WorkCover Authority of NSW (Insp Lyons) v Warman International Ltd

PROSECUTOR: Ms F Backman of counsel Solicitor: Mr A McColm WorkCover Authority of New South Wales

LEGAL REPRESENTATIVES: DEFENDANT: Mr West QC Solicitor: Mr A Ball Corrs Chambers Westgarth

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: WALTON J, VICE-PRESIDENT 9 MAY 2001

WORKCOVER AUTHORITY OF NSW (INSP LYONS) v WARMAN INTERNATIONAL LIMITED.

PROSECUTION UNDER S.15(1) OF THE OCCUPATIONAL HEALTH AND SAFETY ACT 1983.

1 This matter is a prosecution by David Lyons, as an Inspector of the WorkCover Authority of New South Wales ("the prosecutor"), of Warman International limited ("the defendant") for a breach of s15(1) of the Occupational Health and Safety Act 1983 ("the Act"). 2 The prosecution arose from burn injuries sustained by an employee of the defendant, Mr Kevin Kenny, on 14 May 1998. The defendant is a corporation which carries on the business of designing and manufacturing slurry pumps for use in the mining and manufacturing industries. The defendant is engaged in all aspects of the manufacture of these pumps from the raw materials stage through to distribution. As such, within the defendant's business, the defendant engages in the processing and moulding of raw rubber, manufacture of the metals used in the actual component manufacture, preparation of the moulds used with molten metals and heavy machining and fabricating of the metals so made into the various components. 3 The defendant has offices throughout the world. However, in large measure, its workforce is located at a site in Artarmon, Sydney. At the Artarmon site, the defendant operates a foundry, a rubber manufacturing plant and a heavy machining plant, amongst other processing operations, along with a distribution outlet. This was the site at which the incident occurred. 4 The injury was occasioned to an employee of the defendant involved in the transfer of molten metal from one of the defendant's furnaces. The facts surrounding this incident will be described below. 5 Molten metal was poured through a spout on the furnace wall into a large ladle, identified as ladle No."7". This takes place within the "Foundry area" of the defendant's Artarmon plant. The area within the foundry in which this particular process took place is referred to as the tapping area. 6 Ladle No.7 was attached to a bridle which allowed the ladle to be connected to an overhead travelling crane. The points at which the bridle attached onto the ladle were referred to as the trunnions. Attached to the trunnion, on one side of the ladle, through a gearbox, was a metal spoked wheel measuring 700mm in diameter. Located between the wheel and the gearbox was a manually operated metal locking device. The bridle was attached to either side of the ladle so that it bore resemblance to a giant household bucket. A single eyelit was to be found on the cross bar of the bridle, directly over the centre of the ladle. It is to this eyelit on the bridle that a crane would attach, allowing the ladle containing the molten metal to be moved around the foundry. 7 Once filled with the molten metal, the ladle was lifted by an overhead travelling crane, referred to as the "Heavy Jobbing Crane". The crane itself could not be positioned directly above the ladle when lifting. The positioning of the crane meant that a certain amount of non-vertical movement of the ladle would occur as the crane began to lift the ladle. To counteract any tipping effect that may result from this non-vertical movement, the defendant, through the directions of a supervisor, had an employee, Mr Kenny, apply force to the spoked wheel on the side of the ladle. On this occasion, when the crane began to lift the ladle (which contained about 5.5 tonnes of molten metal at a temperature of around 1450 degrees Celsius), the ladle turned suddenly, causing a lapping effect in the molten metal. The molten metal then spilled over the front lip of the ladle. The molten metal was filled to approximately 5cm from the top lip of the ladle. Mr Kenny jumped out of the way and was able to avoid in large part the 80 - 100kg of molten metal that spilled from the ladle. In moving out of the way of the molten metal, Mr Kenny fell. Some of the molten metal came into contact with the elastic area of Mr Kenny's left boot causing 3rd degree burns to his left foot. 8 The charge contained in the summons for prosecution was in the following terms: On 14 May 1998 at 1 Marden Street, Artarmon, 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 and in particular, Kevin Kenny, contrary to s15(1) of the Occupational Health and Safety Act 1983, in that it failed to provide or maintain a system of work, to wit a system of work for the movement of the ladle identified by the number "7" from the furnace identified by the number "4", that was safe and without risks to health. 9 The summons was amended by the deletion of paragraph 3 of the particulars of the charge. In the amended form, the particulars of the charge were as follows: The defendant failed to provide or maintain a system of work to ensure: (i) a safe and controlled movement of the ladle identified by the number "7" from the tapping area adjacent to the furnace identified by the number "4" when the ladle was filled with molten metal. (ii) the ladle identified by the number "7" was maintained in a position to ensure molten metal could not spill from the ladle when it was being moved from the tapping area adjacent to the furnace identified by the number "4". (iii) ... (iv) employee's were positioned a safe distance from the ladle identified by the number "7" when the ladle, filed with molten metal, was moved from the tapping area adjacent to the furnace to the furnace identified by the number "4".

Statement of Agreed Facts 10 Aside from the formal parts, the statement of agreed facts was in the following terms: 5. An inspection of the Number 4 furnace, Number 7 ladle, "Heavy Jobbing Crane" and tapping area of the foundry was carried out on 08 July 1998. An inspection report was completed and photographs caused to be taken

The inspection revealed that at the time of the accident: (a) The Number 4 furnace was located in the "Foundry Area" of the premises. A spout protruded from the Number 4 furnace at a height of 1870 millimetres from the floor of the tapping area. The spout measured 300 millimetres in height, 400 millimetres in width and protruded 170 millimetres from the wall of the furnace (refer to photograph 1). (b) Attached to the floor of the tapping area running from the Number 4 furnace were 2 parallel metal tracks measuring 2100 millimetres in length (refer to photograph 1). The tracks could accommodate a "ladle trolley" upon which appropriately sized ladle's could be placed ensuring smooth, lateral movement of a ladle when being lifted by an overhead crane away from the Number 4 furnace. (c) The Number 7 ladle measured 1280 millimetres in height with a diameter of 1180 millimetres (refer to photograph 2). A metal spoked wheel measuring 700 millimetres in diameter was connected to one side of the ladle through a gearbox and trunnion (refer to photographs 2 and 3). Located between the wheel and the gearbox was a manually operated locking device (refer to photograph 3). A bridle of channel iron and steel plate construction was attached to the ladle. The bridle measured 1400 millimetres in height and 1550 millimetres in width. The point of attachment of the bridle to the ladle, the trunnions, was 650 millimetres from the base of the ladle. A steel "lifting eye" was positioned at a central point of the horizontal cross bar of the bridle (refer to photograph 2). A metal "latch" locking device measuring 260 millimetres in length and 50 millimetres in width was located on the bridle in a position directly above the gearbox and trunnion. A vertical handle measuring 260 millimetres in length was attached to the locking device and 2 curved guide plated used to lock the ladle into a vertical position were welded to the ladle directly adjacent to the locking device (refer to photograph 2). (d) The pendant controlled "Heavy Jobbing Crane" was located in the foundry area. The crane was electrically powered with a top mounted crab (refer to paragraphs 4 and 5). 6. On the day of the incident approximately 5.5 tonne of molten metal had been tapped from the Number 4 furnace into the Number 7 ladle which rested upon the floor of the tapping area directly beneath the spout of the furnace. The temperature of the molten metal within the ladle was approximately 1450 degrees Celsius. The ladle was filled with molten metal to its permitted capacity. The combined weight of the ladle and molten metal content was approximately 7.5 tonne. 7. Mark Jenkins was charged with supervising the task of transporting the Number 7 ladle filled with molten metal from the tapping area adjacent to the Number 4 furnace to the moulding area. Jenkins directed Grant Gillies, an employee of the defendant, to operate the "Heavy Jobbing Crane" and Kenny to take up a position immediately adjacent to the Number 7 ladle and grip the metal spoked wheel of the ladle. 8. The travel of the "Heavy Jobbing Crane" was such that it could not reach a position directly above the "steel lifting eye" of the Number 7 ladle. As a consequence the "Heavy Jobbing Crane" could not lift the ladle in a vertical path from the tapping area floor. Kenny was charged with applying force to the metal spoked wheel of the ladle contemporaneously with the lifting of the ladle by the crane in an effort to compensate for the non vertical force applied by the crane to the ladle. The intention was to minimise tilting of the ladle and maintain vertical alignment of the ladle during the lifting process by application of manual force to the metal spoked wheel of the ladle. 9. As the crane lifted the ladle the ladle turned towards Kenny who was still holding the metal spoked wheel of the ladle. The movement of the ladle caused a lapping effect within the molten metal resulting in approximately 80 to a maximum of 100 kilograms of molten metal spilling over the front of the ladle. Kenny jumped away from the side of the ladle and landed upon the tapping area floor where his left boot came into contact with the spilled molten metal causing the molten metal to penetrate the elastic side of the boot coming in contact with Kenny's skin. 10. The investigation revealed at the time of the accident: (a) The travel of the "Heavy Jobbing Crane" was such that it could not reach a position directly above the "steel lifting eye" of the Number 7 ladle when the ladle was positioned beneath the spout of the Number 4 furnace. (b) The combined height of the "ladle trolley" and the Number 7 ladle, when in a position on the tapping area floor adjacent to the spout of the Number 4 furnace, exceeded the height of the Number 4 furnace spout. Consequently the ladle trolley could not be utilised to ensure a smooth, controlled lateral movement of the Number 7 ladle when lifted by the "Heavy Jobbing Crane" away from the Number 4 furnace. (c) As a consequence of (a) and (b) the Number 7 ladle was required to be transported away from the tapping area in a non-vertical path by the "Heavy Jobbing Crane". (d) The use of the Number 7 ladle to transport molten metal from the Number 4 furnace with the "Heavy Jobbing Crane" was not a regular work practice. The method of lifting the Number 7 ladle away from the Number 4 furnace implemented on the day of the accident was a method ordinarily implemented when larger ladles were required to be used. (e) The method of lifting the Number 7 ladle away from the Number 4 furnace had not been assessed for safety prior to the day of the accident because it was not a regular work practice. 11. Subsequent to the accident the defendant implemented the following remedial changes: (a) A "Safe Work Procedure" dated January 1997 for working with ladles and pouring molten metal was revised in July 1998. The revised procedure relevantly provided: "Do not fill No.7 or 8 ladles directly from the furnace. When filling either ladle, place ladle on the floor adjacent to No.4 and 5 furnaces and transfer molten metal from the furnace to the ladle using a smaller ladle." (b) The tapping area in front of the Number 4 furnace was modified such that the combined height of the "ladle trolley" and the Number 7 ladle when in a position on the tapping area floor adjacent to the spout of the Number 4 furnace did not exceed the height of the Number 4 furnace spout. Consequently the ladle trolley could now be utilised to ensure a smooth, controlled lateral movement of the Number 7 ladle when lifted by the "Heavy Jobbing Crane" away from the Number 4 furnace. (c) A "Safe Work Procedure" dated August 1998 for working with ladles and pouring molten metal was introduced to supersede the interim July 1998 "Safe Work Procedure". It adopted the same provisions of the July 1998 document with an additional provision providing that: "When tapping from furnace No's 4 or 5 all ladles (except ladle 10) shall be placed onto trolleys to enable a smooth lifting action." (d) A "starlock" device was fitted to the Number 7 ladle.

The Verdict 11 Having regard to the summons in this matter, the particulars of the offence and the statement of agreed facts, I accept the plea of guilty of the defendant and I enter a verdict accordingly.

Evidence for the Prosecution 12 The evidence for the prosecutor included a statement of agreed facts and a schedule of prior convictions which was tendered as part of a bundle of agreed material. This bundle also contained copies of two judgments of this Court, namely, WorkCover Authority of NSW (Inspector May) v Warman International (unreported, Marks J, 9 September 1998) and WorkCover Authority of NSW (Inspector Dubois) v Warman International Limited (1999) 87 IR 30.

Evidence for the Defendant 13 The defendant relied upon the statements of evidence of Brian Peter Cross, a senior consultant with the National Safety Council of Australia Ltd ("NSCA"), Noel Raymond Champion, the Engineering Manager of the defendant since 1995, and Sister Mary Frances Henry, the Occupational Health and Safety Co-ordinator of the defendant. 14 Mr Champion gave evidence that his position included functions ranging from the management of some capital works projects and plant engineering, through to environmental management, occupational health and safety management. He estimated that 85 - 90% of his time was spent on the management of the defendant's occupational health and safety systems. 15 Mr Champion stated that the defendant used a safety system adopted from the North Limited environmental, safety and health management system, developed in consultation with the NSCA. It was said that the system involved 18 elements, documented in a comprehensive manual (which was itself annexed to his statement). This manual was made available to employees of the defendant in either hard copy or electronic format. Additionally, the defendant had a number of policies directed to occupational health and safety matters. 16 Mr Champion's statement went into considerable detail in relation to the contents of the occupational health and safety manual and the procedures that the defendant had been using to implement strategies to improve the safety of the workplace. Broadly, those systems included: 1. A comprehensive safety induction program for all new staff. 2. Prior to the commencement of each shift employees are required to attend a 10 minute meeting at which safety and production issues are discussed. 3. Ongoing training as to occupational health and safety systems and ongoing emergency situation management training. 4. A detailed risk assessment process, designed to identify, prioritise and address situations in the workplace involving risks to health and safety. 5. Risk assessments are conducted once per week by a team of the defendant's staff, each of whom have gone through a training course of approximately 1 day's duration. Each week a different area of operation is assessed for risk. This risk assessment team assesses all new pieces of equipment for any health and safety risks and is available to any member of staff who has concerns as to an area of operation within the defendant's organisation. 6. The risk assessment team assesses, documents and then reports to the relevant department as to any risks it may have identified. The risk assessment team was, at the time of the hearing of the matter, embarking upon its second round of reviews at the defendant's Artarmon site. 7. If a significant risk is identified it is referred to a management committee, who will then develop a risk reduction strategy for the relevant department. 8. As part of the defendant's occupational health and safety systems, the defendant had in place an Occupational Health and Safety works committee. This committee is managed by employees and is attended by Mr Champion, Sister Mary Henry and a member of senior management (such senior members attend on a rotating roster). It meets every month for 1 - 2 hours and involves, variously, safety inspections and discussion of safety issues. 9. The defendant also has a Management committee, which meets fortnightly, made up of more senior management and a Senior Management committee, which involves senior management including the General Manager, both of which discuss occupational health and safety issues. 10. Senior managers go through revision of occupational health and safety training on an ongoing basis. 11. The annual budget for the defendant on environment, health and safety issues is $600,000, with a further $1,100,000 having been allocated for capital expenditure on safety related matters. 17 Mr Champion gave evidence as to the monitoring of injuries within the defendant's operations and of there having been a consistent decrease in the number of injuries since the inception of the revamped occupational health and safety systems in 1996. 18 There was an increase in the number of injuries in the last quarter of 1999 following the defendant having been taken over by Weir PLC. The lost time due to injuries statistic had, from the time of that take over, been well above the levels for the preceding 12 months. 19 Mr Champion responded by consulting the NCSA, who suggested work be directed towards cultural change. In consequence, the defendant's Occupational Health and Safety Co-Ordinator developed a proposal for cultural change (which is now being implemented by the defendant). This proposal was discussed at a Senior Management meeting and objectives were drawn up which essentially went to ensuring full compliance with safety systems and to fostering a commitment to safety within the workforce. A number of key safety objectives for the defendant were also established. A series of safety audits were then conducted by the defendant, which were significantly underway at the time of the hearing of this matter. 20 A survey was conducted as part of the objective of obtaining cultural change. There were changes introduced in relation to training and the role of management. 21 Mr Champion concluded by stating that there had been significant initiatives developed by the defendant in relation to the overall safety culture of the business, but that the program of change was slow and gradual. He stated: Warman has had injuries occur in its complex manufacturing plant in the past, and we are doing our best to ensure that there are no more injuries on this site. We have had failures in our system which we have addressed and will continue to address as they come to light. Warman takes the issue of safety very seriously and, through a process of continuous assessment and re-evaluation, and with the assistance of independent consultants, strives to eliminate risks to safety health and welfare of persons at work.

22 Mr Cross gave evidence as to the NSCA, in his capacity as a senior consultant with that organisation over 12 years. His evidence demonstrated that the NSCA is a membership based organisation, which provides its membership with services and advice as to issues of health and safety in industry, having regard to both national and international standards of "best practice" in safety. His evidence was that the NSCA has approximately 3500 - 4000 members in a wide range of industries across Australia. 23 Mr Cross gave evidence of the association between the NSCA and the defendant, which commenced in January 1996. He stated that the defendant adopted the NSCA's 5 Star Health and Safety Management System and gave evidence as to the nature of that system in some detail. Broadly, the system involved the NSCA performing an initial safety survey and audit to set a benchmark. This was followed by reporting, recommendations and planning for improvement, coupled with regular ongoing audits of the client company's performance. The ongoing audits are to rate the client companies' implementation of health and safety systems against the NSCA's 5-Star grading system and to facilitate the continual identification of areas in which the client company should direct its efforts to improve the safety of its workplace. 24 Mr Cross gave evidence as to the conduct of these auditing processes, indicating that when conducting an audit he would spend approximately three days on site at the workplace, observing each area of operation (although not every task within each area of operation). The audits are conducted using the NSCA's 5-Star Health and Safety Management System Auditor's Question Manual ("the Manual"). The Manual contains approximately 1800 questions, grouped into what the NSCA terms the "60 Key Elements". These key elements are divided in the Manual into 5 Categories for the purpose of assessment:

1. Policy, Organisation & Program Management 2. Management of Health and Safety Risks

5. Emergency Preparedness & Management. 25 For each key area, the auditor gives the company a numerical grading. Following each audit, a report of the company's performance is generated and the company's performance on the audit is calculated as a percentage of the total number of points achieved, compared to the total number of points available. At the time of conducting the audit, the auditor also calculates what was termed the Injury Illness Statistical Incident Score, which is designed to measure the frequency of illness and injury within the workplace and the duration of those illnesses/injuries. Once the performance on the audit is determined, the NSCA compares the audit performance with the Injury Illness Statistical Incident Score to determine which provides the poorer result. Based on this, the NSCA gives the company a grading of one, two, three, four or five stars. 26 Mr Cross' evidence was that the defendant adopted the program in 1996 and was, at that time, assisted by the NSCA through David Langton, a senior consultant of that organisation. Mr Langton performed two of these audits on the defendant, one in 1998 and one in 1999. In October 1999, Mr Cross took over from Mr Langton as the senior consultant assigned to the defendant. Mr Cross' evidence was that organisations operating in the medium to heavy engineering industries, such as the defendant, would be expected to attain a 2-Star grading on the NSCA grading system on their first audit. He considered the 4-Star grading given to the defendant in 1998, following its first audit, to be an exceptional grading. The defendant also achieved a 4-Star grading on its 1999 audit report. Further, in 1998 the defendant was given a workplace health and safety achievement award for significant and continued improvements in the operation of the Distribution Department of its Artarmon site. 27 Mr Cross gave evidence as to his primary point of contact with the defendant being Sister Mary Henry, the defendant's Occupational Health and Safety Co-Ordinator. He gave evidence of having attended the defendant's Artarmon site on 11 occasions between his taking over from Mr Langton in November 1999 and August 2000, during which he provided training and conducted various inspections. 28 He stated that the defendant had adopted its own system of internal auditing for the assessment of internal management of its occupational health and safety systems in addition to the defendant consulting the NSCA. Further, in August 2000, the defendant participated in the NSCA's "Safety Climate Survey" - an anonymous questionnaire that the NSCA administers, for a fee, to gauge employees' opinions in relation to a number of matters; such as, the communication and commitment of management to occupational health and safety, the employees' role in the management of health and safety issues and the overall feeling in relation to occupational health and safety in the workplace. The survey identified weaknesses perceived by employees of the defendant in relation to the safety of equipment and facilities and in relation to the actions of management in response to safety issues. Mr Cross gave evidence that some of the items identified in the survey had been the subject of review by the defendant at the time of the survey, such as the emergency response procedures, and that many of the items identified as being of concern had been reviewed by the defendant since the survey. 29 Mr Cross gave evidence that the defendant, in his opinion, was committed to the provision of a safe workplace for the following reasons: a) the formation of Warman's occupational health and safety committee; b) the dedication of onsite resources to occupational health and safety issues, particularly the creation of the full-time position of "Occupational Health and Safety Co-Ordinator"; c) the management performance reviews include the individual manager's commitment to occupational health and safety issues as an assessment criteria; d) the commitment to occupational health and safety issues being included as a business objective and performance measure of the organisation as a whole; e) the high standard of written occupational health and safety policies and procedures; f) co-operation with, and support of, the NSCA; and g) implementation of risk assessment programs. 30 In conclusion, in his statement, Mr Cross gave evidence as to cultural change in the workplace following changes to occupational health and safety policy: A workplace culture is the last thing to change after implementation of a comprehensive occupational health and safety management system. Prior to changing a workplace culture, an employer needs to have in place a proper management system and the ability to relate to a multicultural workforce. The role of the NSCA is to work with Warman in dealing with these problems. 31 The defendant also relied on the evidence of Sister Mary Henry, the Occupational Health and Safety Co-Ordinator of the defendant. Sister Henry had been with the defendant for 14 years, having been initially employed as an occupational health and safety nurse. Sister Henry was promoted to the position of OH&S Co-Ordinator in 1995. Sister Henry outlined her duties as OH&S Co-Ordinator as including the organisation of training sessions, the organisation and conduct of Management Safety Committee meetings, reviewing departmental safety plans, attending and advising the Workplace Safety Committee and having responsibility for the defendant's inhouse risk management system, namely, the "Risk Assessment Methodology" ("the RAM"). 32 The RAM was described as a system developed and implemented by the defendant in conjunction with consultants (other than the NSCA) in 1997. The RAM involves trained facilitators from most departments within the defendant assessing any risks to health and safety in relation to areas, systems or processes within the defendant's operations. The facilitators conduct these assessments once per week, with each assessment focussing on one process or area at a time. Once the assessment is made, a score is given for the area assessed. The results are recorded on the RAM register and given to the particular department manager. The department head is then responsible for identifying the most significant risks identified by the RAM team and developing an action plan for remedying the identified problems in a timely fashion. Once this has been completed, the RAM team reassesses the particular area or process. 33 Sister Henry gave the following evidence: The foundry is seen as an area of more risk than other areas at Warman. In the foundry we have trained a number of people in crane driving, we have trained people in confined space entry, eye safety, permit to work training (identifying more at risk work such as high voltage or excavation work), a hearing conservation program, employee briefing (through the NSCA) about safety management systems, hazard log systems and daily housekeeping inspections. 34 She gave evidence of there being an increased involvement from the defendant's workforce in recent years in safety related issues, such as the reporting of incidents, and greater involvement in housekeeping inspections. 35 Sister Henry gave evidence of her forming a view, in early 2000, of a need to examine the perceptions of the defendant's workforce in relation to the implementation of occupational health and safety systems. To this end, Sister Henry arranged for the engagement of the NSCA to prepare a safety culture report. The survey conducted involved around 20% of the defendant's workforce, involving all levels of employees from foundry workers through to senior management. Sister Henry gave a summary of the findings of the survey in the following terms: The survey results show various strengths and weaknesses. I am now arranging measures to be put in place to implement the recommendations and minimise the weaknesses. Generally, however, employees felt that they are performing their tasks safely. They also thought that Warman could improve the following areas: a) communication on safety issues in the workplace; b) more involvement with development and implementation of safe work procedures; c) increasing the speed of addressing safety issues. 36 In her oral evidence, Sister Henry gave evidence of changes that had been implemented as a response to the survey results: A number of our departments are developing their safe work procedures with all of the team of employees and they are discussing each procedure and ensuring that the employees have input. We have upgraded our communication. We have ten minute communication sessions at the beginning of each shift which focuses very much on safety and on the safe production for that particular shift. 37 In cross-examination, Sister Henry was questioned as to a hazard reporting log that operated within the foundry area of the defendant's operations. Her evidence was that the log had been in operation for some five years. She indicated that she was familiar with the log and had played a part in the log being implemented sometime around January 1996 (around the time the NSCA was first engaged by the defendant). 38 Sister Henry was taken to a particular entry on the foundry hazard log dated 17 December 1997, which identified a hazard relating to the absence of a starlock on the ladles numbered 5, 7 and 8: Q. Do you know what a style lock (sic) is? A. Yes Q. What is it? A. It's a particular locking device on the bridle. Q. On the bridle of the ladle? A. Yes. Q. What's it's function? A. Its function is to ensure that the ladle is locked. Q. That would be particularly important during the procedure of transporting a ladle filled of molten metal from the foundry area to, for example, to the moulding area" A. That is correct? Q. That was on 17 December 1997 and yet the same complaint appears in the following year on 12 February 1998, no starlock on ladle, not safe when 7, 8 and 5 looks like flagging, would that be right, see that, the last entry on the page? A. Yes "Not safe when flagging". Q. Were you made aware at any stage in relation to, for example, this particular defect, that is absence of starlock, for example, on three of the ladles, it was first brought to the company's attention in February 1998. At that stage nothing appears to have been done to fix the problem? A. No ... Q. Are you aware that in relation to the starlock device that it wasn't until sometime after May 1998 that one was eventually fitted, for example, to the number 7 ladle which was involved in the particular accident to Kevin Kenny? A. Yes Q. You were aware of that? A. Yes Q. Can you give the Court any idea as to why it was so long to fix that particular defect? A. I understand there was a maintenance program in place and that other ladles had had this device fitted and this particular ladle was scheduled to have the starlock fitted. Q. But not until some months after the accident, for example, that would be right? A. I am not sure where it was on the maintenance schedule. 39 Sister Henry was then shown an improvement notice from the WorkCover Authority. She gave evidence that the defendant had received the improvement notice to remedy the problems identified by the WorkCover Authority as having contributed to the accident that occurred on 14 May 1998. The improvement notice was dated 27 July 1998. Sister Henry indicated that the work required to make the area safe had not been completed by the date on which the improvement notice was issued.

The Prosecution 40 Ms F Backman of counsel, who appeared for the prosecutor, in her written submissions submitted that because the crane which was used to lift the No. 7 ladle was not able to be positioned directly above the ladle, the inevitable result was non-vertical movement of the ladle making the tilting of the ladle upon lifting (and consequent spillage) almost unavoidable. The work method utilised by the defendant to transport the ladle was not designed to ensure that the molten metal could not spill from it, and having a staff member attempt to compensate for the tilting by gripping the steel wheel was clearly inadequate. It was submitted that the method of work was unsafe in that it required Mr Kenny to be immediately adjacent to the ladle when it was moved, exposing Mr Kenny to the risk of coming into contact with the molten metal. 41 It was submitted that the primary factor to consider in relation to penalty in these matters is the objective seriousness of the offence and, in the circumstances of this offence, the following factors warranted the imposition of a substantial penalty: (a) The maximum penalty relevant in these circumstances at the time of this offence was $750,000: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 (at paragraphs 44 - 52). (b) The need for general deterrence. In this regard Ms Backman relied upon the comments made by Hungerford J in Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388, cited with approval in Capral. (c) The defendant's failure to provide a safe system of work and inform itself of safe working practices: WorkCover Authority of New South Wales (Inspector Gregory Thomas Dawson) v Waugh & Thora Saw Milling Pty Ltd (1995) 59 IR 89 at 100. (d) A factor demonstrating the seriousness of the offence is the simple and straightforward steps available to remedy the defective system of work, as demonstrated by the changes subsequently made. These are to be found in the agreed statement of facts at paragraph 11. (e) The gravity of the injury actually suffered does not of itself dictate the penalty, however, the occurrence of injury manifests the seriousness of the relevant failure on the part of the defendant. (f) There was an obvious and foreseeable risk to safety against which appropriate measures were not taken. 42 As to the subjective features of the offence, Ms Backman submitted: (a) The defendant is entitled to have its plea of guilty taken into account as mitigating the objective seriousness of the offence. This discount should reflect the fact of the plea and also the utilitarian considerations of saving court time and the costs of any trial. However, the extent of the discount should be reduced as the plea was entered in a context in which the defendant recognised the inevitability of conviction, given the strength of the prosecution's case. (b) The defendant has prior convictions, which triggers the provisions of s51A of the Occupational Health and Safety Act 1983, thereby increasing the maximum penalty to $750,000. Further, the fact of prior convictions is a relevant factor to be taken into account as aggravating the seriousness of the offence. (c) The propensity of the defendant to re-offend must be considered in the context of specific deterrence. The Court should have regard to the need to encourage a sufficient level of diligence by the defendant in the future, particularly where, as here, the defendant conducts a large enterprise which involves inherent risks to safety: Capral. 43 In oral submissions at the hearing of the matter, Ms Backman raised further matters which, in her submission, related to the subjective features of the offence. These were: 1. The evidence of Mr Champion and Mr Cross would indicate that, despite the efforts of the defendant to address safety issues, there was a quite lengthy delay from the date of the incident to the problem with the travelling crane being remedied. Further, the safety risks associated with the locking device had been in the defendant's hazard log since early December 1997, and again in February 1998, and yet this defect was not remedied until some time after the accident. This, it was submitted, goes to the weight which the Commission would give a submission made on behalf of the defendant to the effect that it acts promptly to remedy identified hazards. 2. The second point related to the remedial and preventative action which the defendant sought to use in mitigation of penalty. Ms Backman pointed to the retention, on the part of the defendant, of the NSCA following previous convictions and the fact that there had been three breaches resulting in prosecution since the retention of that body. This, it was submitted, again points to the subjective element of the case.

The Defendant 44 Mr West of senior counsel, who appeared for the defendant, submitted that his client did not contend that the events leading to the incident were not reasonably foreseeable. He also conceded that the nature of the risk occasioned by the non-vertical lifting process made the matter serious, although the Court should not have regard to the actual amount of molten metal spilled in assessing the seriousness of the breach. However, as is evident from the agreed statement of facts, the use of the No. 7 ladle, in the process giving rise to the incident, was not considered by the defendant to be a normal work practice. It was submitted that the means used for transferring the molten metal on 14 May 1998 had not been assessed for risk and, as such, the risk was not actually foreseen. Further, the non-vertical lifting procedure giving rise to the incident has been eliminated from the defendant's operations. 45 It was submitted that the industry in which the defendant operated may be considered to be a hazardous industry and that the obligation cast on an employer by s15 of the Act must be considered in the light of those circumstances. It was submitted that this was in accordance with what the Full Bench of this Commission considered in Capral. 46 Mr West submitted that, in such circumstances, as was noted in Capral, the employer must take all steps which are practicable to achieve the provision of a safe working environment. It was submitted that such action, of itself, would not discharge the absolute obligation cast by the Act so as to result in there not being a penalty for a breach. However, the industry in which the defendant operates and the preventative and remedial steps taken by a defendant are to be considered when assessing what level of penalty should be imposed. The appropriate penalty in such circumstances is to be determined by a balancing exercise upon which the Court must embark. 47 In making this submission, Mr West relied upon the decision of the Full Bench in Capral. He submitted: It is a question of balance. Therefore, when an employer is brought before the Commission and for its conduct to be considered against an allegation of breach, and again the answer to that question is found in Capral where this Commission said relevantly towards the end of the judgment in Capral. Your Honour was, of course, a member of that. Page 59 of the printed judgment, the subject matter with which the Court was dealing with, the page, 61 dealt with the nature of general and specific deterrence and I will come back to that in a moment. Then at page 63 the Court said this, in paragraph 77, about point 4: "At least where the offender continues to be an employer, risks to the safety of its employees or contractors may exist or be possible. Breaches of the duties imposed by the Act may occur both by commission and omission. Employers are required to maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. They must adopt an approach to safety which is pro-active and not merely re-active." If I then link that statement of principle with what appears at page 64, at the bottom of the page, paragraph 79 of the same judgment, where your Honour said this: "We conclude that in this case, although deterrence in both of its relevant respects is pertinent here, weight should also be given to the particular circumstances of the appellant."

That is the operative window through which the Court views how its discretion will operate when confronted with cases where section 15 has been breached. There is an absolute obligation if it hasn't been achieved the Court is involved in a weighing process, whether the employer is a first time offender or whether they have offended before, as to how you measure and balance the seriousness of the offences be reason of it being foreseeable. 48 It was submitted that the Full Bench had indicated the approach the Court must take when assessing penalty of an employer in these circumstances. This was the "operative window" through which the Court would view a breach of s15 of the Act by an employer in an inherently hazardous industry, such as that of the present defendant. It was submitted that there is an absolute obligation on the employer and when that obligation is not met, the Court must assess the seriousness of the offence by reason of the degree of reasonable foreseeability attendant upon the breach in light of the industry being one that is inherently dangerous. 49 It was further submitted that when looking at the question of deterrence in this case, be it general or specific deterrence, the Court should recognise the substantial efforts that have been taken by the defendant in order to make what is by its very nature an inherently hazardous workplace safe for its employees. 50 It was submitted that the steps that have been taken by the defendant, evident in the judgments of Marks and Kavanagh JJ, demonstrate that the defendant had taken a serious, active and persistent course of action with a view to providing its employees with a safe workplace as required by the Act. 51 Mr West submitted that the defendant recognised there needed to be substantial action taken to improve the safety of its workplace. To that end, in January 1996, the defendant contacted the NSCA with a view to fundamentally changing the company's approach to occupational health and safety issues. The NSCA completed a safety audit of the defendant in both 1998 and 1999, and it was awarded a four star rating by that organisation. It was submitted that such recognition was unusual, and was particularly so in this case, as the review in 1998 was the first assessment of the defendant for the purposes of the award. 52 Mr West submitted that a defendant that operates in such a hazardous industry could well be expected to have a higher incidence of injury than had been demonstrated by the defendant. This submission was not put as being something, of itself, that would warrant a reduction in sentence, but as evidence that the preventative measures the defendant has taken are indeed working. 53 Mr West submitted that the defendant had put in place a system of monitoring safety issues and put in place the people to administer it. It had adopted work procedures which would enhance safety at the workplace and discharge the defendant's duty to take all practicable steps to satisfy the obligation of s15 of the Act. 54 It was submitted that, having taken all these steps, the defendant recognised there was still more to be done. A further step which was required to be taken was for the defendant to change the culture at the workplace. It was submitted that all the systems in the world would be a waste of time if the culture at the workplace did not change. In an effort to effect such an attitudinal change, the defendant has commenced meetings prior to the commencement of each shift involving, not only the factory floor workers, but also the defendant's management. It was submitted that all these steps have been taken to ensure that the defendant provided its workforce with a safe working environment. 55 Further, Mr West submitted that, assuming the defendant had taken all steps available to it, there is always the potential that the very next day, due to human error whether deliberate or negligent, an employee would be injured. It was submitted that this was the purpose for the inclusion within the Act of the defence of reasonable practicability. 56 However, Mr West accepted that the error of the defendant in this case was not simply a matter of human error and that the failure was related to a method of work adopted on the day in question. It was submitted that the erroneous method of work had been corrected. 57 It was further submitted that the criticisms of the prosecutor as to the defendant taking some considerable time to react to remove the risk of the procedure were simply not made out by the evidence. It was submitted that the failure of the defendant in this case related to the use of a non-vertical lifting procedure for the movement of molten metal throughout the foundry and that the non-vertical lifting procedures were no longer utilised as a method of work. Mr West submitted there was simply no evidence that there had been any use of a non-vertical lifting procedure since the incident. The evidence is that following the day of the incident, the company issued the safe work practice revision and then tailored the tipping area to enable large ladles to be lifted vertically. 58 It was further submitted that the prosecutor's submission as to a failure to remedy a starlock device on a ladle was irrelevant. The absence of a starlock device was not a causative factor of the incident. Hence, at its highest, any delay in rectifying the starlock device should be considered as a minor lack of activity which did not detract from the company's standing as a good industrial citizen. 59 Mr West submitted that since the defendant was taken over in late 1999, there had been a substantial shift in its approach to health and safety matters. This much was clear from the evidence of Mr Champion and the amount of time he now spends in relation to health and safety matters. It was also evident from the expenditure of the defendant on these matters, now totalling $1.1 million for a single year. 60 Mr West submitted that this defendant was not "fiddling at the edges" when it came to the issue of safety in the workplace. The defendant has attempted to effect a fundamental, practical and cultural change in the workplace in an effort to provide the safest possible workplace for its employees. Whilst accepting that there would need to be a penalty imposed, the commitment of the defendant should be reflected by a severe offsetting in the penalty imposed by the Court for what was admitted to be a breach of the Act. 61 It was further submitted that it would be appropriate for the Court to expressly recognise the extensive efforts of the defendant to provide a safe workplace operating, as it does, in an inherently hazardous industry. It was submitted that this would be entirely consistent with the role of the Court in encouraging compliance with the Act. 62 Mr West submitted that it would not be often that a defendant before this Court would be able to demonstrate a level of awareness and commitment to the safety of its employees, as is evident in this case. It was submitted that the defendant recognised it needed to improve and in order to do so it sought out and retained the services of an organisation recognised as an independent specialist in this field of business operations. Further, the defendant had continued its internal attempts at improving performance, as evidenced by the cultural survey completed at the start of 2000. 63 It was submitted that the previous conviction entered against the defendant by Marks J resulted in remedial action being taken. This process was continuing when the incident occurred that led to the conviction entered by Kavanagh J. The process was still continuing at the time of the incident giving rise to these proceedings. It was submitted that the remedial action has now been completed and that work in relation to improvements in safety are now being directed towards effecting a cultural change at the workplace. Given the steps taken by the defendant to provide a safe working environment for its employees and the rectification of the method of work giving rise to the incident, there was, in the submission of the defendant, minimal scope for specific deterrence as a factor to be taken into account in the imposition of a penalty in this case. 64 Finally, it was submitted that the defendant had entered an early plea of guilty and expressed contrition in relation to this matter. These are matters properly taken into account by the Court in assessing penalty.

Relevant General Principles 65 The Court, as presently constituted, recently stated the principles to be applied in relation to the sentencing of an offender under the Act in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and another (2000) 95 IR 383 at 427 - 433. I adopt that statement of principles for the purpose of this judgment. However, it is important to note the more recent discussion of the principles of sentencing, including the place of deterrence in fixing a penalty under the Act and the principles involved in assessing the nature and quality or gravity of an offence, in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610.

Consideration 66 In accordance with the principles for sentencing, I shall firstly consider the objective seriousness of the offence. 67 The maximum penalty for the offence, as charged, having regard to the prior record of the defendant, is $750,000: Capral at [44 - 52]. 68 The detriments to safety occasioned by the defendant in the transport of molten metal in ladle No. 7 on 14 May 1998 are manifest. A procedure was adopted by the defendant on 14 May 1998 to transport molten metal at a high temperature. This procedure involved a non-vertical movement of a ladle holding the molten metal which resulted in the tilting of the ladle. During the transport of the ladle, a lapping effect of the molten metal was created and a spillage occurred. There was a risk to the safety of employees who performed work near the ladle whilst such a procedure was adopted for the transport of the molten metal. This was a fortiori the case where the defendant required Mr Kenny to not only be situated near the ladle, but to hold and apply force to it. Indeed, Mr Kenny's role was to counteract the tipping of the ladle; which movement was, by its very nature, likely to cause spillage of the molten metal. 69 Mr West conceded, properly in my view, that his client did not contend that the events leading to the incident were not reasonably foreseeable. It is plain that the risks to safety of employees occasioned by the method of transport of the ladle adopted by the defendant were reasonably foreseeable. It was reasonably foreseeable that an employee working at or near the ladle during the non-vertical lifting procedure adopted by the defendant may suffer injury as a result of spillage of molten metal, either occasioned by a lapping of the molten metal (which actually occurred in this case) or some other movement of the molten metal resulting from the tilting of the ladle. 70 The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature: Capral at [82]. Again, this was properly conceded by Mr West in his submissions. 71 The defendant submitted, however, that the risk had not been actually foreseen and, therefore, the offence was relatively less serious. In support of this contention, it was submitted that the process giving rise to the incident was not considered by the defendant to be a normal work practice. Further, it was submitted that the means of transferring the molten metal by the defendant on the day of the incident had not been assessed for risk and, therefore, the risk had not been foreseen. 72 I accept the contention advanced by the defendant that had the risk to safety been actually foreseen, there would be an increase in the overall seriousness of the offence: Axer Pty Ltd v Environmental Protection Authority (unreported, Court of Criminal Appeal, Matter No. 60763 of 1992, 22 November 1993) at [8]. I also accept the submission by the defendant that the risk of injury had not been actually foreseen in the present matter. 73 However, the submissions made by the defendant as to whether the incident was 'foreseen' also reveal that the defendant had not established a system for the assessment of risk in relation to the work practice in question prior to the incident. Whilst the defendant, on the evidence, had taken elaborate and extensive steps to ensure occupational health and safety at the workplace, the adoption of the particular process giving rise to the incident, without the assessment of risk, does indicate at least some flaw in the safety systems adopted by the defendant. 74 True it is, that the procedure adopted was not a regular work practice. However, the systems of work adopted by the defendant must include searching for and identifying all possible risks and the institution of safety measures to guard against those risks: WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Hill J, Matter No. CT1280 of 1995, 2 April 1997 at 21). Employers are required to maintain constant vigilance and take all practical precautions to ensure safety in the workplace: Capral at [77]. 75 It was submitted for the defendant that, in assessing the nature and quality of the offence and, in particular, in considering whether or not specific deterrence should feature in the assessment of penalty, the Court should have regard to the difficulties in ensuring occupational health and safety in the hazardous industry in which the defendant operates. Reference was made in this respect to the decision of the Full Bench of the Commission in Court Session in Capral at paragraph 77 when read in conjunction with paragraph 79 of the same judgment. It was submitted that the Court should have regard to the particular circumstances of a defendant and, in this respect, the Court should take into account that the defendant is an employer in an inherently hazardous industry. This also reflects upon the degree of foreseeability attendant upon a breach. As to the question of specific deterrence, the Court should have regard to the substantial efforts undertaken by the defendant in order to make an inherently hazardous workplace safe for its employees. 76 In considering these submissions, it is appropriate, in my view, to set out in full the relevant passages of Capral dealing with the question of specific deterrence. Those passages are as follows at [74 - 79]: We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Limited (No. 2) [2000] NSWIRComm at 40 - 43) we would expect such cases to be very rare , and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

We now refer more particularly to the issue of personal or specific deterrence. For the reasons we have given, we do not accept that the appellant's submissions could have a substantial impact upon the weight to be attached to general deterrence in determining an appropriate penalty in the present case. Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.

On the other hand, the attitude of a defendant to questions of workplace safety and any steps taken to improve safety following an accident may be relevant to specific deterrence. Here the objective is to deter the particular offender from repeating the offence: see Ruby, Sentencing (5th Edition, Butterworths, Toronto, 1999) at 10. The propensity to re-offend must be considered when determining the weight, in any, to be attached to specific deterrence. In R v Pickard [1998] VSCA 50, for example, Winneke P and Charles JA of the Victorian Court of Appeal stated (at 4): An assessment by the judge of the risk of a prisoner re-offending is not a feat which requires any refinement of thought process. If the judge is satisfied that the accused constitutes such a risk that the penalty to be imposed should reflect an aspect of specific deterrence, it will be because he or she has no doubt that the accused poses such a risk. In our view, it is not a question of distinguishing between degrees of risk. It is simply because the judge perceives that the risk is such that the penalty should be one which will deter the accused from re-offending. The greater the judge perceives the risk to be, the more heavily specific deterrence will weigh in the instinctive decision as to the appropriate sentence. In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The court may form such a view as a result of the rehabilitation of the offender: R v Corner (unreported, Court of Criminal Appeal, 19 December 1997) or because the offender will not have the opportunity to commit a similar offence in the future: R v Macdonell (unreported, Court of Criminal Appeal, 8 December 1995). However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in case of offences under the Act . At least where the offender continues to be an employer, risks to the safety of its employees or contractors may exist or be possible. Breaches of the duties imposed by the Act may occur both by commission and omission. Employers are required to maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. They must adopt an approach to safety which pro-active and not merely re-active: WorkCover Authority of New South Wales v Atco Controls Pty Ltd (1998) 82 IR 80 at 85. In view of the scope of these obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. This is particularly so where the offender conducts a large enterprise which involves inherent risks to safety : see WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Ltd [2000] NSWIRComm 53 at 46.

We would have considered that this approach was appropriate even before the significant increase in levels of penalty were legislatively imposed effective from 1996. However, that legislative step is itself relevant to this question. As Spigelman CJ held (with the concurrence of Wood CJ at CL and McInerney J) in R v Howland 41 and 43: 41 ... the community has indicated that it wishes to denounce this conduct in the strongest terms. ... By the increases in the maximum sentences, the community, acting through the Parliament, has indicated that this is a crime which it wishes to denounce and deter. It is the duty of the judges to reflect this community concern. ... 43 Sentencing has always been based on the acceptance of the proposition that condign punishment of offenders will have deterrent effect on others. We conclude, in the light of the extract from the judgment in R v Howland that the significant increases in penalty which occurred from 1996 are of considerable significance in emphasising the importance of both particular and general deterrence in the sentencing process for offences against the Act and that the approach exemplified by the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited is decisively confirmed by that legislative intervention. It follows that we do not accept the appellant's submissions in relation to the question of deterrence, although the precise weight to be given to that issue is inevitably within the sentencing judge's discretion : Director of Public Prosecutions v El Karhani (1990) 21 NSWLR 370 at 378. We conclude that in this case, although deterrence in both of its relevant respects is pertinent here, weight should also be given to the particular circumstances of the appellant . (emphasis added) 77 It should be firstly recognised from the judgment in Capral that the Court there rejected a contention by the then appellant that considerably less weight should have been given to deterrence in its case due to its attempts, both before and after the incident, to ensure the safety of workers. The Court found that both general and personal or specific deterrence were matters which should normally play a role in sentencing under the Act and that, although there are exceptional cases requiring a departure from that approach, they are rare at [74]. 78 Further, the Court considered that it was unlikely that the weight to be attached to specific deterrence could be reduced to zero in cases of offences under the Act. Where the offender continues to be an employer, the risk to safety of its employees or contractors may exist or be possible. Thus, the Court came to the view that in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. 79 It follows, in my view, that notwithstanding the somewhat strident steps taken by the defendant to ensure the occupational health and safety of its employees, to which I will return in relation to the subjective features of this matter (and which are earlier described in the summary of the defendant's evidence and in the submissions made on behalf of the defendant), the question of specific deterrence may, as a matter of general principle, nevertheless be relevant. The fact that the industry in which the defendant operates is hazardous in nature does not eliminate the need for specific deterrence. Contrary to the submissions of the defendant in this respect, the need to encourage a sufficient level of diligence by an offender will be particularly relevant where the offender, such as the defendant, conducts a large enterprise which involves inherent risks to safety: Capral at [77]. 80 In my view, and having regard to the principles of sentencing in Capral, specific deterrence should feature in the assessment of penalty in this matter. The defendant has conceded that it was unaware of, and had taken no steps to, assess the risks to safety of employees engaged in the process giving rise to the incident. It is necessary, in these circumstances, to ensure a sufficient level of diligence in the defendant searching for, identifying and removing risks to safety (even where the work to be undertaken does not form part of the defendant's ordinary work practices). This will be so in a hazardous industry, although regard needs to be paid, as noted in Capral, to the particular circumstances of the offence and the offender. 81 It should be noted at this juncture that allowance should also be made for the nature of the industry in which the defendant operates (and the inherent risks to safety therein) in the assessment of the defendant's prior record and in relation to the assessment of subjective features. These matters are discussed later in the judgment. 82 It should also be observed that general deterrence will also be a factor to be considered in the assessment of penalty: Capral at [75]. 83 There are some additional considerations which are relevant to the assessment of the objective seriousness of the offence. 84 Firstly, in addition to the risks to safety on this occasion being reasonably foreseeable, they were also avoidable by simple remedial measures: Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476. The actions taken by the defendant after the incident to remedy any deficiency in safety and to further improve the overall occupational health and safety of its employees at the workplace are factors in favour of the defendant in the assessment of penalty. However, such actions also clearly demonstrate the flaws in the existing system and steps which could have been taken to remedy those flaws: University of Sydney (at 21 - 22). 85 Secondly, there is the question of the significance of the injuries sustained by Mr Kenny. The relevant principle in relation to such matters is stated in Capral as follows: We consider that the limited injuries suffered by Mr Stafford must be seen in the context of that evidence and also in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries suffered, or which may have been suffered, and the gravity of the offence. We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9; Watson v Southern Asphalters Pty Limited (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Limited (1998) 82 IR 118 at 131; WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409; Lawrenson Diecasting Pty Limited at 476; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited at 90 - 91; and Page v Walco Hoist Rentals Pty Limited (No. 2) at 22. 86 Here, as in Capral, there was a relatively limited injury suffered by Mr Kenny. However, the risks to safety in this case, as earlier described, were not exemplified by the limited nature of the injuries suffered. The injuries do not give an accurate insight into the seriousness of the breach. In this case, there occurred a breach of the Act where there was every prospect of serious consequences arising from the risk to safety and this is the relevant consideration in assessing penalty. 87 Having regard to the foregoing considerations as to the objective features of this matter, I consider that the offence in this case is a serious one. 88 There is one further matter that should be dealt with at this juncture. Firstly, there was insufficient evidence to support the prosecutor's submission that the defendant was slow to act in rectifying various occupational health and safety problems. In the result, I reject those submissions. 89 The defendant has a number of prior convictions under the Act. I have earlier referred to two convictions by this Court in 1998 and 1999. This record needs to be considered in the context of the industry in which the defendant operates. In Capral at [84] it was found that sentencing should occur in relation to particular events associated with an offence with due regard to the particular circumstances of other offences, including the prior record of the defendant. The defendant's submissions as to the size and nature of its operations are relevant in this respect. Furthermore, I shall (following the approach taken by the Full Bench in Capral) avoid double counting of either culpability or penalty having regard to the provisions of s51A of the Act. 90 It is appropriate, in assessing the prior record of the defendant, to have regard to the relatively large number of employees engaged by it and the nature of the work carried out by the defendant and its employees including, as the defendant has put it, the inherently dangerous nature of its operations: WorkCover Authority of NSW (Inspector Sheppard) v The State Rail Authority of NSW [2000] NSWIRComm 179 at [47] and WorkCover Authority of NSW (Inspector May) v Warman International Ltd (unreported, Marks J, Matter No. IRC3166 of 1997, 9 September 1998). Furthermore, the Court should consider the changes in safety measures being implemented by the defendant. In these circumstances, I shall not treat the defendant's record as poor for the purpose of assessing penalty, although the defendant's record may well become an issue in the event of any future breaches. 91 Before passing to the question of penalty, it is, however, appropriate to consider various subjective features which may properly lead to a reduction in the penalty which might otherwise have been imposed. 92 The defendant has entered an early plea of guilty which will give rise to a reduction in sentence upon the principle stated in R v Thompson; R v Houlton (2000) 49 NSWLR 383. I consider that the defendant has co-operated with the prosecutor in the investigation of the incident. In all these respects, I consider that the defendant has demonstrated contrition and deserves a discount based on subjective factors. 93 In applying the judgment in R v Thomson, I have had regard to the decision of Wright J, President, in WorkCover Authority v The State Rail Authority. I adopt his Honour's judgment in relation to the application of the guideline judgment. Wright J, in this respect, stated at [37 - 40]: On 17 August 2000, after judgment was reserved in this matter, the Court of Criminal Appeal ( Spigelman CJ, Wood CJ at CL, Foster AJA, Grove and James JJ) delivered judgment in R v Thomson; R v Houlton [2000] NSWCCA 309, the guideline judgment as to pleas of guilty in criminal proceedings. The guideline adopted and other pertinent observations are set out in the judgment of the Chief Justice as follows: 160. The Court should adopt the following guideline applicable to offences against State laws: (i) 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.

(ii) 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.

(iii) 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. (iv) 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. 161. The Court was asked to clarify its earlier guideline judgments in the light of any guideline it might propose in this respect. The standard case identified in each of Jurisic and Henry included a plea of guilty. That was not the case in Wong in which the range encompassed relevant matters, including a plea. In each of Jurisic at 231 and Henry at [162], the Court was concerned with a guilty plea of limited value. The guidelines for the offences considered in those cases should be understood to involve a late plea of guilty, for purposes of the application of the guideline promulgated in these reasons.

162. The discount range propounded for a guilty plea based on utilitarian consideration is not intended to result in any change in the level of sentences generally. Nothing in these reasons should be construed as indicating an opinion that trial judges have not in fact been giving appropriate consideration and weight to pleas in such a way as to distort the general level of sentences. The purpose of identifying a discount range is to improve the transparency of the process and to alter the widespread perception that there is no benefit from an early plea. Insofar as existing sentencing practice has been to allow discounts for pleas up to 35 percent, encompassing all relevant matters, such a practice remains appropriate.

The guideline is to be considered with the relevant provision of the Crimes (Sentencing Procedure) Act 1999 which replaced s439 of the Crimes Act 1900 and which provides: 22(1) In passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must take into account:

(a) the fact that the offender has pleaded guilty, and

(b) when the offender pleaded guilty or indicated an intention to plead guilty, and may accordingly impose a lesser penalty than it would otherwise have imposed.

(2) When passing sentence on such an offender, a court that does not impose a lesser penalty under this section must indicate to the offender, and make a record of, its reasons for not doing so.

(3) Subsection (2) does not limit any other requirement that a court has, apart from that subsection, to record the reasons for its decisions.

(4) The failure of a court to comply with this section does not invalidate any sentence imposed by the court. Also relevant is the approach followed and applied many times by this Court in R v Winchester (1992) 58 A Crim R 345 where Hunt CJ at CL said, at 350:

A plea of guilty is always a matter which must be taken into account when imposing sentence. The degree of leniency to be afforded will depend upon many different factors. The plea may in some cases be an indication of contrition, or of some other quality or attribute, which is regarded as relevant for sentencing purposes independently of the mere fact that the prisoner has pleaded guilty. The extent to which leniency will be afforded upon this ground will depend to a large degree upon whether or not the plea resulted from the recognition of the inevitable: Shannon (1979) 21 SASR 442 at 452; Ellis (1986) 6 NSWLR 603 at 604. The plea of guilty may also be taken into account as a factor in its own right independently of such contrition, as mitigation for the co-operation in saving the time and cost involved in a trial. Obviously enough, the extent to which leniency will be afforded upon this ground will depend to a large degree upon just when the plea of guilty was entered or indicated (and thus the savings effected): Beavan (unreported, Court of Criminal Appeal, NSW, Hunt, Badgery-Parker and Abadee JJ, 22 August 1991), at p 12. The considerations cited from R v Winchester are to be applied in this matter. The plea should be considered as an early plea; and although the Court does not find that a conviction would have been inevitable in the absence of a plea, the matter should be approached on the basis that a conviction was likely.

I consider it is appropriate to apply the guideline judgment in R v Thomson; R v Houlton in determining the fine that should be imposed on the defendant in these proceedings.

94 I shall also give the defendant a discount on penalty having regard to the actions taken by it to improve safety after the incident: Tyler v Sydney Electricity (1993) 47 IR 1 at 5 and Alcatel Australia Limited v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 at 103. 95 I note that, in accordance with the judgment in R v Thomson, I propose to quantify the discount allowed to the defendant having regard to the plea of guilty (including the utilitarian value of the early plea), the contrition of the defendant, the steps taken by the defendant to remedy defects in safety and its co-operation and assistance with the authorities. I allow, in this respect, 25 per cent discount upon the penalty, being a significant discount for these factors having regard to the substantial subjective factors in favour of the defendant. 96 I have also taken into account, in the assessment of penalty, the evidence led by the defendant as to the extensive measures taken by it to ensure the occupational health and safety of employees at the workplace. I have set these measures out in some considerable detail earlier in the judgment as they are commendable. I do not propose to repeat the various elements of the comprehensive safety management programme adopted by the defendant, but simply note that it is a matter which resulted in a discount in penalty in this matter. 97 In assessing penalty, I have taken into account the objective features of the offence and all matters raised by the defendant in that regard as to the issue of aggravation. 98 For the foregoing reasons, I consider, after discount for the subjective factors, that the appropriate penalty with regard to the offence as charged is $126,000. The prosecutor should have a moity of the fine. 99 I make orders as follows: 1. The defendant is fined an amount of $126,000 with a moity thereof to the prosecutor; 2. The defendant shall pay the costs of the prosecutor as agreed, or failing agreement, as assessed.

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