WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd, t/as Rod, Bar & Wire - [2000] NSWIRComm 241 - NSWIRComm 2000 case summary — Zoe

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WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd, t/as Rod, Bar & Wire

[2000] NSWIRComm 241

Industrial Relations Commission (NSW)|2000-07-01|Before: Hungerford J

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Source facts

Court

Industrial Relations Commission (NSW)

Decision date

2000-07-01

Before

Hungerford J

Catchwords

08/24/2000 DATE OF JUDGMENT: 11/29/2000

Source

Original judgment source is linked above.

Catchwords

08/24/2000 DATE OF JUDGMENT: 11/29/2000

Judgment (57 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd, t/as Rod, Bar & Wire [2000] NSWIRComm 241 PROSECUTOR WorkCover Authority of New South Wales (Inspector Steven Finlay McMartin) PARTIES : DEFENDANT The Broken Hill Proprietary Company Limited, trading as Rod, Bar & Wire FILE NUMBER: IRC 4583 of 1999 CORAM: Hungerford J CATCHWORDS : Occupational Health and Safety - Prosecution for breach of statutory duty - Use of oxy-propane cutting equipment - Explosion causing serious injuries to two workers employed by contractors - Degree of culpability of defendant - Objective seriousness of offence in terms of its nature and quality - Subjective features in mitigation of penalty - Early plea of guilty - Co-operation with investigating authorities - Contrition - Remedial measures implemented - Improved safety performance - Nature of the industry and inherent risks - Record of prior convictions - Application of guideline judgment - Defendant convicted - Fine imposed. LEGISLATION CITED : Occupational Health and Safety Act 1983 s 16(1) Alcatel Australia Ltd v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Carrington Slipways Pty Ltd v Callaghan [1985] 11 IR 467 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 R v Cartwright (1989) 17 NSWLR 243 R v Gallagher (1991) 23 NSWLR 220 R V Thomson, R v Houlton [2000] NSWCCA 309 Tyler v Sydney Electricity (1993) 47 IR 1 Warman International Ltd v WorkCover Authority of New South Wales (Inspector Ankucic) (1998) 80 IR 326 CASES CITED : WorkCover Authority of New South Wales (Inspector Chadwick) v BHP Steel (AIS) Pty Ltd (2000) 98 IR 122 WorkCover Authority of New South Wales (Inspector Dawson) v Waugh (1995) 59 IR 89 WorkCover Authority of New South Wales (Inspector James) v Australian Refined Alloys Pty Ltd [2000] NSWIRComm 224 WorkCover Authority of New South Wales (Inspector McKenzie) v Waste Recycling & Processing Services of New South Wales [2000] NSWIRComm 218 WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd (1999) 90 IR 277 WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd (1999) 96 IR 32 WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd [2000] NSWIRComm 39 WorkCover Authority of New South Wales (Inspector Plowright) v Forgacs Engineering Pty Ltd [2000] NSWIRComm 226 WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales [2000] NSWIRComm 179 WorkCover Authority of New South Wales (Inspector Wong) v Aluminium Contractors Sales (NSW) Pty Ltd [2000] NSWIRComm 233 HEARING DATES: 07/21/2000; 08/24/2000 DATE OF JUDGMENT: 11/29/2000

[6]

As a result of the said failures, Andrew Scott Swan and Mark Boyce were injured. 2 The defendant pleaded guilty and a statement of agreed facts was admitted into evidence. It emerged from those facts that the defendant was an employer who conducted a steelworks at Selwyn Street, Mayfield near Newcastle in the State. As part of its steelmaking operations, the defendant required maintenance work to be carried out to the equipment and included in that requirement was the maintenance of steelmaking ladles. It seems that the defendant on 30 July 1997 made a contract with Transfield Pty Limited, t/as Transfield Maintenance to perform such maintenance at the steelworks and for that purpose Transfield Maintenance used its own employees and also persons employed by Readiskill Pty Limited on hire to Transfield Maintenance. On 25 March 1998, maintenance work was being performed to one of the steelmaking ladles by Andrew Scott Swan, a boilermaker employed by Readiskill, and by Mark Boyce, a boilermaker employer by Transfield Maintenance. At approximately 9.50 pm on that day an explosion occurred within the ladle from the ignition of LP gas that had leaked from oxy-propane cutting equipment and had accumulated inside the ladle. As a result of the explosion, Mr Swan sustained burns to his face and left arm, lacerations to the back of his head, a severed muscle within his right knee, a fractured right ankle and contusions to various parts of the body; Mr Boyce sustained multiple abrasions and contusions to the right side of his body, right arm and head. 3 The prosecutor attended the premises at about 11.20 pm on the night of the incident and again on 26 March 1998 when he conducted a detailed investigation, including photographs of the scene. The agreed statement of facts set out the observations made by the prosecutor and the results of his investigation, including the detailed work procedure followed by Mr Swan and Mr Boyce in carrying out their tasks to the ladle, as follows : 11. At 4:00 pm on the day of the accident Swan and Boyce commenced mechanically repairing the rim of the ladle. The work was performed from within the ladle. Access to the rim was facilitated by the placement of one bricklayer platform on top of another, resulting in a work platform 1230 millimetres from the top of the ladle. The top work platform consisted of four steel channel legs supporting a circular steel 10 millimetre thick plate floor weighing a total of 1080 kilograms. Also located in the ladle, on the work platform, was a steel parts tub measuring 1420 millimetres long, 950 millimetres wide and 640 millimetres high.

[31]

Again, I affirm that view for present purposes. 10 Mr R R Stitt QC, who appeared with Ms A J Silink of counsel for the defendant, tendered into evidence a statement made by Jeffrey Biddlecombe, the defendant's Engineering and Safety Superintendent at the Newcastle steelworks. Mr Biddlecombe's evidence detailed the defendant's safety procedures for contractors at the time of the present incident, the response thereto, changes implemented thereafter and the defendant's safety performance for the year ended 31 August 1999. As to that latter aspect, Mr Biddlecombe pointed out that in the Steelmaking and Caster Division there were only two lost-time injuries during the 12-month period and, overall, he expressed the opinion that the safety performance statistics "demonstrate an excellent safety record, considering the nature of steel-making processes, the high rates of production achieved during this period with pending shut-down of the Steelmaking and Caster Division". 11 I can well understand Mr Biddlecombe having the view he expressed on the defendant's safety performance, but I must reiterate that it is to be seen in the context of the historical industrial safety record as shown by the schedule of prior convictions referred to earlier. It is true that enormous improvements have occurred over the years but the fact that serious accidents, such as the present incident, continue to occur must be a matter for concern. Indeed, that both Mr Swan and Mr Boyce were not killed may be seen as very fortunate, and the incident occurred where the identified risks to safety leading to the explosion were readily foreseeable and avoidable. Nevertheless, it is only appropriate to attend to the facts as disclosed in Mr Biddlecombe's unchallenged statement and to the agreed facts in assessing Mr Stitt's fundamental submission in this case, namely : It is necessary to assess the nature and quality of the conduct of the Defendant bearing in mind the following : (i) there is a significant and relevant distinction between an employer who has no system at all (or who makes no attempt to enforce a system) on the one hand; and

[34]

And so it was that Mr Stitt submitted that the Court "could confidently impose a simple penalty in monetary terms affecting all the facts. It is a matter that does not warrant substantial penalty at all." 12 As to the safety procedures in place for contractors at the time of the incident, Mr Biddlecombe referred to the three-tiered system, together with specific safety check lists, standards and procedural requirements. The three tiers involved: first, a general site induction, including a training session and a written assessment, with respect to safety and emergency procedures; second, a safety induction in the particular department where the person concerned was to perform work, also comprising a written assessment; and, third, on-the-job training and direction to each worker in relation to the particular job to be performed, including the "job ticket" or "work permit" system which outlines the work to be performed, the tools required and the critical hazards and precautions to be taken in relation thereto. That system operated in the present case. In addition, on Mr Biddlecombe's evidence, a system was in place for checking all cutting equipment and hoses used by Transfield Maintenance in welding and cutting work, including a requirement imposed by the defendant on a contractor to ensure its workers inspected the condition of equipment before use to ensure it was not faulty or worn and that the correct equipment was used for the job concerned. 13 Mr Biddlecombe stated that immediately following the subject incident the defendant conducted an internal investigation and commissioned E & K Repair Service to inspect and test the hoses and associated equipment involved. Also, he said the defendant complied with all requests by the WorkCover Authority in its inquiries and that the defendant co-operated with the WorkCover Authority and its inspectors during their investigations of the incident. Following the defendant's investigation, a number of recommendations were made and the defendant implemented them. Those recommendations included : (a) A ladle ventilation system was implemented to ensure that an explosive concentration of LPG could not occur. This was done by the use of a venturi air supply device;

[51]

(10) It was an aggravating factor in the present case that the defendant's failure to ensure basic safe work methods were adopted so that that aggravation should be taken into account in assessing the objective seriousness of the offence and so be reflected in the level of penalty. 15 The prosecutor accepted that in determining an appropriate penalty the defendant was entitled to have taken into account subjective features tending to mitigate the objective seriousness of the subject offence. Mr O'Neil in that respect referred to Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at p 476. Very properly also, counsel referred to the proposition that there were good policy reasons for the encouragement of early pleas of guilty and the assistance given to the investigating authorities, including that the plea reflected contrition on the part of the defendant - in the present case, those aspects had been satisfied by the defendant and a degree of leniency in sentence should follow: see Alcatel Australia Ltd v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 at pp 106-107; R v Cartwright (1989) 17 NSWLR 243; and R v Gallagher (1991) 23 NSWLR 220. 16 Nevertheless, Mr O'Neil put that the degree of discount to be allowed to the defendant for the various subjective features should have regard to the circumstances in which the plea of guilty was provided, that is, where "the defendant failed to ensure that a grave and evident risk, which it had already identified, was obviated by use of proper work procedures". It was submitted that the defendant's breach of the Occupational Health and Safety Act was obvious and that the plea was entered in the face of a strong prosecution case. Reference was made also by counsel to the defendant's record of prior convictions as being a most relevant factor to take into account in assessing penalty. 17 In the result, and in support of the imposition of a significant monetary penalty, Mr O'Neil emphasised that "the subject incident arose out of a known and perceived danger", "the defendant's systems of work were inadequate to meet that risk", "as a consequence of the failing in the defendant's systems of work, Mr Swan and Mr Boyce were subjected to an explosion that presented a grave risk of the ultimate injury, namely death" and "the seriousness of the defendant's acts and omission is not open to denial and the subject offence should be dealt with on that basis". 18 As indicated earlier, Mr Stitt's basic submission was that the defendant had a proper system in place which, if followed, would have avoided the accident and removed the risk of injury. That bore directly upon reducing the culpability of the defendant in terms of the nature and quality of the offence in comparison with a situation where an employer had no system at all in place to ensure workplace safety. The elements of the work system identified by Mr Stitt included that - · before any work was undertaken an evaluation of the scope of the work and site hazards was made; · every job ticket was reviewed and approved by responsible employees of the defendant before any work was undertaken; · regular three-monthly checks were to be made by Transfield Maintenance of all welding and cutting equipment used by it; · all workers were required to visually inspect the condition of the equipment before commencing work; · managers and senior employees of the defendant constantly monitored and reviewed the effectiveness and level of compliance with the job tickets; and · although forced ventilation was required while work was done within the well of the ladle it was not at the time required for work performed above the rim of the ladle in the open air. 19 The immediate and direct cause of the explosion was said by senior counsel to have occurred because of a combination of three things: first, the failure by the two workers to turn off the gas at the regulator outlets, contrary to the express requirement to do so in the job ticket; second, the failure by the two workers to completely remove the cutting equipment from the ladle when they took the 20 minutes break; and, third, on the cutter being ignited on the resumption of work a flare spark had travelled along the hose connected to the cutting equipment and the accumulated gas within the ladle exploded. Mr Stitt submitted that the real failure of the defendant in this case was in not appreciating the risk of injury from non-compliance with its primary safety directives contained in the job ticket and it was at no time alleged that prior to leaving the ladle to take a break the workers were at risk. In the result, senior counsel put that had the requirements of the job ticket in the form in which it was issued been complied with then this accident would never have occurred. Nevertheless, and with the benefit of hindsight, the defendant conceded there were other measures, now implemented and as detailed above, which could have been employed in addition to the requirements set out in the job ticket; it was with that in mind the defendant entered the plea of guilty and to which the particulars in the charge related. 20 I interpose at this point a claim made by Mr Stitt that the prosecutor in submissions added two fresh allegations not contained in the particulars, that is, the defendant failed to maintain a system of inspection and repair of the oxy-propane cutting equipment and did not require or provide equipment to the workers to test for the presence of gas. The prosecutor maintained that such allegations were in fact within the particulars in the summons. I am far from satisfied that Mr Stitt's point was made good, because, after all, the primary particular alleged was a failure "to provide or maintain systems of work for the maintenance of the [ladle] that were safe and without risks to health"; the secondary particular alleged a failure "to provide or maintain oxy-propane cutting equipment … that was safe and without risks to health". However, for present purposes and in deference to the position of the defendant, I propose to consider the question of penalty by disregarding the two aspects resisted by Mr Stitt and to view the relevant safety detriments strictly in accordance with the particulars in the summons as settled in the statement of agreed facts. 21 In the result, Mr Stitt characterised the defendant's culpability in his written submissions as follows : 25. The factor which was not foreseen by the defendant (nor, by the supervisor of the injured workers who was responsible for preparing the first assessment of the nature of the job and the inherent risks) was that the workers would not comply with the requirements of the job ticket. It is noteworthy that the safety requirements of the Job Ticket were not onerous. In fact, not only were they simple, they were absolutely elementary to safe oxy-welding and cutting practice, procedures which any person trained in using such equipment, as the two contract workers were, would ordinarily do and know to do without instruction. There is nothing more basic and fundamental in welding work than turning off the gas. The Defendant was entitled to assume that the procedure which had been laid down would be followed.

[55]

The objective gravity of the Defendant's breach, in light of these circumstances, is not so serious as to warrant a heavy penalty. 22 As to the mitigating factors, Mr Stitt referred to the early plea of guilty, co-operation by the defendant with the investigating authorities, the obvious recognition by the defendant of its obligations concerning occupational health and safety, the preparedness of the defendant to take prompt, extensive and appropriate remedial action and the defendant's continuing awareness of the need to attend to workplace safety at all levels. The defendant's overall safety record, including in particular the prior convictions, were said by senior counsel to be seen in the context of the nature of its industrial activities in the heavy steelmaking industry. In short, Mr Stitt emphasised that "the defendant had in fact adopted and taken a procedure for the work which it considered reasonable and adequate although it unfortunately did not prevent the accident occurring in the circumstances". 23 The particular detriment to safety giving rise to the offence here was, in my view of the facts and as consistent with Mr Stitt's analysis, the defendant's failure to fully appreciate the prudence in establishing measures to support or supplement the primary steps laid down in what was thought to be an otherwise safe work system. This case, I think, emphasises the duty cast on an employer in absolute terms to ensure workplace safety in the sense of guaranteeing, securing or making certain: see Carrington Slipways Pty Ltd v Callaghan [1985] 11 IR 467 at 470. Also, it emphasises the need for an employer to be pro-active in fully informing itself so as to ensure a safe work environment. As was said by a Full Court of the former Industrial Court in WorkCover Authority of New South Wales (Inspector Dawson) v Waugh (1995) 59 IR 89 at 100 - "When considering a statute giving expression as a matter of public policy to standards of safety, management has a positive obligation of informing itself of circumstances of safe working." Even given a system which, if followed, was safe, it seems to me that in order to properly ensure safety an employer who fails to provide for the contingency of a breakdown in the system necessarily has not discharged the positive obligation cast by the statute. Where, as here, the defendant employed persons and utilised employees of contractors in an admittedly dangerous industry with inherent risks, then, it seems to me, the positive obligation is even stronger and, as in Waugh (59 IR at p 100), "amounts to an aggravation of the offence". 24 In such a situation, the question is what is the true degree of culpability. Mr Stitt put it at the lower end of the spectrum as "a comprehensive system for the identification of risks and appropriate precautionary action to be taken" and where "the defendant was entitled to assume that the procedure which had been laid down would be followed". On the other hand, and in light of the defendant's admitted knowledge of the possibility of explosion from the use of oxy-propane equipment, Mr O'Neil called for imposition of "a significant monetary penalty" in circumstances where "the subject incident arose out of a known and perceived danger" and "the failing in the defendant's systems of work … presented a grave risk of the ultimate injury, namely death". It is, of course, well settled that the consequences of an accident, as resulting in serious injury or even death, does not, of itself, dictate the seriousness of the offence although the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the culpability of the defendant: see Tyler v Sydney Electricity [1993] 47 IR 1 at 5 and Lawrenson Diecasting v WorkCover Authority (90 IR at p 476). I accept Mr O'Neil's submission that the failure of the defendant's system of work subjected the two workers to an explosion presenting a grave risk of the ultimate injury. 25 In a very real way, Mr Stitt sought to reduce the culpability of the defendant by the failure of the two workers concerned in taking the break from work to turn off the gas at the regulator outlets and in not completely removing the cutting equipment from the ladle; senior counsel went so far as to submit that the defendant was entitled to assume that the procedure laid down would be followed. It is perhaps timely, therefore, to repeat the observation made by me in WorkCover Authority of New South Wales (Inspector Chadwick) v BHP Steel (AIS) Pty Ltd [2000] 98 IR 122 at p 135, as follows : Inattention or mere inadvertence of an employee only serves to show the need for an employer in ensuring safety to be astute in meeting all reasonable contingencies. This concept, in my view, is the measure of the real culpability of the defendant in this case where almost a "one-off" situation arose to be dealt with away from, as the evidence showed, the defendant's well and long-established procedures for the water testing of oxygen lances in a safe manner.

[56]

I consider that comment to be directly applicable in this case and as illustrating the real measure of culpability. 26 I conclude that the essential nature and quality of the subject offence, in all the circumstances, to be about one-third of what could be expected in the worst case. 27 However, in reduction of an otherwise appropriate penalty in light of the subjective factors for this defendant, as set out in the evidence, I accept that a significant reduction is called for. In this respect, I have taken into account the quite early plea of guilty and the full co-operation by the defendant with the investigating authorities; the prompt implementation of remedial action after the subject incident, I am satisfied, represented a responsible and contrite approach to workplace safety in a manner consistent with Mr Biddlecombe's evidence as to improvements in overall safety performance at the steelworks and for which some credit in further reduction of penalty should be allowed. It is relevant to repeat in connection with this balancing exercise what was observed by a Full Bench of the Court in Warman International Ltd v WorkCover Authority of New South Wales (Inspector Ankucic) (1998) 80 IR 326 at p 339, that is : The approach to the determination of penalty in cases such as these is now well settled. The penalty must reflect the nature and quality of the particular offence; the level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high. 28 On 17 August 2000, the Court of Criminal Appeal in R v Thomson; R v Houlton [2000] NSWCCA 309 gave the guideline judgment as to pleas of guilty in criminal proceedings and referred to other matters of a subjective nature in mitigation of penalty. That guideline judgment was first applied in this jurisdiction by Wright J, President in WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales [2000] NSWIRComm 179 and has since been applied in other cases, such as WorkCover Authority of New South Wales (Inspector McKenzie) v Waste Recycling & Processing Services of New South Wales [2000] NSWIRComm 218, WorkCover Authority of New South Wales (Inspector James) v Australian Refined Alloys Pty Ltd [2000] NSWIRComm 224, WorkCover Authority of New South Wales (Inspector Plowright) v Forgacs Engineering Pty Ltd [2000] NSWIRComm 226 and WorkCover Authority of New South Wales (Inspector Wong) v Aluminium Contractors Sales (NSW) Pty Ltd [2000] NSWIRComm 233. I too will apply the guideline judgment. 29 In light of the maximum penalty available in the present case of $825,000, I assess the objective seriousness in an amount to the order of $275,000. Having regard to the early plea of guilty, I would allow a discount of 25 per cent and for the other subjective features mentioned I would allow a further reduction of 10 per cent. In the result, I consider an appropriate penalty in this case to be $175,000. 30 I find the defendant guilty of the offence charged and enter a verdict accordingly. I order that the defendant is convicted and is fined an amount of $175,000 with a moiety thereof to the prosecutor. The defendant is ordered to pay the prosecutor's costs in an amount as agreed or as assessed. ______________

WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd, t/as Rod, Bar & Wire

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Cases Cited (18)