SafeWork NSW v Trans Vent Spiral Tubing Pty Ltd

SafeWork NSW v Trans Vent Spiral Tubing Pty Ltd - [2020] NSWDC 47 - NSWDC 2020 case summary — Zoe

Judgment

Trans Vent Spiral Tubing Pty Ltd (Trans Vent) has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) (the Act) it failed to comply with that duty and thereby exposed Mr Mark McKenzie 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 Amended Summons filed on 2 September 2019 pleads that Trans Vent should have taken one or more of the following reasonably practicable measures to eliminate or minimise the risk: "(a) Provide clear instructions to workers regarding the reasonably foreseeable risks and hazards associated with transporting or otherwise moving steel coils; (b) Provide clear instructions to workers not to stand and/or work within the area identified as the 'the fall shadow' of the steel coils during the process of transporting or otherwise moving the coils whilst resting on a forklift tine; (c) Require so far as is reasonably practicable that the task of transporting or otherwise moving the steel coils using a forklift is performed by competent persons who are trained and skilled in the safe transportation and/or movement of steel coils, including any site specific guidance; or alternatively, ensure so far as is reasonably practicable that qualified and experienced workers provide adequate supervision to those workers performing the task identified above; (d) Provide clear instructions to workers not to move, rotate or otherwise handle the coils by hand where the coil is without any form of restraint; (e) Require so far as is reasonably practicable that the steel coil is not transported or otherwise moved by way of resting or otherwise hanging/suspending the steel coil from a forklift tine without any form of restraint, such as the use of a coil attachment and/or sling and jib fitted to the forklift tine(s); (f) Provide clear instructions to workers to keep the area identified as 'the fall shadow' of the steel coils clear of all objects, including pieces of timber or other steel coils, during the process of transporting or otherwise moving the steel coils using a forklift."
Trans Vent has also pleaded guilty to an offence that being a person conducting a business or undertaking, it directed or allowed workers, in particular Mr Mark McKenzie and Mr Joshua Corbett, to carry out work at a workplace without holding a prescribed high risk work licence as required by cl 81 of the Work Health and Safety Regulation 2011 contrary to s 43 of the Act.
The maximum penalty for the offence is a fine of $100,000.

[8]

The Incident

On Saturday 21 January 2017, the workers commenced work at approximately 6.00am. They were due to complete their shift at 10.00am. Mr Osborn was operating the Nokia machine. Mr McKenzie was driving the forklift to make a stockpile of spiral tubes.
At approximately 7.30am Mr Osborn asked Mr McKenzie to get a coil for him for the Nokia machine. Mr McKenzie operated the forklift to pick up a steel coil which weighed at least 400kg. He lowered the forklift tines down to the ground, and picked up the coil from the stockpile on one fork arm. Mr Thompson observed Mr McKenzie drive past on the forklift with the coil on the one fork arm. The operation to get the coil onto one tine was carried out within metres of the Nokia machine. Mr McKenzie drove the forklift toward the Nokia machine, at which point he could no longer see Mr Osborn, as Mr Osborn had gone outside to count stock.
While driving, Mr McKenzie thought that he had picked up the coil with the point to be fed into the Nokia machine running the wrong way around. Mr McKenzie also noticed the coil was twisted. Mr McKenzie stopped the forklift and lowered the tine so that the coil rested vertically on the ground.
Mr McKenzie got off the forklift and walked to the front. He observed that the coil was orientated correctly. He pushed the coil a little bit to square it up. The coil started to fall forward off the tine. Mr McKenzie tried to move out of the way but he tripped and the coil fell on him.
Mr Thompson heard the coil hit the ground and a loud noise of someone in pain. Mr Thompson ran over to Mr McKenzie and observed that the coil was on his leg between his knee and ankle. Mr McKenzie was also bleeding from his head. Mr Thompson was unable to lift the coil himself so he went back to the machine he was working on and got a steel bar to lift the coil off Mr McKenzie's leg. Mr McKenzie pulled himself backwards on the ground.
Mr Thompson called for help. Mr McKenzie was conscious and he was transported by ambulance to Nepean Hospital.
There was no supervisor present while Mr McKenzie was performing the task. It was not unusual for someone to do this task on their own.

[11]

Safe Work Procedures and Risk Assessments

During the course of the SafeWork NSW investigation, a document titled "Risk Assessment for Transvent Spiral Tubing" dated 20 March 2013 (Risk Assessment) was produced by Trans Vent. The document provides generic references to all work covered by Trans Vent in its business or undertaking.
Under the title "Fixed plant, Spiral machines...." the Risk Assessment notes the possible harmful effects of "manual handling injuries and crushing". The control actions listed in the Risk Assessment are to "undertake a risk assessment of all plant and machines" and "provide relevant training on safe use". The document is not signed.
With respect to the risks associated with transporting the coils, Trans Vent had a document titled "Safe Work Procedures - Manual Handling" version 1.2. The document states: "Information, training or instruction in manual handling techniques must not be used as the sole or primary means of controlling risk unless altering the workplace, environmental conditions, the systems of work, the objects used in the task, or the use of mechanical aids is not practicable."
The identification of risks at the Trans Vent premises was carried out in an informal manner by supervisors and managers. No SWMS or risk assessment was provided by Trans Vent to SafeWork NSW with respect to the work of loading and unloading steel coils into the spiral tubing machines, or use of the spiral tubing machines including the Nokia machine. Prior to the incident there was no written procedure for the loading of coils on and off the Nokia machine. A verbal instruction was in place. A one page safe work procedure for operation of the machine was in existence, but it did not include the loading and unloading processes of the machine.
The Manual Handling procedure further states "use mechanical aids to handle and transport loads, store heavier and frequently used items at waist level where possible. Match work height to worker wherever possible".
During the course of the SafeWork NSW investigation Trans Vent produced a document titled "Health and Safety Manual" dated March 2015. The Manual states that the organisation will provide and maintain systems of work and a working environment that is healthy and safe; provide the information, training, instruction and supervision necessary to maintain a healthy and safe workplace; and monitor the workplace to assist in preventing injury.
The Manual states it is a duty of managers and supervisors to implement safe systems of work, supply information, training and instruction and identify and control hazards in the workplace.
While Trans Vent had written policies, these documents were not communicated to workers nor adopted on site. Trans Vent previously had an induction booklet. However, it stopped providing it to workers prior to the incident due to the low levels of literacy of workers at the factory.
Mr McKenzie did not sign any documentation when he commenced with Trans Vent other than documentation with regard to his tax file number and superannuation.

[13]

Relevant Guidance Material

The WorkCover NSW Code of Practice titled "Managing the Risks of Plant in the Workplace" dated July 2014 (Code of Practice) was in place at the time of the incident and was readily available on the internet.
Clause 3.4 of that Code of Practice refers to cll 205-206 of the Work Health and Safety Regulation 2011 (WHS Regulation) as follows: "A person with management or control of plant at a workplace must: ● Take all reasonable steps to ensure that the plant is only used for the purpose for which it is designed, unless a competent person has assessed that the proposed use does not increase the risk to health and safety."
SafeWork Australia had a fact sheet titled "Falling Objects - Fact Sheet" dated February 2012 in place at the time of the incident and available for use. The fact sheet states: "Objects have the potential to fall onto or hit people at the workplace or adjoining areas if precautions are not taken. When managing risks, the risk must be eliminated so far as is reasonably practicable. If elimination is not reasonably practicable, the risks must be minimalised so far as is reasonably practicable. This requires each relevant PCBU to provide and maintain a safe system of work including: ● fall prevention, so far as is reasonably practicable, and ● if fall prevention is not reasonably practicable, a system to arrest falling objects...."
The fact sheet further states that: ''Other control measures can include: ● Use of isolation or no go zones where there is a risk of an object falling into an area. ● Providing appropriate training and supervision."
Australian Standard AS2359.2-2013 Powered Industrial Trucks was available prior to the incident for purchase via the Standards Australia website.
Section 3.4, Australian Standard AS2359.2-2013 Powered Industrial Trucks Part 2: Operations states that when handling and placing loads using a truck, the following requirements and precautions shall be observed by the operator: "(a) Before attempting to lift, adjust or place any load, the operator shall ensure that no persons can be struck by the load if it moves, overbalances, or falls."
Sub-section 3.7(f) of the Standard entitled "Handling and Placing Loads" reads: "Operators shall ensure that the load is stable and evenly distributed on both fork arms prior to lifting and when travelling."
SafeWork Australia's guidance material titled "General Guide for Industrial Lift Trucks" dated July 2014 was available on SafeWork NSW's website at the time of the incident. At p 2 it provides that: "A person who operates a forklift truck must hold a valid high risk work licence for the type of industrial lift truck they are operating, be trained to operate the type of industrial lift truck and attachments they are using, and are provided with information, training and instruction on the hazards, risks and control measures relevant to the workplace."
The SafeWork Australia Guide also said: ● Loads that have the ability to slip, fall or roll off the fork arms... should be restrained with straps or similar. (at p 9) ● When handling a suspended load the operator should... secure the load across both fork arms for balance, using an attachment designed to be used on the industrial lift truck. (at p 10)
The Guide included a diagram of a jib attachment (at figure 7) similar to that used to load the ISM machine at the time of the incident.
Pursuant to cll 34 to 36 of the WHS Regulation, a risk assessment was required to be undertaken that would have identified necessary control measures effective to control the risk. Trans Vent did not undertake or direct its workers to undertake a satisfactory risk assessment that identified the risks relating to the task of loading coils on the Nokia machine.
Clause 81 and Sch 3 of the WHS Regulation mandated that a person must not carry out high risk work, which includes operating a forklift, without a high risk work licence. Trans Vent did not have a system in place to ensure workers who had not undergone training to operate a forklift and who did not hold certification allowing operation of a forklift, were prohibited from operating a forklift. Several workers at the site had expired forklift licences, including Mr McKenzie and Mr Joshua Corbett.

[14]

Systems of Work Following the Incident

The day after the incident the system for fitting a coil to the Nokia machine was changed. The new method more closely resembled the method used on the ISM machine, using a jib attachment with a sling attached to a forklift. Under this new system, a worker would put a jib onto the forklift, hook the jib up with the chain, and place a sling through the square hole in the middle of the decoiler fitted with the coil.
Upon SafeWork NSW's attendance at the site to conduct an inspection on 24 January 2017, the attending inspector observed a forklift jib attachment with a sling located on site. That sling and jib attachment was then subsequently used in the revised system of work for loading and unloading the Nokia machine.
Trans Vent created a documented "Safe Work Procedure (Forklift Unloading and Storage of Materials)" and a documented "Safe Work Procedure (Loading Coils onto Lockseamer)". The new process for loading coils was as follows: 1. Assess the coil to determine its weight and the forklift required. 2. Ensure the tines are at correct spacing and locked into the most central position. 3. Lift coil with both forklift arms, adjusting the position of the tines and forklift accordingly. 4. Manoeuvre forklift into an open area. 5. Lower the coil onto evenly spaced timbers. 6. Manoeuvre forklift away from the coil to pick up decoiler, adjusting the tines as required. 7. Manoeuvre forklift so that the decoiler is placed above the centre of the coil and lowered into position and then tightened using socket. 8. Manoeuvre forklift to pick up the SJ20 jib, adjusting the tines so that they are evenly spaced and locked into the most central position. 9. Lower jib into position above coil, feeding the certified sling through the centre of the coil. 10. Raise tines steadily, adjusting the angle and position of the forklift accordingly. The coil must travel no more than 10mm off the ground. 11. Travel with coil attached to jib to the Nokia machine, ensuring that the coil is lined up with the cradle. 12. Raise tines steadily to a workable height where the coil is above the cradle. Steadily lower the coil into position. Continue to lower tines in order to remove tension from the sling around coil. Be in constant verbal communication with the offsider and watch for potential pinch hazard. 13. Remove sling by unhooking it. Manoeuvre forklift away from coil and lower tines onto the ground.
If the coil was running the wrong way around, the worker could simply spin the coil on the sling so that it faced the right way.
Workers were verbally trained and instructed by Trans Vent's management in the new process described above for loading coils on the Nokia machine from the morning of Monday 23 January 2017, when work resumed at the premises following the incident. This step was taken by management before the commencement of SafeWork NSW's investigation. Workers were also subsequently trained and instructed in the new written procedures outlined above, after SafeWork NSW issued Improvement Notice 7-30177 to Trans Vent on 25 January 2017.
Since the incident Trans Vent has also installed a cage around the decoiler on the Nokia machine and a cage around the rollers.
Following the incident Trans Vent established a written register of high risk work licences in order to ensure that workers did not operate forklifts without the appropriate current licence. This step was taken after SafeWork NSW issued Improvement Notice 7-301771 to Trans Vent on 25 January 2017.

[20]

Objective seriousness of the offence

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 The Queen (No. 2) [1988] HCA 14; (1988) 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] NSWCCA 242; (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 [1988] HCA 67; (1988) 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] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
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 judgment without any attempt to state precisely how any given factor has influenced the judgment.
The Court of Criminal Appeal has recently examined the sentencing process with regard to the Act 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. His Honour Justice Basten at par 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 par 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, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
At par 53 his Honour dealt with the proper approach to considering the objective seriousness of offences under the 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 the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting 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 materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken."
My findings about the offender's level of culpability are based upon the following: 1. There was an obvious and foreseeable risk of a crush injury if a coil fell off the tine of the forklift and a worker was standing in the fall zone of the coil. 2. Trans Vent should have known of the risk, and the ways of minimising the risk, from the Guidance Material alone. 3. The likelihood of the risk occurring was not insignificant. Coils were only held onto the forklift by gravity, and any tilting of the tines could reduce in a coil falling forwards and to the ground. 4. The potential consequences of the risk could have been death or serious injury, as did occur to Mr McKenzie. 5. Steps were available to eliminate the risk, not just minimise it. Indeed, Trans Vent already used a jib and sling to transport coils to the ISM machine. There was no explanation why this safe method had not also been adopted for transporting coils to the Nokia machine. Trans Vent was able to implement the jib and sling method with the coils for the Nokia machine the day after the accident. 6. There was no burden, inconvenience or cost in implementing the safe system of work to eliminate the risk. 7. The serious orthopaedic injuries suffered by Mr McKenzie were a manifestation of the risk. 8. The maximum penalty for the offence is a fine of $1,500,000, which reflects the legislature's view of the seriousness of the offence. 9. In relation to the s 43 offence, Trans Vent knew that its workers who operated forklifts needed to have a licence.
I find that Trans Vent's level of culpability for both offences is in the mid-range.

[24]

Capacity to pay a fine

I am required to have regard to s 6 of the Fines Act 1996 (NSW) 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: Mahdi Jahandideh v The Queen [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.
In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said: "First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to 'the means' of the defendant, pursuant to s 6 of the Fines Act 1996."
Trans Vent did not discharge its evidentiary obligation to call evidence to demonstrate that it had a reduced capacity to pay a fine. All it did was put into evidence figures, presumably from balance sheets, setting out the assets and liabilities from one year to the next. There was no evidence regarding the turnover of the company or its profitability. There was no evidence how much, by way of salary or dividends, was paid to the directors, who were members of the family which ran the company. There was no evidence of capacity to borrow, if that should be required to pay a fine.
As I indicated to counsel for Trans Vent during oral submissions, previous decisions have said that it is not enough for an offender to selectively place information before the court in relation to the financial position of a company. At the very least, the material put before the court should include balance sheets, profit and loss statements and tax returns.
The affidavit filed for Trans Vent said that it had been unable to obtain a cash flow statement from its accountant. It had several months to do so. It is hard to understand why an accountant, who is being paid for his or her time, could not produce a cash flow statement. It is also hard to understand how a manufacturing company, which has to keep control of costs and prices, could operate without keeping track of its own cash flow. In short, Trans Vent has not called evidence to establish any limited capacity to pay a fine. The penalties will be imposed on that basis.

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