Australia’s first Building Code sanctions imposed for WHS contravention –despite no injuries

In a national first, a Queensland construction company has been temporarily banned from tendering for Commonwealth-funded building work following its failure to comply with its primary health and safety duties under the Work Health and Safety Act 2011 (Qld) (WHSA).

The decision has significant implications for employers in the construction industry covered by the Code for the Tendering and Performance of Building Work 2016 (Cth) (Building Code) and indicates a greater likelihood of sanctions being applied to employers who fail to comply with their work health and safety obligations.

The incident – fine imposed under WHSA

MCP (Aus) Pty Ltd (MCP) was a subcontractor to Nexus Infrastructure, the primary contractor, on the Toowoomba Second Range Crossing project, a 41km carriageway bypass and partial ring road constructed to the north and west of Toowoomba, Queensland. The project had seen a high number of safety incidents investigated and prosecuted by Workplace Health and Safety Queensland. MCP was operating a concrete pump truck with a 60-metre boom, that became unstable and fell over on 15 August 2017.

MCP pleaded guilty and was sentenced in the Toowoomba Magistrates Court for a category two offence in contravention of section 32 of the WHSA for failing to meet its primary health and safety duty under section 19(1) of the WHSA.

There were no personal injuries despite the incident. In fining MCP $50,000, the Court found that MCP’s employees had breached the concrete pump truck operator’s manual and had failed to complete a series of mandatory checklists or conduct risk assessments prior to setting up the concrete pump truck and boom.

In sentencing MCP and imposing the fine of $50,000 out of a maximum fine available of $1.5 million, the Magistrate took into account MCP’s timely guilty plea, lack of previous convictions and the immediate steps taken by MCP to remedy its safety systems and re-train its workers and refine its safe work method statements immediately following the incident.

The Building Code – further penalty imposed

MCP’s breach was referred to the Minister for Industrial Relations (IR Minister) for consideration under the Building Code. The Building Code sets out the minimum standards of conduct required for companies undertaking Commonwealth-funded building work and specifically provides that a Building Code covered entity must comply with work health and safety laws, including training and right of entry requirements, to the extent that they apply to the entity in relation to the building work.

Section 18 of the Building Code provides that where the Australian Building and Construction Commissioner (ABC Commissioner) is satisfied that a Building Code covered entity has failed to comply with work health and safety laws or the Fair Work Act 2009 (Cth) (FWA) in relation to the underpayment of wages or entitlements, the ABC Commissioner may refer the matter to the IR Minister with recommendations, if any, that sanctions be imposed.

Where a work health and safety matter has been referred, the IR Minister must impose an ‘exclusion sanction’ unless the IR Minister is satisfied that it would not be appropriate in the circumstances because of the nature of, or factors contributing to, the failure to comply with the work health and safety laws. An exclusion sanction has significant consequences for Building Code covered entities, as it is a period where that entity is not permitted to tender for, or be awarded, Commonwealth-funded building work. The IR Minister can impose exclusion sanctions of up to one year in duration.

In this case, the IR Minister considered that MCP had made full admissions, fully cooperated, and took positive steps to remediate and rectify its work health and safety conduct. It also considered that no injuries were suffered by any workers and accepted the Magistrate’s findings that this incident was unlikely to result in death or serious injury. However, despite these mitigating factors weighing in MCP’s favour, the IR Minister determined that the steps taken by MCP following the incident were not enough to render it inappropriate to impose an exclusion sanction under the Building Code.

MCP was issued a one-month sanction preventing it from tendering for Government-funded building work under the Building Code. This is the first exclusion sanction ever imposed since the Building Code was introduced in 2016. In imposing the sanction, the IR Minister announced that, ‘the Australian Government takes any work health and safety contraventions very seriously given the potential for tragic outcomes, including serious injury and death’.

Warning – what does this mean for you?

This decision establishes that moving forward, the ABC Commissioner and the IR Minister will be more active in seeking to impose sanctions banning Building Code covered employers from tendering for, and being awarded, Commonwealth-funded building work, where an employer fails to comply with its primary work health and safety duties under the WHSA or its wage and entitlement obligations to employees under the FWA and applicable industrial instruments.

If you need assistance with understanding your work health and safety duties or wage and entitlement obligations to employees, please contact Sandra Barry or another member of our workplace relations and safety team.