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NSW WHS laws: Easier convictions, higher penalties & corporate culture focus

24 October 2023

5 min read

#Workplace Relations & Safety

Published by:

Chloe Hamer

NSW WHS laws: Easier convictions, higher penalties & corporate culture focus

New amendments to the Work Health and Safety Act (WHS Act) in NSW will not only significantly increase penalties under the law from 1 July 2024, but also increase the likelihood of a company being successfully prosecuted for a category 1 (gross negligence) offence by allowing a court to consider the impact of its “corporate culture”.

The Work Health and Safety Amendment Bill 2023 (NSW) (Bill) was passed by the NSW Parliament on 12 October 2023 and is currently awaiting assent for it to commence operation.

Increased penalties

The Bill increases the maximum fines for category 1 WHS offences (gross negligence or reckless conduct) to the following:

  • bodies corporate – from $3,992,492 to $10,424,983
  • individual ‘person conducting a business or undertaking’ (PCBU) and officers of a PCBU – from $798,383 to $2,168,029 or 10 years imprisonment, or both
  • officers and individuals – from $399,479 to $1,041,992 or 10 years imprisonment, or both.

This doubles the maximum jail time and more than doubles the penalty rates for these offences.

These amendments will commence on 1 July 2024.

Imputing of conduct to body corporate 

Under the current WHS Act, any conduct engaged in or on behalf of a body corporate by an employee, agent or officer “within the scope of their employment or authority” is considered conduct also engaged in by the body corporate. This approach, known as imputation, reflects the traditional legal position that a corporate entity can only act through its officers and employees.

However, to assist the court in convicting a company for a category 1 offence where “gross negligence” or “reckless conduct” must be proved, the Bill expands the group of individuals whose conduct will be imputed to include the company’s conduct and extends the type of prior attitude to safety, or “corporate culture”, as evidence of the company’s reckless or negligent “state of mind”.

This new approach aims to counter a company’s defence that it cannot possibly be considered to have acted recklessly due to an individual’s reckless conduct because that conduct must always be outside of the “scope of [that person’s] employment or authority”. The NSW Minister tabling the Bill stated that:

“Providing for imputation in the Work Health and Safety Act will help to address expectations that exist in the wider community that companies should be held accountable for meeting their work health and safety duties, and prosecuted for failure to uphold their work health and safety duties in the same way that individuals are.”

Under the Bill, individuals whose conduct can now be imputed to the company includes:

  • the board of directors
  • an officer, employee or agent of the body corporate acting within the scope of their employment or authority (authorised persons)
  • a person acting under the direction, agreement, or consent of the board of directors or authorised persons.

Further, the Bill provides that, if it is necessary to establish a body corporate’s state of mind in relation to a WHS offence, it is now sufficient to show that:

  • the board of directors or authorised persons intentionally, knowingly, or recklessly engaged in the relevant conduct, or
  • the board of directors or authorised persons expressly or impliedly authorised or permitted the carrying out of the conduct, or
  • a corporate culture existed within the body corporate that directed, encouraged, tolerated, or led to the carrying out of the conduct.

In determining whether such a corporate culture existed, considerations include whether a corporate officer had previously given authority or permission to carry out similar conduct, and whether the person who carried out the conduct believed on reasonable grounds that a corporate officer would have authorised or permitted the conduct.

The Bill defines ‘corporate culture’ as “1 or more attitudes, policies, rules, courses of conduct or practices existing within the body corporate generally, or in the part of the body corporate in which the relevant activity takes place.”

These amendments will commence on assent of the Bill. 

Other changes

Banning insurance for WHS penalties

Since 2020, the WHS Act has prohibited a person from entering into an insurance contract or other arrangement which covers liability for penalties under the WHS Act. The Bill makes this prohibition complete by proscribing that any such contracts are void, meaning it’s not just an offence to have the insurance – you also cannot rely on it.

These amendments will commence on assent of the Bill.

Prohibited asbestos orders and silica register

The Bill now authorises SafeWork NSW as the regulator to issue a ‘prohibited asbestos notice’ (notice) if the regulator reasonably believes prohibited asbestos is present in the workplace. This notice must contain directions regarding the management and removal of asbestos and will come into effect six months after the Bill becomes law.

SafeWork NSW is also empowered to establish a silica register in accordance with the regulations commencing on assent of the Bill.

Police power to enforce WHS regulations regarding delivery drivers

The Bill amends the regulations to allow police officers to enforce compliance and issue penalty notices if food delivery drivers breach their duties, which includes failing to wear high-visibility personal protective equipment, or failing to provide their training verification records for inspection when requested by a police officer. This amendment commences on the date of assent.

If you have any questions about the Bill, please get in touch with a member of our national Workplace Relations & Safety team below.

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Chloe Hamer

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