WorkCover Authority of NSW (Insp Ankucic) v Capral Aluminium Limited - [2001] NSWIRComm 10 - NSWIRComm 1994 case summary — Zoe

NSWNSWIRComm

WorkCover Authority of NSW (Insp Ankucic) v Capral Aluminium Limited

[2001] NSWIRComm 10

Industrial Relations Commission (NSW)|1994-05-20|Before: Kavanagh J, Mr J

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Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1994-05-20

Before

Kavanagh J, Mr J

Source

Original judgment source is linked above.

Judgment (36 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : WorkCover Authority of NSW (Insp Ankucic) v Capral Aluminium Limited [2001] NSWIRComm 10 PROSECUTOR: PARTIES : WorkCover Authority of NSW (Insp Ankucic) DEFENDANT: Capral Aluminium Limited FILE NUMBER: IRC5288 of 1999 CORAM: Kavanagh J CATCHWORDS : s15(1) prosecution - breach a foreseeable risk to safety in the defendant's failure to maintain part of a plant which corroded and caused failure of a rubber seal - defendant in the design of equipment needs to eliminate recognised risks to safety - s51A consideration in mitigation as to corporate character of defendant, utilitarian value of the plea and consideration of revised procedures LEGISLATION CITED : Occupational Health and Safety Act 1983 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 Haynes v James Glass & Aluminium Pty Ltd (unreported, CT91/772-775, 20 May 1994) Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 CASES CITED : Tyler v Sydney Electricity (1993) 47 IR 1 SRA v WorkCover Authority of NSW (Insp Dubois) [2000] NSWIRComm 261 Capral Aluminium Ltd v WorkCover Authority of NSW (2000) 99 IR 29 R v Thomson, R v Houlton (2000) 49 NSWLR 383 HEARING DATES: 12/05/2000 DATE OF JUDGMENT: 03/08/2001

[6]

IRC5288 OF 1999 WORKCOVER AUTHORITY OF NSW (INSP ANKUCIC) v CAPRAL ALUMINIUM LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT (AS TO PENALTY) 1 This prosecution is under s 15(1) of the Occupational Health and Safety Act 1983. It is alleged by way of summons the defendant, Capral Aluminium Limited: . . . has breached Section 15(1) of the Occupational Health and Safety Act 1983 on 07 October 1997 at factory premises at Hart Road, Loxford in the State of New South Wales, in that being an employer, it failed to ensure the health, safety and welfare at work of all its employees, and in particular, Robert Bruce Mellon, in that it failed to maintain plant, to wit, a fluxing lance for use at furnace number 7, which was safe and without risks to health. In particular, it failed to maintain the Kamlock coupling and a rubber seal inside the Kamlock coupling of the fluxing lance in a safe working condition to ensure its employees were not at risk of injury. 2 Mr J.L. Trew QC with Mr J. Robinson appeared for the defendant and entered a plea of guilty to the charge. Mr M.P. Cahill appeared for the Prosecutor. This Judgment gives consideration as to penalty for the breach. 3 The following agreed statement of facts are relevant. The defendant: 3(a) Carried on the business of manufacturing aluminium at sites throughout New South Wales and Australia. b) Occupied factory premises at Hart Road, Loxford New South Wales ("the site"). c) Employed approximately 650 employees and was producing approximately 170,000 tonnes of aluminium per year at the site. d) Employed Robert Bruce Mellon, 42 years of age, as a Furnaceman (Operator) at the site. e) Owned and operated a furnace at the site known as 'Furnace number 7', which was one of 6 similar furnaces in the Defendant's Casting Department at the site. Each of these furnaces produced about 40-50 tonnes of aluminium per batch. Collectively these furnaces produced about 450 tonnes of aluminium per day. Of these furnaces, two commenced operations in 1969, two commenced in 1979 and the final two in 1985.

[26]

In response to an improvement notice served by Inspector Perkins of WorkCover requiring the Kamlock couplings to be replaced on a routine basis, the Defendant, as part of its continuing investigations into the Kamlock fittings, discovered that by reversing the fittings on the rubber tube and the fluxing tube, so the Kalmia coupling (female section) is attached to the rubber tube and the male portion is attached to the end of the fluxing tube, the wear on the rubber seals is significantly reduced. In any event, the male portion of the Kamlock coupling will be replaced each time the tube is replaced. Operators are still required to "inspect valves, hoses, slides and tubes on the furnace to be fluxed" in accordance with the Current Best Practice, which has not changed in that regard. 4 Evidence revealed the company had a system in place to regularly test and replace the rubber seals inside a Kamlock coupling. However, the evidence also revealed the seals were not regularly tested or replaced with any reliable regularity. As a result of this failure to regularly conduct checks the coupling, on the day of the accident, was in a very corrosive condition. Due to a failure of the rubber seal there was a significant release of gas. Mr Mellon, an employee, was thereby exposed to and inhaled chlorine gas. Mr Mellon suffered injury as a consequence of the exposure. 5 Evidence further revealed the company was aware of the corrosion problem and the seal failure and had over a number of years tested different seals including the design of a teflon seal. Each adjustment tried was found to be rigid and difficult to install. Other styles of Kamlock couplings were also tried in an endeavour to limit the failure rate of the seals. Upgraded inspections of the valves, hoses, slides and tubes were recommended but not always complied with. 6 In assessing the gravity of this offence, the court takes into its consideration the defendant was aware of the need to maintain the Kamlock coupling. The defendant was further aware that the rubber seal inside the coupling required regular replacement due to predictable corrosion and failure. Prior to the incident the defendant relied on its employees to identify leaks from the rubber seal. It has now instituted a preventative maintenance and seal replacement programme and regular inspections as an obligation. 7 In assessing the gravity of this offence a Full Bench said in the matter of Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 (at 474) commented: . . ., in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH & S Act, this proposition has often been expressed by saying that the 'true measure of penalty lies in the nature and quality of the offence'.

[29]

And also (at 476): In the case of an offence under s 15(1) of the OH & S Act, there are a number of factors which may tend to establish the existence of an objectively serious offence. It will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible: see Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9. The gravity of the consequences of an accident does not, of itself, dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant; see Tyler v Sydney Electricity (1993) 47 IR 1 at 5. 8 In the present case there are a number of objective features which are called into account in assessing the gravity of this offence. The above analysis of the worksite operation reveals there was a forseeability element to this breach of the Act and the words of Walton J, Vice President become relevant. In Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 said (at 27): Whilst the reasonable forseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng ), the degree of foreseeability is a significant factor to be taken into account when 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: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and The University of Sydney (at 16). 9 In assessing the objective seriousness of this offence and the foreseeable risk to the safety of workers the following matters become relevant. The defendant knew the rubber seal had a limited life span, the defendant experimented with alternative materials but returned to rubber seals because alternative materials proved to be even less reliable; the defendant did not introduce a systematic replacement of the rubber seals while knowing of their regular failure; the defendant relied upon its employees to identify a failure in the seal before requiring it to be replaced. It is relevant to note the words of the shift maintenance fitter, Mr Ross Boughton who inspected and replaced the fitting after the event. He said: . . . the fitting was one of the worst I had ever seen, it was badly corroded and was covered in green residue. . . . In my experience with these fittings the rubber seals and the two wings are always a problem. The seals last only a matters (sic) of a few days. 10 Evidence further revealed the defendant was able to redesign the application of the rubber seal to the coupling and introduce a systematic preventative maintenance system after the accident. It is noted since this new system has been introduced there has been no further gas leaks. In assessing the gravity of this offence what is revealed is that a simple proactive procedure would have obviated a major risk of injury. Since the accident greater endeavours have been made. The company has reversed the fittings on the rubber tubes and the fluxing tubes so the Kalmia couplings (the female section) is attached to the rubber tube and the male operation is attached to the end of the fluxing tube. This leads to the wear on the rubber seals being significantly reduced. Further, the male portion of the Kamlock coupling is now replaced each time the tube is replaced. There is a reliable and routine inspection of the coupling now undertaken. This inspection is insisted upon. 11 At the time of the accident the defendant had in place to ensure safety at the worksite a detailed procedure known as a Current Best Practice ("CBP") for work being performed. The CBP was regularly updated. Had the CBP been followed by Mr Mellon, the company submits, he would not have sustained any injuries at all. The company submits it is not appropriate for the court to use Mr Mellon's injuries as a gauge of the seriousness of the offence as the company had other measures in place which, had they been followed by Mr Mellon, would have mitigated against the seriousness of the offence. However, as was said in Tyler v Sydney Electricity (1993) 47 IR 1 (at 5): The gravity of the damage or injury actually resulting from breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from breach and its foreseeability are clearly relevant as are the measure of gravity of the breach itself and the measure of culpability.

[31]

The Full Bench also make a statement this court finds relevant to the facts before it: 25 . . . inattention or mere inadvertence of an employee serves to show only the need for an employer to be astute in ensuring safety and in meeting all reasonable contingencies: see WorkCover Authority of New South Wales (Inspector Chadwick) v BHP Steel (AIS) Pty Ltd (2000) 98 IR 122 at p 135 per Hungerford J. Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (unreported, CT94/1037, 13 April 1995) correctly and forcefully emphasised (at p 18) that "the Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry". 12 I find this a serious offence. I find in the circumstances of this incident there was a reasonably foreseeable risk to the safety of the workers at Capral, Kurri Kurri which risk was likely to and did result in injury to a worker. 13 The penalty at the time of this offence under s15(1) was $550,000. However, the provisions of s51A of the Act come into effect as the defendant has prior convictions, some 30 in all, of which 20 are recorded as breaches of s15(1) of the Act: Capral Aluminium Ltd v WorkCover Authority of NSW (1999-2000) 99 IR 29. One of the offences attracted a very significant penalty and that offence was committed on 11 March 1997 prior to this offence at the same site at Kurri Kurri. The maximum penalty under s51A for a further offence is $275,000. The maximum penalty for this offence is therefore $825,000. 14 In these circumstances, an overview of the defendant's operations becomes relevant to the consideration as to penalty. The defendant commenced operations in Australia in 1936. Relevantly it operates 13 sites throughout New South Wales. It is to be properly classified as a large employer in a heavy industry operation. It employs 1585 workers in New South Wales and the site at which this accident occurred, Kurri Kurri, employs 690 workers. The Kurri Kurri smelter commenced operations in 1969. It operates as a completely separate business unit within the corporate group that is Capral and has its own distinct management team. It now produces 170,000 tonnes of aluminium per year. 15 The Kurri Kurri smelter independently had a structure in place entitled "The International Safety Rating System". This system is recognised as an efficient safety and loss control programme. It involves training at management and leadership level, site audits and regular review of company procedures and manuals. Evidence revealed the manual has been reviewed since the incident. These policies and procedures are task related and it is to be recognised that there are approximately 400 different task related procedures. There are both divisional safety committees and safety co-ordinators for each division. Across the site, since the accident in 1998, Capral participated in a WorkCover audit which led to a series of safety recommendations all of which had been implemented. 16 The company after the incident recognised immediately its breach of the Act. It has expressed its concern as to the breach and in accordance with the procedures adopted by the Authority in relation to Government bodies and statutory corporations under the Premier's guideline, it proactively approached WorkCover, prior to commencement of the prosecution, to simplify the conduct of the prosecution. In response, a proposed Statement of Facts was agreed to and within two weeks of the first mention of the matter before this court, Capral entered a plea of guilty to the charge. This matter was able to be set down for hearing speedily after the summons was issued. This is a reflection of the co-operation Capral provided. I find the court may assess this as an early plea of guilty. 17 In assessing the value of the discount to be granted in respect of this early plea of guilty, the Court applies the approach evidenced in the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton (2000) NSWLR 383 where Spigelman J, Chief Justice endorsed the application of a discount in consideration of a plea of guilty saying (at 418): 152 In my opinion, the appropriate range for a discount is from 10-25 percent.

[35]

And as to the application of that reasoning under the heading "Guideline" the Court of Appeal held (at 383): The following guideline is adopted: (a) A sentencing judge should explicitly state that a plea of guilty has been taken into account. Failure to do so will generally be taken to indicate that the plea was not given weight. (b) Sentencing judges are encouraged to quantify the effect of the plea on the sentence insofar as they believe it appropriate to do so. This effect can encompass any or all of the matters to which the plea may be relevant - contrition, witness vulnerability and utilitarian value - but particular encouragement is given to the quantification of the last mentioned matter. Where other matters are regarded as appropriate to be quantified in a particular case, e.g. assistance to authorities, a single combined quantification will often be appropriate. (c) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 percent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge. (c) In some cases the plea, in combination with other relevant factors, will change the nature of the sentence imposed. In some cases a plea will not lead to any discount. 18 In assessing the value of the co-operation with the investigating authorities the court has regard also to the degree of assistance provided by the defendant (R v Cartright (1989) 17 NSW LR 243; R v Gallagher (1991) 22 NSWLR 220). The court finds the defendant is entitled to a discount with respect to the co-operation it provided the WorkCover Authority both in its investigation, its plea of guilty and its co-operation in the filing speedily of an agreed Statement of Facts. I find the plea was entered at the earliest possible time and reflects contrition on the part of the defendant (Winchester (1992) 50 A Crim R 345 at 350, Hunt CJ at Common Law). I take into account in mitigation the early plea of guilty and allow a discount of 22% on penalty. 19 Also placed before the court for consideration in mitigation of penalty was the corporate character of the defendant company. The defendant corporation sponsors community projects and contributes significantly to community life through research projects, support for wheelchair athletes and the Paralympics and the support for bush fire appeal in the local region. The defendant's good standing as a corporate citizen is not challenged although one notes the unsatisfactory industrial record of the company: WorkCover Authority of NSW (Insp Ankucic) v McDonald's Australia Limited & Anor (1999) 95 IR 383 at 454). 20 The extensive steps taken by the defendant corporation to ensure no recurrence of this breach I find reveals now a real commitment to Occupational Health and Safety. There is by way of corporate planning, identified safety procedures and task-specific identification of risks to safety. There has been a significant endeavour to refine the safety procedures related to this task and a demonstrated effectiveness of the amended procedure. 21 However, the evidence has revealed a very serious breach of the Act and as a corporation the defendant has recorded a number of breaches against it under the same section of the Act - the most significant occurring at this site. The court is obliged under the Act to consider the maximum penalty as $825,000 because of prior convictions under s51A of the Act. In making the assessment as to penalty the court takes into account the other mitigating elements placed before the court, the utilitarian value of the plea as well as the refined site-related amendments to the workplace procedures and the general up-grading of site safety. 22 The court takes all of these matters into account. I find the defendant guilty. I fine the defendant the sum of $200,000 with a moiety to the WorkCover Authority. The defendant to pay the prosecutor's costs as agreed or assessed.