Penalties increased, insurance prohibited: Changes to Work Health and Safety

There are important changes to the Work Health and Safety Act 2011 (NSW) after the Work Health and Safety Amendment (Review) Bill 2020 passed through both houses of parliament on 10 June 2020.

The most significant changes are set out below:

Increased penalties and fines for breaches of the WHS Act

Breaches of the Work Health and Safety Act 2011 (NSW) will now be subject to increased penalties. Penalties will now be based on the value of a penalty unit, which will increase year on year in line with changes to the Consumer Price Index.

For 2019-20, this increases the maximum penalties (for over 550 different offences) to:

‘Gross negligence’ now considered a Category 1 offence

The Bill has expanded Category 1 offences (the most serious offences) to also include ‘gross negligence’.

Previously Category 1 offences required recklessness – that is, the person was reckless as to the risk to an individual of death or serious injury or illness.

This presented difficulty for prosecutors to prove a Category 1 offence, as they were required to prove a level of intent.

Unlike recklessness, ‘gross negligence’ does not require any proof of intent to disregard a risk of death or serious injury. This will therefore be easier for prosecutors to establish and is likely to see an increase in prosecutions by the regulator.

Manslaughter

An explanatory note has been added to the legislation that sets out that the death of a person at work may constitute manslaughter under the Crimes Act 1900 (NSW), punishable by imprisonment of 25 years.

Taking out insurance to cover liability for WHS offences now prohibited

New offences now exist for entering into, providing, or benefiting from insurance or indemnity arrangements that cover liability for monetary penalties arising from a WHS offence. It has previously been the case that insurance had been available that covered penalties arising from breaches of the WHS Act, which the government have determined significantly undermined the deterrent power of the legislation.

Schools should be aware that significant penalties apply in relation to this and must not take out insurance policies that cover penalties for WHS breaches (this is not to be confused with workers compensation insurance which is compulsory for all employers).  The maximum fine for entering into such arrangements being $250,000 for PCBUs and $125,000 for officers.  The changes do not prohibit indemnity for legal costs incurred in defending a WHS prosecution or during an investigation.

These changes underline the critical importance of schools complying with their WHS responsibilities to workers, students, and others who may attend the school campus.

If you require specific WHS advice please contact the Workplace Management Team on (02) 9299 2845.