Employers exposed to $3 million fines under Federal OHS Laws

The Safe Work Act 2009, the model national occupational health and safety laws, was released on 28 September 2009. This bulletin provides an overview on the key features of the proposed Act.

Duty of Care

If the proposed Act is accepted by the States, employers will be exposed to a new standard of duty of care. This new standard will require employers to demonstrate that they have so far as reasonably practicable, implemented systems in the workplace which will ensure the health and safety of workers in the workplace.

What is reasonably practicable will be determined by taking into account and giving appropriate weight to:

• the likelihood of the hazard or risk occurring;
• the degree of the harm that might result from the hazard or risk;
• what the person concerned knows, or ought reasonably to know about the hazard and the risk and ways of eliminating or minimising the hazard or the risk;
• the availability and sustainability of ways to eliminate or minimise the hazard or risk; and
• the cost of eliminating or minimising the risk.

It could be argued that this is a more sensible approach than the current Queensland standard.

Cost to employers

The Government has claimed in its regulatory impact statement that employers are not likely to incur “significant” costs while learning to “play under the new rules”. However, a review of the proposed laws demonstrates a system that increases employers’ current obligations by, for example, imposing a positive obligation on all employers to engage employees in a consultation process when implementing and monitoring any risks within the workplace. Employers who fail to discharge this risk face a fine.

Contrary to the Government’s claims this process may result in a decrease in business efficiencies as more time is spent negotiating methods of improving safety than actually doing so, and by reducing employee efficiency as more work time is spent assisting and negotiating the manner in which workplace health and safety systems will be improved instead of conducting their usual duties.

Costs will also be incurred to business as employers will be expected to provide those employee representatives who are acting in safety roles with adequate facilities and external training to adequately perform their role. Whilst employee representatives currently exist in Queensland, the proposed scope of their powers will be increased by the proposed Act.

It might be expected that this will impose a heavy compliance burden on SMEs who may not have the resources available to attend to the detail required by the Act.

New Fines

Although the extent of fines have not been set out in the proposed Act, the federal Government has announced that it intends to introduce fines of up to $3 million, and provide for a five year jail term, in “worst case scenarios” of breaches against the new occupational health and safety laws.

Union rights of entry

Like the Fair Work Act 2009 provisions, the proposed Act extends right of entry provisions to allow an OHS entry permit holder (who must be a union official) right of entry for the purposes of investigating suspected contravention of the proposed Act.

The right of entry provisions is linked to a union’s right to represent the industrial interests of the employees at the workplace. Whilst at the workplace, OHS entry permit holders may inspect any work system, plant or substance, consult with relevant workers, inspect and make copies of records or document that are directly related to the suspected contravention, and warn any person who may be exposed to serious risk to his or her health of the suspected contravention.

The proposed Act also allows an OHS permit holder the right to enter any workplace to consult on general occupational health and safety matters with any worker who is or is eligible to be a member of that permit holders union.

Stakeholder Consultation

Safe Work Australia, the new national regulatory body for occupational health and safety, has also released draft regulations, a consultation regulatory impact statement and a discussion paper to allow all stakeholders the opportunity to provide public comment until Monday 9 November 2009 about the model Act and model Regulations. More information about this process can be found at Safe Work Australia’s website

Key Dates

Below are the key dates which the Government is targeting to meet for rolling out the new laws. It is anticipated that all jurisdictions will have implemented the model OH&S Act and Regulations by December 2011.

September 2009
Workplace Relations Ministers Council (WRMC) to approve model OHS legislation exposure draft and consultation Regulation Impact Statement for public comment.

September 2009
Stage One: model regulations associated with core functions, obligations or powers, arising from the recommendations from the national review released for public comment.

November/ December 2009
Model OHS legislation submitted to WRMC for agreement.

November/ December 2009
Draft model OHS regulations developed and progressively submitted to WRMC for decision.

Progressively from late 2009
Stage Two: model regulations on matters addressed in existing national OHS standards.

Progressively from late 2009
Stage Three: model regulations on matters currently included in regulations in two thirds, or more, of the jurisdictions.

Early 2010
Stage Four: model regulations on matters currently included in regulations in one or several jurisdictions.

Progressively from late 2010
Development of model Codes of Practice.

December 2011
All jurisdictions have implemented the model OHS Act and regulations.