Duty of Officers – Do you know how to avoid a 5 year jail term?
The introduction of a separate duty on officers of organisations is an important change in the workplace health and safety legislation because they now may be charged with an offence under the WHS Act independently of any breach of duty by the Person Conducting a Business or Undertaking (PCBU). This means, that even when an organisation is not prosecuted for a breach an individual Officer can still be prosecuted. Yes – the penalties imposed are significant, including a maximum 5 year jail term for a Category 1 offence.
Who is an Officer?
An Officer is defined as per the Corporations Act 2001 as:
(a) A director or secretary of the corporation; or
(b) A person:
i. Who makes, or participates in making decisions that affect the whole or a substantial part, of the business of the corporation; or
ii. Who has the capacity to affect significantly the corporation’s financial standing;
iii. In accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors of the corporation); or
(c) A receiver, or receiver and manager, of the property of the corporation; or
(d) An administrator of the corporation; or
(e) An administrator of a deed of company arrangement executed by the corporation; or
(f) A liquidator of the corporation.
The Corporations Act definition provides similar categories for an officer of a partnership or an unincorporated association. However the WHS Act excludes a partner in a partnership from being an officer of a PCBU. This is to avoid double liability for the partners as they are individual and collectively a PCBU and would owe duties under the Act and have the potential liability of a PCBU.
Due Diligence
An Officer of a PCBU has a duty to exercise due diligence to ensure that the PCBU complies with its health and safety duties and obligations.
Due diligence includes, but is not limited to, personally taking reasonable steps to:
- acquire and keep up-to-date knowledge of work health and safety matters; and
- gain an understanding of the nature of the operations of the business and generally of the hazards and risks associated with those operations; and
- ensure that the business has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business; and
- ensure that the business has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information; and
- ensure that the business has, and implements, processes for complying with any duty or obligation of the business under the Act (e.g. reporting notifiable incidents, consulting with workers, provision of training, ensuring compliance with notices issues); and
- verify all of the above.
The duty imposed on Officers creates a positive onus on them to actively ensure the health and safety of their workers and others affected by their operations. To find out the practical steps Officers and PCBUs should take to meet their obligations under the Act contact Eve Harward, Senior Consultant.
