WorkCover Authority of NSW (Insp Vierow) v Transfield Pty Ltd

PROSECUTOR Ms Backman of Counsel

AGENT WorkCover Authority of New South Wales SYDNEY LEGAL REPRESENTATIVES: DEFENDANT Mr B D Hodgkinson SC

SOLICITOR Carroll & O'Dea SYDNEY

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Prosecution under s.15(1) of the Occupational Health and Safety Act 1983

Prosecution under s.15(1) of the Occupational Health and Safety Act 1983 JUDGMENT

1 These matters concern prosecutions brought by Inspector Vierow as the representative of the WorkCover Authority of New South Wales against the defendant, Transfield Pty Limited in respect of two breaches of section 15(1) of the Occupational Health and Safety Act 1983 ("the Act") arising out of work at the Northside Storage Tunnel at Bluefish Road, Manly. In each matter the defendant has pleaded guilty.

2 The matters were heard together by consent. I will summarise some of the common, general facts taken from an agreed statement of facts tendered in each matter and then deal with the particular facts relating to each charge separately.

3 The authority of the inspector to prosecute and the incorporation of the defendant were admitted.

4 The defendant was a participant in an alliance with Sydney Water Corporation, Montgomery Watson Australia Pty Limited and Connell Wagner Pty Limited to construct the Northside Storage Tunnel. The defendant was engaged in construction work associated with that project at the Manly site.

5 The defendant has prior convictions in respect of breaches of section 15(1) of the Act, the last two of which involved the impositions of fines of $12,500 by the Chief Industrial Magistrate on the 16 November 1998 and $130,000 by this Court on 8 November 2000.

Matter IRC 4860 of 2000: The particular facts relating to this matter are as follows: At all material times the defendant employed a number of personnel at the said site including John Wright, 22 years of age, as a miner/tunneller.

At all material times the defendant owned plant to wit a ventilation pipeline known as a Ventcan at the said site.

At all material times the defendant owned an Alpine AM 105 Roadheader.

The defendant had been engaged by the Sydney Water Corporation to carry out the said construction work at the said site.

On 11 June 1999, John Wright received injuries to his back and to his leg when he was struck by a falling section of the ventilation pipeline (Ventcan) at the said site.

John Wright had been employed by Transfield Pty Ltd, at the said site, since August 1998.

On 11 June 1999 the crew that he was working with was operating an Alpine AM 105 Roadheader to excavate a tunnel. The crew had excavated a section of the tunnel and needed to trim the lower level of the tunnel to complete it.

It was discovered that the Ventcan, (the Ventilation line in the said tunnel), was too low and would be damaged by the Roadheader if it was not lifted and secured out of the way.

The Ventcan consisted of a metal conduit which was 1200 millimetres in diameter, 6 metres in length and was secured to the tunnel roof by a length of 6 metre commercial chain. Each section of the Ventcan was secured to the next section by bolted metal plates. Any air leaks were sealed by duct tape. This was done to block any air leaks that would compromise the ventilation of the tunnel.

In order to raise the Ventcan it was decided to use the cutter head of the Roadheader and the bucket of an excavator to lift and support the Ventcan while the chains were shortened and the ends of each section of the Ventcan were resecured.

On the said date, one section of the Ventcan had been lifted and secured. That section of the tunnel had then been trimmed. The Roadheader then lifted the next section and the crew shortened the chain. While two of the work crew were rebolting the plates to secure the ends, John Wright and Martin Harvey, Supervisor, noticed some unsecured duct tape at a joint. They believed it would cause a problem with the ventilation. John Wright pulled the tape from the Ventcan out of the way. He took two steps back when the Ventcan fell, hitting him across the back of the shoulder blades. The Ventcan hit the apron of the Roadheader at a distance of approximately half to 1 metre from him.

John Wright was assessed at the scene before being transported to the surface where he was assessed and then transported by Transfield "Troop Carrier" to Manly Hospital. He was there assessed by a Doctor Holt who found him to have suffered spinal injuries.

Investigations by the informant revealed the following:

(a) John Wright was not aware of any work method statement in relation to the relocation of the Ventcan line.

(b) The defendant did not devise a safe system to lift the 1200 millimetre Ventcan. Workers had talked amongst themselves as to how they would do it.

(c) The Roadheader had previously been used to lift 600 millimetre Ventcans.

(d) The Supervisor, Martin Harvey, had decided to use the Roadheader cutting head to lift the 1200 millimetre Ventcan on the said date.

(e) A report was prepared, by Management, in relation to the accident. The report stated that the weight of the mud within the Ventcan had been the cause of the chain failure.

(f) Lack of maintenance to the Ventcan line allowed a build up of mud in the line. This caused an excess of weight to be placed on the support chain.

It is alleged that the defendant, TRANSFIELD PTY LTD [ACN: 000 854 688] on the 11 June 1999, at the Northside Storage Tunnel, at Blue Fish (sic) Road, Manly in the State of New South Wales, did breach Section 15(1) of the Occupational Health & Safety Act, 1983, in that, being an employer, it failed to ensure the health, safety and welfare at work of all its employees, in particular John Wright, in that:

(a) The defendant failed to provide or maintain systems of work for undertaking tunnel excavation work involving the relocation of a ventilation pipeline known as a "Ventcan".

(b) The defendant failed to maintain plant, to wit a ventilation pipeline known as a Ventcan.

(c) As a result of the said failure John Wright was placed at risk of injury.

Matter IRC 5713 of 2000 The particular facts relating in this matter are as follows: At all material times the defendant employed a number of persons, at the said site, including: a) Antonio Alzapiedi, 63 years of age, as a Concrete Finisher and Labourer.

b) Marco D'Intino, 28 years of age, as a Rigger Scaffolder.

c) Paul Cotts, 42 years of age, as a Civil Supervisor.

On the 23rd July, 1999, Antonio Alzapiedi received serious back injuries (a fractured vertebra) when he fell a distance of approximately four metres through a penetration, while carrying out work erecting handrails around penetrations in the concrete floor of the motor room at the said site.

Antonio Alzapiedi commenced employment with the Defendant, at the said site, on 16th June 1999.

On the 23rd July, 1999, Antonio Alzapiedi was working with Marco D'Intino on the concrete slab floor of the motor room at the said site.

At the time of constructing the slab floor of the motor room, the soil underneath the slab was solid rock, which provided a firm base.

The slab floor of the motor room had been constructed with a number of penetrations so that connections could be made to equipment that would be installed in the pump room that was being constructed below the motor room.

The penetrations were filled with soil so as to provide a level surface for the work being undertaken on the concrete slab on which Antonio Alzapiedi was working.

The penetrations were covered with form ply, supported on pipes and further covered with black plastic.

Later, the rock supporting the soil in the penetration was removed as part of the construction of the pump room.

This required safety barriers to be installed around the now open penetrations.

Antonio Alzapiedi was installing these barriers when he fell through the open penetration, falling some four metres into the chamber below.

Antonio Alzapiedi was off work from the 23rd July, 1999, for approximately six months. He returned to work and resumed his normal duties on the 1st February 2000.

On the 16th December, 1999 Inspector Maurice Vierow attended the said site at Bluefish Road, Manly, to investigate the accident that occurred to Antonio Alzapiedi on the 23rd July, 1999.

Inspector Vierow prepared a Factual Inspection Report and took a number of photographs of the accident site.

Investigations by Inspector Vierow revealed the following: a) That instructions regarding the erection of the handrails were passed on to Alzapiedi by D'Intino. D'Intino stated that he made sure that Alzapiedi understood the hazards and risks involved, explaining to him both in English and Italian.

b) Alzapiedi then walked off. The lighting in the motor room was dim.

c) At this time Alzapiedi was seen by D'Intino to step off the concrete and disappear.

d) The Defendant had not carried out a job safety analysis for the erection of the handrails in the motor room.

e) The system of work, which was in place, was by way of verbal instructions given by Mr Cotts for the erection of the handrails.

f) Mr Antonio Alzapiedi had received safety training from the company every Monday morning between 6:00am and 6:30am. Although he could not remember the exact name of the various courses he took, he did remember being instructed in general safety measures.

g) On the 4th August, 1999, an Accident Investigation Report was compiled by Peter Dutch, OH&S Coordinator for the Northside Storage Tunnel. Amongst other things, it recommended that handrails around penetration openings, where the lower level is going to be excavated at a later date, needed to be installed prior to the excavation taking place.

It is alleged that the Defendant Transfield Pty Limited [ACN: 000 854 688] on the 23rd July, 1999 at the Northside Storage Tunnel, at Bluefish Road, Manly in the State of New South Wales, did breach Section 15(1) of the Occupational Health and Safety Act, 1983, in that, being an employer, it failed to ensure the health, safety and welfare at work of all its employees, in particular, Antonio Alzapiedi, in that: a) The Defendant, at all material times, employed a number of persons, including Antonio Alzapiedi, to undertake the erection of handrails around penetration openings of the floor of the motor room at the Northside Storage tunnel site, at Bluefish Road, Manly, in the State of New South Wales.

b) The Defendant, at all material times, carried out construction work associated with the Northside Storage Tunnel Project, at the Northside Storage Tunnel site, at Bluefish Road, Manly, in the State of New South Wales.

c) The Defendant failed to provide or maintain a safe system of work for employees undertaking the erection of handrails around penetration openings of the floor of the motor room at the defendant's place of work. In particular, the defendant failed to provide full protection equipment to employees in circumstances where the employee concerned was at risk of falling a distance greater than 1.8 metres in height. The failure to provide such equipment constitutes a failure to provide or maintain a safe system of work in relation to the carrying out of the task involving the erection of handrails around the penetrations.

d) As a result of the said failures, Antonio Alzapiedi suffered injuries.

6 Other evidence introduced in the proceedings consisted of affidavits by Neville J. Betts who was employed from November 1999 as the Manager, Occupational Health Safety & Rehabilitation for the Northside Storage Tunnel project; Russell John Cuttler, who was formerly the Project Manager employed by the defendant for the Northside Storage Tunnel Project; and Michael Kiprioti, the defendant's Safety Manager for New South Wales. This evidence was particularly relevant to the subjective features of the cases, in that they dealt at length with the policies and approach of the defendant in respect of occupational health and safety. Also tendered in matter IRC 4860 of 2000, the Ventcan matter, was a record of interview undertaken by Inspector Vierow of Martin Harvey who was, at the time of the Ventcan accident, the tunnel shift superintendent employed by Transfield. Mr Harvey's explanation of the accident was as follows: Q: What do you think was the cause of the accident?

A: The failure of the chain hanging the ventcan due to the angle of the ventcan which allowed a build up of mud. The build up of mud was caused by the scrubber system we were using, a wet system, because we suck a large volume of dust through the scrubber system there was water running back down the ventcan from the scrubber system and the dry dust coming through turned to mud and it sat in the low point of the ventcan.

Q: What do you believe could have been done to prevent the accident from occurring?

A: In hindsight we should have had a look at the cans to see how much mud was in them. But it had never been a problem before where this much weight had been in a can. Because we are lifting them mechanically, we did not notice how heavy they had become.

Q: What changes have been made to the system of work since the accident?

A: First of all, we looked at why we got the build up of mud. We determined why and looked at where else this problem may arise. What we did was cut inspection ports in the ventcan where we thought we may have a similar problem. We were to inspect the ventcans a minimum of once a week if we felt there was a build up of extra mud in the system. The cans were to be washed clean.

7 Mr Betts' evidence indicated that he has been employed by Transfield to bring about further changes to the standards of occupational health and safety management. He is very well qualified in this area. His evidence included the following as to his qualifications and experience: I am one of the several safety professionals to achieve "Chartered Fellow" status through the Safety Institute of Australia. I have had a distinguished career in safety, which has involved me working in most industry groups. I have been the editor and publisher of the prestigious publication Safety in Australia and have authored many articles and publications, including the Victorian Division of the Safety Institute of Australia journal, The Health and Safety Professional:

I have been an expert witness in 'risk management' to the Victorian State Coroner covering the Police Shooting Inquiry and the Longford Disaster. I have represented Australia at both the International Standards Organisation (Geneva) and the European Standards Setting Authority CEN (Brussels).

I am currently an invited member of the Standards Australia, Environmental, Safety and Materials Sector Board. This Board is responsible for the development and approval of standards, to arbitrate on matters where unanimity has not been achieved, to assist in the promotion of standards and to facilitate trade in goods and services with Australia's trading partners in Oceania, Asia and the Pacific.

My research work into injury costs and their causation has been published in the international publication Safety Science.

8 His evidence referred to job safety analyses, documents which measured risk and were required whenever the workplace commenced a new task or following an incident; toolbox meetings which are frequently held and are designed to maintain enthusiasm and interests of the employees by addressing real issues at the workplace level; and safety alerts which are issued to the attention of all staff on every hazardous or safety problems identified. Safety alerts require managers and employees to act immediately and require immediate attention to safety issues. His evidence also related to safety audits, safety committees and a review commissioned in July 1999 of a project, conducted by Dr Keith Jonson, who was appointed to review the safety culture within the workforce. Mr Betts also attested to his having introduced several new in-house training programmes by way of short courses upon safety related matters.

9 In summary, Mr Betts said that the defendant and the Northside Storage Tunnel Alliance have made occupational health and safety their highest priority; that it was his hope and ambition that the OH&S policies and procedures developed by the defendant may become an industry standard for others to bench mark against.

10 Mr Cuttler's evidence also dealt with job safety management and training on the project. He referred to the significant increase in activity of the occupational health and safety committee following a fatality which occurred on the project on 2 November 1998, upon which focus was placed in the judgment in WorkCover Authority of NSW (Inspector Dubois) v Transfield Pty Limited [2000] NSWIRComm 204 (8 November 2000).

11 Included within Mr. Cuttler's evidence were statements by persons involved in the work surrounding Mr. Alzapiedi's incident. That of Mr. D'Intino details the way in which he gave the work instructions to Mr. Alzapiedi in both English and Italian and warned him of the risks. The area was dimly lit and caplamps were needed. It was while Mr. Alzapiedi was going for a caplamp that he stepped into the excavation hole.

12 As to the Ventcan incident he deposed to the excavation work having being completed and the solid ducting material having being removed. This meant that the process involved in Mr Wright's accident was no longer required. As to Mr Alzapiedi's incident, the difficulty was that he himself was erecting what was to be the full protection around the excavation, to render the area safe.

13 Mr. Kiprioti's evidence dealt with Transfield on a more general basis. He deposed that Transfield was founded in 1956, employs approximately 900 people in operation throughout Australia, Asia and New Zealand and manages a significant number of contractors. It has been a leader in complicated infrastructure projects such as the Sydney Harbour Tunnel, New South Wales Airport Rail link and the Northside Storage Tunnel. The company has been involved in similar projects in Melbourne and Brisbane. He also dealt with Transfield as a corporate citizen and its contribution both financially and through the activities of its chairman Franco Belgiorno- Nettis A.C., C.B.E. to the Sydney Maritime Museum, in the Arts, the Biennale of Sydney, Music and Opera. The contribution to, for example, the restoration of the barque, the James Craig, exceeds $500,000. The current commitment for each Biennale exhibition is in excess of $350,000.

14 As to Transfield's approach to Occupational Health and Safety, Mr Kiprioti dealt with the statement of policy contained in the Transfield Engineering Construction Safety Management System Manual.

15 Approximately 3 months before the two accidents the subject of these proceedings the Board of Directors of the defendant commissioned a major external report on risk control ratings systems. The company had been directing significant resources to OH&S yet despite this a number of incidents still occurred. The RCRS report was part of the company-wide review, and initially focused on New South Wales operations. A number of recommendations were made by the report and, at the date of Mr Kiprioti's affidavit, 16 October 2001, their implementation was substantially complete.

16 This material together with other matters which I have not repeated from the affidavit material, supports the conclusion that, in an obviously difficult industry, the defendant does make and has made positive approaches tending to ensure the safety of its employees and contractors.

17 Pursuant to s.51A of the Act, the defendant having previous convictions, the maximum penalty applicable in respect of each offence, the dates of which were 11 June and 23 July 1999, is increased from $550,000 to $825,000.

18 Mr. Hodgkinson submitted that, to get to the larger maximum penalty, there still had to be an "additional penalty", but there was here no call, either by the prosecution or by the facts, for an additional penalty. However, the judgment of the Full Bench in Capral Aluminium Limited v The WorkCover Authority of New South Wales, [2000] IRComm 71 (21 July 2000), has clarified the law in that respect to be that, notwithstanding the difficult wording employed in the section, the penalty must be approached as a single penalty, not involving notions of additional penalty. The reasons therefore are set out in the judgment at par. 39 to 52.

19 Counsel for the Prosecutor drew to attention a number of objective features which, it was submitted, called for the imposition of a substantial penalty. They were:

(b) the need for both general and specific deterrence; (c) the defendant's failure to provide a safe system of work and inform itself of safe working for the obvious foreseeable risks to safety; (d) the nature of the offences, the seriousness of which was manifested by the injuries and the simple steps available to remedy the defective systems.

20 The step taken to avoid the second incident was to ensure that safety railing would be installed prior to the completion of a penetration between floors. The ease with which this could be done seems to me to negate any suggestion that Mr. Alzapiedi's accident was somehow de minimis because he was attempting to make safe the area through which he fell. The altered work practice shows how simply an accident of this kind can be avoided.

21 The remedy in the Ventcan matter was to assess the way in which the mud built up and to install inspection ports to enable any build up to be washed away. This incident involved a lower degree of foreseeability than the penetration incident, because the build up of mud in the Ventcan was not expected and the accident occurred during an attempt to lift the Ventcan for another purpose, namely to remove it from the path of the Roadheader excavation machine. The relevant failure here, as particularised, was in relation to the system of work employed to move the Ventcan and the failure to maintain that plant.

22 There is an obvious need in industry to maintain awareness of the duties and obligations imposed by the Act. While I accept that the defendant is properly motivated, I consider that the need for general deterrence to be recognised in this case remains a necessary factor in the sentencing equation. Similarly, there is a need to impose a fine here which takes due account of the need for specific deterrence. There is an inevitable conflict between the work assiduously done by employers, as here, to meet their obligations to employees and others in the context of workplace safety, and the occurrence of an accident or accidents which themselves illustrate the relative simplicity of the measures which might have been taken to avoid the particular accident/s. Both of those competing elements must be weighed in the balance when assessing penalty.

23 In these matters no request has been made to take into account the principle of totality. The present state of the law in this Court, as I understand it, is that the principle of totality is applicable where offences arise out of the same or similar facts or where there are common elements of multiple offences. On that approach it would be inappropriate to consider the principle of totality in the context of the present matters. A Full Bench of the Court in Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 stated (at 339), that in relation to a number of different prosecutions which arose on appeal "(t)his inter-relationship seems to us to satisfy with considerable ease the proposition involved in the principle of totality that there be some similarity in the offences". However, the principle was given detailed consideration by a Full Bench of the Court in Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan [2001] NSWIRComm 106 (25 May 2001). The approach in Warman was not in issue in Keenan, but the judgment, referring to the sentence I have quoted, observed: "The last sentence of the passage cited, however, which seems to limit the circumstances in which the principle of totality is to be applied, appears to state the principle to narrowly and may well require reconsideration in subsequent Full Bench proceedings (see, for example, the judgment of the Court of Criminal Appeal in Close (1993) 65 A Crim R 55 at 59-60)." There Hunt CJ at CL had said that the principle of totality "is not restricted to sentences imposed for offences committed as part of a connected and roughly contemporaneous series of offences … in such circumstances, all of the sentences which are accumulated should usually be adjusted downwards in order to produce an acceptable total sentencing."

24 In the present matters there is no similarity of the facts and accordingly I am bound by authority to deal with them as separate offences without regard for totality.

25 I take into account the prior record of the defendant, which I consider overall not to be a particularly bad record, especially in the context of the industries in which it operates. However, I note that I have considered the extensive observations of Kavanagh J. in WorkCover Authority of NSW (Insp. Dubois) v Transfield Pty. Ltd. where her Honour considered subjective evidence as to corporate character of a similar kind to that which is now before me. I concur, with respect, with the observations concerning the standing of the defendant and the "real commitment" of the defendant to the principles of workplace safety. After finding the plea in that matter was entered at the earliest opportunity, Kavanagh J gave a discount for the utilitarian value of the early plea of 25%, and imposed a fine of $130,000. Having regard to what I have earlier said concerning in particular the matter of foreseeability and the difference in these matters in that respect, and taking into account all relevant features of the facts, I consider the nature and seriousness of the offences involved in these matters is not high in contrast with the matter before her Honour.

26 Similar evidence of corporate character was also introduced in proceedings before Hungerford J., the judgment in which was given on 14 November 2001 in WorkCover Authority of New South Wales (Inspector McMartin) v Transfield Pty Limited trading as Transfield Maintenance (No. 2) [2001] NSWIR Comm 209. That evidence was again given by Mr Kiprioti.

27 In a further judgment in Inspector Olive v Transfield Pty Limited [2001] NSWIRComm 295 given on 23 November 2001, Kavanagh J again addressed evidence of the corporate character and reputation of the company and its relevance on the basis of decided authority there cited, (see para 19 et seq). After referring to evidence of that corporate character, which would appear to be a reflection of the evidence now before me, Kavanagh J turned to the recognised need in assessing penalty to consider deterrence and then said: The court's consideration related to deterrence therefore brings to the fore for examination the industrial record of the company. Transfield in its operations has been charged with 23 breaches of the Occupational Health and Safety Act, since 1962. In WorkCover Authority of NSW (Insp McMartin) v Transfield Pty Ltd t/as Transfield Maintenance (No 2) [2001] NSWIRComm 289 (published 14 November 2001) Hungerford J noted [at 36]: …the prior convictions of the defendant, particularly the two most recent instances where (the defendant) was subject to fines of $70,000 and $130,000, must be viewed as somewhat negative factors.

His Honour then convicted the defendant of two further breaches of the Act each attracting a penalty of $80,000 although it is noted they arose from the same incident and his Honour determined an overall penalty of $160,000 after applying the principles of parity and totality and allowing for a discount for the utilitarian value of pleas. Both parties have revealed three further breaches of the Act are before the court for consideration as to penalty.

Having regard to the size and nature of the organisation, its large range of industrial activities and the heavy industrial nature of those activities, Bauer J in Inspector Jones v Transfield Construction (unreported decision, CT1217 of 1996, 28 November 1997 at 10) was able to comment "the record of the company in the past has to be viewed as a reasonable one" (see WorkCover Authority of NSW (Insp McMartin) v Transfield Pty Ltd t/as Transfield Maintenance (No 2) [2001] NSWIRComm289 [at 36]). The court cannot anymore endorse this comment. The community demands rigorous adherence to occupational health and safety standards from its employers. The legislature has expressly reflected the community's demand with the obligations it has imposed on employers through the Occupational Health and Safety Act, 1983. The company proffers, and the court accepts, this corporation's commitment to safe working. That commitment is reflected in a fully documented worksafe procedure. However the industrial record of recent breaches of the Act, the nature of which indicates a gravity to each offence, reveals the need for a much more rigorous implementation of this company's adopted standards for safe working. The recent industrial record is of concern.

The observation of Deane J in Channon v The Queen (1978) 20 ALR 1 at 18 is, however, in the circumstances, noted: In every case, there is but one ultimate question involved in the determination of sentence. That question is what is the appropriate punishment for the particular offence in the relevant circumstances.

28 Considering the objective seriousness of each matter as affected by the subjective features to which I have referred, I would consider an appropriate penalty, before discount in each matter, would be $120,000 in respect of matter IRC 5713 of 2000 and $90,000 in matter IRC 4860 of 2000. I would give a discount in each matter of 20%, having regard to the utilitarian value of the early pleas and taking into account to an appropriate degree the relative likelihood of convictions in the matters.

29 The defendant is convicted and fined the sum of $96,000 in matter IRC 5713 of 2000 and $72,000 in matter IRC 4860 of 2000 with a moiety in each case to the WorkCover Authority.

30 The defendant should pay the prosecutor's costs of the proceedings as agreed. In the event of disagreement, I grant liberty to apply.

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