SafeWork NSW v Confeta Pty Limited;; SafeWork NSW v Cleo Antoniou

District Court of NSW|2018-11-02

Background

The parties presented four Agreed Statements of Facts and this material is summarised below.
Confeta was in the business of manufacturing baking products including baking cups, cake boxes and cake boards. Its business activities were located at 99 Chapel Street, Marrickville (the premises) and 61 - 65 Shepherd Street, Marrickville. Mr Antoniou was one of three directors of Confeta and was the only director responsible for the day to day management and control of the company. Mr Antoniou was present at either or both Confeta factories on most business days. However, he was not present at the premises at the time of the incident.
Mr Stavropoulos was employed as a Production Manager at Confeta. Mr Lancaster was employed to take responsibility for work, health and safety, including appropriate documentation. Ms Rousianos was employed by Confeta as a human resources and payroll officer and personal assistant. Ms Papadopoulos was employed by Confeta as a production manager and production supervisor. Ms Adhikari, Ms Chitrakar and Ms Fazal were employed by Confeta as machine operators.
In 2007 Confeta purchased four Folded Cup Machines (machine) to be used at its premises. Each machine would stamp and form paper into the shape of a paper cup. A cup is made by the machine operator placing a single sheet of creased paper napkin in a horizontal position on the die plate. The die is activated by a foot pedal. When the pedal is pushed, the male die plunges into the paper to form a cup shape. The male die will remain in position until the pedal is released at which time it retracts up to its vertical position. The operator is then required to remove the formed paper cup from the die and place it on the bench. During operation, the die and plate on the machine were heated to approximately 200 degrees Celsius.

Evidence for Confeta - in respect of Section 19

Mr Antoniou was born on 10 August 1955 and has held the position of Managing Director of Confeta since 1984. Mr Antonio is responsible for the general management of Confeta, including accounts, production, sourcing machinery and materials, and ensuring that appropriate persons are employed or engaged to manage, maintain and safeguard machinery.
Confeta has expanded from 13 employees in 1984, to 70 employees across three States in 2018.
Confeta's business was and is the production of baking papers and packaging. Confeta manufactures and distributes baking cups, cake boards, cake boxes, clear packaging, container lids, food trays and release papers. To produce these products, Confeta uses equipment including guillotines, die cutting machines, stamping machines, slitters and sheeters, laminating machines, shrink packaging machinery and forklifts.
Confeta has not been previously been prosecuted or found guilty of an offence in respect of health or safety legislation in New South Wales or anywhere else in Australia.

Confeta - Systems of work prior to the incident

Prior to the incident, Confeta's safety system included the following key elements: 1. Employing capable workers responsible for risk assessment, training, supervision and maintenance; 2. Risk assessment; 3. Practical training; 4. Supervision; and 5. Maintenance.
Confeta acknowledges that its safety systems prior to the incident had not been reduced to writing in easily accessible documents.
In respect of Mr Stavropoulos, who was responsible for maintenance and initial training, he had worked directly with machinery for over 20 years as at February 2016. Mr Stavropoulos holds qualifications in respect of motorbike machinery and has mechanical knowledge of gearboxes, motors and pumps similar to the machinery used by Confeta. Mr Stavropoulos was competent and experienced in conducting testing and maintenance on Confeta's machinery. He would contact experts to conduct repair and rectification works when issues arose. Prior to this, Mr Stavropoulos would contact Mr Antoniou to report issues with the machinery. Mr Antoniou would physically inspect the machinery before it was to be repaired. Once the experts performed the rectification work, Mr Stavropoulos would sign off on the work.
Ms Papadopoulos, by August 2012, had worked as a machine operator and supervisor in respect of the machine for approximately three years. She was able to safely operate the machine and was initially shown by Mr Antoniou how to operate the machine. Ms Papadopoulos would train Confeta's workers approximately three to four times a year when new workers were employed. Her training was precise and accurate. Ms Papadopoulos regularly asked workers if they were tired and encouraged them to take breaks.
Ms Chitrakr, by August 2012, had worked as a machine operator in respect of the machine for approximately three years. She was able to safely operate the machine.
Prior to the incident, Mr Stavropoulos, Ms Papadopoulos, Ms Rousianos and Mr Lancaster were responsible for identifying risks and hazards; identifying and implementing control measures for those risks and hazards; if necessary, requesting approval for large expenditure on safety matters from Mr Antoniou; reporting safety incidents to Mr Antoniou, Confeta's workers compensation insurer and to WorkCover NSW and discussing with Mr Antoniou and each other, Confeta's safety systems, including the risks identified and control measures taken.
Prior to the incident, Confeta's risk assessment process, in respect of machinery, involved Mr Antoniou attending the supplier or manufacturer's premises to speak with the supplier or manufacturer and to observe the machines being used. Mr Antoniou would then decide whether he could explain and demonstrate how to operate the machine safely or whether a video demonstration was necessary or whether representatives from the manufacturer would attend the premises to demonstrate how to operate the machine.
The risk assessment process did not involve Mr Antoniou considering whether the safety of a particular machine could be improved.
Mr Antoniou conducted risk assessments of the machines when he visited China, on arrival of the machines in Australia and before the machines were put into service. The risk assessment process involved Mr Antoniou showing Mr Stavropoulos how the machines were to be operated. During this process, Mr Antoniou and Mr Stavropoulos discussed the possibility of installing electronic interlock guarding on the machine. It was ultimately decided that guarding would not be installed as it would affect the intended operation of the machine and the ease of use of the operator. During the risk assessment process, presence sensing devices or two-hand operated controls were not discussed or considered.
The risk assessment undertaken recognised the risk of a worker's hand coming into contact with the hot die or plate as a result of working too quickly, lack of coordination between hand and foot, something being caught in the mechanism or through inattention or other factors. Control measures which were implemented in respect of these risks included not enforcing quotas; to work at a pace at which the operator could control both their hand and foot; encouraging workers to take breaks; servicing the machines regularly; requiring workers not to be under the influence of drugs or alcohol while using the machines; requiring workers not to wear earphones or jewellery and to wear tight clothing and hair nets; banning smoking and mobile phones during shifts and providing training and supervision. Despite these measures being implemented by Ms Papadopoulos, there was a lack of documentary material showing employees signing off on being provided with this information.
After the machines became operational, periodic visual, mechanical and electrical risk assessments were performed by Mr Antoniou, Mr Stavropoulos and, on occasion, electrical engineers.
In or around 2011, after conducting a risk assessment, it was decided by Mr Antoniou and Mr Stavropoulos that some parts of the machine needed to be replaced in order to improve safety. As a result of this risk assessment, the original footswitches were replaced with footswitches with metal covers.
Prior to the incident, Mr Stavropoulos attempted to install a light sensor on the machines. However, workers raised a concern that sometimes the sensors did not work, causing them to feel unsafe and therefore the sensor option was not pursued.
Prior to the incident, employee safety training occurred during induction of workers. Safety inductions were generally performed by the relevant staff supervisor. Safety topics generally included safety within the work area, first aid and general risk identification responsibilities and safety reporting. Supervisors would also provide additional information that specifically related to the work area and work tasks.
The area supervised by Ms Papadopoulos contained 10 machines. During the first two days of her employment, Ms Adhikari received general safety induction training from Ms Papadopoulos regarding trip hazards, keeping walkways clear, distractions, manual handling procedures, emergency procedures, evacuation, assembly points, food safety, hygiene and washing hands.
Prior to the incident, the training program for new employees who were to work on the machine involved workers performing paper folding duties for approximately one month and then being trained by Ms Papadopoulos in the operation of the machine.
A paper folder was required to fold paper and pass that paper to a worker working on the machine. A paper folder was also required to watch the supervisor and other workers perform work on the machine in order to learn how to use the machine properly.
Ms Adhikari worked as a paper folder for the first two days of her employment. During this time, Ms Adhikari was informed by Ms Rousianos that she was not supposed to operate the machine.
Training in respect of the machine involved Ms Papadopoulos personally demonstrating how to use the machine or directing and overseeing another experienced worker to demonstrate how to use the machine. An experienced worker may have demonstrated how to use the machine if the new worker's primary language was not English and the experienced worker spoke the same primary language as the new worker.
Ms Adhikari was provided with training in the operation of the machine by both Ms Papadopoulos and Ms Chitrakr on 3 August 2012. Ms Adhikari sat at the machine and Ms Chitrakr stood next to her. Ms Chitrakr demonstrated how to fold the paper with her hands and verbally instructed Ms Adhikari to hold the paper in her left hand, to feed the paper into the front of the machine with her right hand, to, after removing her hands, press the foot pedal with her right foot in order to depress the rod, and then release her foot in order to release the rod. Ms Chitrakr verbally instructed Ms Adhikari that the rod and plate were very hot; that she needed to take her foot off and out of the foot pedal while she was putting her hand in the machine; and that she should move her hands away while she was pressing the foot pedal.
Ms Papadopoulos provided Ms Adhikari with further training, especially in relation to the process that Ms Adhikari was using to feed the paper into the machine. Ms Papadopoulos provided instructions and demonstrations to Ms Adhikari for between 10 and 20 minutes and watched Ms Adhikari produce approximately 10 pieces of paper over a period of five minutes.
On 3 August 2012, the ordinary training and supervision process broke down, in that: 1. Ms Adhikari progressed to working on the machine after three days rather than at least one month; 2. Ms Chitrakr did not fully demonstrate how to use the machine; 3. Ms Chitrakr remained with Ms Adhikari for a short period of time during demonstration and training; 4. Ms Adhikari may not have understood that she could not operate the machine unless in the presence of a supervisor; and 5. Whilst Ms Papadopoulos provided general supervision of the machine work area, she did not actively supervise Ms Chitrakr during Ms Chitrakr's training of Ms Adhikari. After providing Ms Adhikari with additional training, she did not prioritise her supervision of Ms Adhikari over her other duties or reconsider whether it would be appropriate for Ms Adhikari to work on the machine at all.
Confeta did not enforce quotas in respect of the machine.
When the machines were installed, Mr Lancaster, without Mr Antoniou's approval or knowledge, arranged for quota signs to be displayed on the machines.
Mr Antoniou observed that workers worked at varying rates, sometimes slower and sometimes faster than 800 pieces per hour.
By August 2012, the machines had produced approximately 78,000,000 baking cups.

Confeta - Due diligence steps prior to the incident

Prior to the incident, Mr Lancaster was employed by Confeta as a Creative and Compliance Director, who had responsibility for work, health and safety, including reviewing, improving and drafting documents regarding Confeta's safety system.
Prior to the incident, Mr Antoniou met with Mr Lancaster regularly. Mr Antoniou was informed by Mr Lancaster that Confeta had appropriate work health and safety policies in place.
Prior to the incident, employees had access to documents, such as production sheets, on which employees were encouraged to write concerns, including safety concerns. These documents were provided to managers and serious safety concerns were raised with Mr Antoniou.
Confeta spent approximately $39,000 on safety items during 2011 and 2012 and $30,000 on maintenance.

Confeta - changes to Confeta's machinery following the incident

All machine operators employed by Confeta were re-educated in safe operational procedures of the machine and similar machines. This training was conducted verbally and through demonstrations by Ms Papadopoulos.
Following the incident, the operational use of machines at the premises was limited.
In November 2012, Confeta purchased 9 half-automatic machines that could be used to replace the machines. However, these machines did not operate properly and were returned.
In December 2013, Confeta purchased 4 fully automatic machines to replace the machines. The machines were installed in the Shepherd Street Factory in May 2014. However, operators complained that the new machines were too noisy.
In September 2014, Confeta purchased fully automated machines which replaced the machines. These machines replaced the machines which were purchased in December 2013.
The original machines were retired in July 2015. Production gradually moved to the Shepherd Street Factory as it used safer and more efficient machines.
After 1 September 2015, safety buttons were installed on the one remaining machine.
In April 2016 Confeta purchased two further machines of the kind purchased in September 2014. The original machines were totally decommissioned at this time.

Confeta - Changes to systems of work following the incident

Confeta's safety system now involves all workers who operate a machine for the first time and those operators who move onto a different machine being inducted and trained in all plant and machines operated by Confeta. Workers are also required to read and sign Safety Operating Procedures.
All workers are required to be trained in and are required to read and sign the WH&S Site Induction Rules.
Confeta has also implemented a Risk Assessment Form in relation to workplace hazards. The ongoing risk assessment process is that machines are risk assessed prior to use. Where there has been a change to the machine, another risk assessment is performed.
A workplace Injury Incident Register is maintained as part of Confeta's incident and injury system. Work Health and Safety Checklists are also used and implemented. Confeta's policy is now that each policy related to a machine has a checklist at the end of the policy that details how to use the particular machine. Other Work Health and Safety forms are used, including a Risk Assessment Form, Incident Injury Report Form and Contractor Safety Form. If faults or repairs are necessary, a specific form is used.
Monthly management meetings are held prior to regular toolbox meetings. Toolbox meetings are held once a month and include training on health and safety in the workplace, hygiene and good manufacturing.
Confeta employed an engineer between May 2013 and April 2016 whose duties included performing regular maintenance on machines, equipment and tools and troubleshooting machine problems. Confeta has employed a Management Systems Compliance Officer whose duties include those of a Work Health & Safety Advisor. Confeta has employed a Maintenance Engineer whose duties include conducting risk assessments and installing safety measures, including guarding. Confeta has also paid for a staff member to undertake mechanical maintenance training; engaged a Legal Compliance Officer between January 2016 and December 2017 to establish a new framework for legal compliance and has employed a Maintenance Handyman.
Confeta has also implemented a number of work health and safety policies since the incident. Each policy is reviewed on an annual basis and is accessible to Confeta employees.
Expenditure on safety related costs by Confeta has increased to approximately $904,000.

Evidence for Mr Antoniou - in respect of Section 27

Mr Antoniou has not been previously been prosecuted or found guilty of an offence in respect of health or safety legislation in New South Wales or anywhere else in Australia.
Mr Antoniou used his knowledge gained from working on the production floor to assist him in his role as Managing Director.

Mr Antoniou - Systems of work prior to the incident

Mr Antoniou's assessment of the employees performing their safety tasks competently was based on his observations at the premises, as well as Ms Papadopoulos attending his office two to three times a week to discuss working issues, including safety issues. Monthly meetings were also held between Mr Antoniou, Ms Papadopoulos and Ms Roussianos regarding safety.
Mr Antoniou would visit China once or twice a year to consider purchasing machinery. Before the machines were purchased by Confeta, Mr Antoniou travelled to China to see whether the machines could be operated safely. Mr Antoniou received training in China on how to properly operate the machine, how to change the tooling and how to adjust the air pressure and the heating controls.
Mr Antoniou undertook step by step training on how to use the machines. He turned the machine on and waited for it to reach the advised temperature. Then he folded his own paper. He then took the paper and operated the machine. Mr Antoniou observed other workers using the machines. If he did something incorrectly, he was told to get off the stool and the worker would sit down and show him the correct procedure. This was the process which Mr Antoniou adopted when training others, including Ms Papadopoulos.
In China, Mr Antoniou was told that the machines would be used to produce approximately 20,000 cups per eight hour shift and that the supplier was not aware of any workers being injured as a result of using the machine.
Mr Antoniou decided in about 2011 or 2012 that the machines should be gradually phased out with more automated machines. This was partially due to eliminating the risks associated with using the machines. Due to this, Mr Antoniou visited other manufacturers in China and engaged an engineering company to perform research and development.
When Mr Antoniou was in China, he did not ask the supplier of the machine whether the manufacturer had guidelines for the safe operation of the machine. Mr Antoniou assumed that no guidelines existed as his previous experience in buying machines from China was that if a manufacturer's manual was available, it would be provided with the machines, but it would be in Chinese.
While Mr Antoniou accepted that Ms Papadopoulos had told Ms Adhikari to work faster, prior to the incident, he did not witness her telling any new employee to work faster. Prior to and after the incident occurred, Mr Antoniou had told Ms Papadopoulos that speed of production was not part of Confeta's business criteria.
Despite being told in China that in an eight hour shift a worker could produce 20,000 cups while using the machine, Mr Antoniou was of the impression that this was too many. When he performed his initial risk assessment of the machine, he sat at the machine and timed how many paper cups he could fold in a minute. Mr Antoniou could fold one cup every three seconds, meaning that he could potentially make 1000 paper cups in an hour. Mr Antoniou did not intend for this amount to be set as a minimum quota.
Confeta workers were not disciplined by Mr Antoniou for not making enough cups.
The signs put up by Mr Lancaster created a potential risk to safety by giving the impression that Confeta required employees to produce a minimum number of pieces per shift, irrespective of any safety considerations.
At the time of the incident, Mr Antoniou was not aware of the details of previous incidents set out at paragraph 33. Mr Antoniou was of the view that, prior to August 2012, the likelihood of a worker being injured as a result of the risk of their hand coming into contact with the die and hot plate was low.
In August 2012, Mr Antoniou was told that Ms Adhikari's finger had been injured. He was not told about the full extent of her injury until later. At the time of the incident, Mr Antoniou did not know that Ms Adhikari's injury was serious.
Mr Antoniou accepts that his risk assessment process was flawed.

Mr Antoniou - Due diligence steps prior to the incident

Mr Lancaster showed Mr Antoniou some papers relating to health and safety matters but Mr Antoniou cannot recall the content of the papers and did not take any copies of them.
Mr Antoniou relied on Mr Lancaster's statements that he had taken steps to ensure that Confeta had appropriate work health and safety policies in place. Mr Antoniou did not insist on Mr Lancaster providing him with a hard copy of all policies and procedures which Mr Lancaster claimed had been implemented and he did not independently check that such documentary records were maintained. It was not until Mr Lancaster left in 2013 that Mr Antoniou became aware that Confeta did not have any written safety policies or procedures.
Prior to the incident, Mr Antoniou personally attended a number of manufacturers' worksites and observed the operation of machines and safety precautions taken by manufacturers.
Mr Antoniou regularly attended the premises, spoke with senior staff members and undertook annual audits of Confeta's compliance with safety requirements in order to verify that Confeta had implemented work health and safety processes.

Mr Antoniou - Changes to Confeta's machinery following the incident

Mr Antoniou spoke to mechanical and electrical engineers and agents overseas in relation to alternative machinery that was available.

Personal impact on Mr Antoniou

Mr Antoniou is involved in significant travel overseas in relation to Confeta. Mr Antoniou takes trips overseas in order to meet with suppliers, inspect and source products, inspect machinery and attend trade shows.
Mr Antoniou visits China and the United States of America for work and is concerned that a criminal record will impact on his ability to travel for work.
Mr Antoniou is concerned that a criminal conviction will be required to be disclosed to his clients, some of which are large businesses, and may result in a termination of his contracts.
Mr Antoniou believes that these factors may negatively affect Confeta's business.

Evidence for Confeta - In respect of Section 38

Confeta did not notify WorkCover NSW of the incident on 3 August 2012. In August 2012, Ms Roussianos notified Confeta's insurer of the incident. A WorkCover NSW Certificate of Capacity was provided to Confeta in respect of the incident. A claim number was then provided to Confeta by the insurer. Ms Roussianos understood that as the insurer was the workers compensation insurer for the incident, the issuing of a claim number meant WorkCover NSW had been notified of the incident.
Ms Roussianos informed Confeta's safety officer, Mr Lancaster, about the incident on or around 3 August 2012. She told Mr Antoniou that Mr Lancaster did not mention any need to separately inform WorkCover NSW of the incident.
Since the time of the incident, Confeta has notified SafeWork NSW of an incident, which has not resulted in any prosecution being commenced or any improvement notice being issued.

Consideration

I have had regard to the objects set out in s 3 of the Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999.

Objective seriousness of the offence - principles

The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v R (No. 2) (1998) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton (2006) 66 NSWLR 566 at [15].
The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1998) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively.
The Court of Criminal Appeal has recently examined the sentencing process with regard to the Work Health and Safety Act 2011 in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96; 93 NSWLR 338. His Honour Justice Basten at paragraph 34, under the heading 'Assessment of Risk' said: "The sentencing judge commenced his consideration with the proposition that 'greater 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 on assessment of all those factors."
Further at paragraph 42 his Honour continued: "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, were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."

Objective seriousness - Confeta and Section 19

My findings about Confeta's level of culpability in relation to the charge under s 19(1) of the Act are based upon the following.
Confeta failed to: 1. Conduct a documented or formal risk assessment of the machine; 2. Conduct an adequate assessment to determine what guarding was available for the machine to ensure the workers were unable to access the moving parts of the machine while it was in operation; 3. Carry out sufficient visual risk assessments of the machine. Further, the visual risk assessments carried out were not in accordance with Clauses 34 and 35 of the Regulation or the risk identification process set out in AS 4024.1301 -2006; 4. Modify the machines to prevent injuries of the kind suffered by Ms Adhikari; 5. Provide workers with personal protective equipment which could have reduced the potential for injury, for example, heat-proof gloves to help reduce the risk of burns; 6. Take steps to obtain an operator manual for the machine; 7. Provide Safe Work Method Statements, Safe Work Operating procedures and Safe Work Procedures for operating the machines at the premises. 8. Provide adequate supervision of Ms Adhikari; 9. Provide adequate signage to warn workers of the risks of using the machine; and 10. Eliminate or minimise the risks, so far as was reasonably practicable, before workers operated the machines, despite identification of the risk of injury similar to the injury suffered by Ms Adhikari, and the fact that these risks came home on two previous occasions at Confeta.
Ms Adhikari was a vulnerable employee who had only just started work at Confeta. Ms Adhikari will not make a full recovery. She continues to suffer weakness in all four of her fingers and is unable to make a fist with her right hand. She needs help to dress and tie shoe laces. She finds general housework a problem and she cannot eat with her right hand, which is tradition in the Nepalese culture. She can't sleep on her right side or grip knives to prepare food. Ms Adhikari's injury was of a serious nature and will continue to affect her in the future.
I find that the Confeta's level of culpability for the s 19 offence is in the mid-range.

Objective seriousness - Mr Antoniou and Section 27

My findings about Mr Antoniou's level of culpability in relation to the charge under s 27 of the Work Health and Safety Act 2011 are based upon the following.
Mr Antoniou failed to: 1. Conduct a documented or formal risk assessment of the machine; 2. Conduct an adequate assessment to determine what guarding was available for the machine to ensure the workers were unable to access the moving parts of the machine while it was in operation; 3. Carry out sufficient visual risk assessments of the machine. Further, the visual risk assessments carried out were not in accordance with Clauses 34 and 35 of the Regulation or the risk identification process set out in AS 4024.1301 -2006; 4. Modify the machines to prevent injuries of the kind suffered by Ms Adhikari; 5. Provide workers with personal protective equipment which could have reduced the potential for injury, for example, heat-proof gloves to help reduce the risk of burns; 6. Take steps to obtain an operator manual for the machine; 7. Provide Safe Work Method Statements, Safe Work Operating procedures and Safe Work Procedures for operating the machines at the premises. 8. Provide adequate supervision of Ms Adhikari; 9. Provide adequate signage to warn workers of the risks of using the machine; and 10. Eliminate or minimise the risks, so far as was reasonably practicable, before workers operated the machines, despite identification of the risk of injury similar to the injury suffered by Ms Adhikari and the fact that these risks came home on two previous occasions at Confeta.
Given that Mr Antoniou was present at either or both of the Confeta factories on most business days, attended the folded cup section of the premises approximately 2 to 3 times per week to check how things were running and attended monthly meetings and received reports on production and staff (including training of new staff in operations) and safety, he should have been aware of the inadequacies with Confeta's work, health and safety procedures, or the lack thereof, and sought improvement of them.
I find that the Mr Antoniou's level of culpability for the s 27 offence is in the lower end of the mid-range.

Objective seriousness - Confeta and Section 38

My findings about Confeta's level of culpability in relation to the charge under s 38 of the Work Health and Safety Act 2011 is based upon the fact that Confeta failed to notify the WorkCover Authority (Authority) of the notifiable incident immediately after it occurred, or at all. It was not until Ms Adhikari's solicitor contacted the Authority on 22 July 2015 that it became aware of the incident. This was almost three years after the incident occurred. It would not have been an onerous task for Confeta to comply with this requirement under the Act. However, it is not an uncommon misconception that a notification to the insurer is all that is required.
I find that the Confeta's level of culpability for the s 38 offence is in the low range.

Objective seriousness - Confeta and Section 39

My finding about Confeta's level of culpability in relation to the charge under s 39 of the Work Health and Safety Act 2011 is based upon the fact that Confeta failed to take any steps whatsoever to preserve the incident site. The fact that the Authority was not notified of the incident until almost three years later, by Ms Adhikari's solicitor and not Confeta, indicates that by the time the Authority became aware of the incident and subsequently had time to inspect the incident site, it was highly unlikely that any of the incident site would have been preserved.
I find that the Confeta's level of culpability for the s 38 offence is in the low range.

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: R v Irvine; R v Dynamic Industries Pty Limited [2000] VSCA 239.
The penalty must reflect the need for specific deterrence. The offender is still conducting a business. Many of its operations involve potentially dangerous machinery.

Aggravating factors

The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999.

Mitigating factors

The offenders do not have a significant record of previous convictions: s 21A(3)(e) of the Crimes (Sentencing Procedure) Act 1999. There are no convictions recorded against either offender.
Both the offenders were otherwise of good character: s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999. The steps which the offenders took after the incident demonstrate this.
The offenders are unlikely to re-offend: s 21A(3(g) of the Crimes (Sentencing Procedure) Act 1999.
The offenders have good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offenders have taken positive steps to guard against the risk of an incident such as this ever happening again. Confeta has brought its documentation and its procedures into line with those which, on all the evidence, should have been in place before this accident occurred.
The offenders have shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offenders have provided evidence through Mr Antoniou that they have accepted responsibility for their actions and have acknowledged that the injury to Ms Adhikari was caused by their actions.
The offenders entered a plea of guilty: s 21A(3)(k) Crimes (Sentencing Procedure) Act 1999. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) Crimes (Sentencing Procedure) Act 1999. It is appropriate to give Confeta a 25% discount for its three early pleas.
Mr Antoniou pleaded not guilty on 27 November 2017. On 5 February 2018 the matter was listed for trial to commence on 3 September 2018 with an estimate of seven days. On 27 July 2018 the matter was listed for directions in relation to the running of the trial which was to commence on 3 September 2018. The matter was stood over for further directions on 28 August 2018.
On 28 August 2018 leave was granted to the prosecutor to file in court an Amended Summons and an Agreed Statement of Facts. A plea of guilty was entered. The hearing dates of 3-11 September 2018 were vacated. The matter was set down for a sentence hearing on 2 November 2018.
Mr Antoniou is entitled to a discount for this plea of guilty. However, the discount should not be 25%. He pleaded guilty only days before the trial was due to start. However, it is appropriate to take into account that such plea, even at that late stage, saved the public expense of a seven day trial. The appropriate discount is 15%.
The offenders gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. The offenders co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to pay a fine

I am required to have regard to s 6 of the Fines Act 1996 before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine. The offender's capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.
No issue was raised in relation to capacity to pay a fine.

Consideration of penalty for Confeta - Section 19

Having regard to the matters set out above, the appropriate penalty for Confeta is a fine of $200,000. This will be reduced by the 25% discount for the early guilty plea to $150,000.

Consideration of penalty for Mr Antoniou

Senior counsel for Mr Antoniou submitted that instead of a conviction, the court should deal with the matter by way of a bond under s 10 of the Crimes (Sentencing Procedure) Act 1999 or alternatively under the provisions of s 239 of the Act.
In the written submissions for the defendant, it was suggested that as part of a penalty, the court could require Mr Antoniou to contact other operators of the folded cup machine and advise them of the availability of two-handed control devices, and automated machine alternatives. It was submitted that this would enhance deterrence and provide a safe workplace for others in all the circumstances.
I do not think that there is any utility in considering that course. Firstly, if Mr Antoniou thought that it was important for workplace safety to contact other operators, he could have done so on his own initiative before now. Secondly, there was no evidence before the court that these folded cup machines have led to injuries in other circumstances. Thirdly, the competitors of Confeta and Mr Antoniou may not be disposed to speak to him at all about their business operations.
It was also submitted that approaching the matter by declining to record a conviction would take into account the impact such a conviction would have on Mr Antoniou personally or professionally. I reject this submission. There was no evidence to suggest that Mr Antoniou will not be able to travel to other countries, if a conviction is recorded. The offence under s 27 is not one which involves moral turpitude. Further, most countries require a person to declare whether they have been found guilty of an offence, not just whether they have been convicted of it. There was no evidence that there will be any impact on Mr Antoniou's ability to travel overseas, over and above his asserted concern. As to the impact on the business of a conviction of Mr Antoniou, no contracts with commercial counterparties were put into evidence. There was no evidence that Mr Antoniou will be forced to disclose a personal conviction to any of his business associates. There was no evidence that, a conviction for Confeta being inevitable, there would be any additional damage done to the reputation of the business if Mr Antoniou was also subject to a conviction.
Finally, the submission was made that a training order could be made under s 239 of the Act. The form of such order was proposed in the document Draft Orders (MFI 6). The court cannot see the utility of making such an order. On the evidence of Mr Antoniou, all of the steps set out in the Draft Orders have been taken. There is no evidence to suggest that Confeta needs to improve its safety standards, and indeed it is being sentenced on the basis that it has now put in place appropriate safe work systems and processes. There is no utility in making a training order.
The charge against Mr Antoniou is one under s 27 of the Act of failing to exercise due diligence to ensure that Confeta complied with its duty under the Act. Section 27(5) of the Act defines "due diligence" as follows: "(5) In this section, "due diligence" includes taking reasonable steps: (a) to acquire and keep up-to-date knowledge of work health and safety matters, and (b) to gain an understanding of the nature of the operations of the business or undertaking of the person conducting the business or undertaking and generally of the hazards and risks associated with those operations, and (c) to ensure that the person conducting the business or undertaking has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking, and (d) to ensure that the person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information, and (e) to ensure that the person conducting the business or undertaking has, and implements, processes for complying with any duty or obligation of the person conducting the business or undertaking under this Act, and For the purposes of paragraph (e), the duties or obligations under this Act of a person conducting a business or undertaking may include: • reporting notifiable incidents, • consulting with workers, • ensuring compliance with notices issued under this Act, • ensuring the provision of training and instruction to workers about work health and safety, • ensuring that health and safety representatives receive their entitlements to training. (f) to verify the provision and use of the resources and processes referred to in paragraphs (c)-(e)."
Mr Antoniou was the directing mind of the corporate business. A director cannot be expected to run every part of the operation, and for that purpose corporations employ managers and specialists, particularly in work health and safety matters. However, Mr Antoniou had an obligation to exercise due diligence to ensure that those under him were carrying out their duties properly.
It is hard to understand how he could have gained an understanding of the hazards and risks associated with the operations of the business, when he did not know of the two prior similar incidents. Further, when he had his yearly review of work health and safety practices with Mr Lancaster, one wonders what they talked about. There were no documented work health and safety procedures at all at that stage. Due diligence would have required the director to ask to see those documents. Mr Antoniou could have, and should have, become aware of the prior incidents and the obvious risks to health and safety arising out of the use of this unguarded machine.
In those circumstances, the appropriate penalty is a conviction and a fine of $30,000 reduced by 15% to $25,500.

Costs

The parties have agreed to an order that the offenders are to pay the prosecutor's costs as agreed or assessed.

Penalties for Confeta Pty Limited

I make the following orders: 1. The offender is convicted of an offence under s 19 of the Work Health and Safety Act 2011. 2. The appropriate fine is $200,000 but that will be reduced by 25% to reflect the plea of guilty. 3. Order the offender to pay a fine of $150,000. 4. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender to pay the prosecutor's costs as agreed or assessed. 6. The offender is convicted of an offence under s 38 of the Work Health and Safety Act 2011. 7. The appropriate fine is $5,000 but that will be reduced by 25% to reflect the plea of guilty. 8. Order the offender to pay a fine of $3,750. 9. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 10. Order the offender to pay the prosecutor's costs as agreed or assessed. 11. The offender is convicted of an offence under s 39 of the Work Health and Safety Act 2011. 12. The appropriate fine is $5,000 but that will be reduced by 25% to reflect the plea of guilty. 13. Order the offender to pay a fine of $3,750. 14. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 15. Order the offender to pay the prosecutor's costs as agreed or assessed.

Penalty for Mr Antoniou

I make the following orders: 1. The offender is convicted of an offence under s 27 of the Work Health and Safety Act 2011. 2. The appropriate fine is $30,000 but that will be reduced by 15% to reflect the plea of guilty. 3. Order the offender to pay a fine of $25,500. 4. Order pursuant to s 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender 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: 13 December 2018

erground Operations Pty Limited v Nash (2016) NSWCCA 37; BW v R [2011] NSWCCA 176; Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; Jahandideh v R [2014] NSWCCA 178; Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96; 93 NSWLR 338 R v Borkowski (2009) 195 A Crim R 1; R v McNaughton (2006) 66 NSWLR 566; R v Thomson & Houlton (2000) 49 NSWLR 383; R v Wilkinson (No. 5) [2009] NSWSC 432; Veen v R (No. 2) (1998) 164 CLR; Texts Cited: SafeWork NSW Hazardous Manual Tasks Code of Practice, 2011 Category: Sentence Parties: SafeWork NSW (Prosecutor) Confeta Pty Ltd (Defendant) Cleo Antoniou (Defendant) Representation: Counsel: T Hammond (Prosecutor) A Moses SC with J Steele (Defendant)

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Judgment (28 paragraphs)

Cases Cited (10)