WorkCover Authority of New South Wales (Inspector Glass) v Kellogg

PROSECUTOR: Mr Skinner (of counsel) SOLICITOR: Mr McCann LEGAL REPRESENTATIVES: WorkCover Authority of NSW

DEFENDANT: Mr Carson Blake Dawson Waldron Solicitors

JUDGMENT:

• 16 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: WALTON J, Vice-President

WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR GLASS) V KELLOGG (AUST) PTY LTD.

Prosecution under s15(1) of the Occupational Health and Safety Act 1983.

INTRODUCTION 1 On 26 February 1996 there was an accident at Kellogg (Aust) Pty Ltd's ("the defendant's") factory on the corner of Stephen Street and Swinbourne Street, Botany, New South Wales as a result of which Salih Husakovic suffered severe burns to his body and his workmate Ljubisav Jovanovic suffered burns to his hands. 2 The defendant was prosecuted in relation to two charges that it had committed offences under s15(1) of the Occupational Health and Safety Act 1983 ("the Act"). 3 At the trial, the Court found the offence proven in relation to the prosecution brought in Matter No. IRC 4732 of 1997. In that respect the defendant had been charged as follows: On 26 February 1996 at Stephen Road, Botany in the State of New South Wales, the defendant, being an employer, DID FAIL to ensure the health safety and welfare at work of all its employees in particular, Salih Husakovic and Ljubisav Jovanovic in failing to provide and maintain systems of work, to wit, systems of operation of the rotary cookers, that were safe and without risk to health, contrary to Section 15(1) of the Occupational Health and Safety Act , 1983, in such case made and provided.

4 The Court also found the defendant not guilty of an offence in relation to the prosecution brought in Matter No IRC 4733 of 1997. 5 The reasons for judgment at the trial were delivered on 19 October 1999. This judgment deals with the appropriate penalty to be imposed and the question of costs.

Factual Circumstances 6 The Court made a number of findings of fact bearing upon the assessment of the culpability of the defendant in its judgment of 19 October 1999. I do not repeat those facts in this judgment. However, I shall return to particular aspects of those factual findings (as well as conclusions as to culpability) later in this judgment. It is sufficient at this point to broadly state the circumstances of the accident. 7 The accident happened at approximately 1.24 am. Mr Husakovic and Mr Jovanovic were employed by the defendant on the 3.00 pm to 11.00 pm shift but were on overtime on the night of the accident. They were working on a production line (called the "combination line") which contained a line of six large industrial cookers producing breakfast cereals. Each cooker consisted of a revolving drum which was charged with grain and flavouring and into which steam was introduced. In the days prior to the accident the product was Special K which did not involve all the cookers in the line being in simultaneous production. The accident happened on cooker number 4.

8 Cooker number 4 had been charged with grain and cooked some five days prior to the accident. It had resulted in a "bad cook". This means that the product was not useable. The decision was taken to shut off the steam to the cooker and to leave it rotating until the contents had been completely dried when they would be easy to remove and the cooker could be used again for production. Cooker number 2 had also been charged and cooked at the same time and also resulted in a bad cook and had been left in the same way. At the end of their shift on 25 February, Mr Husakovic and Mr Jovanovic were instructed to discharge the contents of cookers 2 and 4 and, having discharged cooker 2 with relative ease, found they were struggling with the lid of cooker 4. With difficulty Mr Husakovic finally loosened the nut on the lid of cooker number 4 with the result that there was an explosion of product from within the cooker with such force that it blew out the grating on the walkway situated above the cooker and struck and adhered to the ceiling some 4.5 metres above the cooker. Mr Husakovic luckily managed to avoid the full force of the molten product but some landed on him and he was badly burned. Mr Jovanovic sustained burns to his hands when he went to Mr Husakovic's rescue and tried to remove the latter's clothing. Submissions for the Prosecutor

9 Mr Skinner of counsel, who appeared for the prosecutor, submitted that the maximum penalty prescribed for the offence was $500,000. He submitted that the provisions of s51A of the Act did not apply to the present matter notwithstanding some prior convictions of the defendant. He submitted that s51A of the Act only operated in circumstances where there was a conviction for an offence under the Act. The prior convictions of the defendant were for offences committed under the Factories, Shops and Industries Act 1962. Furthermore a prosecution had been brought against the defendant under the Act but had been dismissed pursuant to s556A of the Crimes Act 1900.

10 As to the objective seriousness of the offence, Mr Skinner submitted that the offence was not at the upper end of the range of culpability as the Court had made findings in favour of the defendant properly maintaining a maintenance system for the cookers. However, the prosecutor submitted that the objective seriousness of the offence was not at the "lowest end of the range". It was submitted that there was a failure in the system of work which included a failure to adequately train employees as to the checks which were needed to be undertaken before opening cookers.

11 In particular, Mr Skinner referred to the judgment at the trial wherein the Court found that the defendant had a duty to ensure that where the lid on a cooker had been secured (so that any pressure within it could not escape through the lid) then the lid should not be loosened or removed until it has been ascertained that there was no pressure within the vessel. This would be achieved by employees being required to check the gauges and the computer screen including the trend screen. The defendant had failed to adequately train, instruct and warn the employees to check the pressure gauge and computer screen to ensure that there was zero pressure within the cooker before attempting to lift the lid in relation to a "bad cook".

12 Mr Skinner also submitted that the findings of the Court, particularly at the trial in relation to the defences raised by the defendants, indicated that the accident was not of a freak occurrence. Furthermore, the magnitude of the risk was real and substantial. 13 The equipment was dangerous and there was a serious injury to the two employees concerned. Furthermore, as to the objective seriousness of the offence the actual breach was foreseeable and the company had a history of convictions for breach of occupational health and safety laws. 14 As to the matter of costs, the prosecutor submitted that it was a matter for the consideration of the Court.

15 Mr Carson, solicitor, appearing for the defendant, submitted that the offence was very much at the lower end of the range. He submitted that the Court would be assisted in assessing penalty by considering this matter in the light of the maximum penalty which the Chief Industrial Magistrate could award in relation to such an offence, that being an amount of $50,000. He further submitted that the "most" the Court would be considering in terms of penalty would be a range of $25,000 to $50,000.

16 Mr Carson submitted that there were a number of steps taken by the defendant after the accident. One such change was the introduction of the requirement to complete a "cooking report" after each cook. This document required information as to whether the cooker was empty, the time of the cooking process and whether the cook was "scraped". There is also a provision for comments such as product defects, any changes in parameters, silos and other conditions. This report dealt specifically with the disposal of "bad cooks".

17 The company also introduced a number of documents after the accident which were described respectively as "health and safety policy", a "handbook diary" and a "health and safety handbook". The company also produced information in relation to induction procedures.

18 The company introduced a change to the manual governing operating procedures after the accident. An important aspect of the change introduced in that manual was that it prohibited the leaving of a "bad cook" in the cooker until the end of a run or until some later time and required it to be disposed of forthwith. The cooking report had the same effect. Further, Mr Carson submitted that there had been installed an additional isolation valve to deal with pressure considerations. The company had also introduced additional safety showers with a special design.

19 As to the absence of training, Mr Carson submitted that the operators had received training to carry out their duties. Facilitators were also trained. If operators had a problem, they could approach facilitators where difficulties arose. A facilitator could have been called in the present case, it was submitted, to deal with the problems that confronted Mr Husakovic and Mr Jovanovic. It was submitted that this was not a case where the company did not have a system in place or that there were no existing measures which could have avoided the accident occurring. Rather, it was a case where the system was insufficient to deal with the circumstances arising in relation to the accident because the company had not ensured that the system was fully and effectively put into operation by it's employees. The Court had made a number of findings that the system operated by the company had otherwise operated effectively.

20 The defendant referred to the various findings made by the Court at the trial contrary to the contentions of the prosecutor, including the finding of "not guilty" in relation to the charge that the defendant had failed to maintain plant so as to ensure the health and safety of employees at work. It was submitted that there was a proper maintenance system and that the circumstances which arose were not predictable.

21 Mr Carson submitted that there was no fault in the company's record keeping system as historical faults identified by the Court in its judgment of 19 October 1999 related to the failures in the record keeping system during the commissioning process. At this time an independent contractor was involved in carrying out tests and making adjustments as required.

22 As to the defence of the matter by the defendant, it was submitted that whilst a plea of guilty may lead to discount on sentence, the absence of a plea of guilty does not require the Court to impose a harsher sentence.

23 Further, as to mitigation, it was submitted that the defendant was a corporation of a considerable size that had been operating with a large number of employees for many years. The operations involved a substantial amount of machinery and in that context the record of the company was excellent. Furthermore, the company co-operated with the WorkCover Authority in its investigation of the matter.

24 The defendant submitted that s51A of the Act did not apply in the present case and further noted that the matter, with respect of timing, barely fell in the period in which the increase in the penalty for the offence had increased from $250,000 to $500,000.

25 As to the question of costs, Mr Carson opposed the application by the prosecutor for costs and submitted that each party should pay its own costs having regard to the dismissal of one of the charges and the findings made by the Court against various contentions made by the prosecutor in relation to the successful prosecution.

CONSIDERATION 26 The general principles to be applied in this matter are set out in my judgment in WorkCover Authority of NSW (Inspector Petar Ankucic) v McDonald's Australia Limited & another (unreported, Matter No. IRC 1104 and 1106 of 1998, 4 February 2000 at 87 - 98). I adopt the discussion of those principles for the purposes of this judgment. 27 The maximum penalty for an offence, in a general way, indicates the seriousness with which Parliament, representing the people, has viewed the offence and represents an appropriate starting point for the assessment of penalty: Director of Public Prosecutions (Cth) v Said Khador El Karhani (1990) 21 NSWLR 370 at 380. 28 The prosecutor and the defendant contended that the provisions of s51A of the Act do not apply to the present proceedings as there are no relevant prior convictions for the purposes of that section. They submitted that the maximum penalty prescribed for the offence was $500,000. 29 The submissions of the prosecutor and the defendant were not developed at any length in relation to this point and the material produced as being relevant to the question was not entirely satisfactory. However, on the evidence presented to the Court, it would appear that the provisions of s51A do not apply in the present matter. 30 Section 51A(1) is in the following terms: This section applies to proceedings for a second or subsequent offence against this Act which comprises a wilful repetition of the act or omission which constituted a previous offence. 31 I will firstly consider the prior convictions of the defendant under the Factories, Shops and Industries Act 1962. Section 51A(1) is confined to circumstances where a person has been previously convicted under the Act. Whilst the Factories, Shops and Industries Act 1962 is associated legislation to the Act (see s35), it does not relevantly fall within the words "this Act" for the purposes of s51A. If more were needed, this conclusion is confirmed by the terms of s32 of the Act, which provides that the Factories, Shops and Industries Act 1962 shall be observed "in addition to the provisions of [the] Act". The provisions of the Factories, Shops and Industries Act 1962 are thereby applied additionally to the provisions of the Act. By the operation of s33 the Act prevails over the provisions of the Factories, Shops and Industries Act 1962 which are inconsistent with the Act. 32 It appears that a prosecution was brought against the defendant under the Act but this charge was dismissed pursuant to s556A. No conviction was entered against the defendant. In these circumstances, s51A would not apply as its operation is restricted to a prior conviction for an offence. 33 In the circumstances I shall approach this matter as one in which the maximum penalty is $500,000. 34 It is appropriate to have regard firstly to the objective seriousness of the offence. 35 At the trial the defendant was found not guilty of the charge of failing to maintain plant, namely the rotary cookers, to ensure the health and safety of employees at work. The Court found that steam had been released at pressure into cooker number 4 but that the defendant could not be criticised for this occurrence. At the requisite standard of proof, the Court was not satisfied that the defendant had failed to adequately repair or maintain the plant. 36 The Court also rejected the allegation that it was unsafe to leave product within the cooker for five days in the circumstances of this case. 37 However, in the judgment of the Court of 19 October 1999 the culpability of the defendant was broadly described as follows: Thus, whilst the defendant cannot be criticised for the fact that the valve leaked steam into cooker number 4 nor, on the evidence, for the suggestion that it had been leaking and had not been repaired, the defendant was guilty of a failure to ensure that the operators checked the pressure gauges, including the trend screen, before attempting to remove the lid. 38 The Court did find that Mr Jovanovic had undertaken checks on the gauges in relation to cooker number 2 before discharging it, but had failed to do so with respect to cooker number 4. In the result the lid of pressure cooker number 4 was opened under pressure. The Court had also noted that operators, such as Mr Jovanovic and Mr Husakovic, had effectively worked without supervision and were encouraged to do so. Facilitators were engaged by the defendant, but these persons had little knowledge of the productive processes and were certainly not in a position to advise experienced operators. Specifically, it was noted that these persons were not supervisors. The operators had to act on their own resources and were instructed to do so. 39 The detriment to safety occasioned by, and the culpability of, the defendant were in these circumstances described as follows: I find that the duty under s15(1) translates in this case to a duty on the defendant to ensure that where the lid on a cooker has been secured so that any pressure within it cannot escape through the lid, then the lid should not be loosened or removed unless and until it has been ascertained that there is no pressure within by checking the gauges and the computer screen including the trend screen. This is an essential aspect of the duty to provide a safe system to remove spoiled product from the cookers which is at the heart of the summons in Matter No. IRC 4732 of 1997.

In my view, there is a causal connection between the failings identified in the conduct of the defendant and the risk thereby created to the safety of the two operators concerned. Messrs Jovanovic and Husakovic were responsible and sensible workers, as is evidenced by the fact that the defendant considered they should work unsupervised. I am satisfied that had they been adequately trained, instructed and warned to check the pressure gauges and the computer screens to ensure that there was zero pressure within the cooker before attempting to release the lid after a bad cook, they would have done so. It was not sufficient to rely upon any general instruction as to the checking of gauges, (which, in any event, did not include the checking of a trend screen) given years before the event to bring home to the operators the need for rigorous checking of pressures before opening lids, particularly in relation to bad cooks, where an expectation of the absence of pressure may exist. Had they carried out those checks they would have seen from the gauges and the computer screens that the cooker was pressurised. They would not, I believe, have then attempted to release the lid, but would have sought other means of reducing the pressure within the cooker. The accident would not have occurred. I hold, therefore, that the risk to safety was caused by the defendant's breaches of duty I have identified.

It is not for the Court to specify how the defendant's statutory duty could be fulfilled: see Drake at 36-37 and WorkCover Authority of NSW (Inspector Penfold) v Fernz Construction Materials Limited (unreported, Walton J, Vice-President, IRC3235 and 3236 of 1998, 3 May 1999); but better warnings, instructions and training of the operators were required in the instant case. The need to take such steps was, in my view, all the greater where the system of work employed by the defendant was not to supervise the operators on the combination line, but to rely on them to cope with problems and, in particular, to foresee and take precautions against the risks of the job: see Cullen at 218. It was necessary to actively and consistently convey to the operators the need to conduct such checks.

In any event, the mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s15 of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees. 40 This is a case therefore where there existed a known and perceived danger which was insufficiently controlled by the defendant. It is necessary for the defendant, in order to meet the requirements of the Act, to search for and identify all possible risks and institute safety measures to guard against those risks: McDonald's Australia Limited at 133. However, the existence of settled safety procedures and instructions is a factor which will mitigate the seriousness of the offence: Department of Mineral Resources of NSW (Inspector McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 25; Warman International v WorkCover Authority of NSW (1998) 80 IR 326 at 342. In this respect, I note that the defendant had established various safety procedures and instructions including a system of pressure gauges and procedures for the checking of these instruments. 41 It is also appropriate to have regard to the degree of foreseeability in assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence. The proper test of foreseeability and the standard of foreseeability is discussed in Kembla Coal & Coke (at 27). I adopt that reasoning for the purposes of this decision. 42 In my view, the risk of injury in this case was both known and foreseeable. This was the conclusion reached at the trial in the following extracts from the Court's judgment of 19 October 1999: The release of the lid on a cooker such as number 4 was hazardous. The cooker was built to contain product and steam at pressure. There was an obvious risk (with or without any previous incidents) of a violent expansion of product and/or steam in the event that the lid was loosened or removed whilst there was product and steam under pressure within. This was a reasonably foreseeable risk although it is not necessary for me so to find in relation to s15. It was incumbent upon the defendant therefore to ensure that the system for removal of the lid was safe. ... In this case, the accident was not, as Mr Carson sought to characterise it, a freak occurrence which cannot be explained and which arose in an unknown situation. The risk of valves leaking was both known and foreseeable. The possibility of steam leaking from a defective valve into a container charged with spoiled product and on which the lid was secured so containing the pressure was equally obvious. The possibility of an explosion thereby resulting was also known. These were dangers which the defendant could have, and should have, taken steps to address. 43 Furthermore, this is a case where simple and straightforward remedial steps could have been taken by the defendant to avoid the accident. This again is a matter relevant to the assessment of the seriousness of the offence: see WorkCover Authority of NSW v ACI Operations Pty Limited (unreported, Schmidt J, CT1025 of 1993, 25 February 1994). 44 In my view, simple measures were available to the defendant to avoid the risk occasioned to the employees of the defendant in this matter, namely the giving of better warnings, instructions and training as to the need to carry out checks before the opening of pressurised vessels and the use of all relevant pressure gauges. Further, the measures taken by the defendant after the accident also indicated the simple and straightforward steps which may have been taken by the defendants to prevent the accident: WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Matter No. CT1280 of 1995, 2 April 1997 at 21). These measures were described in the judgment of the trial as follows: Exhibit 11 contains a new procedure entitled "Cooker Lid Removal Procedure - Manual Operation". That document states at paragraph 1.6 that the cooker pressure must be checked both at the cooker pressure gauge and on the computer display "to establish that the cooker is no longer under pressure, i.e. the cooker gauge reads zero (0) and the [computer] display reads zero (0)". The procedure also requires that "at all times during this procedure the cooker shall be considered under pressure until proven otherwise". The document, in the description of the purpose of the procedure, stipulates that the procedure expressly applies to bad cooks. Additionally, a bad cook disposal and conditioning procedures were brought into existence.

The revisions were steps which demonstrably could have been taken in relation to bad cooks before the accident but were not. Instructions in relation to bad cooks could have been specifically conveyed to operators and appropriate training could have been supplied. However, even had that revision taken place prior to the accident and appropriate instructions and training issued, it would have been insufficient, in my view, to fulfil the duty on the defendant which I have identified. In view of the patent danger of opening, or partially opening, a cooker under pressure, as was so dramatically illustrated to Messrs Bannerman, Vanslambrouck and Zolnierczyk, the paramount importance of carrying out the pressure check, identified in the revised manual, should have been brought home to the operators much more forcefully than simply inserting it in a manual or giving an instruction as to the use of such a procedure. The operators were largely self-taught and self-supervised. The experience (or experiences) of Messrs Bannerman, Vanslambrouck and Zolnierczyk was never conveyed to Messrs Husakovic and Jovanovic, although they knew vaguely of an earlier incident. The risk that a cooker charged with product might be under pressure of boiling steam by reason of a phenomenon known to occur from time to time, namely a leaking valve, appears self-evident. 45 Before turning to the subjective features of this matter I note that whilst the defendant's record keeping system was not causative of the accident, it was, in my view, gravely deficient. There was not a reasonable system for recording faults and malfunctions and acting promptly upon them. 46 I have also concluded that both elements of general and specific deterrence should play a role in the determination of sentence in this case. As to the specific elements of deterrence, I have had regard to the fact that the defendant is a large enterprise involved in the operation of potentially dangerous equipment under pressure involving the injection of steam. There is a need to ensure that due diligence is paid by industry where existence of vessels or machinery under pressure are used to ensure that a sufficient level of diligence is undertaken in the instruction and training of employees in relation to the opening of such vessels or machinery. 47 I now turn to the subjective features of the offence. In addition to the discussion of general principles for sentencing in McDonald's Australia Limited, to which I have earlier referred, I note and adopt my discussion of the relevance of subjective features in the assessment of an appropriate sentence in Kembla Coal & Coke at 29-30. These are factors which will properly lead to a reduction in penalty. 48 In this case, I have had regard to the factors raised by Mr Carson in his submissions on penalty. In particular I have had regard to the measures introduced by the defendant after the accident to improve the safety mechanisms operating at the workplace, the prior record of the defendant and its co-operation with the WorkCover Authority. 49 Whilst the defendant has had some prior convictions under the Factories, Shops and Industries Act 1962, these penalties concerned relatively minor matters. Having regard to the size of the corporation, the number of employees and longevity of its operations, I consider that, in all the circumstances, I should treat this corporation as one which, in relative terms, should receive discount for good industrial citizenship. This is particularly so as the defendant has operated throughout this period in a hazardous field and where it is quite evident that the defendant has strived for the establishment of good safety procedures and continues to do so.

Penalty and Costs 50 I consider that the appropriate penalty with regard to the offence under s15 of the Act to be a fine of $60,000. I have had regard in assessing this penalty to those factors as earlier discussed which might reduce the objective seriousness of the offence as well as those factors in mitigation raised by the defendant, including the steps taken by it after the accident and its good industrial record. The prosecutor should have a moiety of the fine. 51 Having regard to the finding of not guilty of the defendant in Matter No. IRC 4733 of 1997 and further that a substantial number of the contentions raised by the prosecutor in Matter No. IRC 4732 of 1997 were ultimately not accepted by the Court, I consider that this is a case where, notwithstanding the conviction of the defendant and the imposition of a penalty, each party should pay its own costs. 52 I make orders as follows:

1. The defendant is fined an amount of $60,000 with a moiety thereof to the prosecutor.

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