Comcare v John Holland Pty Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA

Comcare v John Holland Pty Ltd (No 2) [2009] FCA 1515

INDUSTRIAL LAW – breach of duty of employer to take all reasonably practicable steps to protect health and safety of employees – s 16(1) Occupational Health & Safety Act 1991 (Cth) – death of employee on construction site – determination of pecuniary penalty –seriousness of breach – principles applying to determination of pecuniary penalty – whether mitigating factors can be taken into account

Held: declaration of contravention in terms sought by applicant – pecuniary penalty of $180,000 imposed

Occupational Health and Safety Act 1991 (Cth) s 16(1), Pt 1 Sch 2 cll 2(1), 4

Australian Ophthalmic Supplies Pty Ltd v McAlary -Smith [2008] 165 FCR 560 applied
Comcare v Commonwealth of Australia [2007] 163 FCR 207 applied
Comcare v John Holland Pty Ltd [2009] FCA 1196 related
Comcare v John Holland Rail Pty Ltd [2009] FCA 771 applied
Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 applied
WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) v Maitland City Council (1998) 83 IR 362 cited

COMCARE v JOHN HOLLAND PTY LTD (ACN 004 282 268)

QUD 37 of 2009

COLLIER J
17 DECEMBER 2009
BRISBANE


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 37 of 2009
BETWEEN:

COMCARE
Applicant
AND:

JOHN HOLLAND PTY LTD (ACN 004 282 268)
Respondent

JUDGE:

COLLIER J

DATE OF ORDER:

17 DECEMBER 2009

WHERE MADE:

BRISBANE

THE COURT DECLARES THAT:

On 6 May 2008, the respondent contravened subclause 2(1) of Part 1 of Schedule 2 of the Occupational Health and Safety Act 1991 (Cth) by reason of it having breached section 16(1) of the Occupational Health and Safety Act 1991 (Cth). The respondent acknowledges that:

(a)its work method statement did not adequately identify the risks associated with the relevant work process, and did not adequately identify suitable control measures to remove or minimise those risks; and

(b)it did not carry out a plant hazard assessment with respect to the front and rear jinkers, which may have identified a requirement for a remote braking system or other controls on the jinkers for use by spotters and others; and

(c)it did not have in place a formal system whereby employees were certified as being competent in the use of jinkers; and

(d)it did not have in place a formal protocol or procedure for the use of radios to ensure that the transmitter of a radio message was able to be informed that the message had been received by its intended recipient and understood; and

(e)it did not have sufficient communication mechanisms in place to ensure that employees working out of sight of the loader operator and the rear spotter were able to communicate directly with spotters and the loader operator; and

(f)it did not ensure that an observer of a trainee jinker operator was also issued with a radio to directly communicate with the other members of the transportation crew responsible for the propulsion of the load;…

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Details
Case
[2009] FCA 1515
Decision Date

CaseChat Overview and Summary

In Comcare v John Holland Pty Ltd (No 2), the respondent, a company involved in various specialist businesses, was found to be liable for the death of one of its employees, Mr McCallum, during the Dalrymple Bay Coal Terminal 7X Berth Expansion Project. The incident occurred while Mr McCallum was operating a jinker, a platform supported by two jinkers propelled by a front-end loader. The jinkers were equipped with an independent steering system but lacked a separate braking control for the operators. The case revolved around the adequacy of the safety protocols and the respondent’s efforts to mitigate the risks associated with the operation.

The court had to decide whether the respondent’s conduct was adequately addressed by its post-incident measures and whether these efforts should influence the penalty. The legal issues included whether the respondent could be held liable for systemic failures and whether the penalty should reflect the gravity of the offence while also considering the respondent's post-incident actions and contrition. The court found that while the respondent had taken significant steps to improve safety protocols and demonstrated contrition, the initial systemic failure was significant enough to warrant a substantial penalty.

The court reasoned that despite the respondent's efforts to enhance safety measures post-incident, the initial oversight in implementing a fail-safe means of emergency communication indicated a systemic failure. The court acknowledged the respondent's early plea of guilt, contrition, and subsequent measures to prevent similar incidents but concluded that the penalty should still reflect the severity of the breach. The penalty was ultimately set at $180,000, reduced by 10% due to the respondent's early admission of liability, contrition, and efforts to prevent future incidents.

The court's final orders included a pecuniary penalty of $180,000 to be paid by the respondent within 28 days of the judgment, along with the respondent covering the applicant's costs, to be taxed unless otherwise agreed. The court extended its sympathy to Mr McCallum's family, acknowledging the profound impact of his loss.

Orders

Orders of the court

1. Pursuant to clause 4 of Part 1 of Schedule 2 of the Occupational Health and Safety Act 1991 (Cth) the respondent pay to the Commonwealth a pecuniary penalty of $180,000 within 28 days of the date of judgment.

2. The respondent pay the applicant’s costs to be taxed unless otherwise agreed.

Note:

Background

Background to the litigation

Before turning to the submissions of the parties it is useful to outline the background of these proceedings.Background The respondent is a company incorporated on 14 September 1950. It has been in continuous operation since that time. The respondent operates its business in all States and territories in Australia, including national specialist businesses such as rail, telecommunications, power, roads, aviation engineering, water and mining services. As at 18 September 2009 the respondent employed approximately 2,418 employees and 6,659 contractors. At the time of the incident leading to the death of the respondent’s employee, Mr McCallum, construction work was being carried out in connection with the Dalrymple Bay Coal Terminal 7X Berth Expansion Project (“the project”). The respondent’s role in the project was to construct a duplicate coal loading jetty (“the jetty”) beside the existing infrastructure. This work involved the transportation of precast concrete decks by means of a platform supported by two jinkers (the front jinker and the rear jinker) which were propelled by a front end loader (for convenience I will refer to the two jinkers and the front end loader collectively as “the transportation unit”, and the front end loader as “the loader”). The jinkers were fitted with an independent steering system operated by way of a hand-held remote control device. Employees designated as jinker operators ordinarily walk beside the jinkers and steer them by means of this remote control device. However there was no separate braking control for the jinkers held by the operators of the jinkers. The loader was owned by the respondent, and the jinkers owned by a third party, Rex J Andrews Pty Ltd (“RJA”). The respondent hired the jinkers in September 2007 for use on the project. RJA conducted training for the safe use and operation of the jinkers in October 2007 with employees of the respondent. One of the persons trained by RJA was Colin Shaw, who in turn provided training to others (including Mr McCallum) in the use of jinkers. Mr McCallum was assessed as competent. On 6 May 2008 Mr McCallum was part of a five man crew tasked with moving a number of precast concrete decks. Colin Shaw was the supervisor of the crew. The other members of the crew were Paul Sudholz (loader operator), Andrew Cribbens (rear jinker operator and spotter) and Phillip Grech (observer). Mr McCallum was the front jinker operator and spotter. He was also the most recent employee of that crew at the time, having commenced employment on 21 April 2008. As the front jinker operator, Mr McCallum’s role was to steer the loaded front jinker by way of the remote control device while walking in front of the front jinker on the left hand side of the jetty. The day of the incident was the first time Mr McCallum had operated the jinker arrangement transporting the precast concrete deck on the jetty. He was being observed in the course of performing this role by Mr Grech, an operator with six months relevant experience, whose only duty was to observe Mr McCallum and provide him with assistance and guidance in performing his task.

Evidence

Evidence Before The Court

I consider that the penalty should be reduced by 10% in light of the early plea by the respondent, its contrition as demonstrated by its early admission of liability and the assistance provided to both the family of Mr McCallum, other employees, and Comcare in its investigations, and the extensive changes to the work system introduced since the incident which indicate a genuine attempt by the respondent to prevent the recurrence of a similar tragedy. Accordingly, in my view the appropriate penalty is $180,000.Family Impact Evidence For the reasons provided in a previous judgment in respect of this matter Comcare v John Holland Pty Ltd [2009] FCA 1196 I allowed members of Mr McCallum’s family to file impact evidence statements with the Court, which I have read. While, as I indicated in my interlocutory judgment, their statements were accepted on the basis that they would not be taken into account for the purposes of determining the appropriate penalty in this case, the Court extends its sympathy to the family of Mr McCallum, and acknowledges the extreme pain and anguish caused them by the loss of Mr McCallum.

Decision

Reasons for decision

COLLIER J
In my view the respondent is entitled to recognition for its genuine endeavours to eliminate risks associated with this form of work.Conclusion In this case the respondent admits that the result of its conduct was the death of Mr McCallum. While there is no question here that Mr McCallum’s death was actually foreseen by the respondent, in my view implementing a work method incorporating an appropriate radio protocol would not have been unreasonable, and to so find now is not, in my view, “substituting reasonable hindsight for reasonable foresight” (WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) v Maitland City Council (1998) 83 IR 362 at 381). The size of the plant involved, the vulnerability of workers in front of it, and the very real risk of serious injury or death in the absence of a fail-safe means of immediate emergency communication does suggest a systemic failure by the respondent rather than “a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision” as contended by the respondent. Indeed, it is not conclusive that there was either inadvertence on the part of Mr McCallum or a momentary lapse in his supervision by Mr Grech – and the incident still occurred. It is clear that, despite the efforts taken by the respondent to implement a safe working environment, the operation involving the transportation unit was flawed in its original conception. The dangers were obvious from the start, relatively simple to avoid, but unrecognised and unaddressed in a manner which raises the objective gravity of the offence in these proceedings towards the higher end of the scale. The respondent submits that the improvements made to its work systems and the immediate action it took following the incident indicate that specific deterrence is not a factor of significance in this matter. I disagree. While the initiatives of the respondent are to be applauded, a relevant consideration in respect of the quantum of a penalty is that it be a deterrence to the specific employer in question as well as the community at large (including other employers). The respondent in this case has admitted that the result of its conduct was the death of an employee. It is necessary that the penalty reflect that fact. Further, while the work systems in place at the time of the incident support a finding that the respondent had adopted an approach to safety which was proactive rather than reactive, it is clear from both the obviousness of the risk to which Mr McCallum was – fatally – exposed and the simple but effective measures put in place since the incident – including the adoption of a radio protocol – that there were serious deficiencies in the quality of the proactive work undertaken. In the absence of mitigating circumstances, I consider that the appropriate penalty in this case would be $200,000. This is reflective of the fact that the objective seriousness of the respondent’s conduct is at the higher end of the scale but does not exhibit characteristics of the worst kind of conduct. However I agree with, and adopt, observations of Barker J in Comcare v John Holland Rail Pty Ltd [2009] FCA 771 at [143] where his Honour observed:Where, for example, a respondent in a proceeding such as these early on acknowledges fault and willingness to accept a declaration of contravention, then the respondent will ordinarily be entitled to additional consideration in the assessment of the penalty. In some contexts this process is termed giving credit or “discount” on penalty. There is no statutory entitlements to such credit or a discount but it serves public policy in that it encourages a respondent to act responsibly, and may achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings against the respondent. (at [143])

Ratio Decidendi

Legal Principle Established

Established by: COLLIER J

Full text does not contain this section.