First explanation of “officer” under model WHS laws

Analysis

First explanation of “officer” under model WHS laws

The ACT Industrial Magistrates Court has provided the first guidance on who has due diligence obligations as an “officer” under the harmonised work health and safety laws.

By Monique Howell and Michele O’Neill*

The ACT Industrial Magistrates Court has provided the first guidance on who has due diligence obligations as an “officer” under the harmonised work health and safety laws. 

Summary


The decision involves the prosecution of both an organisation, Kenoss Contractors, and  an individual, Munir Al-Hasani, for alleged failure to comply with health and safety duties pursuant to section 32 of the Work Health and Safety Act 2011 (ACT) (“the Act”). Section 32 of the Act creates a category two offense if there has been a breach of a health and safety duty which has exposed an individual to risk of death or serious injury/illness.

Background


Kenoss Contractors Pty Ltd (‘Kenoss’) is a family business consisting of one director (Beverly Brendas), a general manager (Spiro Brendas), a project manager (Munir Al-Hasani), a systems manager/ work health safety representative (Dimitri Brendas –  unqualified), a surveyor, a project quality engineer and a general foreman.

Kenoss was contracted by the ACT Government for road resurfacing works in Turner on the Barry Drive Project.  There were two sites provided for use by Kenoss including a main site housing a site office, some temporary buildings, as well as housing plant. A second smaller storage site (‘Boldrewood Street Site’), a short distance away, was used solely to store materials.

Kenoss retained a sub-contractor – David O’Meley Truck Hire – on a daily basis for the delivery of materials. David O’Meley provided the delivery service either himself or by one of his drivers. O’Meley confirmed during the court proceedings that he had never had a site induction or attended a safety talk prior to attending the site.

On 23 March 2012, Kenoss contacted O’Meley to make a number of deliveries. The driver sent to the site, Michael Booth, had made a number of deliveries that day and went to the Boldrewood Street site alone.

The general foreman stated in evidence that, given there were low hanging power lines at the Boldrewood Street Site, he had instructed employees to stop using this site. This instruction was not communicated to the subcontractor and through the evidence brought before the Court, it was clear that while there was signage saying “Construction Site, Keep out”, the gates were not locked. 

On the day in question, Booth went to the Boldrewood Street site and was tipping his load when the bucket of the truck either contacted or was very close to the power lines. An electrical arc formed and burn marks were found under the partially deflated tires. Booth had exited the truck and was found lying on the ground. He had been electrocuted. Attempts to resuscitate him failed and he died from electrocution and its complications.

The matter came before the Industrial Magistrates Court when both Kenoss and Al-Hasani were charged with committing an offence contrary to section 32 of the Act. Kenoss was charged as a corporate defendant and Al-Hasani in his capacity of an officer of the corporation.

During the proceedings consideration was given to whether Al-Hasani was an “officer” for the purpose of the Act and consideration was given to his position within the company and his role and functions.

The decision


Industrial Magistrate Walker found there had clearly been a breach of section 32 of the Act by Kenoss as a corporation. However, it was not clear as to whether Al-Hasani was an “officer” for the purposes of the alleged breach.

One of the key changes of the model work health and safety legislation was the introduction of a positive obligation on “officers” to exercise due diligence.

The requirement to exercise “due diligence” under section 27 of the Act only arises if Mr Al-Hasani was an “officer” of Kenoss. This is defined by reference to section 9 of the Corporations Act 2001 (Cth).
 
In para 42 of Magistrates Walker’s decision she states:
“… as the definition is imported from the corporations law into the work health and safety context through the Act, it appears that the interpretation of the concept of an officer should be viewed through the prism of the organisation as a whole rather than a particular function in which the individual was engaged.”
 
Magistrate Walker found there was no evidence within the corporation as to where Al-Hasani sat within it or his level of influence, other than from those who sat below him in the chain of command.

Al-Hasani stated he could not hire people and agreed that he participated in management meeting, and, as the project manager, he would sometimes make decisions and participate in making decisions with Spiros Brendas and Beverly Brendas. Al-Hasani was also the project manager for a number of other projects undertaken by Kenoss.

The Magistrate found the prosecution had not established that Al-Hasani had control or was responsible for the business or undertakings of the company; rather he had operational responsibility for delivery of specific contracts which had been entered into.

Al-Hasani’s participation in the business process was described as “operational” and it was said to be speculative as to whether it went beyond that to be being organisational. There was no evidence of matters such as who determined the corporate structure, who established company policy as to the type of business to be pursued and which projects were to be entered into.

In reaching the conclusion Al-Hasani was not an officer, Magistrate Walker considered that Mr Al-Hasani:
  • could not commit corporate funds
  • had no direction over the type, or the specific contracts, which were to be pursued by Kenoss
  • did prepare tenders for particular work, but he did not sign off on them
  • may or may not have attended Board meetings and it was not clear if he met any of the corporations legal obligations, such as ASIC returns or establishing quality assurance compliance.

What does this mean?


It is important to note in this decision, that in determining whether Al-Hasani was an officer who was required to exercise due diligence, the magistrate was required to consider his influence over Kenoss as a whole, rather than the “role in respect to the particular matter in which it was alleged there was a breach of duty”.

Relevant to the assessment of whether the person is an officer is a person’s ability to make decisions, exercise control and authorise the substantial use of capital expenditure.

Council should take care to review its documentation to ensure that it accurately reflects who is intended to be an officer. Council should also provide clarity around employee obligations (including but not limited to officers).

See: M v Al-Hasani & Kenoss Contractors Pty Ltd (In Liq) [2015] ACTIC 1

*Monique Howell is the human resources officer with Local Government NSW and Michele O’Neill is the senior industrial officer with Local Government NSW. 
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