her supervisor in the Hot Pot Room and that he was 'always there' 'but not during the accident';
that while Mr Ye was watching she had 'everytime' taken out the ends of the meat rolls, and that she had done that by 'stop[ping] the machine and get[ting] meat out with metal stick';
that Mr Ye had told her to switch off the machine to reload the meat;
that Mr Ye had made sure she understood the instructions by 'speak[ing] Chinese and also show[ing] me how to use the machine'.
that prior to the incident she had loaded/removed a 'few boxes' of meat.
that when the incident occurred she was 'just trying to get meat out because the meat stuck in the machine'.

B & E also had a document titled 'New Worker Orientation (Hot Pot Slice)' to induct workers, including Ms Yang. It did not address the risk of injury from the exposed blade at the rear of the machine. The document was written in English. Ms Yang had signed it on 5 August 2020.
Mr Ye was not present to supervise Ms Yang at the machine at the time of the incident.
Mr Dong did not prohibit the operation of the machine without it being adequately guarded and when there was a foreseeable risk of injury to workers, including new inexperienced workers using the machine.

E & J

E & J did not have adequate systems in place to ensure that specific machines they imported and supplied to B & E were without risk to the health and safety of persons using the machines at the premises.
E & J:

Did not identify that there was an absence of guarding on the machines before it supplied them to B & E.
Did not conduct an inspection of the machines when they were received at its warehouse, instead supplying them directly in their original unopened state to B & E.
Did not obtain information about the machines (including the Instruction Manual) from the manufacturer in China.

From the time that B & E acquired the machines in 2019 they had been operated by workers employed by NL.
Nianci Lyu ('Ms Lyu') visited the premises each week and observed NL's labour hire workers operating the machines.
NL relied on B & E's systems to protect its workers from the risk of using their hands to clear blockages or remove meat rolls from the machines.
NL did not conduct a risk assessment or an inspection of the machines prior to the incident nor did it assess the state of the guarding.
NL did not provide training to its workers, including Ms Yang, pertaining to the safe operation of the machine and instead relied on B & E to provide any such training.

Systems of work after the incident

Within six days of the incident and at Mr Dong's instruction, B & E added labels to the control panels in English and installed interlocked tunnel guards at the rear of each of the three machines, at an approximate cost of $2,500.
Also at Mr Dong's instruction, B & E updated its Operation Manual for the machines, in both English and Mandarin, to include new information about the interlocked rear guarding. There were also new safety signs placed on the machines, in both English and Mandarin.
B & E has also been careful since the incident to purchase plant from Australian and overseas suppliers that is certified to meet Australian safety standards.
NL, in conjunction with B & E, conducted a review of the control measures for the operation of the machines. As part of this review, all NL workers were retrained and re-inducted into the new Operations Manual, by B & E's Operation Manager. Mechanisms were also put in place to ensure workers were able to report hazards in the workplace.

The risk

The risk relevant to the offences with which the defendants have been charged is described in Annexure 'A' to each of the Summonses in the following terms: 'The risk was the risk of workers, in particular Ms Yang, suffering serious injury, in particular having their hands or fingers crushed and/or amputated, as a result of their hands or fingers coming into contact with the moving parts of the machine.'

Sentencing

The penalty to be imposed must be one which will give overall effect to the policy of the WHS Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises. I have had regard to the principle contained within the WHS Act that workers should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the WHS Act.
The Court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act') which include: 1. Section 3A which sets out the purpose of sentencing; 2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing; and 3. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.
The Court is to approach a sentencing exercise on the basis of it being one of 'instinctive synthesis': Markarian v The Queen (2005) 228 CLR 357.
The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way: 'The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement.'

Objective seriousness of the offence

The primary consideration requires a determination of the objective seriousness of the offence. The High Court made this clear in Muldrock v The Queen (2011) 244 CLR 120 at [27]: '…The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of offending.'
Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464, 474-5.
The duties of the defendants require that they ensure the health and safety of workers as far as reasonably practicable. These duties are not delegable, require the identification of risks in the workplace and an assessment of measures to address such risks.
The gravity of an offence is determined by the extent of the duty holder's failure to ensure, so far as was reasonably practicable, that its workers were not exposed to risks to their safety: Orbit Drilling v The Queen (2012) 35 VR 399 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No 2) (1988) 164 CLR 465.
The objective degree of foreseeability is a matter for the Court to have regard to when considering the gravity of an offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 ('Capral Aluminium') at [81].
An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117.
Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at [31].
The Court of Criminal Appeal examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 ('Nash v Silver City'). His Honour Justice Basten, under the heading 'Assessment of Risk' said at [34]: 'The sentencing judge commenced his consideration with the proposition that '[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.' However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors.'
His Honour further observed at [42]: 'The culpability of the respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent's responsible officers knew or ought to have known.'
I accept that s 3A of the Sentencing Act is generally regarded as a codification of the common law principles of sentencing: R v MA [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK [2006] NSWCCA 272.
The Court is obliged to make an assessment of where on the scale of criminality the offences lie referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17]-[18] (Latham J).
Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).
The objective seriousness of an offence under s 32 of the WHS Act is considered in the context of the gradation of offences contained in ss 31-32 of the WHS Act: Nash v Silver City at [54]-[56]. The matters relevant to objective seriousness for a s 32 offence include: 1. The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Nash v Silver City [34]; 2. The availability of steps to eliminate or minimise the risk: Nash v Silver City [34]; 3. Whether those steps are complex, burdensome or mildly inconvenient. If mitigating steps could easily have been taken, the offending will be more serious: Nash v Silver City [34] and [53]; 4. Whether the risk was known or ought reasonably have been known to or identified by the offender; 5. Whether the risk was an obvious or clear one; and 6. The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ).
However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of it. At [53] in Nash v Silver City, Basten JA dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying: 'It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.'

Matters relevant to determining the culpability of the defendants

Foreseeability of risk

The failure to guard moving parts of machinery presents an obvious risk. The moving parts of the hot pot slicing machines were able to be reached by an operator at the rear of each machine.
The foreseeability of the risk was significant.
The risk was identified in the available guidance material, including in the Australian Standard AS4024 (Series) Safety of Machinery (2014) and the SafeWork NSW Code of Practice Managing the risks of plant in the workplace (August 2019).
E & J should have been aware of the risk of a worker's fingers or hands coming into contact with the blades of the machines. A cursory inspection of the machines would have revealed that there was no guarding on the machines which complied with the Australian Standard when the machines were imported and supplied by E & J in about June and July 2019.
B & E, Mr Dong and NL were aware of the risk as a result of the earlier incident in January 2020, in which another labour hire worker lost her thumb when she came into contact with the unguarded blade of one of the machines.
The three Prohibition Notices which are annexed to Mr Ye's affidavit (exhibit 3) detail under the heading 'Basis for the Inspector's belief' as follows: 'Workers are exposed to an immediate and serious risk of injury, such as amputation of body parts (eg. the injury occasioned to Xiaolan Zhang), from the use of the Hot Pot Slicer Machine #1 in the Hot Pot Slice Room, as the machine has a guillotine blade (a dangerous part) operating to slice meat in close proximity to workers body parts and the machine is not adequately guarded.'
This is exactly the risk that is pleaded in all the Summonses against the defendants.
I accept that B & E took steps to comply with the Prohibition and Improvement Notices, by extending the front tunnel guards, which were an engineering control to prevent access to the blades from the front of the machine. B & E also provided workers with a metal 'puller' to remove any meat caught in the blades.
B & E further in response to the notices issued by SafeWork NSW in February 2020, extended the front tunnel guards and installed fixed plates at the back of the machines. However, the fixed plates did not prevent rear access to the blades.
Following the incident in January 2020, there had been some risk assessment on the machine by B & E, which resulted in the implementation of some lower order administrative controls. Ms Yang had been trained in the operation of the machine and had been told not to use her hands to remove meat. She had also been provided with a metal pull stick to keep her hands clear from the blades. There was also a warning sign to this effect on the machine, albeit written in English. Ms Yang was literate only in Mandarin.
The risk of a worker such as Ms Yang inadvertently placing her fingers or hand under the blade whilst operating the machine was a foreseeable one. The unguarded blade of the guillotine was activated when Ms Yang attempted to remove the ends of the meat rolls from the rear of the machine.
Duty holders must take steps to protect against risks created by inadvertent conduct of workers in the course of their work, if it is reasonably practicable to do so: SafeWork NSW v Poletti Corporation [2019] NSWDC 491 at [88].

Gravity of risk

Offending is more serious where the potential injuries are severe, regardless of whether they are likely to materialise: Nash v Silver City at [34].
The risk was one of serious injury. Ms Yang lost the tips of two fingers on her right hand in the incident. Another worker had her thumb amputated only seven months earlier in almost identical fashion.
There was a substantial chance of the risk manifesting, as the risk was posed by more than one machine; the ends of meat rolls had to be removed by an operator from each machine; and the rear opening of each machine was large enough (520mm wide and 130mm high) for an operator's hand or fingers to readily access the guillotine blade.
Further, Ms Yang was a brand new recruit within the business of B & E and she was inexperienced in operating the machine. This makes her a vulnerable employee. The incident happened within a very short time after she started work on her second day. She was under no direct supervision at the time she was injured.

Availability and feasibility of measures to control the risk

The offending conduct will also be more serious if mitigating steps could easily have been taken to eliminate or minimise the risk: Nash v Silver City at [34] and [53].
Simple remedial steps were available which would have completely avoided the risk. Firstly, the rear section of the machine should have been guarded. Secondly, machine operators should have been prevented from accessing the guillotine blade area of the machines while the machines were running.
The reasonably practicable measures pleaded against each of the offenders in the Amended Summonses, and accepted by each of them as part of their pleas, would have involved little effort and minimal cost, and this is a factor that increases the objective seriousness of the offences by each defendant.

Contribution to the creation of the risk

E & J supplied the machines to B & E by importing them into Australia.
By its plea, E & J accepts that it failed to comply with its duty under s 25(2) of the WHS Act to ensure, so far as was reasonably practicable, that the machines were without risks to the health and safety of persons who used the machines for a purpose for which the machines were designed or manufactured.
The Instruction Manual for the machines issued by their Chinese manufacturer confirmed that the machines were designed and manufactured to be used for the slicing of meat rolls. This was the task being done by Ms Yang at the time of the incident.
E & J did not have adequate systems in place to ensure that the machines were without risk to persons such as Ms Yang. E & J failed to identify that there was an absence of guarding on the machines before E & J imported and supplied the machines to B & E.
The guidance material available to E & J provided that 'any imported plant must be inspected having regard to information provided by the manufacturer'.
E & J did not conduct an inspection of the machines when they arrived at E & J's warehouse on 20 May 2019 and 1 July 2019. E & J did not obtain any information from the Chinese manufacturer about the machines, including the Instruction Manual prepared by the manufacturer.
B & E held the responsibility to ensure that the machines were adequately guarded in compliance with its duty under s 19(1) of the WHS Act. B & E was in a position to assess the risks and hazards arising from the operation of the machines. From the middle of 2019, B & E owned the machines. A thorough risk assessment for the machines by B & E would have identified the need for guarding at the rear of the machine, especially as the rolls of meat were fed by the workers into this part of the machine for slicing.
B & E and Mr Dong did not prohibit the operation of the machines without them being adequately guarded, when there was a foreseeable risk of injury to workers, including new and inexperienced workers using the machine.
B & E and Mr Dong had a documented safety management system in place, however it was not implemented. B & E's system failed to identify the risk posed by the absence of rear guarding on the machines, and there was over-reliance on administrative controls to ensure the safety of operators. Ms Yang was required to sign the B & E Operation Manual for the machine and the B & E induction checklist written in English, when she was unable to read these documents for herself.
NL knew that its workers could be exposed to risks to their health and safety when sent to work for its client, B & E, as temporary workers. NL did not have in place a documentary system that recognised and sought to manage those risks in relation to the placement of Ms Yang or other temporary workers.
NL accepts by its plea that it should have provided Ms Yang with adequate written information and practical training to safely operate the machine, having regard to the fact that Ms Yang was not experienced in the operation of the machine and was not literate in English.
NL should not have relied solely on B & E to ensure the health and safety of the workers placed by NL with B & E. NL should have inspected the machine prior to Ms Yang's use of it, and required B & E to confirm in writing that the machine was adequately guarded. NL and its director, Ms Lyu, were clearly in a position to take these simple steps.
The prosecutor accepts that the inspector's approval of the modifications made by B & E to the machines in February and March 2020, without any rear guarding, is a factor which mitigates the seriousness of the offending conduct by B & E, Mr Dong and NL.
I do have some sympathy for the defendants in that they believed after the issue of the Improvement Notices on 23 January 2020, and the Inspector then lifting the Improvement Notices, that the machines were safe for use.
However that proved not to be the case, and the defendants cannot rely on the Inspector's notice to obviate them of their duties under the WHS Act. The Improvements Notices were only issued to B & E. The breach committed by E & J was a continuing offence that had commenced on 20 May 2019 and remained continuing until the date of the incident.
I accept that that by late 2019, B & E had in place a system to reduce the health and safety risks to workers when operating the Meat Slicing Machines, however it failed to develop and enforce the systems that they had in place and, the systems themselves were inadequate - particularly with regard to supervision which was grossly inadequate. However, I do accept these are not defendants who come before the Court having had no regard to safety.
It is an agreed fact (Agreed Statement of Facts ('ASOF') at [39]) that no steps or controls were in place to ensure new and inexperienced workers such as Ms Yang were actively supervised whilst operating the machine, and that Ms Yang's supervisor, Mr Ye was not present at the machine and not supervising Ms Yang at the time of the incident: ASOF at [40].
It is also an agreed fact that Mr Dong did not prohibit the operation of the machine without it being adequately guarded when there was a foreseeable risk of injury to workers, including new and inexperienced workers using the machine: ASOF at [42].
I accept that Mr Dong was under the mistaken belief that the Meat Slicing Machines were safe, based on the conduct of the SafeWork Inspector, however he does accept that the machine was not appropriately guarded when it was brought into Australia.
There was ample guidance material available to the defendants whether they be a host employer, a labour hire company or an employer.
Behind Tab 12 of the PSTB, there is a copy of the SafeWork NSW Code of Practice: Managing the risks of plant in the workplace. At page 101 the duties of suppliers or purchasers of plant are clearly described, which includes identifying, so far as is reasonably practicable, faults in the plant. At page 112 it identifies the manner for appropriate guarding and at 134, the guide sets out a hazard checklist.
Behind tab 14 of the PSTB is the SafeWork Australia, Guide to supplying and importing safe plant, which provides further guidance with regard to importing and supplying safe plant, and clearly sets out the health and safety duties that plant importers and suppliers have at page 187. Importantly it states as follows at about point 8 of the page: 'Importers and suppliers must, so far as is reasonably practicable, eliminate or minimise risks to health and safety regarding the plant being supplied, where the manufacturer has not already done so. This may be necessary where the importer has no direct connection to an overseas designer or manufacturer'
This clearly indicates that if the manufacturer of the plant had not provided it in the appropriate manner for safe use, the obligation is on the supplier to do so. This did not occur in the circumstances of this offending.
Behind tab 15 of the PSTB is a copy of SafeWork Australia, Labour hire: duties of persons conducting a business or undertaking, which at page 192 of the bundle, sets out the duties of PCBUs in the context of labour hire. It states at point 2 of the document: 'This Guide provides information for persons conducting a business or undertaking (PCBUs) involving the supply of workers (labour hire PCBUs) to work for another business or undertaking (host PCBUs) on complying with their health and safety duties under the model Work Health and Safety (WHS) laws…. The primary duty of care under the model WHS Act is owed to a "worker", which includes a labour hire worker. All labour fire PCBUs and host PCBUs have a primary duty of care to ensure, so far as is reasonably practicable, the health and safety of labour hire workers engaged by, or caused to be engaged by them, or whose activities are influenced are influenced or directed by the PCBU.'
These duties are clearly spelt out at page 195, and details steps that must be taken before placing labour hire workers, and during their placement.
As a consequence of the matters set out above, I am of the view that these are objectively serious offences. The seriousness of the foreseeable harm to a worker was significant, and the steps available to avoid the risk were straightforward and available to the defendants.

Deterrence

In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.
General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the Court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).
When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.
The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016) 93 NSWLR 338 at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a Court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]-[75] which said: '[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. … [75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.'
General deterrence must be a significant feature of the sentence imposed upon the defendants. It can be appropriately used to direct the industry's attention to the consequences of inattention and the need for greater concentration on the potential risks of death or serious injury associated with the use of machinery in the food preparation industry, and in particular when automated sharp blades are used.
The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the WHS Act very seriously.
However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors.
In relation to specific deterrence, the attitude of the defendants to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendants to reoffend.
Immediately after the incident B & E took the following steps (as set out in Mr Ye's affidavit - exhibit 1): 1. Installing a secondary safety guard; 2. Updating safety signage, including in English and Mandarin; 3. Updating the operating manual, including translating the manual and providing it to workers; 4. Updating the induction program; 5. Working with an independent safety consultant to further improve guarding to other machines throughout the B & E business; 6. Conducting regular safety checks of the Meat Slicing Machines; 7. Following the incident, only purchasing new machines from suppliers certifying the machine's compliance with Australian safety standards; 8. Hiring an in-house mechanic to ensure, amongst other things, the ongoing safety of the machines; and 9. Reminding workers of their safety obligations. 10. This all occurred at significant cost, and from August 2020 B & E at the behest of Mr Dong spent well in excess of $3 million to update machinery, maintenance and employing additional safety staff.
I accept that after the incident, Mr Dong has arranged for B & E to do more to protect workers safety whilst in the workplace.
Nonetheless, there needs to be an element of specific deterrence for B & E and Mr Dong, but it is not relevant to E & J and NL as they are no longer trading. General deterrence is an aspect of sentencing that applies to all of the defendants, to send the message to any other PCBUs that the duty to protect persons at work in the workplace is a positive, non-delegable duty that must be at the forefront of their minds.
Counsel for the defendants submits that E & J's level of culpability is less than that of B & E's, and states as follows in [80]-[81] of the defendant's written submissions: '80. While the principal of totality does not apply to the present prosecution, as SafeWork NSW has elected to charge what are, in effect, different arms of the same business separately. Rather, "there should be a proper weighing of the respective culpabilities of the defendants and, in this regard, attention should be paid in properly measuring the actual culpability of each defendant in relation to the detriment to safety. Where there are overlapping responsibilities, the Court will ensure that there occurs a proper apportioning of responsibility by the respective defendants: Inspector Sharpin v A Team Concrete [2004] NSWIRComm 182 at [110], per Staff J 81. This submission ultimately falls within the submission that the Court should consider financial and other circumstances of the defendant when deciding what fine to impose: per Walton J, VP in WorkCover Authority (NSW) v Lyndhurst (2000) 95 IR 462 at 475. ln this, E & J is not submitting that it should be fined as an individual (which submission was rejected in the cited passage).'
Further it is submitted that E & J were not involved in the selection of the machines, as they were chosen by B & E. Thus, it is submitted that effectively E & J was an agent for B & E in respect of the purchase, and was simply acting as B & E's import arm for the purpose of the import of the machines.
E & J were charged with an offence under s 25(2) of the WHS Act which reads as follows: '25 Duties of persons conducting businesses or undertakings that supply plant, substances or structures (1) This section applies to a person (the supplier) who conducts a business or undertaking that supplies - (a) plant that is to be used, or could reasonably be expected to be used, as, or at, a workplace, or (b) a substance that is to be used, or could reasonably be expected to be used, at a workplace, or (c) a structure that is to be used, or could reasonably be expected to be used, as, or at, a workplace. (2) The supplier must ensure, so far as is reasonably practicable, that the plant, substance or structure is without risks to the health and safety of persons - (a) who, at a workplace, use the plant or substance or structure for a purpose for which it was designed or manufactured, or (b) who handle the substance at a workplace, or (c) who store the plant or substance at a workplace, or (d) who construct the structure at a workplace, or (e) who carry out any reasonably foreseeable activity at a workplace in relation to - (i) the assembly or use of the plant for a purpose for which it was designed or manufactured or the proper storage, decommissioning, dismantling or disposal of the plant, or (ii) the use of the substance for a purpose for which it was designed or manufactured or the proper handling, storage or disposal of the substance, or (iii) the assembly or use of the structure for a purpose for which it was designed or manufactured or the proper demolition or disposal of the structure, or Example - Inspection, storage, operation, cleaning, maintenance or repair of plant. (f) who are at or in the vicinity of a workplace and who are exposed to the plant, substance or structure at the workplace or whose health or safety may be affected by a use or activity referred to in paragraph (a), (b), (c), (d) or (e)……'
In my view, whether E & J were involved in the selection of the machines is irrelevant, as the duty imposed by s 25(2) of the WHS Act applies when the defendant is an importer or supplier. The plea entered to this charge implicitly demonstrates that E & J failed to comply with that duty, regardless of who selected the machine. Further I note that when it was supplied to B & E it was not supplied with an operating manual as E & J did not have one.
It is apparent that E & J's main failure was to check that the machines complied with Australian Standards. The failures that E & J committed were not related to the Inspector's visit as E & J was not the owner of the machines, the Inspector's visit was as a consequence of a previous incident and the Notices were addressed to B & E. The breach by E & J was a continuing one having commenced at the time the machines were supplied on 20 May 2019, and this was at a point earlier in time to the Inspector's visit, and prior to 6 August 2020.
The defendants have submitted that E & J and NL were part of B & E's business and therefore part of the overall enterprise, that B & E were the controllers of the works, and were the driving force of the enterprise.
I do not accept that to be the case. E & J was a duty holder under s 25(2) of the WHS Act, and it is implicit by its plea that it accepts that it owed this duty. The offence is of a continuing nature which started in May 2019 and continued up to the date of this incident.
It is critical to note that such duty that applies to E & J cannot be transferred or delegated: s 14 of the WHS Act.
Further, s 272 of the WHS Act is as follows: '272 No contracting out A term of any agreement or contract that purports to exclude, limit or modify the operation of this Act or any duty owed under this Act or to transfer to another person any duty owed under this Act is void.'
This section provides a prohibition against contracting out of the WHS Act, and does not allow one duty holder to contract out that duty, or rely on another person to take on that duty.
In light of the continuing conduct of E & J, interactions with the SafeWork Inspector are irrelevant - the breach by E & J had already occurred. In any event, there is no evidence that E & J relied on the inspection which provoked a modification of the machine. The relevant time is the time at which the machines were supplied, and E & J can't rely on the intervention of the Inspector.
The defendants assert that the purpose for which NL existed was to supply labour to B & E, as Ms Lyu's primary work is as a registered nurse. At her affidavit (exhibit 1) at [23] she states that like E & J, NL relied upon B & E to discharge its safety obligations, in circumstances where: 1. B & E was NL's only client; 2. B & E facilitated the hiring process; and 3. Mr Tyse, who worked for B & E, managed NL's business.
The defendants submit that I could consider NL as a part of B & E's business, and sentence it accordingly.
With respect, I think that the defendant, NL through Ms Lyu has fundamentally misunderstood the duty owed - Ms Lyu's case is that she and NL relied on B & E's processes and procedures, however she had a separate and positive duty to ensure the safety of workers that she provided under a labour hire arrangement to B & E as she is the sole director of NL.
In SafeWork v Tunny Pty Ltd; SafeWork NSW v Waring [2022] NSWDC 306, his Honour Judge Russell SC stated as follows: 'Mr Waring had not been involved in the running of Tunny since 2014. Yet he was the sole director and was paid significant franked dividends every year by the company. Not only did he fail to exercise due diligence as defined in s 27(5) of the Act; he exercised no diligence whatsoever. Section 27(1) of the Act says that an officer must exercise due diligence. It is not optional. If you are a director you have the duty.'
NL cannot rely on B & E to discharge its safety obligations.

Aggravating factors

The injury, emotional harm, loss or damage caused by the offences was substantial: s 21A(2)(g) of the Sentencing Act. In order for this 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] (Hidden J, McColl JA and Levine J agreeing). Ms Yang suffered very serious injuries, and this is an aggravating factor.
Ms Yang was injured on her second day at work who did not speak English, and I view her as a vulnerable worker: s 21A(l) of the Sentencing Act.

Mitigating factors

The defendants have not been subject to any prior convictions under work health and safety law: s 21A(3)(e) of the Sentencing Act.
I accept that the defendants are corporate citizens of good character and have made significant charitable donations and contribute to the community: s 21A(3)(f) of the Sentencing Act.
I accept that NL is unlikely to reoffend (s 21A(3)(f) of the Sentencing Act ) as all workers of NL have been transferred away from NL and Ms Lyu has no plans to rehire workers or start providing labour hire (Ms Lyu affidavit exhibit 1 at [35]).
I accept that E & J is unlikely to reoffend as at [38] of the affidavit of Mr Dong (exhibit 4) Mr Dong indicates that the overall operation of the business ceased on 21 November 2022, and at [39] in indicates that the company does not actively engage in any type of business, and will be deregistered by 30 June 2024.
I accept that the incident has had a significant impact on all the parties, and I note that B & E have taken extensive and expensive steps to the plant that is used in the business: Exhibit 2 at [60]-[67]. However B & E remain performing similar work in the wholesale food supply industry and engage workers to perform the work required, and I am cautiously confident that they will not offend: s 21A(3)(g) of the Sentencing Act.
I accept that B & E has demonstrated a strong commitment to workplace safety, has very good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act.
I accept that the defendants have demonstrated their remorse and accepted responsibility for the offences: s 21A(3)(i) of the Sentencing Act.
The defendants co-operated with SafeWork NSW during its investigations: s 21A(3)(m) of the Sentencing Act.
The defendants entered a plea of guilty which demonstrates remorse, and the prosecutor submits it is open to me to find that the defendants are entitled to the maximum discount on that basis. Thus, I will allow a deduction of 25% for the utilitarian value of the plea in accordance with the principles set out in R v Thomson & Houlton (2000) 49 NSWLR 383 and ss 21A(3)(k) and 22 of the Sentencing Act.

Costs

The issuing of costs against a defendant in both criminal and civil proceedings is not punitive, but rather compensatory to the prosecution: Latoudis v Casey (1990) 170 CLR 534 at 543 (Mason CJ).
The Court is entitled to take into account the fact that the defendants will be liable to pay the prosecutor's costs when considering any monetary penalty to be imposed on them, and I have taken this into consideration.
The Court can also have regard to the defendant's own costs that it will have to bear as a consequence of a breach of the WHS Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78].

Penalty

I make the following orders: 1. B & E Foods Pty Ltd is convicted. 2. The appropriate fine for the offence is $500,000 and that will be reduced by 25% to reflect the plea of guilty. 3. Accordingly, I order B & E Foods Pty Ltd to pay a fine of $375,000. 4. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed above at (3) is to be paid to the prosecutor. 5. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), B & E Foods Pty Ltd is to pay the prosecutor's costs, as agreed or assessed. 6. Xu Chun Dong is convicted. 7. The appropriate fine for the offence is $50,000 and that will be reduced by 25% to reflect the plea of guilty. 8. Accordingly, I order Xu Chun Dong to pay a fine of $37,500. 9. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed above at (8) is to be paid to the prosecutor. 10. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), Xu Chun Dong is to pay the prosecutor's costs, as agreed or assessed. 11. E & J International Pty Ltd is convicted. 12. The appropriate fine for the offence is $350,000 and that will be reduced by 25% to reflect the plea of guilty. 13. Accordingly, I order E & J International Pty Ltd to pay a fine of $262,500. 14. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed above at (13) is to be paid to the prosecutor. 15. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), E & J International Pty Ltd is to pay the prosecutor's costs, as agreed or assessed. 16. NL Workforce Solutions Pty Ltd is convicted. 17. The appropriate fine for the offence is $350,000 and that will be reduced by 25% to reflect the plea of guilty. 18. Accordingly, I order NL Workforce Solutions Pty Ltd to pay a fine of $262,500. 19. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed above at (18) is to be paid to the prosecutor. 20. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), NL Workforce Solutions Pty Ltd is to pay the prosecutor's costs, as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 December 2023

Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 Markarian v The Queen (2005) 228 CLR 357 Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117 Muldrock v The Queen (2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 Orbit Drilling v The Queen (2012) 35 VR 399 R v Cage [2006] NSWCCA 304 R v MA [2004] NSWCCA 92 R v Miria [2009] NSWCCA 68 R v MMK [2006] NSWCCA 272 R v Thomson & Houlton (2000) 49 NSWLR 383 R v Youkhana [2004] NSWCCA 412 SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 SafeWork NSW v Poletti Corporation [2019] NSWDC 491 SafeWork v Tunny Pty Ltd; SafeWork NSW v Waring [2022] NSWDC 306 WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 Category: Sentence Parties: SafeWork NSW (Prosecutor) B & E Foods Pty Ltd, NL Workforce Solutions Pty Ltd, E & J International Pty Ltd and Xu Chun Dong (Defendants) Representation: Counsel: Mr M Moir (for the Prosecutor) Mr S McIntosh (for the Defendants)

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Judgment (24 paragraphs)

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Cases Cited (29)