Amendments to Work Health and Safety Act 2011 (NSW) – offences for obtaining insurance for WHS penalties26 June 2020
On 4 June 2020, the Work Health and Safety Amendment (Review) Bill 2019 (NSW) (Bill) was passed which introduces changes to the Work Health and Safety Act 2011 (NSW) (WHS Act). The amendments include prohibiting employers from obtaining indemnity insurance for payment of penalties for offences under the WHS Act, increased penalties for offences and clarifying that a prosecution may be issued under the Crimes Act 1900 (NSW) for a workplace death.
By Luisa Gonzaga (Partner) and Alexandra Gonos (Employer Lawyer)
The NSW Government introduced the Bill on 12 November 2019, in response to recommendations in the “Review of the model Work Health and Safety Laws: Final Report”.
The Bill was passed on 4 June 2020 and will commence on the day it receives assent.
The Bill contains a number of key amendments, including (but not limited to):
- expressly making it clear that manslaughter prosecutions for workplace deaths are available under the Crimes Act 1900 (NSW);
- a new fault element of “gross negligence” for the most serious WHS offences; which previously only required a higher bar of recklessness;
- increasing the maximum penalties for WHS breaches, including Category 1 breaches from $3 million to $3,463,000 (for a corporation) and from $600,000 to $692,500 (for body corporate officers); and
- prohibition on insurance for WHS monetary penalties, including entering into, providing or receiving a benefit from insurance or indemnity arrangements.
Manslaughter offences available under the Crimes Act 1900
While the WHS Act does not currently have manslaughter law offences, the Bill inserts a note into Part 2 – Division 5 which makes it clear that industrial manslaughter offences are available under the Crimes Act 1900 (NSW).
This means anyone who causes the death of a worker through negligence may be prosecuted under the Crimes Act 1900 (NSW) attracting a maximum penalty of 25 years’ imprisonment.
New fault element of “gross negligence”
A new fault element of “gross negligence” has been introduced for Category 1 offences.
A person’s conduct will constitute “gross negligence” when it:
- falls so far short of what is reasonable; and
- involves such a high risk of death or serious injury that it deserves criminal punishment.
At present, the current fault element of recklessness is difficult to prove; requiring the prosecution to prove matters relating to the defendant’s subjective state of mind. The insertion of ‘gross negligence’ means that a person may be charged under Category 1 if it is proved that the health and safety risk involves a ‘high risk of death or serious injury’.
Insurance outlawed for WHS offences
The Bill provides that it is an offence for a person, without reasonable excuse, to enter into, provide, or benefit from insurance or indemnity arrangements for liability for a monetary penalty for WHS offences.
If a company commits this offence, its officers may also be liable.
The Bill does not define what constitutes “reasonable excuse”, however, those words suggest a person may have good reasons for doing so.
A person will not commit an offence for providing insurance or indemnity, or taking the benefit of such insurance, if the insurance or indemnity was:
- in force before the commencement of the offence; and
- any payment made under the insurance or indemnity is not related to a penalty for an incident that occurred after commencement.
It is important to note that there is a distinction to be made between a “monetary penalty” and any related costs for defending a WHS matter. This means, insurance can continue to be offered, or a person may benefit from an insurance policy for legal or other costs related to defending WHS prosecutions and/or investigations.
The nature of the Bill is aimed to provide greater deterrence for WHS breaches and ensure businesses have effective safety systems and procedures in place that prevent or minimise the risk of death, serious injury or illness.
This is timely for businesses to continue to review and audit its systems of work to ensure they properly correspond to the health and safety risks associated with the operation of your business.
Hentys will continue to update you with any future developments.
For further information, please contact our experienced Occupational Health and Safety by emailing firstname.lastname@example.org.