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Case Study: $400,000 fine for failure to 

proactively reduce risks

Thursday, 18th September, 2014, by Joanna Weekes

In today's Health & Safety Bulletin:
  • Case Law: Failure to take adequate steps to reduce risks with foreseeable consequences
  • 3 factors that led to the guilty verdict
  • Lessons to take from this case
Dear Reader,
As an employer, you need to be proactive in your risk management processes – being reactive leaves you vulnerable to liability for an incident you could have prevented, just like the one described in the case law featured today.

This case demonstrates the consequences of failing to take adequate steps to control known safety risks in the workplace. It resulted in a fatality and in a significant penalty for the business – so take heed and learn from others’ mistakes!

I’ll get to that case in a moment…

First, having an employee who is underperforming can put you in an uncomfortable position, but it’s important to confront the issue before it impacts other employees and your business.

If you don’t take reasonable steps to help improve your employee’s performance before dismissing them, you may leave yourself vulnerable to a claim of unfair dismissal.

Click here to find out where you stand and how you can manage underperformance fairly and effectively.

Case Law: Failure to adequately reduce risks
In DPP v Melbourne Water Corporation (2014), Mr Bakerov was walking along a walkway at the defendant’s sewage treatment plant. As he was walking, a steel slatted grate situated on the walkway dislodged, causing Mr Bakerov to fall through the walkway into a sludge channel below, where he subsequently drowned.
As early as 2008, a number of reports had been lodged outlining how several slatted and checker plate grates at the worksite had become dislodged. Those reports recognised that the consequences of the dislodged grates included serious injury or fatality due to drowning.
Although the specific grates that were reported had been fixed, Melbourne Water Corporation failed to ensure that all grates were properly secured, and similar instances continued to be reported throughout 2010.

The defendant pleaded guilty to one charge of failing to keep its workplace safe and without risks to health and safety in accordance with s21 of the Occupational Health and Safety Act 2004 (Vic).

The judge ordered the defendant to pay a fine of $400,000, which would have been $500,000 if the defendant had lost a not-guilty plea.

3 factors that led to the guilty verdict
The following 3 factors created particular concern for the Court:
    1. Reports concerning the grates had gone unheeded.
    2. Failure to take adequate steps had dire consequences.
    3. There was a ‘foreseeable potential consequence’ of a failure to take adequate steps.
Continued below…
How to get immediate access to 17 practical checklists
that will help you manage the performance of
your employees effectively and fairly.
Similar cases outline the importance of taking proactive steps to reduce risk…
Before forming the view that the penalty should be $400,000 in DPP v Melbourne Water Corporation(2014), the judge reviewed three similar cases:
Director of Public Prosecutions v Amcor Packaging Australia Pty Ltd (2005): A fine of $180,000 (maximum penalty: $250,000) was imposed after a man was crushed by rollers in a paper manufacturing plant. There had been no safety procedures or safeguards in place at the time despite two previous incidents.
Director of Public Prosecutions v Nationwide Towing & Transport Pty Ltd (2011): The Court imposed an aggregate penalty of $450,000 for two charges (maximum penalty: $966,000) after a man was killed while loading an excavator onto a trailer which did not have the appropriate surface. Previous incidents had occurred which the company had tried, but failed, to fix. Safety instructions hadn’t been given to the worker and risk assessments hadn’t been conducted.
Director of Public Prosecutions v Coates Hire Operations Pty Ltd (2012): The Court of Appeal imposed a fine of $500,000 (maximum penalty: $966,000) after a contractor died while loading equipment onto a semi-trailer without following proper safety procedure. The victim had not been made aware of the loading procedures for a truck where a winch cable was required when loading and unloading goods.
What lessons can you take from this case?
  • The critical importance of employers being proactive in identifying and eliminating risks to health and safety.
  • The importance of alerting all workers about a risk to health and safety that may occur in a similar situation, e.g. a grate located on a different walkway.
  • The Court being prepared to impose a significant penalty for a breach of health and safety laws in circumstances where the business should have addressed known dangers which posed a risk for its workers.
Enjoy your weekend,
Joanna Weekes
Joanna Weekes
Health & Safety Bulletin

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