Managing Principal, Workforce Strategies, Marsh Advisory, Pacific
At a glance:
The independent review on national Work Health and Safety (WHS) laws conducted by Marie Boland on behalf of Safe Work Australia in 2018 proposed a number of key recommendations, one of which was the inclusion of the offense of industrial manslaughter. Since the review, industrial manslaughter has been increasingly under the spotlight in the ongoing discussion and advancement of WHS laws throughout Australia.
The Commonwealth, South Australia and New South Wales are currently reviewing draft amendments to their respective WHS Acts, with intentions to introduce industrial manslaughter laws in 2024. Tasmania is currently the only jurisdiction yet to raise a Bill or enact legislation on this offence.
Despite legislative progress in recent years, the number of workplace fatalities in Australia have remained relatively static over the last five years. In 2022 alone, 195 Australian employees tragically lost their lives at their place of work. In addition to laws and regulations, systematic change and proactive risk management within businesses and organisations are critical to the success of elevating the overall standards for workplace safety and reducing serious injury and fatality risks. Organisations need to proactively review and implement the necessary changes/improvements to their safety systems to ensure a safe work environment is provided and maintained. The consequences of not doing so can be severe.
A good place for companies to start is having a sound understanding of industrial manslaughter laws in the various jurisdictions you operate in and how they may impact your business. Let’s take a closer look at each state and territory.
In September 2023, the Federal Government put forth a Bill aimed at addressing the "loopholes" in Commonwealth employment laws. This Bill suggests several modifications to Commonwealth work health and safety legislation, including the implementation of industrial manslaughter provisions at the Federal level. These provisions would be applicable to both the Commonwealth public sector and Comcare covered licensees.
If approved, persons conducting a business or undertaking (PCBU) and their officers, falling under the jurisdiction of the Commonwealth WHS Act, would be subject to a new offence of industrial manslaughter if their actions of "gross negligence or recklessness" are found to have played a role in the death of a worker. The penalties for individuals could result in imprisonment for up to 25 years, while body corporates could face fines of up to $18 million.
In October 2023, the NSW Government presented a Bill to ament the current WHS Act. One of the proposed amendments relates to the introduction of an industrial manslaughter offence. The Bill is expected to be introduced to parliament in early 2024. There will be an extensive consultation with work health and safety experts, business groups, unions, legal stakeholders and families of people who have been killed at work.
The aim of the new legislation is to enforce stringent penalties for the most severe violations of work health and safety regulations, reflecting the government’s strong stance that individuals and companies who endanger the lives of workers will be held responsible under law.
In July 2023, a Bill was presented to Parliament recommending the addition of an industrial manslaughter offence to the current WHS Act. If passed, the legislation would hold employers and their officers criminally liable if an employee dies due to an incident at work involving grossly negligent or reckless conduct. Under the proposed legislation, bodies corporate with a health and safety duty under the Work, Health and Safety Act 2012 (SA) could face a maximum penalty of $18 million, while sole traders or officers could face up to 20 years of imprisonment.
In November 2020, the Work Health and Safety Act 2020 (WA) was passed, bringing Western Australia in line with work health and safety laws in most other jurisdictions. The Act includes an industrial manslaughter offence, which occurs when a duty holder (including officers of PCBUs in some situations) fails to comply with their health and safety duty and engages in conduct that causes the death of an individual, knowing that the conduct was likely to result in death or serious harm, and disregarding that likelihood. The maximum penalty for an individual is 20 years' imprisonment and a fine of $5 million, while companies can face fines of up to $10 million.
On 1 July 2020, the offence of workplace manslaughter was introduced in Victoria. This law states that a corporation or officer can be charged with workplace manslaughter if they engage in conduct that is negligent, breaches an applicable duty owed to another person, and results in the death of that person. The maximum penalty for individuals is 25 years' imprisonment, while companies can face fines of up to $18.49 million.
On 1 February 2020, the Northern Territory amended the WHS Act NT to include an industrial manslaughter offence. Under this law, a PCBU or an officer of a PCBU can be charged with industrial manslaughter if they intentionally engage in conduct that breaches a health and safety duty and results in the death of an individual to whom the duty was owed. The PCBU or officer must also have been reckless or negligent about the conduct breaching the health and safety duty and causing the death. The maximum penalty for an individual is life imprisonment, while companies can face fines of up to $10.2 million.
The offence of industrial manslaughter came into effect in Queensland in 2017. This law makes it illegal for a PCBU or a senior officer to cause the death of a worker through negligence, including cases where a worker is injured while carrying out work and later dies. The maximum penalty for an individual is 20 years' imprisonment, while companies can face fines of up to $10 million.
Industrial manslaughter has been a criminal offence in the ACT since 2004. In 2021, legislative amendments were introduced to align with other work safety offences. In the ACT, a PCBU or an officer of a PCBU can be charged with industrial manslaughter if their conduct breaches a health and safety duty and results in someone's death, and if they were reckless or negligent about causing the death. The maximum penalty for an individual is 20 years' imprisonment, while companies can face fines of up to $16.5 million.
Tasmania does not have and is not actively considering the introduction of industrial manslaughter laws.
These laws serve as a call to all organisations to thoroughly assess their safety systems and governance structure, ensuring that directors and officers possess effective oversight of business operations and prioritise safety management.
Regardless of these laws, the impact of a workplace fatality or serious injury is profound. It not only results in a tragic loss of life but also affects the individual's family and friends, other employees, the reputation and functioning of the business, and the local community. While implementing effective safety systems may incur expenses, the cost of an inadequate or non-existent safety system can be far greater.
All businesses and organisations need to have a robust risk management system in place that both mitigates risk and responds in crisis situations, and one which is functional, practical, understood and used by all levels of management and staff.
Safety systems and protocols should be periodically reviewed and tested to ensure they meet the latest industry standards. Sound WHS practices and consistent supervision should form the foundations of a safe work environment, which helps to mitigate workplace fatality risks.
Recent case law related to industrial manslaughter shows that the size, industry or complexity of an organisation do not play a role in judgements. We have witnessed trials play out in the public eye and severe penalties being imposed to both the individual and/or the company across businesses of all sizes, ranging from sole traders to large organisations. Most companies that experienced a workplace fatality also faced significant disruption to their business operations from the impacts of a trial or prosecution, cost of penalties and reputational damage.
Below are some examples of recent industrial manslaughter cases that have resulted in significant fines and/or imprisonment.
When it comes to industrial manslaughter laws and their potential implications on insurance, it is a general principle that insurance is not available where the loss is uninsurable at law (whether the policy provides such a term or not). This would include any policy that may appear to indemnify a person or entity against criminal liability if the crime is one which can only be, or is in fact committed with both guilty intent and guilty act. Any insurance contract purporting to insure against such risks would be void and unenforceable. This is for reasons of public policy on the basis that a person or entity should not benefit from their own wrongdoing and, by extension, may not be indemnified against the consequences of that wrongdoing.
The insurance position is less clear where the crime is one of strict liability and the conduct of the offender is morally innocent. By and large, commentators in the insurance and legal industry prefer the view that insurance can cover such risk. This may depend on whether there is an element of fault attributable to the person or entity who has committed the strict liability offence.
Notwithstanding the above, insurance for legal and defence costs are typically still permitted under policies that provide this cover.
For a more detailed analysis of WHS legislations and their implications on specific classes of insurance, please refer to our previous publications Victoria insights paper and NSW and WA insights paper.
To learn more about how industrial manslaughter laws may impact your business and your insurances, or if you need assistance with reviewing, testing, designing or implementing effective safety systems throughout your business, please contact your Marsh representative.
Managing Principal, Workforce Strategies, Marsh Advisory, Pacific
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