Directors and managers have onerous obligations and personal liability under occupational health and safety laws. Different provisions apply across the country however, regardless of where the workplace activities are being undertaken, the obligations and duties on directors and managers are particularly onerous.

In all jurisdictions except for New South Wales and Queensland, the primary obligation requires an employer to take all reasonable and/or practicable steps to ensure or provide a safe working environment or to protect the health and safety at work of employees.

 

In New South Wales and Queensland the obligation of an employer is to ensure the safety of the work environment. The employer obligations, which apply in all jurisdictions, covers:

• employers and self-employed manufacturers;
• suppliers of plant and substances;
• erectors or installers of plant; and
• employees themselves.

Personal Liability In New South Wales, Queensland, Victoria, Western Australia, Tasmania and the Northern Territory, individuals who are persons concerned in the management of the corporation, managers, officers or directors of corporate bodies are liable to prosecution for breaches of work safety obligations by the corporation with which they are associated.

In South Australia, a corporation is required to appoint one or more “responsible officers” who are resident in the state and who must be either a director of the corporation, the chief executive officer or another executive officer or officer of the company. This person once appointed, is required to undergo an approved training program and thereafter is required to take reasonable steps to ensure compliance with the legislative obligations.

Neither the Commonwealth nor the ACT makes provision for personal liability of directors and managers of a corporation.

When are directors/persons concerned in the management of the corporation liable?

In New South Wales, the approach is one of strict liability. Liability is established if it is proved that:

(a) there is a corporation;
(b) the corporation has, by an act or omission, contravened any provision of the OHS Act or the regulations made under it; and
(c) the person charged is a director of the corporation or concerned in the management of the corporation.

In order for a person so charged to avoid conviction personally for the offence committed by the corporation, he or she is required to prove either:

(a) s/he was not in a position to influence the conduct of the corporation in relation to the contravention; or
(b) s/he being in such a position, used all due diligence to prevent the contravention.

It is not necessary that the corporation be prosecuted and convicted for the contravention before any director of manager is proceeded against.

Position to influence

Significantly, the Courts in New South Wales have adopted a very broad approach that by reason only of holding the office of director, the person charged is in a position to influence the conduct of the corporation – see Inspector Wayne James v Ngai & Ors [2007] NSWIRComm 20.

Due Diligence

No statutory definition of “due diligence” seems to exist. Case law suggests that the notion of due diligence involves an absence of negligence or fault – seeAustralian Iron and Steel Pty Ltd v Environment Protection Authority (1992) 29 NSWLR 497.

Considerations

In New South Wales the potential for personal liability for directors and persons involved in the management of a corporation to ensure the safety of the work environment is particularly onerous and more so, given broad legislative interpretation by the Courts raising the bar of an available defence in the event of prosecution.

Directors and persons concerned in the management of corporations should consider managing their potential liability by:

• considering the adequacy of OHS policies and procedures in the workplace;
• assessing the due diligence processes associated with such OHS policies and procedures;
• checking their directors’ and officers’ liability insurances; and
• considering whether contractual arrangements might be able to reduce their personal exposure.

If you are a director or person concerned in the management of a corporation, act now by contacting Andrew Bland at [email protected] for further details or to discuss your OHS obligations and legislative compliance.