WorkCover v TRW

Industrial Relations Commission (NSW)|1999-09-17|Before: Boland J, Mr P

Industrial Relations Commission of New South Wales in Court Session

CITATION : WorkCover v TRW [2001] NSWIRComm 52 PROSECUTOR: PARTIES : Inspector Ching of the WorkCover Authority of New South Wales DEFENDANT: TRW Steering & Suspension Australia Ltd FILE NUMBER: 2918 of 1999 CORAM: Boland J CATCHWORDS : Occupational Health and Safety - Offence under s 15(1) of Occupational Health and Safety Act 1983 - Employee injured while assisting another employee to set up and operate a thermal lance - Plea of guilty - Fine imposed - Costs LEGISLATION CITED : Occupational Health and Safety Act 1983 Broomham v BHP Steel AIS Pty Limited, t/as BHP Steel Flat Products Division (unreported, IRC98/3440, 17 September 1999) at 25-26 Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 99 IR 29 Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27 CASES CITED : Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320, McLean v Tedman (1984) 155 CLR 306 at 311 - 312. R v Thomson, R v Houlton [2000] NSWCAA 309 Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 at 15 WorkCover Authority of NSW (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 722 HEARING DATES: 03/02/2001 DATE OF JUDGMENT: 04/02/2001

PROSECUTOR: Mr P M Skinner of counsel Solicitor: Mr G McCann of WorkCover

LEGAL REPRESENTATIVES: DEFENDANT: Mr B K Cross of counsel Solicitor: Mr T Plummer Moray & Agnew

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J Monday 2 April, 2001 Matter No IRC 2918 of 1999 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR CHING) v TRW STEERING & SUSPENSION AUSTRALIA LTD Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 The defendant conducted the business of manufacturing motor vehicle steering and suspension components from factory premises at Carrington Road, Marrickville in the State. On 12 June, 1997, in the course of his employment Sanjay Devarkonda, a maintenance fitter employed by the defendant, was assisting another maintenance fitter, Alan Pritchard, to set up and operate a thermal lance to cut solidified aluminium from a furnace at the defendant's premises. In the course of testing the lance for use it exploded, setting fire to Mr Devarkonda's clothing and causing him to sustain severe burn injuries to the right arm, left hand and abdomen. Mr Devarkonda was absent from his employment for approximately eight weeks before returning on selected duties. 2 A prosecution was instituted against the defendant by Inspector Barnabas Ching of the WorkCover Authority of New South Wales for an alleged breach of s 15 of the Occupational Health and Safety Act 1983. The charge against the defendant in the amended summons was that: On the (sic) 12 June 1997 at its premises at Carrington Road, Marrickville, 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 Sanjay Devarkonda, contrary to Section 15(1) of the Occupational Health and Safety Act 1983,

The Particulars of the charge are: 1. The Defendant failed to adequately train its maintenance employees involved in assembly and operation of thermal lancing equipment in a safe procedure for the performance of this task. 2. The defendant failed to provide and maintain plant that was safe and without risks to health and in particular it failed to provide and maintain a thermal lancing set to be operated by its employees that was safe and without risks to health. 3. The defendant failed to adequately supervise its maintenance employees to ensure that thermal lancing equipment was not assembled or operated by persons who had not been trained in the safe assembly and operation of such equipment. 4. As a result of the said failures there was a risk of injury to its employees. On 12 June 1997, its employee Sanjay Devarkonda sustained severe burn injuries when a thermal lance being used at work exploded. 3 The defendant entered a plea of guilty to the charge. An Agreed Statement of Facts was tendered. Relevant extracts from the Agreed Statement explain how the accident occurred and identify the likely cause of the accident. The Statement also refers to the steps taken by the defendant following the accident: 7. In the course of its manufacturing operations at the said premises, the Defendant utilised electric furnaces to heat aluminium which is then utilised in a die casting process. Prior to the said date, on 10 June 1997, a crack developed in a furnace crucible, which was reported to the Defendant's maintenance department. To enable the furnace to be repaired, an amount of solidified aluminium metal contained in the furnace was required to be removed. On 11 June 1997, a number of unsuccessful attempts were made to remove the metal with oxyacetylene equipment. Subsequently, on that date the Defendant's maintenance supervisor, Shankar Gopalan discussed the removal of this metal with Alan Pritchard and Stan Deregowski, the Defendant's production supervisor. A decision was made that the metal would be removed by means of thermal lancing.

Thermal lancing is a procedure by which the tip of a metal lancing rod containing welding rods is heated by an external source, usually an oxyacetylene set, to a high temperature. The heated lancing rod is then fed with oxygen through a supply valve in the handle section of the rod. Combustion is enhanced when the oxygen passes along the length of the rod, exiting at the heated tip. Sufficient heat can be generated by such equipment to melt and gouge out solidified metal.

On 11 June, 1997, following the discussion between Gopalan, Pritchard and Deregowski, a thermal lance was constructed by an afternoon shift fitter employed by the Defendant, David Farrelly, from a lancing rod and other components including an old oxyacetylene hose, a ball valve and fittings. This was utilised on the night of 11 June to attempt to remove the metal, but was unsuccessful. The oxyacetylene hose failed to provide sufficient oxygen flow to heat the lance to the required temperature.

Subsequently, on the said date, Devarkonda was requested to assist Pritchard with the thermal lancing operation. Gopalan was aware that both Pritchard and Devarkonda were qualified as fitters and that Pritchard had previously worked in the maintenance team at the Defendant's Rockdale site where lancing had been used on the main furnace approximately once every 4 months. However, the date of the accident was the first occasion on which Pritchard and Devarkonda had assembled or used thermal lancing equipment.

Although thermal lancing procedures were occasionally utilised by the defendant's employees at its other factory premises at Rockdale and at said premises, such procedures had not previously been undertaken by Devarkonda and Pritchard. As at the said date, the Defendant had no written procedures in place at the said premises for the performance of such works.

Prior to the said date, neither Pritchard nor Devarkonda had received any instruction or training from the Defendant in the assembly of thermal lancing equipment, or in procedures to be following (sic) when carrying out thermal lancing operations.

On the said date, Pritchard replaced the tubing which had been utilised unsuccessfully on the lance the previous day with 12.5 mm diameter flexible Parker hosing, rated at 29.3 Mpa (4,250 psi). This was connected to a bottle of compressed industrial oxygen, size G, rated at 17.5 Mpa. No regulator was attached between the oxygen bottle and the lance supply hose to ensure that the maximum pressure imposed on the system did not exceed the maximum pressure rating of the components used. Between the supply hose and the lance tube, Pritchard fitted a Richards series 51 Class 800 hydraulic ball valve with a coupling to connect it to the lancing rod. This ball valve was approximately 400 mm in length and fitted with a metal lever, by means of which the valve could be opened, introducing oxygen into the attached lance. The maximum pressure rating of this valve was 13.8 Mpa.

The Richards ball valve utilised by Pritchard to assemble the thermal lance was obtained by him from a cupboard in the defendant's maintenance workshop. It was not a new valve, but had previously been used in hydraulic applications. Prior to attaching the valve to the thermal lance, Pritchard attempted to clean it by blowing it twice with compressed air. The valve was not otherwise cleaned.

Immediately prior to the accident, Pritchard and Devarkonda attempted to test the operation of the assembled thermal lance. Pritchard went to the oxygen cylinder and opened the supply valve. Devarkonda was holding the lance and opened the ball valve supply lever. Immediately upon Devarkonda doing so, the lance exploded.

It appears that the proximate cause of the explosion was the presence of contaminants, possibly hydraulic oil, in the ball valve fitted to the unit.

Following the accident, the thermal lancing equipment involved in the explosion was inspected by D. Singh, a safety inspector employed in Pressure Systems Unit, Engineering Services Branch of the WorkCover Authority. A copy of Inspector Singh's report, dated 24 June 1997, is attached hereto. In that report, Inspector Singh expresses the opinion that the Richards ball valve utilised in the oxygen delivery circuit was not suitable for the pressure applied to it and that the presence of oil in a previously used valve of this type would provide an ideal combustion/explosive condition upon the introduction of oxygen under pressure.

The Material Safety Data Sheet for compressed oxygen, published by its Australian Manufacturer, BOC Gases Australia Ltd, indicates that this substance is a non-hazardous, non-flammable gas, which can be utilised to enhance combustion. Oil, grease and most lubricants can ignite in the presence of this gas, and it is not compatible with such substances. Engineering controls specified for safe gas usage include the following: "Securely connect regulator or manifold having suitable pressure and flow rating with connection to match cylinder valve outlet. Never allow oil or grease on cylinder valves. Use only oxygen compatible materials degreased for oxygen service. Copper, copper alloys and stainless steel are recommended. Teflon is preferred. Most lubricants are not suitable."

A copy of the MSDS, dated 6 March 1996, is attached hereto. 19. Following the said accident, the following steps were taken by the Defendant to reduce or eliminate risk of a recurrence: (a) Thermal lancing activities by employees of the Defendant have been prohibited. Such works are now to be conducted only by external specialised contractors. (b) A Hot Work Permit System was been introduced. (c) The Defendant's Induction Program for all employees has been extended to include a component related to the usage of compressed gases for all new maintenance staff. (d) A review of clothing policy for maintenance, die cast and forge employees has been carried out. 4 In addition to the Agreed Statement of Facts an affidavit of Mark Wylie was tendered by the defendant. Mr Wylie was employed by the defendant at the time of the accident as its Human Resources Officer. Mr Wylie's affidavit dealt with the following issues: · Circumstances surrounding the accident. · Rehabilitation of Mr Devarkonda. · The defendant's approach to training. · Measures taken by the defendant prior to and after the accident. Submissions by the Prosecutor 5 Mr P M Skinner of counsel appeared for the prosecutor. His submissions may be summarised as follows: · The objective facts in this case indicate a serious offence. The activity engaged in by Mr Devarkonda and Mr Pritchard was a dangerous activity in respect of which the severe consequences were immediately foreseeable. · The two employees had not been involved previously in a thermal lancing operation; they had no training in such an operation; there was no regulator attached between the oxygen bottle and the lance supply hose; the ball valve used in the oxygen delivery circuit was not suitable for the pressure applied to it, and; there was the presence of lubricants on the valve. · The maximum penalty for the offence was $750,000; the offence should attract a mid-range penalty. · There are subjective factors to be taken into account including an early plea of guilty, contrition and improvements to procedures post the accident. · Deterrence is a factor to be taken into account: Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 99 IR 29. Submissions for the Defendant 6 Mr B K B Cross of counsel appeared for the defendant. Mr Cross's submissions in mitigation may be summarised as follows: · The industry of the employer involves a relatively high risk of injury. · Both Mr Devarkonda and Mr Pritchard were qualified fitters and the maintenance supervisor, Mr Gopalan, was aware that Mr Pritchard had previously worked in the maintenance team at the defendant's Rockdale site where thermal lancing had been used approximately every four months. · Prior to the accident the defendant had in place occupational health and safety measures including: an occupational health and safety committee; a corporate safety and policy procedures manual; the provision of personal protective equipment and training in the use of such equipment; a company policy to maintain Material Safety Data Sheets; the provision of emergency showers. · The defendant fully investigated the accident. · Mr Devarkonda was rehabilitated back into his role as maintenance fitter. · The defendant took steps to ensure there could be no repetition of the accident. These measures included: developing a training procedure and operation instruction for hot work involving a hot work permit system; ceasing to undertake thermal lancing; seconding from the US a leading health and safety expert to initiate the development of improved health and safety systems; employment of a safety manager to oversee the development and implementation of an integrated management system and to develop a site safety manual for training of managers and supervisors in relation to their safety responsibilities and accountabilities. In addition, the safety manager instituted a visual management system involving amongst other things, a walk each morning by the senior management around the plant. · The defendant has dramatically improved its performance in relation to lost time injuries and lost time injury days. Since 1997, lost time injuries have reduced from 70 to 16 and lost time injury days have reduced from 1287 to 354. · The defendant has improved the safety standard at its Marrickville site to such an extent that it is now used by WorkCover as a model in its advertising. · There is no need to include in any fine an element for deterrence. · The defendant has entered a guilty plea. · The defendant cooperated with the WorkCover Authority. · The nature and quality of the offence is at the lower end of the spectrum. Consideration 7 After reviewing the agreed facts, and in light of the charge and the particulars thereof, I am satisfied the offence has been proven. The plea of guilty by the defendant was properly made and I will enter a verdict accordingly. 8 It remains to deal with the questions of an appropriate penalty and costs. The maximum penalty for the offence at the time it was committed and taking into account the defendant's prior convictions, was $750,000. A schedule of those convictions shows that there have been four offences in recent years incurring fines ranging from $10,000 to $25,000. 9 The approach I should take to sentencing was conveniently summed up by Hungerford J in Broomham v BHP Steel AIS Pty Limited, t/as BHP Steel Flat Products Division (unreported, IRC98/3440, 17 September 1999) at 25-26: Given that the maximum penalty for the instant offence is $750,000 as providing for the worst case, it seems clear to me on the settled authorities that in assessing penalty I am required to do so by reference to the objective seriousness of the offence in terms of its relative seriousness to a worst case: see Camilleri's Stock Feeds Pty. Limited v. Environment Protection Authority (1993) 32 N.S.W.L.R. 683 at 698 per Kirby P., as he then was, as applied recently in Tuckley v. The Crown in Right of the State of New South Wales (Department of Community Services) (unreported, Hungerford J., IRC97/7324, 7 September 1999 at pp.22-23). In that respect, however, and again as Kirby P. suggested in Camilleri's Stock Feeds (32 N.S.W.L.R. at p.698) - "The Court must keep in mind not only the facts which establish the seriousness of the offence but also those which tend to mitigate that seriousness or exculpate the offender". But, as was observed by me in WorkCover Authority of New South Wales (Inspector Dowling) v. Overtop Pty. Ltd. (1998) 86 I.R. 319 at 333 and cases cited therein, "subjective considerations going to mitigation are necessarily subsidiary to the objective factors of the nature and quality of the offence". The applicable principles to follow in the sentencing process were, with respect, conveniently collected by a Full Bench (Wright J., President, Walton J., Vice-President and Peterson J.) of the Court recently in Fletcher Construction Australia Limited v. WorkCover Authority of New South Wales (Inspector Fisher) (1999) 90 IR 66 at 77-81 and where their Honours' earlier decision in Lawrenson Diecasting Pty. Limited v. WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 91 IR 464 at 472-472 was affirmed. I have had recourse to those authorities in considering the present task. 10 It seems to me that there was a complete failure on the part of the defendant in three significant respects: 1. It did not provide and maintain a thermal lancing set that was safe and without risks to health. Indeed, it did not provide a thermal lancing set at all and so maintenance fitters, who had no training in assembling a set, were left with the task of constructing it out of bits and pieces.

It did not adequately train its maintenance fitters involved in the assembly and operation of thermal lancing equipment in a safe procedure for performing the task. Mr Devarkonda and Mr Pritchard had not received any training or instruction from the defendant in the assembly of thermal lancing equipment or in procedures to be followed when carrying out thermal lancing operations. The fact that they were qualified fitters was no basis to assume that Mr Devarkonda and Mr Pritchard knew what they were doing in assembling and operating the thermal lancing equipment.

It failed to provide adequate supervision of its maintenance fitters to ensure that the thermal lancing equipment was not assembled or operated by persons who had been trained in the safe assembly and operation of the equipment. No attempt was made to determine whether any of the fitters involved had training on the equipment and the extent of that training and, despite that failure, the attendant allowed the fitters to proceed to undertake what was an inherently dangerous task. No check was made as to whether Mr Pritchard, who had previously been part of the maintenance team at Rockdale, had been involved in thermal lancing on that site. No procedures were in place for performing the work of thermal lancing. No check was made by supervision that the equipment assembled by Mr Devarkonda and Mr Pritchard was safe to use before the two fitters tested the equipment. 11 As to the question of the reasonable foreseeability of the risks to safety, Walton J, Vice President, in Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27: Whilst the reasonable forseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng , Matter No IRC 3064 of 1997, 12 August 1999 at 39), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and The University of Sydney (at 16). 12 It seems to me there was every prospect of serious injury arising from the assembly and operation of the thermal lancing equipment by persons who had no training or experience in doing so; it was a reasonably foreseeable risk to safety. 13 I note what could only be described as the foolhardiness of the two fitters in proceeding to assemble and operate the thermal lancing equipment without proper training and without donning the protective clothing that was available and I have taken this into account. However, the duty to provide a risk free work environment is a duty owed not only to the careful and observant employee but also to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman (1984) 155 CLR 306 at 311 - 312. 14 I respectfully agree with the conclusions of the Full Bench in Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 [at 15] as follows: The magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of common sense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction afforded the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257: "Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry."

See also WorkCover Authority of NSW (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 722. 15 It is apparent to me, on a consideration of the relevant objective factors, that the offence involved a serious detriment to safety. I conclude that the essential nature and quality of the offence would attract a penalty in an amount of $150,000. There are, however, a number of subjective factors to be taken into account. These include the early plea of guilty, the recognition by the defendant of its obligations concerning occupational health and safety and the preparedness of the defendant to move quickly in taking extensive and appropriate measures to remedy the deficiencies in its system for regulating occupational health and safety at its Marrickville site. The measures taken are, indeed, highly commendable but as factors to be taken into account in mitigation they "are necessarily subsidiary to the objective factors of the nature and quality of the offence". 16 Having regard to the early plea of guilty and the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton [2000] NSWCCA 309 I would allow a discount of 25 per cent. For the other subjective factors mentioned, particularly the measures taken to improve occupational health and safety, I would allow a further reduction of 15 per cent. In the result, I consider an appropriate penalty in this case to be $85,000. 17 I find the defendant guilty of the offence charged and enter a verdict accordingly. I order that the defendant is convicted and is fined an amount of $85,000 with a moiety to the prosecutor. The defendant is ordered to pay the prosecutor's costs in an amount as agreed or assessed.

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