MPMG FM Pty Ltd (the offender) has pleaded guilty to an offence that being a person who a health and safety duty pursuant to section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Mohamad El Ayoubi and Samir Grahovic to a risk of death or serious injury contrary to section 32 of the Act. The maximum penalty for the offence is a fine of $1.5 million.
[2]
Facts
The parties presented a statement of agreed facts that can be summarised as follows.
The offender, MPMG FM Pty Ltd, conducted a business providing facilities maintenance by builders and painters. On 30 January 2005, the offender became an approved contractor for Spotless Facility Services Pty Ltd (Spotless). Spotless is the principal contractor to New South Wales Public Works and the Department of Education, providing maintenance services for schools in the Sydney metropolitan region.
The offender, MPMG FM Pty Ltd, conducted a business providing facilities maintenance by builders and painters. On 30 January 2005, the offender became an approved contractor for Spotless Facility Services Pty Ltd (Spotless). Spotless is the principal contractor to New South Wales Public Works and the Department of Education, providing maintenance services for schools in the Sydney metropolitan region.
The offender submitted a quote for the project, and was awarded the contract on 3 March 2016. The duration of the contract was for 10 weeks, from 14 March - 20 May 2016.
On 8 March 2016, a pre-start meeting was held on site at Heathcote High School. In attendance were Paul Slunjski (client services manager of Spotless), Miodrag Todorovic (sole director of the offender), Namir Varka (project/site manager of the offender) and Cathy Pearce (acting principal of Heathcote High School). The attendees discussed access to work areas. Mr Todorovic, who was responsible for implementing the offender's work health and safety systems, advised that an elevated work platform (EWP) would be used to access the highest parts of the work. It was agreed that a mobile scaffold to a maximum height of 4m would be used in areas where ladders were not practical. Both Mr Todorovic and Mr Varka confirmed that the offender had an adequate number of staff who were competent and experienced in erecting scaffolding.
As site manager for the offender, Mr Varka was responsible for liaising with contractors, and ensuring health and safety, progress and quality standards were maintained onsite. Mr Varka was also appointed as supervisor of painting works at Heathcote High School.
In a walkthrough of the worksite, Mr Varka identified that approximately 40% of the painting work would require workers to access heights of over 4m. These areas were not documented, and at no time prior to the incident was a EWP provided for use at the site.
Mohamad El Ayoubi was a contract painter, who worked exclusively for the offender. He had completed OHS General Induction training, and held a yellow card with the Elevating Work Platform Association of Australia in relation to several types of EWPs.
On 14 March 2016, a site meeting was attended by Mr Todorovic, Mr Varka and Mr El Ayoubi. At this meeting, the scope of works was explained to Mr El Ayoubi, and he was provided with an MPMG site folder containing several documents, all of which needed to be signed. These included a daily register, a site induction register (to be signed by all employees on site), a risk assessment, and a generic safe work method statement (SWMS) review checklist (to be signed by all employees prior to commencing work). In relation to the use of mobile scaffolds, the SWMS stipulated that where there was a risk of a fall from a height of 4m or more, a ticketed scaffolder was required to erect the scaffold. Mr El Ayoubi completed the risk assessment and signed the daily register, but did not complete the site induction register or the SWMS review checklist. He commenced work for the offender at Heathcote High School that day.
On or about 31 March 2016, Mr Varka delivered a Climbrite mobile scaffold (the scaffold) to the worksite at Heathcote High School. The scaffold was owned by Classic Lining Australia Pty Ltd, a company related to the offender. Mr Varka was qualified to erect scaffolding to a height of 4m.
Mr El Ayoubi was directed to erect the scaffold, which was missing the outriggers and safety pins. The offender did not provide him with any instructions or training in relation to this task, or in relation to the appropriate height of the scaffold. No other person from the offender inspected the scaffold before it was used by Mr El Ayoubi.
From about 1 April to 27 April 2016, Mr El Ayoubi used the scaffold to undertake painting work at heights that could not be accessed with a ladder. Prior to the incident, he reconfigured the scaffold three times, assisted by other subcontractors of the offender. In order to paint the front right hand side of Block D, Mr El Ayoubi was required to erect the scaffold to a height of over 4m. Mr Varka visited the site weekly to check on progress.
Samir Grahovic, a contract painter, commenced painting work for the offender at Heathcote High School on 28 April 2016. Mr Grahovic had not seen the SWMS before the incident, and was not inducted to the site.
Mr El Ayoubi and Mr Grahovic pushed the scaffold around the corner of Block D to paint the second side of the building. The ground on this side of Block B was sloped, so in order to level the scaffold Mr El Ayoubi placed four pieces of timber under the right side and visually assessed it to be level.
Mr Grahovic began painting the guttering of Block D from the top platform of the scaffold, which was approximately 7m from the ground. Mr El Ayoubi began painting from the middle platform, which was approximately 5m from the ground.
At about 8:20am, while Mr El Ayoubi and Mr Grahovic were painting from the scaffold, it shifted and moved to the right. Mr El Ayoubi moved to the left side of the scaffold in an attempt to counterbalance it but the entire scaffold collapsed, falling on top of Mr Grahovic.
Mr Grahovic sustained multiple left rib fractures, left side pulmonary contusions, a small anterior pneumothorax, right side chin laceration, a small puncture wound to his left hand with associated erythema and swelling, and several broken teeth in the fourth quadrant. He was discharged from St George Hospital on 3 May 2016.
Mr El Ayoubi sustained lumbar spine tenderness, tenderness in the distal 1/3 of his right radius and bilateral tenderness. He was discharged from St George Hospital on 29 April 2016.
On 28 April 2016, the collapsed scaffold was inspected by inspectors from SafeWork NSW, who determined that the ladder was mounted incorrectly, outriggers were not fitted, and safety pins were not inserted into the joints of the scaffold.
On 29 April 2016, SafeWork NSW issued an improvement notice on the offender, in response to which it submitted a revised SWMS that included control measures for working at heights of over 4m. On 20 May 2016, painting work at Heathcote High School recommenced. Work from heights was required to be completed by painters who held EWP licences.
[3]
The offender's case on sentence
The offender relied on a unsworn affidavit of Miodrag Todorovic, the sole director of the offender, sworn 29 October 2018. Mr Todorovic was present in court and was cross-examined. Mr Todorovic's evidence can be summarised as follows.
The offender was incorporated on 19 November 2014. It employs approximately 8 staff, and utilises the services of over 15 subcontractors. Approximately 95% of the offender's work is sourced from government contracts.
At the time of the incident, Mr Todorovic was overseas attending to business interests; however, he acknowledged that he was ultimately responsible for implementing the offender's work health and safety system for all projects.
Mr Varka, who had been employed as project manager of the offender for eight years, was immediately demoted to the position of pricing coordinator following the incident. In this position, he has no oversight of matters pertaining to safety. Mr Varka is in the process of being retrained. He is scheduled to undertake courses in work health and safety, first aid, and the use of EWPs.
From 1 March 2018, the offender has employed a safety compliance officer, Mirko Peljic. The offender has obtained QMS certification in OH&S Management, and has retained the services of the Compliance Counsel at a cost of $18,810. It has developed an Integrated Management System with a particular focus on safety and quality management, which is implemented at all worksites.
The offender relied on an affidavit of Mirko Peljic sworn 25 October 2018. Mr Peljic is the safety compliance officer of the offender. Mr Peljic has been employed in the construction industry for more than 40 years. He has liaised with Compliance Counsel to oversee the implementation of various quality assurance certifications with respect to safety matters.
The offender relied on an affidavit of Brett Duff, affirmed on 28 October 2018. Mr Duff is a senior consultant at Compliance Counsel. Mr Duff confirms that the offender has met the requirements for the certifications referred to my Mr Peljic. In addition the offender has been provided with an Integrated Management Plan to be able to manage subcontractors with respect to their provision of SWMS.
[4]
Objective Seriousness
The offence is objectively serious.
The risk posed by the improperly constructed mobile scaffold was obvious. The workers had not been given proper instruction on how to erect the scaffold and had not been given all of the required parts, including outriggers and securing pins. The mobile scaffold had been allowed to be used for a number of weeks in its dangerous condition. Mr Varka on behalf of the offender had seen the scaffold being used in this way when he attended the site from time to time. Mr Varka failed to inspect the mobile scaffold to ensure that it had been erected properly and was safe to use. Further, the offender failed to supply an EWP which was necessary for the work to be conducted safely.
There were simple and identified steps available to eliminate the risk.
The risk was one of death or serious injury to two workers
The two workers both suffered serious injuries.
I have had regard to the maximum penalty.
[5]
Deterrence
The penalty imposed in relation to the offences must provide for general deterrence. PCBUs must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large businesses will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180].
There is also a need for specific deterrence. The offender continues to employ workers and engage contractors to operate its business in circumstances where they are required to work at height and to use EWPs and mobile scaffolds.
[6]
Aggravating factors
The injury, harm and loss caused by the offence was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the aggravating factor to be established, I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The offence does not require an injury to be sustained but only the creation of a risk. The injuries sustained by Mr El Ayoubi and Mr Grahovic were serious. I am satisfied beyond reasonable doubt that the injury, harm and loss caused by the offence was substantial.
[7]
Mitigating factors
The offender does not have any previous convictions for offences: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender was incorporated on 19 November 2014. Mr Todorovic had previously operated a company, Mick's Painting Pty Ltd from 21 October 2005. He was advised to incorporate a company with a more professional name for attracting government contracts.
The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has accepted responsibility for the failings that led to the risk to which Mr El Ayoubi and Mr Grahovic were exposed and their subsequent injuries and taken steps to address them. The offender has arranged for Mr Varka to undertake a number of training courses and the offender has employed external safety consultants to provide it with better systems and with increased capacity to implement and manage those systems.
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender expressed remorse through the affidavit of Mr Todorovic, as well as through its actions in implementing changes. I am satisfied on the balance of probabilities that the offender has accepted responsibility for its actions and has demonstrated genuine remorse and contrition.
The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The prosecutor submitted that the plea of guilty was not entered at the earliest opportunity, but in my view it was still an early plea entered about 7 months after the first return date where various negotiations were entered into for the purpose of entering the plea. The appropriate discount is 25%.
The offender co-operated with the Safe Work investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
[8]
Other matters
The offender contended that it is at risk of losing government contracts as a result of the conviction it will receive for this matter. The offender submits that as a result it may suffer a downturn in profitability.
[9]
Penalty
The offender is convicted.
The appropriate fine is $120,000 that will be reduced by 25% to reflect the plea of guilty.
I impose a fine of $90,000.
I order that pursuant to section 122(2) Fines Act 1996, 50% of the fine is to be paid to the prosecutor.
The defendant is ordered to pay the prosecutor's costs as agreed at $40,000.
[10]
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Decision last updated: 07 December 2018