Comcare v Australian Postal Corporation

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FEDERAL COURT OF AUSTRALIA

Comcare v Australian Postal Corporation [2011] FCA 530

Citation: Comcare v Australian Postal Corporation [2011] FCA 530
Parties: COMCARE v AUSTRALIAN POSTAL CORPORATION
File number: VID 429 of 2010
Judge: KENNY J
Date of judgment: 20 May 2011
Catchwords: INDUSTRIAL LAW – Occupational Health and Safety – penalty hearing – failure to take reasonable steps to protect health and safety – statement of agreed facts – agreed penalty and declarations as to contravention – penalty assessment ultimately for the court – principles to be applied –  imposition of pecuniary penalty – declarations of contravention and award of costs considered
Legislation:

Occupational Health and Safety Act 1991 (Cth)
Safety, Rehabilitation and Compensation Act 1988 (Cth)
Cases cited: Comcare v Linfox Australia Pty Ltd (2010) 198 IR 160
Comcare v Post Logistics Australasia Pty Ltd (2008) 107 ALD 578
Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72
Comcare v Commonwealth (2007) 163 FCR 207
Comcare v Commonwealth (2009) 184 IR 441
Comcare v John Holland Rail Pty Ltd (2009) 188 IR 415
Comcare v National Gallery of Australia (2007) 98 ALD 6
DPP v Amcor Packaging Australia Pty Ltd (2005) 11 VR 557
Chugg v Pacific Dunlop Limited (1990) 170 CLR 249
Kirk v Industrial Court of New South Wales (2010) 239 CLR 531
Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
CFMEU v Williams (2009) 262 ALR 417
Stuart v CFMEU (2010) 185 FCR 308
CFMEU v Cahill (2010) 194 IR 461
Australian Building & Construction Commissioner v CFMEU (No 2) (2010) 199 IR 373
Date of hearing: 31 March 2011
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 64
Counsel for the Applicant: Mr P O'Grady
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the Respondent: Mr M Croucher
Solicitor for the Respondent: Sparke Helmore

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 429 of 2010
BETWEEN:

COMCARE
Applicant
AND:

AUSTRALIAN POSTAL CORPORATION
Respondent

JUDGE:

KENNY J

DATE OF ORDER:

31 MARCH 2011

WHERE MADE:

MELBOURNE

THE COURT DECLARES THAT:

1.In April and May 2008, the respondent contravened clause 2(1) of Schedule 2 of the Occupational Health and Safety Act 1991 (Cth) (“OHS Act”) by reason of its having breached section 16(1) of the OHS Act in that:

a)despite documenting procedures (“documented procedures”) for the inspection, maintenance and repair of motorcycles, which were used by Postal Delivery Officers (“PDOs”) employed or engaged under contract at the Palmerston Delivery Centre in the Northern Territory (Palmerston DC) to perform postal delivery services, it failed to effectively implement the documented procedures;

b)it failed to provide the supervisor/manager at the Palmerston DC with adequate training in relation to the documented procedures necessary to enable him to:

i)understand the obligation upon him as supervisor to observe PDOs carrying out daily inspections of their motorcycles;

ii)understand and carry out the obligations he was required to discharge as supervisor under the documented procedures;

iii)understand…

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Details
Case
[2011] FCA 530
Decision Date

CaseChat Overview and Summary

The case of Comcare v Australian Postal Corporation involved the Commonwealth of Australia, represented by Comcare, and Australia Post. The dispute centred around allegations that Australia Post had failed to take reasonable steps to protect the health and safety of its employees, specifically postal delivery officers, in relation to the maintenance and use of motorcycles at the Palmerston Delivery Centre. The court was tasked with assessing the penalty for these breaches of occupational health and safety legislation.

The central legal issues in the case were whether Australia Post had indeed failed to take reasonable steps to ensure the safety of its employees and whether the penalty imposed was appropriate given the circumstances. Australia Post admitted to the breaches and agreed to the penalty and declarations of contravention. However, the ultimate decision on the penalty lay with the court. The court had to consider the nature and extent of the contravention, the circumstances of the breach, the size of the contravener, the deliberateness of the contravention, the period of the contravention, and the amount of loss and damage.

In determining the appropriate penalty, the court emphasised that the penalty should reflect the seriousness of the contravention and maintain public confidence in the statutory regime. Despite the breaches not resulting in injury, the court found the penalty of $95,000 to be within the permissible range. This decision was based on the nature of the contravention, the systemic nature of the failure, and the importance of maintaining safety standards in Australia Post’s operations. The court also took into account the steps Australia Post had previously taken to address similar issues, including the development of maintenance and inspection procedures and the undertaking to conduct an independent compliance audit.

The court ordered Australia Post to pay a penalty of $95,000 and to cover Comcare’s costs amounting to $80,000. The application was otherwise dismissed. This decision underscores the importance of adhering to occupational health and safety regulations and the consequences that can follow from non-compliance, even in the absence of direct injury to employees.

Orders

Orders of the court

4. Pursuant to clause 4 of Schedule 2 of the OHS Act, on or before 4.00pm on 30 April 2011, the respondent pay a penalty of $95,000.00.

5. The respondent pay the applicant’s costs fixed in the amount of $80,000.00.

6. The application be otherwise dismissed.

Note:

Background

Background to the litigation

As a consequence of the matters listed above, Australia Post agreed that it had failed to take reasonably practicable steps to protect the health and safety of its employees at the PDC; and that it had contravened s 16(1) of the OHS Act by failing to: (1) take all reasonably practicable steps to ensure each workplace under its control (namely, the motorcycles) was safe for the PDOs at the PDC and without risk to their health; (2) take all reasonably practicable steps to ensure the safety at work of, and the absence of risks at work to the health of, the PDOs at the PDC in connection with the use of plant (namely, the motorcycles); and (3) take all reasonably practicable steps to provide to Mr Nurton the instruction and training, and to the PDOs at the PDC the instruction, training and supervision necessary to enable them to perform their work in a manner that was safe and without risk to their health. Some observations about the agreed facts This is not a case, like many cases in this area, where a breach of s 16(1) of the OHS Act has resulted in injury, or even death, of an employee (or contractor). What is notable here is the undertaking given by Australia Post to Comcare in December 2007, some several months or so before the breaches in question in this case. The undertaking in terms shows that it came about following the injury of an Australia Post employee after a motorcycle tyre ‘blew-out’ in 2004 at least in part because of excessive tyre wear. The seriousness of the injury occasioned by this incident is also apparent from the undertaking that records that the employee was unable to work for a number of months. In these circumstances, Australia Post acknowledged that it “had foreseen the risks associated with postal delivery motorcycles”. Evidently too the risk of serious injury as a result of riding motorcycles with faults of the kind identified in the motorcycles at the PDC (as, for example, worn tyres) was plain enough. Following the incident in 2004, Australia Post developed the documented procedures for the systematic maintenance and repair of motorcycles used in its mail delivery business. It is not, however, suggested that the failure to implement the documented procedures at the PDC constituted a systemic failure at a national level. Australia Post submitted (and, for present purposes, I accept) that this was “an example of a large national employer that did foresee a risk, developed a system to protect its employees against that risk, and failed to correctly implement that system at a specific locality over a specified period of time”. Australia Post added (and, for present purposes, I accept) that “[t]hat the Breach occurred in the context of the Respondent’s response to a previous incident is a relevant consideration. But only insofar as it contextualises the objective seriousness of the omission on this occasion”. Further, for the same reason, whilst not a circumstance of aggravation, it is also relevant that non-compliance with the documented procedures exposed the PDOs riding the motorcycles to the risk that the motorcycles would not be free of faults that could endanger their health and safety. Indeed, it was agreed that the state of the six faulty motorcycles at the PDC was attributable to the failure properly to implement the documented procedures.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In the end, as Buchanan J said in Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 580, “the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations”.CONSIDERATION As Comcare noted in its written submissions, the remedies for which Part 1 of Schedule 2 of the Act provides are designed to promote the objects of the Act as stated in s 3. The statement of agreed facts sets forth matters relevant to the nature and extent of the contravening conduct; the circumstances in which it took place; the size of the contravener; the deliberateness of the contravention; the period of the contravention; and the amount of loss and damage. I outline below the salient facts drawn from the statement of agreed facts. It is necessary to set out the facts in some detail in order to appreciate why a penalty of $95,000 falls within the permissible range notwithstanding that this is not a case in which injury has resulted from the admitted breaches. The contravener Australia Post is a body corporate established for a public purpose under a law of the Commonwealth and, amongst other things, engaged in the mail delivery business. At all times material, Australia Post had a number of employees acting as Postal Delivery Officers (“PDOs”) in its mail delivery business at Palmerston. Each PDO was a “Commonwealth authority employee” within s 9(2A); and an “employee” within s 9(1)(b) or a “Commonwealth authority contractor” within s 9(1)(b) and (3) of the OHS Act. The duties of a PDO at Palmerston included the delivery of mail using motorcycles owned by Australia Post. At the relevant time, Mr Michael Nurton was employed at the PDC as the Acting Postal Delivery Centre Manager. At all relevant time Australia Post was the registered owner of the six motorcycles based at the PDC. Each of these motorcycles was used by the PDOs to deliver mail in Australia Post’s mail delivery business. Furthermore, each of these motorcycles was “plant” and a “workplace” as defined in s 5(1) of the OHS Act. Past events – the undertaking Some factors relevant to the present assessment of penalty relate to Australia Post’s giving of an enforceable undertaking to Comcare in December 2007 and the contents of that undertaking. The undertaking is an attachment to the statement of agreed facts. Amongst other things, the undertaking:- records that Australia Post has a sizeable workforce and operates nationally.-describes an incident in November 2004 in which an employee suffered serious personal injury when engaged in duties as a PDO attached to the Bundoora Delivery Centre in Melbourne. The undertaking states that the employee was hurt in a road traffic collision after losing control of a motorcycle used to deliver mail, following a “blow out” and pressure loss in the rear tyre. In the undertaking, Australia Post conceded that the failure of the tyre arose because of deficiencies on its part in ensuring the effective implementation of Australia Post’s motorcycle maintenance and inspection practices at the Bundoora Delivery Centre. -sets out the initiatives taken by Australia Post during 2004 through to 2006 to ensure the safety of PDOs working in its mail delivery business.-details Australia Post’s review and revision of procedures in 2007 to seek to ensure that motorcycles used in its mail delivery business were inspected each day and any faults were identified and repaired.-states that Australia Post would arrange an independent national compliance audit of the revised procedures to be completed by July 2008; that Comcare would be informed of the identity of the audit agency; and that the results of the audit would be given to Australia Post’s Corporate Audit Group and reported to its Board for any subsequent action. Australia Post was also to notify Comcare of the results and subsequent action. The statement of agreed facts indicates that these steps were taken.The applicable documented procedures