WorkCover Authority of NSW (Insp Mauger) v Ridge Consolidated Pty Ltd

HEARING DATES: 12/06/2000 DATE OF JUDGMENT: 03/08/2001

PROSECUTOR: Mr P.M. Skinner of counsel Solicitors: Mr G.M. Phillips Carroll & O'Dea LEGAL REPRESENTATIVES: DEFENDANT: Mr F.C. Corsaro SC Solicitors: Mr E.D. Crennan Colin Biggers & Paisley

JUDGMENT: - 17 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date: Thursday 8 March 2001 IRC1311 of 1999 WORKCOVER AUTHORITY OF NSW (INSP MAUGER) v RIDGE CONSOLIDATED PTY LTD Prosecution under s 16(1) of the Occupational Health and Safety Act 1983 JUDGMENT (As to penalty) 1 This is a prosecution under s 16(1) of the Occupational Health and Safety Act 1983. The summons pleads the defendant company, Ridge Consolidated Pty Ltd (Ridge Consolidated): . . . . being an employer, on 24 March, 1997 at the site of the construction of additional carriageway lanes to the M4 Motorway, at a place about 700 metres west of Church Street, Parramatta DID FAIL to ensure that persons not in its employment and in particular Pietro Panebianco, were not exposed to risks to their health or safety arising from the conduct of its undertaking while they were at its place of work contrary to section 16(1) of the Occupational Health & Safety Act, 1983. 2 The particulars as to the breach that were supplied by the Prosecutor to the defendant were as follows: 1. The Defendant failed to instruct Mr Panebianco that he was not to work near to or in the vicinity of gaps in the concrete protection barrier. 2. The Defendant failed to prevent persons and, in particular, Mr Panebianco from working within three (3) metres of traffic travelling at speeds up to and in excess of 60 kph without providing a physical barrier. 3. The Defendant failed to supervise persons and, in particular, Mr Panebianco so as to ensure that no person did not carry out work near to or in the vicinity of the gaps or entry points in the concrete protection barrier. 4. The Defendant failed to ensure SWR provided protection barriers to isolate the area where the work was to be carried out prior to the work commencing. 5. The Defendant failed to relocate work so that persons and, in particular, Mr Panebianco were not working in the proximity of the known gaps or entry points to the contract protection barrier. 6. The Defendant failed to implement a system whereby as work progressed towards one of the known gaps or entry points in the concrete protection barrier, that gap or entry point was relocated away from construction work that was being undertaking and in so failing to prevent persons from working in areas where there was a risk to health and safety. 7. The Defendant failed to request the erection by SWR of suitable protection barriers inside the construction site so as to protect workers from being struck by motor vehicles entering work areas through one of the gaps or entry points. 8. The Defendant failed to ensure that all persons and, in particular, Mr Panebianco had undertaken the site induction process prior to commencing work. 3 The defendant represented by Mr F.C. Corsaro SC entered a plea of guilty to the charge. The prosecution was represented by Mr P.M. Skinner. 4 There is an agreed statement of facts as to the breach which relevantly reads: 6. The site was alongside the eastbound carriageway of the M4 Motorway, where two lanes remained open and carried a heavy motor vehicle traffic. 7. The site was separated from the open eastbound carriageways of the M4 Motorway by a barrier formed by movable concrete barriers. There were gaps in the said barrier at intervals along its length to enable access from time to time for plant and machinery required on the site. 8. SWR had placed the concrete barrier in position and was responsible for the placement and positioning of the concrete barriers. The placement was determined by SWR for its own purposes and in consultation with all of its subcontractors including the defendant for the purposes of access of its subcontractors. 9. The defendant subcontracted with Hitex Concrete Pty Limited ('Hitex') in relation to concreting work required to be done on the site pursuant to the SWR contract. 10. Pursuant to the Hitex subcontract, on 27 March 1997 Hitex had employees on the site subject to the direction and control of the defendant. Those employees of Hitex included Eddie Lombardo, Gerardo Mediati, Drazen Varga and Pietro Panebianco. 11. SWR gave directions to Ridge about work areas. The employees of Hitex received directions on the site concerning work areas from the defendant's site supervisor, Garrick Maybury. 12. As at 24 March 1997 Pietro Panebianco had been on the site previously working for a couple of days. He was a day labourer supplied from time to time by Hitex, through its foreman Eddie Lombardo when requested to do so by the defendant. On the 23 March 1997 Garrick Maybury had contacted Eddie Lombardo and requested the provision of two day labourers for the next day. 13. On 24 March 1997 Pietro Panebianco was directed to do concrete patching by Garrick Maybury to the northern kerb of the existing eastern carriageway adjacent to the site. 14. Pietro Panebianco proceeded to carry out work adjacent to one of the known gaps in the concrete barrier, approximately 700 metres east of Church Street Parramatta ("the gap"). 15. At or about the time that Pietro Panebianco was carrying out that concrete patching work Drazen Varga and Gerardo Mediati were also on the site in the vicinity of the gap. 16. On 24 March 1997 Pietro Panebianco and Drazen Varga worked within 3 metres of the motor vehicle traffic in the carriage way lane adjacent to the gap. The said traffic was travelling at speeds subject to a 60kph limit. 17. At about 10.50 a.m. on 24 March 1997 Pietro Panebianco was struck and killed by a motor vehicle that entered the site through the gap. 18. The driver of the motor vehicle was under the influence of an intoxicating drug and was driving dangerously. He was charged and convicted of one count of 'Dangerous driving occasioning death' under s 52A of the Crimes Act 1900. . . . 20. The Defendant failed to prevent persons and, in particular, Pietro Panebianco from working adjacent to traffic travelling at speeds up to 60 kph without ensuring that SWR provided a physical barrier at all times. 21. The Defendant failed to supervise persons and, in particular, Pietro Panebianco so as to ensure that no person did not carry out work near to or in the vicinity of the gaps or entry points in the concrete protection barrier. 22. The Defendant failed to ensure that all persons and, in particular, Pietro Panebianco had undertaken the site induction process prior to commencing work. 5 The particulars pleaded against the defendant fall into three specific areas in relation to the breach, namely, the defendant failed to ensure there were in place suitable physical barriers to protect the workers on its site; it failed to supervise workers at its site to ensure they did not carry out work near gaps or entry points in the concrete protection barriers that were provided and it failed to ensure workers on the site had undertaken a site safety induction programme. 6 The offence pleaded under s16(1) of the Act is a single offence. As the Full Bench recently commented in Mainbrace Constructions Pty Ltd v WorkCover Authority of NSW (Insp Charles) [2000] NSWIRComm239 (published 7 December 2000) (at para 12): 12. In Inspector Page v Woolworths Ltd (unreported, CT93/1044, 9 September 1994), Peterson J, correctly in our view, identified four elements the prosecution needs to prove beyond reasonable doubt in order to establish an offence under s 16(1). These we paraphrase as follows: 1. the defendant was an employer; 2. there were persons not employees exposed to risks to their health or safety; 3. the risk arose from the conduct of the defendant's undertaking; and 4. the exposure to risk was at the defendant's place of work. 7 Each element is admitted by the defendant. 8 In considering the gravity, that is the objective seriousness of this offence, the court is guided by the words enunciated by a Full Bench in Lawrence Diecasting 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'.

and the Full Bench said (at 474): It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence.

The Full Bench cited with approval the passage from the judgment of Fisher CJ in Haynes v James Glass & Aluminium Pty Ltd (unreported, CT91/772-775, 20 May 1994) where his Honour said (at 474): . . . While previous good industrial citizenship and the absence of prior convictions are proper considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce. The Full Bench notes (at 476): . . . the proper approach is to first consider the gravity of the offence viewed objectively. 9 The gravity of this offence must be considered in the context of the task at hand and the absolute obligation placed on the defendant under the Act. However, the nature of the offence requires an examination. This defendant played a part in what was a complex set of agreements entered into by a number of companies to extend the M4 motorway. 10 The State Government, through the Roads and Traffic Authority called for tenders to complete an extension of the M4 motorway by way of an additional lane. SWR was the successful tenderer for building an extension to the M4 motorway. A company related to SWR, SWR Constructors, was prosecuted as the main contractor on site. A judgment of this Court in WorkCover Authority of NSW (Insp Mauger) v SWR Constructors Pty Ltd [2000] NSWIRComm115 published on 25 July 2000 found it was not proven that the named company in the prosecution had any employees and the prosecutor's case was dismissed. 11 Evidence from the transcript of that matter which was tendered in these proceedings reveals SWR was a conglomerate company with many subsidiary companies. Through one such company SWR employed a number of supervisors on the site. SWR then sub-contracted out to Ridge Consolidated, the defendant company, the concrete construction work required for the roadway extension. Ridge Consolidated then sub-contracted out the concrete work to a company called Hitex. Hitex has now gone into liquidation. Ridge Consolidated also had only a supervisor on site. The two major companies on site therefore had only supervisors on site on a daily basis. 12 SWR had a Site Safety Plan which was adopted and then adapted by each company. The various particular responsibilities for site safety however were disbursed by agreements between the parties. However, they cannot dispense with their absolute obligation as employers on the site under the Act. SWR provided the safety barriers but the concrete company, Hitex, had to induct and train the workers in site safety. Ridge Consolidated assumed responsibility for checking that workers who came on site were trained. The evidence revealed Hitex used mainly day labourers and so the training was not always adhered to. 13 On the day of the accident Ridge Consolidated had arranged through Hitex for Mr Panebianco, the deceased, to work as a day labourer employed by Hitex on the site under the direction of Ridge Consolidated. 14 Modern industrial trends are such that what has been revealed in this complex arrangement of sub-contracts is a complete avoidance of responsibility for site safety notwithstanding the absolute obligation that the Act places on each of these employers. Ridge Consolidated to their credit, come before the court to face their responsibilities and obligations for the lack of industrial safety on this site. But an examination of the contractual arrangements reveals SWR had a Site Safety Plan which it handed down to the various sub-contractors. SWR viewed itself responsible for the placing of the safety barriers. As each sub-contract was entered into, some of the responsibilities for the site safety were passed down the line. 15 On the day of the accident, Hitex was responsible for training the day labourer and did not. Ridge Consolidated, who had to check Mr Panebianco was inducted into site safety, did not. 16 Mr Panebianco was not trained. The defendant company did not check on the day whether he was or was not trained as he entered the site. Ridge Consolidated also did not question the placement of the concrete barriers which provided no protection to the site where it required Mr Panebianco to work. It failed to ensure Mr Panebianco did not work within an area without risk to his safety. 17 The absolute obligation under s16(1) of the Act is to ensure any worker on a site within the defendant's control is provided with safe working and is not exposed to any risk to health and safety. The labyrinth of sub-contracts and the passing over of various responsibilities for site safety, while adopting documentation in support of safe working, in reality ensured no contractor felt the full burden of the absolute obligation imposed on them by the legislature as employers on the site. This was a related State Government contract. It must view this aberration with some concern. 18 This court is left grappling with the terrible consequences of this type of contractual arrangement. As was said in Swift Placements Pty Limited v WorkCover Authority of New South Wales (Louise May) (1999-2000) 96 IR 69 by a Full Bench in viewing a workplace relationship where the worker performed his duties on a Warman site but his labour was supplied by a personnel agency, Swift Placements (at 89): . . . The relationship is to be viewed, in our opinion, in light of contemporary employment practices by applying the established legal principles and tests but recognising the variety of different employment situations which have arisen in modern Australian society. At first instance in this case, Marks J. recognised as much, in a way with which we agree, when he said that "this is not a traditional employment situation" but was "a contemporary situation now not uncommonly encountered within the business world" so that "new and evolving techniques require the law to continually evaluate its approach to the characterisation of relationships and rights and obligations which may flow from them". 19 The characterisation of the obligation on this defendant was to ensure a workplace site was devoid of any risk to the safety of this employee. This obligation under the Act was not met. 20 The most serious of consequences of sub-contracting out work and using day labour placements have been revealed through this prosecution. The obligation on employers under the Act is absolute. It must be ensured that corporate responsibility for site safety is not so dispersed through sub-contracts as to deflect employers from their awareness and obligations to protect workers at their worksite from a risk to their health or safety. 21 The defendant company, Ridge Consolidated had an $8 million contract but had on site only two workers and only one of which was on the site on a permanent basis. The permanent worker on the site of the defendant company was a site supervisor, Mr Garrick Maybury. The deceased, while directed by the defendant company, was employed by Hitex. A check was sometimes performed by Mr Maybury to ensure Hitex workers had been inducted into the accepted Site Safety Plan. However, it is agreed that the deceased, Mr Panebianco had not been inducted into the site safety procedures by Hitex and Mr Maybury had not checked on that day to ensure that Mr Panebianco had been trained. 22 An examination of the relevant Site Safety Plan revealed it provided the workers with first-aid information; site layout and traffic control plans; the workings of a safety co-ordination committee; risk management procedures such as reporting hazards; procedures for reporting of accident injury incidents; the prohibition on trucks and alcohol and environmental responsibilities. Each worker who had undergone such site safety induction was required by Hitex to sign an agreement acknowledging they had been made aware of the requirements of the traffic control plan and that they agreed to abide by safety and environmental plans and instructions. Relevantly, in Ridge Consolidated's Occupational Health and Safety Plan it was specified: All personnel to wear appropriate safety clothing and work behind the installed concrete barriers.

However, Mr Panebianco was not trained in the Plan. 23 Mr Panebianco was performing concrete patching work beside one of the known gaps in the concrete barrier fence when Mr Stephen Lawrence Wells, drugged and under the influence of alcohol, drove his car right across two lanes of the road and through the gap in the concrete barrier, striking Mr Panebianco while he was working. He suffered fatal injuries. Mr Panebianco was not properly supervised given he was working near the gap. He was not satisfactorily protected. He was not inducted into any safety procedures. He was not properly trained. He was exposed to serious risk of injury by this employer at its place of work. 24 I find this a serious offence. 25 A number of subjective elements to the breach were placed before the court in consideration as to penalty. The prosecution reveals the maximum penalty at the time of this offence was $500,000. Ridge Consolidated has no prior convictions. The director of Ridge Consolidated, Mr Backhouse gave evidence. The company is a small family company headed by Mr Backhouse, a director. The company's assets and liabilities are shared between himself and four children. The company operates a concrete supply business. Mr Backhouse reveals his company performs all its work through a day labour programme. He had two contracts with SWR, one to the value of $7 million and the other to the value of $1 million on this site. He reveals his tenders have an expectation as to profit of one third of the value of the project. He sub-contracts out much of his work taking out his profit margin. 26 The financial returns of the company were placed before the court. The company in the half year July 1999 to December 1999 show a trading income of $20.4 million and a gross profit from trading of $1.2 million. Its operating profit in that half year was expected to be $500,000. This is a company of some substance. 27 Mr Backhouse revealed the nature of the company. Before this accident, the company had tendered for the concrete work only on country roads. He was approached by SWR to tender for this contract having worked with them on country roads. Arising from this accident he chooses no longer to work in the city environment and is now operating the company solely in the construction of country roads. 28 Mr Backhouse, to the court, expressed his personal regret at the suffering the accident has caused and acknowledged the site safety procedure in place was not followed on the day of the accident. The company submits that while it instructed workers not to work in gaps, it concedes Mr Panebianco was not properly instructed nor supervised and the company did not ensure the appropriate safety barrier was provided. It is agreed the gaps are required in order to give site access for the delivery of construction materials. 29 Another element of the offence must be given consideration. One could not predict the erratic behaviour of the driver of the vehicle. However, it is the responsibility of an employer to ensure workers on its work site are not exposed to any risk to their safety. An employer has an obligation to ensure that it protects workers from even such erratic behaviour. 30 The Full Bench reiterated this principle in SRA v WorkCover Authority of NSW (Insp Dubois) [2000] NSWIRComm261 saying: 23. It is apt while considering the nature of the obligation cast on an employer to maintain a safe workplace to repeat the words of Hill J, with which we agree, in WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 at p 85, that is : This case is yet another illustration of the need for employers to exercise abundant caution, maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. It is essential that the approach should be a pro-active and not a re-active one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time in the workplace. 31 Counsel for the defendant submits that because Ridge Consolidated is the only company that can meet its obligations under the Act from the several companies represented at the worksite, the court should not allow this company to carry the full burden of this accident. That is not a persuasive argument before the court. The court must look at the objective seriousness of the offence, that is, the gravity of the offence, by this defendant in the context of the absolute obligation of the defendant to provide a safe work site with no risk to health or safety and only then assess the mitigation as to penalty that the subjective elements of the offence attract. 32 The court accepts there was in place a Site Safety Plan even though many of the responsibilities for it were, in reality, dispersed amongst sub-contractors. The company co-operated with the WorkCover Authority in providing an agreed statement of facts and the matter was quickly listed for the plea. Recently the New South Wales Court of Criminal Appeal published a guideline judgment in R v Thomson; R v Houlton (2000) NSWLR 383 in relation to the consideration a court should give to pleas of guilty entered by a defendant. The judgment calls for a discount range in consideration of the utilitarian value of a plea of guilty. 33 The defendant makes application for consideration as to a discount for the utilitarian value of its plea in accordance with the principles as enunciated by Spigelman CJ in Thomson's Case (at 418): 153 The determination of where, within such a range, the discount should fall in a particular case is a matter for the discretion of the sentencing judge.

154 There are however two circumstances which will generally affect the appropriate level of discount in a particular case: (i) The time at which a plea is entered. A plea entered at committal has a more significant utilitarian benefit than a plea entered at first listing, which in turn has the greater benefit than a plea entered at the beginning of trial.

(ii) The complexity of the issues about which evidence will have to be gathered and adduced affects the value of the plea. The greater the difficulty of assembling the relevant evidence and the greater the length and complexity of the trial, the greater the utilitarian value of a plea. 155 The top of the range would be expected to be restricted to pleas at the earliest possible opportunity and should not be given, save in an exceptional case, after a matter has been set down for trial. A discount towards the bottom of the range is appropriate for late pleas, e.g. on the date fixed for trial, unless there are particular benefits arising from the prospective length and complexity of the trial. 34 The guideline adopted by the Court of Criminal Appeal was as follows (at 383): (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. (d) 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. 35 I find there should be some consideration as to the utilitarian value of the plea entered. The history of the litigation of this prosecution should be recorded. The summons was filed on 6 May 1999. As to the validity of the summons the court heard a Notice of Motion brought by the defendant that the summons be dismissed as it was not issued in accordance with the provisions of the Act. The court determined to hear the Notice of Motion as an interlocutory matter. Argument was heard and a Judgment of this court of 23 February 2000 was published. It was appealed to the Full Bench. The Full Bench upheld generally the Appeal as to jurisdiction giving validity to the form of the summons issued under the Act. The appeal was Dismissed with Reasons on 18 August 2000. The plea of guilty was not entered until after the Appeal judgment and the matter came on for hearing on 6 December 2000. However, notification was given to the court by the defendant at a mention on 18 October 2000 that a plea would be entered when the matter was listed for hearing on 6 December 2000. 36 In all of the circumstances, the court allows a discount for the utilitarian value of the plea entered after appeal and I allow a 10% discount on penalty. 37 In consideration of the subjective elements of this offence, I take into account the reputation of the company as a good corporate citizen and the expressed contrition of Mr Backhouse on behalf of the company who acknowledged the gravity of the offence both in the plea of guilty and personally. The further refinement of safety procedures made by the company under the guidance of the WorkCover Authority is noted. A document reflecting the WorkCover assistance has been placed before the court entitled "Ridge Consolidated Safety Handbook" which, while a general handbook, is supported on various sites, by further documentation directed to site specific safety procedures. Accordingly, I allow a further discount to reflect the other subjective features related to the breach placed before the court. 38 I find the defendant guilty. I fine the defendant in the sum of $110,000 with a moiety to the WorkCover Authority. The defendant shall pay the prosecutor's costs as agreed or assessed.

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