SafeWork NSW v QSR Pty Ltd

District Court of NSW|2019-03-15

Judgment

QSR Pty Ltd (the offender) has pleaded guilty to an offence that being a person conducting a business or undertaking who had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (the Act) as it failed to comply with that duty and thereby exposed Mr Jake Colgan (Colgan) to a risk of death or serious injury contrary to s 32 of the Act.
The maximum penalty for the offence is a fine of $1,500,000.
The prosecutor tendered a joint signed Statement of Facts and a Prosecution Sentence Tender Bundle which displayed the basis of the circumstances as set out below.
The offender tendered an Affidavit of Emma Ryan-Jones (Ryan-Jones), the General Manager (People & Performance) of the offender.

BACKGROUND

The offender, as part of its business or undertaking operated fast food restaurants which traded as KFC (KFC) in NSW. The offender was a franchisee of the KFC restaurants. Pursuant to the franchise agreement between KFC and the offender, the offender was obliged to comply with all of the standards and manuals in its conduct of the restaurant business.

PARTICULARS OF THE RISK TO COLGAN

The risk was the risk of workers, in particular Colgan, suffering serious injury or death as a result of being burned by the hot oil in the cookers whilst undertaking the task of cleaning the HVAC system.
PARTICULARS OF THE OFFENDER'S FAILURE TO COMPLY WITH THE DUTY UNDER S 19(1) OF THE ACT
The offender failed to ensure so far as is reasonably practicable the health and safety of workers, in particular Colgan, in that it failed to take one or more of the following reasonably practicable measures to eliminate (or alternatively minimise if not reasonably practicable to eliminate) the risks to health and safety to workers: 1. Ensuring that the task of cleaning of the HVAC system was only undertaken when: 1. The lids of the cookers were closed and in a locked position; 2. The cookers were switched off and were isolated from their power source; the cookers were moved away from underneath the HVAC system; and /or 1. Ensuring that there was a safe system of work provided for the task of cleaning the HVAC system, in particular developing, implementing and enforcing an adequate work procedure for undertaking the task which specified that the task of cleaning the HVAC system was only to be undertaken when: 1. The lids of the cookers were closed and in a locked position; 2. The cookers were switched off and were isolated from their power source; 3. The cookers were moved away from underneath the HVAC system; 4. The cook line area and platform ladder was clean and free from grease. 1. Providing information, training and instruction to the workers, in particular Colgan, in respect of the matters set out in the safe work procedure for the task of cleaning the HVAC system; and/or 2. Enforcing the safe work procedure for performing the task of cleaning of the HVAC system by providing adequate supervision for workers undertaking the task.
As a result of the offender's failures, workers were exposed to a risk of death or serious injury. The serious injuries sustained by Colgan on 17 November 2016, including third degree burns to his left leg and hands, were a manifestation of the risk.

SYSTEMS OF WORK PRIOR TO THE INCIDENT

Each restaurant operated by the offender, including this restaurant the offender had in place a work, health and safety (WHS) management system that included a risk management program for the identification, assessment and elimination of hazards. Under the franchise agreement, the franchisor's safety systems were to be complied with for the operation of each of the franchised restaurants at a minimum.
At the time of the incident, KFC had a manual in place for the HVAC system (the HVAC manual). The manual provided the following relevant information in respect of the task of cleaning the hood and filters: 1. Do not stand on cooking or kitchen equipment while cleaning - always use a clean and approved ladder, free of grease; 2. Always close cooker lids, and put trays over open fryers and food preparation surfaces; 3. Where possible, move any items from under the hood you are about to clean; 4. Always wear protective gloves and goggles 5. Do not clean filters above fryers whilst fryers are turned on.
Colgan does not recall seeing the HVAC manual before the incident.
At the time of the incident safety signage was affixed to the wall directly behind the cookers. One safety sign said: '! Danger Water under Pressure Becomes Superheated. Turn off fryer before cleaning…'
A sign affixed to the cookers read: '! Danger. High temperatures! Hot Cooking oil under pressure! High-voltage! To avoid painful, scarring, life threatening injuries, or property damage read and obey all danger labels, the Use and Care Manual, and information supplied with service parts before using, cleaning or working on this fryer…'
The sign contained a list of 19 instructions. Instruction 6 read: '6. DO NOT stand, sit or lean on fryer.'
The signs that were affixed to the cookers were permanent signs, and had also been referred to in the Web Based Training materials (WBT). Colgan had completed the WBT training course for the Collectramatic cooker on 2 June 2014. It included the following terms; 'There are a few key things you need to learn and do to protect yourself and your team. 1. LOOK AFTER YOURSELF Do the right things, follow the procedures and take care around the cookers…' And 'Cleaning the Collectramatic Cooker Important tips for cleaning … * When cleaning or servicing canopies/hoods and filters, disconnect the cooker, close the cook pot lid, pull the cooker away from the wall, and use a ladder to reach the canopies - do not stand on top of the cooker.' And 'Always use heavy duty gloves when cleaning a cooker.'
Colgan's usual practice was that the cookers were on, with lids open, whilst he was cleaning the canopies, on the instruction of the assistant manager, Brooks.
On the day of the incident, he used the same method to clean the cookers and the canopies as he had always done on a Thursday morning since his first Thursday shift, as he had been told to do by the manager on that day.
Prior to the incident a risk management program was in place to identify, assess, control and eliminate hazards in the workplace. It was reviewed on an on-going basis. Compliance checks were conducted by a representative of the franchisor on an unscheduled but quarterly basis to review the restaurant's compliance with food safety, safety and operational standards. This was followed up with the manager of the relevant store, specifying any actions required.
All new workers were required to complete WBT and their results and competency were checked. It was suggested by Ryan-Jones in her affidavit that the workers were also given on-the-job training, however there is no evidence before me that any on-the-job training was given to Colgan. Colgan did however attend quarterly safety meetings, his attendances at those meetings are recorded and are attached to the affidavit of Ryan-Jones.
The offender did not adequately implement the safe work procedure for the task of cleaning HVAC system, including not providing adequate training and instruction to the workers, in particular Colgan, as to the correct procedure to be followed when performing the task.
The offender failed to enforce compliance with the safe work procedure by providing adequate direction and supervision for workers undertaking the task.

CODE OF PRACTICE

The SafeWork Australia Code of Practice, How to Manage Work Health and Safety Risks (December 2011) outlines how to identify hazards and assess, control and review risks, and relevantly provides: 'Implementing controls The control measures that you put into operation will usually require changes to the way work is carried out due to new or modified equipment or processes, new or different chemicals or new personal protective equipment. In these situations, it is usually necessary to support the control measure with: Work procedures Develop a safe work procedure that describes the task, identifies the hazards and documents how the task is to be performed to minimise the risks. Training, instruction and information Train your workers in the work procedure to ensure that they are able to perform the task safely. Training should require workers to demonstrate that they are competent in performing the task according to the procedure. It is insufficient to simply give a worker the procedure and ask them to acknowledge that they understand and are able to perform it. Training, instruction and information must be provided in a form that can be understood by all workers. … Supervision The level of supervision required will depend on the level of risk and the experience of the workers involved. High levels of supervision are necessary where inexperienced workers are expected to follow new procedures or carry out difficult and critical tasks. … 4.3 How to ensure that controls remain effective The following actions may help you monitor the control measures you have implemented and ensure that they remain effective: Accountability for health and safety - Accountability should be clearly allocated to ensure procedures are followed and maintained. Managers and supervisors should be provided with the authority and resources to implement and maintain control measures effectively. … Up-to-date training and competency - Control measures, particularly lower level controls, depend on all workers and supervisors having the appropriate competencies to do the job safely. Training should be provided to maintain competencies and to ensure new workers are capable of working safely. … Regular review and consultation - Control measures are more effective where there is regular review of work procedures and consultation with your workers and their representatives.'

SYSTEMS OF WORK AFTER THE INCIDENT

On the day of the incident, the CEO of the offender visited the store and offered support and confidential counselling in relation to the incident.
The offender immediately after the incident had a message sent to approximately 42 of its restaurants advising them of the incident, and detailing immediate precautions to be taken to eliminate and/or minimise the risk of a similar occurrence.
The offender conducted further training and induction for the task of cleaning the HVAC system and created a document highlighting the step-by-step process for safely cleaning the canopies. The first step of the procedure was to unplug all cooking equipment and remove the plugs from the power line. On 1 December 2016, a meeting was held at the restaurants during which training and instruction was provided to the workers about the written procedure for cleaning the canopies in accordance with such document.
The offender met with WHS and managerial staff to communicate changes and area/store managers conducted subsequent meetings with their respective staff.
The offender also changed the cleaning days of the HVAC system to Tuesdays so that two managers would be physically present to provide adequate supervision of the workers whilst cleaning the canopies. Prior to the incident the task was done on Thursdays when only one manager was present.
The workers who were tasked with the cleaning of the canopies stared work earlier on the days that the HVAC system was to be cleaned. This was to allow more time and it was done first thing in the morning before any of the cooking oil was heated in preparation for the day's cooking.
Adherence to the new procedure was continually monitored by the area manager and by inspection of the CCTV footage in each store.
Since early 2017, the offender has worked with the franchisor to identify and trial a tool which would permit the task of cleaning canopies to be completed from the ground. Seven different tools have been trialled to date. The offender has purchased 30 units of one particular tool for ongoing testing in selected restaurants. The offender is also continuing to test other tools for suitability for other hoods in-store.
In 2017, the refresher training program was revised to deliver two programs (instead of one), each of which was/are delivered as WBT. One program is for members of the offender's management. The other program is for team members who do not form part of QSR's management. In 2017, the program for members of management included a video in which there was a discussion about the impact of a serious workplace accident and the implications for the employee, the employee's family and the workers in the restaurant.
In 2018, each of QSR's restaurants received an additional set of canopy filters to reduce the time pressure associated with the task of cleaning canopies. This meant that one set of filters could be soaking as part of the cleaning process, whilst the other set was placed in the HVAC so that it could continue to function.
The offender engaged an external WHS consultant in 2018 and a strategic plan was devised to implement improvements. An experienced WHS Manager has also been appointed.

Considerations

I have had regard to the objectives set out in s 3A of the CSP Act for the purpose of sentencing.

Objective Seriousness of the Offence

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 the offending: Muldrock v The Queen [2011] HCA 39 at [27].
The following matters are relevant to the objective seriousness of an offence against occupational health and safety legislation: 1. The maximum penalty available under the relevant provision; 2. The obviousness or foreseeability of the risk; 3. The gravity of the risks to safety flowing from a breach; and 4. The availability and feasibility of measures to eliminate or control that risk.
The maximum penalty is $1,500,000 in the case of an offence committed by a body corporate.
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 time 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 of aggravation or mitigation: R v Wilkinson (No. 5) [2009] MSWSC 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 attached to the failure to guard against 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 and overall evaluation of various factors, which may pull in different directions.'
My findings about the offender's level of culpability are based on the following: 1. The risk to which Colgan was exposed was the risk of workers suffering serious injury or death as a result of being burned by the hot oil in the cookers whilst undertaking the task of cleaning the HVAC system. 2. The risk of a worker sustaining serious injury or death from coming into contact with hot oil was a known risk. The defendant had taken measures to control the risk. The Court of Appeal in R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 at [30] and [31] stated: '30….The only question is whether the employer company has done everything that it was (reasonably)practicable to do to ensure the safety of its employees. If not, the company has breached it's duty. It is irrelevant to the question of liability where the failure occurred. 31….How and why the failure occurred is, however, relevant to sentencing. In assessing the company's culpability, it will be relevant to know, for example, whether the breach was the result of a failure to adhere to systems put in place by management or, alternatively was the result of a failure by management to establish adequate safety systems and procedures in the first place.' 1. I accept that the offender was aware of its obligations under the WHS Act and has made significant efforts to comply with those obligations, however they were not enough. 2. Whilst the cookers had warnings and instructions affixed directly to them, and that the training provide to the workers also provided similar warnings, the system of work that Colgan was using on the day of the incident was one that he had used from the first time that he cleaned the HVAC, as he had not been told not to do it by any supervisors or managers. 3. Similarly, although the WBT specified that the cookers must be disconnected from the power and have their lids closed prior to the cleaning of the HVAC, Colgan had not been directed to disconnect the power before cleaning the HVAC, and had in fact been told by Brook to leave the lids of the cookers open as it could spoil the oil. 4. The system of work that Colgan was using to clean the HVAC was unsafe and exposed Colgan to the risk of coming into contact with hot oil, which manifested itself on the day of the incident. 5. Whilst the blackout that occurred may have contributed to Colgan's fall, it of itself was not necessarily the cause of the incident. The risk to vulnerable workers such as Colgan, was the risk of coming into contact with hot oil. As a consequence of the unsafe system he was using, the risk was the same whether the lights in the kitchen were on or off. 6. The third degree burns which were sustained by Colgan required treatment in hospital, including skin grafts and I note that the Victim Impact Statement highlights that he continues to have significant physical and psychological damage as a result of the incident. 7. I accept that there was a lack of clear understanding by at least Colgan and potentially other workers as to exactly how the task was to be undertaken, and I also accept that the there should have been a far greater level of supervision to ensure adequate safety in the workplace, 8. The gravity of the potential risk was high and the lack of experience of Colgan is something I have taken into account. The workers in the restaurant were vulnerable, as they were at the beginning of their working careers. Colgan was aged 19, Brook was 20 years old, and Merriman was also aged 19 years. The duty to ensure the safety of young and vulnerable workers must be taken very seriously. 9. The offender did not adequately implement the safe work procedure for the task of cleaning the HVAC system, including by not providing adequate training and instruction to workers, in particular Colgan, in the correct procedure for the task. 10. The offender acknowledges by its plea of guilty that the risk arising from its failure to take the reasonably practical steps that it could have taken and that the risk was foreseeable. It also thereby concedes that the risk Colgan was exposed to was a risk of serious injury or death.

DETERRENCE

In imposing a penalty in relation to this offence, general deterrence must be provided for, and plays an important role. (s 3A(b) CSP Act)
The Prosecutor submits that it is appropriate for the penalty imposed contain a significant component for specific deterrence to compel the offender to undertake a rigorous approach to health and safety in the future.
The objective of specific deterrence is to deter the particular offender from repeating the offence, and the attitude of the offender to workplace safety and steps taken to improve it following the incident are also relevant. (see Capral Aluminium Limited v WorkCover Authority of NSW (2000) 99 IR 29).
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 Act very seriously. I accept that general deterrence is a matter that I must consider in the sentencing process, however it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all factors. I am satisfied that the changes in management practices and there is evidence before me of those changes. It is conceded by the Prosecution that I can take this into account on sentencing.
The Court of Criminal Appeal in Bulga Underground Operations Pty Ltd V Nash [2016] NSWCCA 37 at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given the weight of some substance in the sentencing process, and the Court would not be able to depart from this rule, unless there were exceptional circumstances.
In Bulga (supra), the Court of Criminal Appeal affirmed the decision in Capral (supra) as follows: '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, WorkCover Authority (NSW) (inspector Page) v Walco Hoist Rentals Pty Ltd (no.2) [2000] NSWIR Comm 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….. 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.'
The Prosecutor further submits that the issue of general deterrence must be approached in the context of the industry in which the offender operates - here the offender is a large corporation and currently operates 61 restaurants. The industry must be sent a message that the safety of young workers is paramount and the obligations under WHS must be complied with.
The Prosecutor further submits that I should have regard to the remarks made by Basten JA in Unity Pty Ltd v SafeWork NSW [2018] NSWCCA 266 (26 November 2018) at [79] when imposing the penalty: 'a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation'.
Whilst I see the importance of that reasoning, I do not think that the ability to pay a large fine, due to the size and profitability of a corporation, means that a heavy fine is appropriate.
In coming to my sentence I have had regard to this submissions and the steps that the offender has taken since the incident, which are not insignificant.

MITIGATING FACTORS

The offender cooperated with SafeWork during its investigations into the incident.
The offender has no prior convictions (ss 21A(3)(e) CSP Act). Given the size and scope of the operation, some 61 restaurants, this is a very important factor in my view when assessing what the penalty should be. The offender must by very nature of the circumstances in this matter, employ a large number of people, and possibly quite a proportion of that work force is young. The kitchens will obviously all have a number of cooking pots with hot oil in them every day, so that the chicken and other foods can be cooked. That informs me that the compliance with the systems that were in place was working fairly effectively.
The offender pleaded guilty at the first available opportunity and ought therefore be entitled to a 25% discount based on the utility of the plea. (ss21A(3)(k) and S 22 of CSP Act)
I accept that the offender has demonstrated remorse and contrition, and has taken the many steps since the incident to ensure the safety of its workers. These steps are outlined in paragraphs 30-38 above.
Such remorse is also exemplified by the circumstances immediately after the incident. The CEO went to the franchise to see how the other employees were dealing with what must have been a most distressing incident. I further note from the affidavit of the General Manager of People and Performance, Emma Ryan-Jones sworn 28 February 2019, that regular contact was kept with Colgan and his family, and monies were advanced to him and payments were made for his living expenses exclusive of his workers' compensation entitlements.
I note that the offender is a good corporate citizen, and I accept that given the steps taken subsequent to the incident, the offender has good prospects of rehabilitation. (s 21A (3)(h) of the CSP Act)

AGGRAVATING FACTORS

The injuries sustained by Colgan were serious (s 21A (2)(g) of the CSP Act). I have had regard to the Victim Impact Statement and note that his recovery has been slow, and is incomplete. This event has had a significant impact on his life, and may possibly continue to do so into the future.
In all the circumstances, I think the appropriate penalty in this matter is $80,000, to be discounted by 25% for the early plea.

COSTS

The offender is to pay the prosecutor's costs as agreed or assessed.

PENALTY

My orders are: 1. The offender is convicted. 2. The appropriate fine is $80,000 but that will be reduced by 25% to reflect a plea of guilty. 3. I impose a fine of $60,000 in total. 4. I order pursuant to s 122(2) of the Fines Act 1996 that 50% of that fine is to be paid to the prosecutor. 5. I 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: 22 March 2019

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Judgment (14 paragraphs)

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Cases Cited (10)