The buck stops with you - yes, you! Print 21 magazine article

Directors beware - when it comes to employee health and safety, everybody has a responsibility to ensure compliance, writes Wal Abramowicz, even if you delegate the task to someone else.

The safety of workers needs to be taken very seriously at all levels within a business organisation. In particular, directors don't have to be 'hands on' in order to be held liable.

Businesses are most commonly owned by sole traders, partnerships or companies. Sole traders and partners can have no doubt that they are personally open to prosecution if their businesses breach occupational health and safety (OH&S) laws.

On the other hand, if a company breaches OH&S laws then each director and each person concerned in the management of the company can be prosecuted unless they can prove they showed due diligence to prevent the breach, or they can prove they were not in a position to influence the conduct of the company relating to the breach.

While Courts have recognised that not all company directors and managers have equal influence in management and operational decisions, it is becomingly increasingly difficult for directors to argue successfully they were not in a position to influence the company's conduct.

Even CEO's are liable
In a 2004 Industrial Relations Court decision, the CEO of a group of companies was held liable for an employee's death. The CEO of the group was responsible for the management of 30 subsidiaries which employed 1,600 employees.

One of the subsidiaries had a tank washing facility. An employee was carrying out his usual duties cleaning resin residue out from some tanks, using a highly flammable solvent. He had twice been told not to use the solvent because it was so volatile.

Regardless of the warning, the employee sprayed the inside of a tank with the solvent and returned 30 minutes later. He then used a high-pressure water spray gun to remove the resin. The tank exploded throwing the employee through the air causing him to suffer fatal injuries.

WorkCover investigated the accident and successfully prosecuted the CEO as well as subsidiary company and its director.

The CEO tried to prove he had delegated day-to-day management of the subsidiary to the general manager and was therefore "not in a position to influence the conduct of the company".

The CEO also argued he had used all "due diligence" to prevent any contravention of the OH&S laws. He reviewed OH&S specialists' reports on the subsidiary's compliance with safety laws and regularly visited the site and made enquiries about safety.

This case is a reminder that if you are a company director you can be liable for OH&S breaches even if you are in the upper levels of the company and delegate responsibility to middle management further down the chain of command. A lack of 'hands-on involvement' is unlikely to be a defence.

Bullying isn't harmless
A word on bullying. Bullying in the workplace can include undermining or intimidating an employee, physical assault or even making it difficult for an employee to carry out their job.

Two recent Court cases have demonstrated that behaviour perhaps once considered 'harmless fun' is unacceptable and those in a position to stop the behaviour can be liable where they have failed to do so.

In 2004, WorkCover prosecuted the employer of an apprentice who was subjected to an 'initiation'. The apprentice was wrapped in cling wrap, had sawdust and glue forced into his mouth and threatened with physical violence. The employer did not discipline the perpetrators and did not have a workplace violence policy. The employer was fined $24,000 and the two directors were each fined $1,000.

In a high profile case earlier this year, Cox v NSW, Mr Cox was harassed and bullied at two state primary schools. On two occasions, he was seriously physically assaulted. Each school was informed of the bullying but did little or nothing to stop the bullying behaviour, a Department of Education officer even stating that bullying built character. As a result of the bullying, Mr Cox did not complete high school and suffers from a range of severe psychiatric conditions rendering him unemployable. He was awarded just over $1million in compensation.

If you're in charge, be involved
The Court has indicated that very few company directors will be able to say they had no influence on the conduct of their company when it comes to OH&S matters. As a result, all directors should be familiar with their company's OH&S obligations and its safety systems. Consult an expert and act on their recommendations. As a director, you should do everything possible to avoid a breach of OH&S laws.