REVIEW OF THE OPERATION OF WORK HEALTH AND SAFETY ACT REPORT November Robin Stewart-Crompton RSC Advising Pty Ltd

Transcription

1 REVIEW OF THE OPERATION OF WORK HEALTH AND SAFETY ACT 2012 REPORT November 2014 Robin Stewart-Crompton RSC Advising Pty Ltd

2 Contents Terms of reference... 5 Summary of report...s Options... 8 Options for improving the operation of the WHS legislation... 8 Introduction Background Origin of the WHS legislation Extract from the IGA Current status of harmonised laws Overall operation of the Act Table 1: Additional variations to the model WHS law...15 Context...17 Table 2: Number of South Australian businesses by employee size Comparison with operational experience under the OHSW Act...18 Table 3: SafeWork SA resources and activities in the last complete financial year of operation of the OHSW Act compared to the first full financial year of operation of the WHS Act Outline of the next part of this report The operation of Part 1of the WHS Act- Preliminary...19 What Part 1provides...19 Views of interested stakeholders Discussion and options Options 1and 2 for improving the operation of Part The operation of Part 2 of the WHS Act- Health and safety duties What Part 2 provides Views of interested stakeholders Discussion and options Option 3 for improving the operation of Part The operation of Part 3 of the WHS Act -Incident notification What Part 3 provides Views of interested stakeholders Discussion and options Options 4 and 5 for improving the operation of Part The operation of Part 4 of the WHS Act- Authorisations What Part 4 provides

3 Views of interested stakeholders Discussion and options Options 6 and 7 for improving the operation of Part The operation of Part 5 of the WHS Act- Consultation, co-operation and co-ordination between duty holders What Part 5 provides Views of interested stakeholders Discussion and options Options 8 and 9 for improving the operation of Part The operation of Part 6 of the WHS Act- Discriminatory, coercive and misleading conduct What Part 6 provides Views of interested stakeholders Discussion and options The operation of Part 7 of the WHS Act- Workplace entry by WHS entry permit holders (EPHs) What Part 7 provides Views of interested stakeholders Discussion concerning Part 7 generally Table 5: comparison of types of issues raised in the national review and in this review Interaction with the outcomes of the national review Operation of s.117 of the WHS Act Table 6: Outline of s.117 policy and outcomes Table 7: Operation of s Views of interested stakeholders on s.117 reporting requirements Discussion and options concerning s Options 10 and 11 for improving the operation of s The operation of Part 8 of the WHS Act- The regulator What Part 8 provides Views of interested stakeholders Discussion and options Option 12 for improving the operation of Part The operation of Part 9 of the WHS Act- Securing compliance What Part 9 provides Views of interested stakeholders Discussion and options..., Option 13 for improving the operation of Part

4 The operation of Part 10 of the WHS Act- Enforcement measures What Part 10 provides Views of interested stakeholders Discussion and options Option for improving the operation of Part The operation of Part 11of the WHS Act- Enforceable undertakings What Part 11provides Views of interested stakeholders Discussion and options Option 14 for improving the operation of Part 11...: The operation of Part 12 ofthe WHS Act- Review of decisions What Part 12 provides Views of interested stakeholders Discussion The operation of Part 13 of the WHS Act- Legal proceedings What Part 13 provides Views of interested stakeholders Discussion and options Options 15 and 16 for improving the operation of Part The payment of fines by third parties Views of interested stakeholders Discussion and options Laws prohibiting insurance against fines and penalties Option 17 for addressing the question of insurance against fines under the WHS legislation The operation of Part 14 of the WHS Act- General What Part 14 provides Views of interested stakeholders Discussion and options Option 18 for improving the operation of Part The operation of the WHS Act's Schedules What the schedules provide Views of interested stakeholders Discussion and options Option 19 for improving the operation of Schedule The WHS Regulations

5 Table 8: Comparison of the structure and length of the former OHSW regulations and the current WHS regulations Views of stakeholders National review of the model WHS regulations Discussion and options Structure and length Content of possible 2 volume set of WHS regulations Issues concerning particular regulations...72 Threshold for high risk construction work Options 20, 21, 22 and 23 for improving the operation of the regulations Appendix A: Persons and bodies who made submissions Appendix B: Safe Work SA Policy- Inspector attendance at workplaces when notified of a proposed entry by a WHS Entry Permit Holder Appendix C: Eight step process for South Australian WHS codes of practice Appendix D: Nationally developed codes of practice in effect in South Australia Appendix E- Acronyms and abbreviations

6 Terms of reference Under s.277 (Reviews) of the WHS Act, the Minister must cause a review of the operation of the Act to be conducted as soon as practicable after the expiry of 1year from its commencement. The review must include a specific report on the extent to which inspectors have attended at workplaces under s.117 of the WHS Act and an assessment of the operation and effectiveness of the policy established for that purpose by the Executive Director of Safe Work SA under the section. 1 The review was established to undertake the work described below. The Review is examining the WHS Act's impact in the South Australian context to ensure the continued effectiveness of the nationally harmonised WHS laws in this State. Among other things, the review will examine the operation of provisions that were amended or inserted in the Parliamentary process, including: a) those that were amended to clarify certain situations; b) requirements relating to the approval of national Codes of Practice; and c) local consultation arrangements. Summary of report This is the report of my review of the operation of the Work Health and Safety Act 2012 and it also reports on the regulations. The report, which is required under s.277 of the Act, focuses on how the provisions are working. To determine this, I conducted thirty-seven face to face meetings with interested persons from industry associations, businesses, unions, SafeWork South Australia, WorkCover, and government departments. I was also able to discuss with the Small Business Commissioner (SBC) his role in relation to Codes of Practice. I met the Presiding Members of the SafeWork SA Advisory Council and the Mining and Quarrying Occupational Health and Safety Committee (and attended a Committee meeting) to discuss the review. I prepared and published an issues paper, which prompted fifteen written submissions. The review was undertaken at the same time as Safe Work Australia was conducting a national review initiated by the Council of Australian Governments (COAG) that investigated ways in which the model Work Health and Safety (WHS) laws could be improved, with a particular focus on reducing red tape. To reduce confusion about the respective reviews, I informed Safe Work Australia about the progress of my review and was 1 Section 117 relates to the entry of WHS permit holders into workplaces to inquire into certain suspected contraventions of the Act. The section also requires the Executive Director to establish and maintain a policy relating to the circumstances when inspectors will attend at workplaces when notified of the proposed entry of WHS entry permit holders. 5

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8 advised about progress with that review. At the time of the presentation of my report, the outcome of the national review was not publicly known. My report considers the operation of each of the fourteen Parts ofthe Act, as well as the Schedules and the regulations. In doing so, I have recognised that South Australia is committed to implementing the nationally harmonised Work Health and Safety laws and certain associated policies in accordance with the Inter-Governmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety. This means that South Australia's WHS regulation is part of a national framework of almost identical laws in every Australian jurisdiction except Victoria and Western Australia (which proposes to introduce a version of the law in 2015). It is relatively early in the life of the nationally harmonised laws. The South Australian versions ofthe model Act and regulations are the equal newest (with Tasmania's). There have been few cases before the courts (only one completed prosecution in South Australia), so it is not possible to refer to authoritative jurisprudence on the interpretation of the key provisions of the Act and regulations. Overall, the legislation is working as it was intended to, but there are practical issues for some parties. Some persons who are conducting businesses or undertakings (PCBUs) or who represent them drew my attention to various concerns. These went to some aspects of the legislation and to how it was being applied. In particular, they felt that the legislation was not sufficiently clear about how the duties of PCBUs interacted where there were several of them (for example, on a construction site), and there was considerable concern about the use of right of entry provisions by union officials in the construction industry. There were concerns about the increased length of the regulations and about some aspects of their application, particularly in the housing sector, where there was perceived to be a considerable increase in red tape (which is what the national review examined). On the union side, there were consistent concerns expressed about whether SafeWork SA was giving sufficient attention to enforcing the Act and regulations. A common view was that Safe Work SA had not struck the right balance between providing information, education and advice on the one hand and enforcement under the legislation on the other. This is difficult for a regulator to manage and, as in this case, there are likely to be objections by workers and unions that enforcement is suffering and by PCBUs and their associations that not enough effort is being made on education and advice. In overall trend terms, South Australia is continuing to improve its work health and safety performance and is one ofthe few Australian jurisdictions that are performing consistently well against long term national targets. This suggests that the regulator and parties are moving in the right direction. Turning to my review of the Act, I did not identify any major problems in the legislation itself, but consider that there is more that could be done to improve understanding of rights and obligations and to clarify certain elements of the law. These possible actions include: making it easier to see from the Act itself who is an officer (the Act refers to the definition used in the Corporations Law without setting it out) and an outworker (undefined); providing more guidance about the relationships and obligations where there are multiple PCBUs assisting PCBUs to understand better their responsibilities where there are notifiable incidents addressing delays in issuing licences and permits 6

9 helping HSRs by there being a dedicated hotline to SafeWork SA subject to the outcome of national review, providing some flexibility in the training of HSRs (for example, where a new HSR has recently been trained while working in the same industry for someone else) proposing consideration be given some possible changes to the notice to be given for right of entry (subject to the outcome of the national review) empowering SafeWork SA to issue non-binding guidelines about what it requires for compliance under a particular provision of the legislation and how it will address compliance in such cases (to give greater assurance about how the regulator will apply the law) suggesting some options in relation to the s.172 right to silence, including making it less likely that a witness who is not going to be charged with anything is misinformed by third parties about possible culpability and therefore declines to provide important information that will help to secure good health and safety a fresh approach to raising awareness of the availability of enforceable undertakings action to attempt to speed up the justice process, with prosecutions coming to court more quickly and to ascertain how SafeWork SA might assist the courts in deciding on sentencing options suggesting options for addressing the complex issues in dealing with persons insuring themselves against fines under the WHS laws; improving both the process for making codes of practice and their content, subject to the outcomes of the national review; making the regulations more user friendly; subject to the outcome of the national review, increasing the threshold monetary value at which a construction project becomes high risk construction work. Options There are 23 options for consideration. They are suggestions about action that could be taken so that the various Parts, schedules and regulations might operate better. They appear in the report and are set out in the following table for ease of reference 7

10 Options for improving the operation of the WHS legislation Element of Options Page of WHS report legislation Partl Option 1: Add a note to the definition of officer in s.4 that sets out the definition used in the Corporations Act. Option 2: Add a note to the definition of worker (s.7) to assist in identifying who is an outworker [s.7(1)(e)] (an alternative approach of unilaterally defining the term is not consistent with the IGA process for changes to the harmonise WHS laws). Page 21 Page 21 Part 2 Option 3: SafeWork SA should, in consultation with industry associations, consider developing and promoting additional detailed guidance about the responsibilities of PCBUs under the WHS Act and regulations in work circumstances where there are several of them. Any such guidance materials and programs could also be discussed with the SafeWork SA Advisory Council. Page 26 Part 3 Option 4: Include a note in the Part drawing attention to the additional requirements in the regulations relating to incident notification. Option 5: SafeWork SA should consider adopting, or providing a link to. Safe Work Australia's Incident notification fact sheet. Page 27 Page 27 Part 4 Option 6: SafeWork SA might consider benchmarking its performance in the authorisations area against that of other jurisdictions. Option 7: SafeWork SA could maintain a record of issues raised about the nature and scope of authorisations for the purposes of the 2016 national review of the harmonised WHS legislation. Page 29 Page 29 Part 5 Option 8: To provide prompt assistance for HSRs, SafeWork SA could establish a dedicated hotline for HSRs to contact SafeWork SA for advice or assistance. Matters raised should be monitored to assist in guiding action Page 33 8

11 Element of WHS legislation Options to assist the constructive engagement of HSRs in protecting and improving work health and safety in their workplaces. Page of report Option 9: Consideration could be given to some HSR training options [s.72(9)], noting that the South Australian WHS Act has already differed from the model law in this area in terms of the numbers of training days: Page 33 A. Some flexibility might be provided in the number of training days required for HSRs by recognising prior HSR training that has been undertaken by the person concerned within a prescribed period (e.g., up to 3 years) before the person's current election as an HSR- this could allow the PCBU and HSR to agree on changes in the content of, or time required for, training, with the safeguard that consent must be genuine and approved by SafeWork SA or some other appropriate entity. [This option might be of particular value where a person has recently been an appropriately trained HSR in another workplace and is taking up the same kind of work in the same kind of work environment and is unlikely to benefit from the repetition of recently undertaken training]. B. A reduction could be permitted in the number of training days required for a person who is re-elected as an HSR in relation to the same work group without a break in holding the position and if there is no material change in the work or working environment- for example, 3 days of training in the first year of a new term as the HSR for that work group, then not less than 1day in each of the following 2 years, subject to the consent of the PCBU and the HSR. Part 7 Option 10: Three approaches could be considered in relation to s.117 right of entry: Page 47 A. no change; B. ifthe model Act changes as a result of the national law to provide for at least 24 hours' notice of entry in all cases, change the notice requirement in the South Australian Act; or c. as a variation on B, at least 24 hours' notice of entry unless a serious incident has occurred and a member requests the EPH's attendance (under s.119, notice would have to be given as soon as reasonably practicable after entry). If approach A or C were accepted, there could be a time limit added for written reports and consequences for non-compliance (e.g., condition 9

12 Element of WHS legislation Options placed on the right of entry) Page of report If approach B were implemented, s.117(4)-(6) concerning notice to SafeWork SA's Executive Director would be redundant and could be omitted. Option 11: This relates to the reports required under s.117 (6) and reg.28. If reports to the Executive Director are retained, they might require only publication of which EPH entered the workplace, the name and location of the workplace, the time and date of entry and the purpose of the entry. Page 47 Part 8 Option 12: SafeWork SA could be empowered to issue non-binding guidelines (however described) on how Safe Work SA sees provisions of the legislation applying to a class of persons or a set of circumstances (along the lines of ss ofthe Vic OHS Act 2004). Page 50 Part 9 Option 13: Consideration could be given to: Page 52 A. revising s.172 to align with the model WHS Act provision and other SA laws that are in accordance with the model law approach (this could be done after the 2016 comprehensive national review ofthe harmonised laws, by which time it will be clear whether there are any difficulties in the use ofthe model WHS Act provision); B. as for A, but retain existing s.172,right to silence' where a possible category one offence is being investigated; c. modifying s.172 so that the protection does not apply to a person who is indemnified against prosecution; D. no change to s.172, but make provision for an inspector to be able to require a person to be interviewed without any other person being present except the person's legal adviser or, in the case of a minor, an appropriate adult. Part 10 See option 12 in relation to Part 8. Part 11 Option 14: SafeWork SA might again raise awareness ofthe option for enforceable undertakings instead of prosecutions, including by consulting industry associations and the legal profession about their views on the most Page 55 10

13 Element of WHS legislation Options useful information and materials for this purpose. Page of report Part 13 Option 15: SafeWork SA should, in conjunction with the Crown Solicitor's Office, seek to identify processes for instituting prosecutions more speedily. Option 16: SafeWork SA should also examine, with the Crown Solicitor's Office, whether it would assist the Court in deciding on sentencing options for SafeWork SA to be available to provide advice on the likely effects of those options on WHS outcomes. Page 58 Page 58 Option 17: If it is considered that the current position whereby insurance is available for fines for criminal WHS offences should be changed separately from a general policy decision in relation to insurance against criminal penalties under South Australian laws, the following four options might be considered: A. refer the matter to Safe Work Australia for further consideration (probably in the context of the 2016 national review of the WHS laws); or Page 63 B. include a complete prohibition in the WHS Act along the lines of the prohibitions under the Road Traffic Act and the New Zealand OHSE Act; or c. apply such a prohibition to category 1and (possibly) category 2 offences in which there has been wilful or negligent conduct endangering other persons and allow the court to decide whether any order prohibiting indemnification should be made in other cases; or D. apply the prohibition to any criminal offences under the WHS Act that involve wilful, reckless or negligent acts. Part 14 Option 18: The following approaches concerning codes of practice might be considered: Pages 67 and 68 A. revise all codes in line with outcomes of national review; and B. invite SBC to make comments on proposed codes at a much earlier stage of development, for example, when a code is first under consideration at the national level, which add expertise in a crucial stage of the process (this would not preclude the Commissioner's providing comments or advice later for the Minister's consideration under s.274}; and 11

14 Element of WHS legislation Options Page of report c. where a nationally agreed code is not approved as a code, it could be issued as guidance material (to maintain the spirit of national harmonisation); and D. the SafeWork SA Advisory Council (and the Small Business Commissioner) should be consulted about any fact sheets that support codes. Schedule 2 Option 19: In any future consideration of the role or nature of the Advisory Council, consideration might be given to broadening its membership. Page 68 Regulations Option 20: Publish the regulations in two volumes. Option 21: Produce a user-friendly version of the regulations (as was done with the former OHSW regulations). Page 74 Page 74 Option 22: Subject to the outcomes of the national review of the harmonised WHS laws, consider increasing the threshold amount at which a construction project becomes high risk construction work to $450,000. Page 73 Option 23: Safe Work Australia should be invited to review whether Chapter 6 of the WHS regulations should cease to apply to power station outage or overhaul work on fixed plant on which outage work or overhaul work that involves or may involve work is being carried out by 5 or more persons conducting businesses or undertakings at any point in time. Page 73 12

15 Introduction 1. South Australia's Work Health and Safety Act 2012 (WHS Act), together with its accompanying regulations and codes of practice, took effect on 1January Under s.277 3, its operation must be reviewed as soon as practicable after the expiry of 1year from its commencement. 2. The review commenced on 1July It had 4 stages (initial contacts with stakeholders to guide the development of an issues paper; release of the issues paper for public comment, accompanied by further consultation; consideration of submissions responding to the issues paper and continuing consultation; preparation and presentation of the final report). A list of submissions appears at Appendix A I was greatly assisted by the officers of SafeWork SA who facilitated the review in many ways, including by providing me with expert advice and assistance and very helpful data. I express my deep thanks to them. Background 4. The review took place against a background of South Australia's significant improvement in its work health and safety performance in the past decade. This is illustrated by South Australia's performance when compared with that of all other Australian jurisdictions. All Australian governments are parties to the National Occupational Health and Safety Strategy and its successor, the Australian Work Health and Safety Strategy Each strategy has national improvement targets. The most recent national Comparative Performance Monitoring report 5 recorded that only South Australia achieved an important 10-year target of a 40% reduction in the incidence of workplace injury to 30 June The national Work-Related Traumatic Injury Fatalities 2013 data recently published by Safe Work Australia shows that South Australia has been under the national average for such fatalities in six of the past ten years. 7 That is the third best record (only Victoria and NSW have better performance in that period). It is consistent with the data reported under the SA Strategic Plan (T.21- Greater 2 The Act and the Work Health and Safety Regulations are referred to in this paper as 'the WHS legislation'. 3 In the debate on the WHS bill, the provision for the reviews of the legislation was described by the Hon. J.A. Darley, who successfully moved for their inclusion as allowing an... opportunity for us to assess how the legislation and codes of practice are working, whether they need improving and whether indeed they have led to the sorts of issues that have been raised by those who oppose the bill. The then Minister, the Hon. R.P Wortley, stated that, (t)he review of the act will allow the examination of the impacts of the laws in a South Australian context and ensure the continued effectiveness of nationally harmonised work health and safety laws within that context. This amendment is consistent with the Council of Australian Governments' request for a national review of the legislation under the auspices of Safe Work Australia by the end of The findings of the review of the South Australian work health and safety act may be used to inform the national review. Hansard, Legislative Council, 1 November 2012, p I also had the opportunity to provide an update on the review to the Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation Committee on 17 October s Safe Work Australia, Comparative Performance Monitoring Report 16th Edition, South Australia recorded a 44% improvement. 7 Fatalities-Report-2013.pdf 13

16 safety at work: Achieve a 40% reduction in injury by 2012 and a further 50% reduction by 2022) for the period to Origin of the WHS legislation 6. The South Australian WHS Act and regulations are based on a model Work Health and Safety Act and model regulations, which were developed at the national level by Safe Work Australia, in consultation with the Commonwealth and all States and Territories. 7. By introducing the WHS Act, South Australia joined the other Australian jurisdictions (other than Victoria and Western Australia 9 ) in having nationally consistent WHS laws, with some local variations. The South Australian introduction ofthe Act (and accompanying regulations and codes of practice) is consistent with a 2008 national, inter-governmental agreement (IGA). 10 Similarly, South Australia is party to nationally consistent compliance and enforcement policies The IGA sets out the purpose of national harmonisation as follows (IGA, para 1.4). Extract from the IGA (T)he fundamental objective of the reform... is to produce the optimal model for a national approach to OHS regulation and operation which will: a) enable the development of uniform, equitable and effective safety standards and protections for all Australian workers; b) address the compliance and regulatory burdens for employers with operations in more than one jurisdiction; c) create efficiencies for governments in the provision of OHS regulatory and support services; and d) achieve significant and continual reductions in the incidence of death, injury and disease in the workplace. 9. It is not yet possible to assess how effectively the nationally harmonised laws have achieved these objectives. A full national review of the laws is to be conducted in 2016 which will allow a comprehensive assessment to be made. 8 u/media/bahbbl shogzmssihm jaxms8xms8wnc8wmv8wml8xn F8yM jnfzmi szqy6 BkVU/ file 9 The Western Australian government has announced that a modified version of the WHS Act will be enacted in that State in The State Minister for Commerce has tabled the WHS Bill 2014 in Parliament and a public comment period has commenced (it will close on 30 January 2015). 10 Inter-Governmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety. 11 See discussion of securing compliance later in this paper. 14

17 Current status of harmonised laws 10. The nationally harmonised laws have been in effect since 1January The following table shows when the model WHS Act was given effect in each of the seven implementing jurisdictions. 12 Implementing jurisdiction Title of implementing Act Commencement date of substantive provisions A.C.T. Work Health and Safety Act January Commonwealth Work Health and Safety Act January 2012 New South Wales Work Health and Safety Act January 2012 Northern Territory Work Health and Safety (National Uniform Legislation) Act January 2012 Queensland Work Health and Safety Act January 2012 South Australia Work Health and Safety Act January 2013 Tasmania Work Health and Safety Act January 2013 Overall operation of the Act 11. Although during the review, some stakeholders expressed the view that national harmonisation was not being achieved (and therefore South Australia should not have to conform to the model legislation), there is in fact a very high degree of consistency in the WHS Acts of the seven implementing jurisdictions. In most key areas, there is uniformity (for example, duties, offences, penalties and sentencing options). Some local variations were permitted to reflect jurisdictional arrangements, for example, in relation to courts, but some additional variations to the model WHS law occurred in four jurisdictions, including South Australia. They are outlined in the following table. Table 1: Additional variations to the model WHS law Implementing jurisdiction Title of implementing Act Additional variations A.C.T. Work Health and Safety Act 2011 No material changes. Commonwealth Work Health and Safety Act 2011 Powers added for Director-General of ASIS and 12 Victoria and WA have not yet given effect to the model WHS legislation, but see footnote 9 for information about WA's legislative intentions. 13 The ACT legislation formal provisions commenced on 29 September 2011, the substantive provisions commenced on 1January

18 Implementing jurisdiction Title of implementing Act Additional variations Chief of Defence Force to modify or exclude provisions of the Act. NSW Work Health and Safety Act 2011 Various variations and additions relating to mining. Modification of who may be an inspector under the Act and new provisions about the extra-jurisdictional exercise of the functions of an inspector. Union secretaries given standing to commence legal proceedings in specified circumstances. Strict liability for each physical element of an offence under the Act unless otherwise stated. NT Work Health and Safety (National Uniform Legislation) Act 2011 No material changes. Queensland Work Health and Safety Act 2011 The power of HSRs to direct the cessation of unsafe work was removed. At least 24 hours' notice of entry must be given by union entry permit holders and by persons assisting HSRs. Codes of practice may be adopted, varied or revoked without national consultation. South Australia Work Health and Safety Act 2012 Clarification that duty holders are only required to manage health and safety risks to the extent to which they have the capacity to influence and control the relevant matter. Exception for officers of prescribed strata/community titles corporations. Increased number of training days for HSRs. 16

19 Implementing jurisdiction Title of implementing Act Additional variations Specification of who may assist an HSR. WHS entry permit holders must notify SafeWork SA of a proposed entry. A right to silence for individuals questioned by an inspector. The Small Business Commissioner must be consulted over proposed codes of practice, which may be disallowed by the Parliament. Increase in a penalty. Tasmania Work Health and Safety Act 2012 No material changes. Context 12. The WHS Act is designed to apply to virtually all persons conducting a business or undertaking in the private or public sector, their officers, workers (very widely defined) and other persons at workplaces. In other words, almost everyone in the community is likely to come, one way or another, within the scope of the legislation. 13. As Business SA commented, South Australia's private sector is predominantly made up of small businesses. 14 This is demonstrated in the following table. As discussed later, it has implications for how PCBUs and other duty holders are able to understand and apply the WHS legislation and associated materials. Table 2: Number of South Australian businesses by employee size Number of employees Number of businesses Percentage Non-employing 92, % 1-19 (small businesses) 47, % Total- Small businesses 139, % , % % 14 Business SA submission, p.6. 17

20 Total- Businesses employing 20+ 3, % Total- All businesses 143, % Supplied by Business SA- source: Australian Bureau of Statistics 2014,Counts of Australian Businesses, including Entries and Exits, Cat: 8165, June 2009 to June 2013, Canberra. Comparison with operational experience under the OHSW Act 14. Notably, the underpinning concepts of the legislation are not markedly different from the previous OHSW Act, so the change from that Act to the WHS Act should not have resulted in significant disruption for duty holders in coming to terms with its operation. The experience of stakeholders and their views about the legislation are described in the discussion of the substantive Parts of the Act and the regulations that follow. 15. To illustrate the practical effects ofthe new legislation and the resources available for implementing it, the following tables compare SafeWork SA's resources and activities for the last complete financial year under the OHSW Act and the first complete financial year under the WHS Act. Table 3: SafeWork SA resources and activities in the last complete financial year of operation of the OHSW Act compared to the first full financial year of operation of the WHS Act Resources and activities Last complete year of operation of the OHSW Act { } First complete year of operation of the WHS Act { } Budget $,DOOm $35,180m $35,724m OHS/WHS related staff {FTEs) 240 FTE 234 FTE Inspectors WHS field active 89 FTE 89 FTE No. of inspections 30,580 29,693 (interventions) Worksite Visits {WV) 15,944 15,855 Inspection Reports (IR) 1,478 2,403 Total activity {WV + IR) 17,422 18,258 Table 4: SafeWork SA funding under the OHSW Act and the WHS Act Funding source WorkCoverSA funding for preventative activities Last complete financial year of operation of the OHSW Act { ) $11,239m First complete financial year of operation of the WHS Act { } $11,396m OHS levy (prescribed fee) $6,842m $7,280m 18

21 Funding source Last complete financial year of operation of the OHSW Act { } First complete financial year of operation of the WHS Act { } WHS regulatory Fees (registrations, licences, etc.) $2,315m $5,642m 15 Government appropriation $14,784m $11,406m Total WHS budget $,000m $35,180m $35,724m 16. These tables show that the overall resources were broadly the same and SafeWork SA's performance level, notwithstanding the introduction of the new laws, was similarly maintained. Outline of the next part of this report In the next part of this report, the operation of each ofthe fourteen substantive Parts of the Act and the Schedules are described. This is followed by consideration of key parts of the regulations. The discussion of Part 8 of the Act includes a report on s.117's operation. Stakeholders' views are outlined. Options are suggested for improving the legislation's operation. The operation of Part 1of the WHS Act -Preliminary What Part 1 provides 17. Part 1contains preliminary provisions, including the object ofthe legislation, definitions and the provisions setting out the Act's scope and application. Like the OHSW Act, the WHS Act has broad application, including to the Crown The WHS Act has introduced some new terms and definitions. Significant new terms include Person conducting a business or undertaking (s.5) 17 and worker (s.7). The former term includes, but is wider than, employers; the latter term includes, but is wider than, employees. These definitions are intended to provide broad scope to the legislation and avoid uncertainty about whether nontraditional work relationships or activities (for example, share farming) are covered The increase in revenue for is mainly attributed to change of licence periods for Plant Registration and Asbestos licences from annual to 5 year registration and Assessor Registration from annual to 3 year registration. 16 WHS Act, ss.10-12, OHSW Act, s The phrase 'business or undertaking' is intended to be read broadly and covers businesses or undertakings conducted by persons including employers, principal contractors, head contractors, franchisors and the Crown. 18 The legislation specifically excludes certain types of persons or activities from the scope of PCBU, for example, a volunteer association is not a PCBU- see subsections 5(7) and (8). 19

22 Views of interested stakeholders 19. There were mixed views about key aspects of Part Business SA considered the Act's application to be clear, but contended that some definitions were confusing, particularly for small businesses. Business SA saw difficulties in the term Person conducting a business or undertaking (PCBU), so saw particular value in Safe Work Australia's national interpretive guideline explaining who is a PCBU. 19 On the other hand, the SafeWork SA fact sheet was not regarded as helpful. More information was needed to assist PCBUs, particularly in circumstances where there were multiple PCBUs The MBSA similarly found the definition of PCBU to be too wide and confusing on construction sites In the MTA's view, the objects appeared to be being achieved. There were some issues with definitions, however, and the roles and responsibilities of PCBUs and officers needed to be made clearer. The MTA also proposed that the term outworker (which is included in the definition of worker in s.7) should be defined Union submissions also saw a need for some expansion or clarification of definitions. SA Unions submitted that the term consultation should be defined (notwithstanding the statutory description of consultation in s.48). 23 The ASU proposed that additional definitions are required for the terms consultation; hazardous work with clients and serious risk According to some union submissions, there were some practical issues that demonstrated that the objects were not fully achieved. The AMWU considered that some duty holders in small and medium enterprises were not aware of their obligations under the Act. The AMWU strongly supported reintroducing WHS training for PCBUs, officers and HSC members as under previous OHS laws. 25 The ASU expressed similar views about duty holders' lack of understanding of their responsibilities and unwillingness to meet certain requirements (e.g., obligations to consult workers under s.47). 26 The CEPU also considered that objects concerning fair and effective workplace representation, consultation, co-operation and WHS issue resolution [s.3(1)(b)] and securing compliance [s.3(1)(e)] were not being met. 27 MrGrinham expressed similarviews Safe Work Australia, Interpretive Guideline- Model Work Health and Safety Act- The meaning of 'Person conducting a business or undertaking'. The document is available on the Safe Work Australia web site at: 20-%20PCBU.pdf) 20 Business SA submission, p.ll. 21 MBSA submission, p MTA submission, pp.7 and 9. It might be noted that the term outworker is defined in some legislation, e.g., s.l2 of the Fair Work Act SA Unions submission, p ASU submission, p.lo. 25 AMWU submission, p.4. The AMWU also drew attention to Danish requirements for training of SMEs and the Republic of Korea's free medical services at five centres for SMEs, online education for foremen and financial assistance to improve the work environment. 26 ASU submission, p CEPU submission, p.3. 20

23 25. The issues paper for the national review of the model WHS laws acknowledged that some persons were having difficulty identifying who within their organisations would be considered officers under the WHS laws. Safe Work Australia noted that it had been suggested further guidance on who is an officer might address this concern. Discussion and options 26. There has been limited jurisprudence on the concept of PCBU since the harmonised laws commenced. The issue has not arisen in a South Australian court or tribunal decision, but its breadth is clear from the statutory definition. As noted in the discussion of the operation of Part 2, some uncertainty seems to arise where there are multiple PCBUs with overlapping and contemporaneous duties of care. 27. The term officer is not defined in the WHS Act, instead adopting the Corporations Act definition by reference. Users ofthe Act would be assisted by including that definition as a note after the definition of officer in s.4 rather than having to resort to another Act to confirm who is covered. Options 1 and 2 for improving the operation of Part 1 Option 1: Add a note to the definition of officer in s.4 that sets out the definition used in the Corporations Act. Option 2: Add a note to the definition of worker (s.7) to assist in identifying who is an outworker [s.7(1)(e)] (the alternative approach of unilaterally defining the term is not consistent with the IGA process for changes to the harmonise WHS laws). The operation of Part 2 of the WHS Act- Health and safety duties What Part 2 provides 28. Part 2 consolidates the principal duties of care of PCBUs, officers, workers and other persons at a workplace. This Part also provides offences and penalties for non-compliance. There have not yet been any matters decided by the courts that deal with the provisions. 29. There are a number of enumerated principles that apply to all duties that persons have under the Act and regulations (not simply the duties contained in Part 2). 30. Sections 14 to 16 state that the principles have wide scope, that a duty cannot be transferred to someone else, that a person may have more than one duty at the same time by being in more than one class of duty holder and that more than one person can concurrently have the same duty of care and must discharge the duty (subject to certain qualifications of that requirement- see later). 28 A. Grinham, submission, pp.l and 2. 21

24 Report of the 2014 Review of the South Australian Work Health and Safety Act Section 17 stipulates that where a duty holder is required to ensure the health and safety of another person, the duty holder must eliminate the risks to health and safety so far as is reasonably practicable (that term is defined in s.18) and, if that is not possible, to minimise the risks so far as is reasonably practicable. 32. Sub-section 17(2) was added during the passage of the WHS bill. It has no counterpart under the other versions of the model law implemented in other jurisdictions. It qualifies the duty to eliminate or minimise risks to health and safety to the extent that the person has the capacity to influence and control the matter or would have that capacity but for an agreement or arrangement purporting to limit or control that capacity. This additional provision is discussed later. 33. The remaining sections in Part 2 provide for the primary duty of care of PCBUs and specified classes of PCBUs (ss.19-26), the duty of officers of PCBUs (s.27) to ensure that their PCBUs comply with their duties and obligations under the Act and regulations (not simply the Part 2 duties); the duties of workers to take reasonable care for their own health and safety while at work and that of other persons (s.28); and the duty of any persons at a workplace to take reasonable care for their own health and safety and that of other persons (s.29). 34. As noted above, Part 2 also contains (in ss.30-34) the relevant offences and penalties for noncompliance with the duties set out in the Part. These new categories of offences have higher maximum penalties in most cases compared with the OHSW Act. Imprisonment may be imposed for the most serious offences Certain exceptions from the offences are stipulated (s.34). Officers of prescribed strata/community titles corporations are exempted from the primary duty of care under s.27 (but not other duties); volunteers are exempted from liability except in relation to their duties of reasonable care as workers under s.28 or persons at a workplace under s.29. Unincorporated associations are exempted from liability for not complying with any duty or obligation under the Act or regulations, but officers other than volunteers may be liable for a breach of s.27 (duty of officers) and members of the association may be liable for breaches of their duties as workers or persons at a workplace. 36. The exception for officers of prescribed strata/community titles corporations was added during the passage of the WHS bill. It is a purely South Australian exception. 37. At the time of the completion of this report, no cases have been decided that involve the duties or exemptions under Part 2. Views of interested stakeholders 38. Business SA drew attention to a lack of clarity in how to manage situations with multiple PCBUs and in identifying their respective levels of responsibility. 30 Business SA also emphasised the importance of the 'control test' in s.17(2) and stated that it must be retained. 31 As noted elsewhere, Business SA 29 The WHS Act provides for the same maximum period of imprisonment (5 years) as was provided by s.59 of the OHSW Act. 30 Business SA submission, p.ll. 31 Ibid, pp.l6,

25 would also prefer greater clarity in identifying the primary duty holders {by using the term employer, defined widely, rather than PCBU) and advocated a stand-alone definition of officer The HIA strongly expressed its concern that actual control should qualify the primary duties under the Act and felt that situations could arise where a non-specialist principal contractor or builder may not be able to rely on the knowledge and skill of specialist contractors engaged to undertake a specific task. 33 In addition, the HIA felt that the due diligence test placed on officers was unfair and unrealistic, particularly in the circumstances of the building industry The MBSA suggested that the definition of reasonably practicable (s.18) should be made exhaustive. 41. For the MBSA, the practical implications of multiple and overlapping duty holders on a building and construction site were confusing. It considered that the concept of control should be strengthened using a test of a person's capacity to command, direct and compel The MBSA had various concerns with the legislation. The specific duties (ss.20-26) were not considered to be appropriate or reasonable, particularly the manufacturer's duty (s.23) which was seen as open ended. It failed to take account of the capacity to control or address risks as they occurred. Builders were caught as structure is defined (s.4) to include a building. Even so, a specific duty of care should be placed on commercial clients [based on s.30a of the former Work Health and Safety Act 1995 (Qid)] The MBSA noted particular obligations (ss.22 and 23), including carrying out any reasonably foreseeable activity at a workplace in relation to the assembly, use or proper demolition of a structure. As there is no limitation period, a builder could (unfairly) be liable for accidents in demolition after 30 years Similarly, the MBSA considered that the duties on architects and designers (s.22) were unrealistic, apparently requiring consultation with persons responsible for demolition and (as above) holding designers liable for demolition incidents well after the event. Accordingly, in the MBSA's view, there should be a specified time limit for duties in relation to buildings. 45. Further, the MBSA felt that a provision like s.30b(3) of the former Work Health and Safety Act 1995 (Qid), was needed, namely: For deciding, after the structure has been designed, whether the designer discharged the designer's workplace health and safety obligation under subsection (1}, regard must be had to the standards of design prevailing when the designer designed the structure Ibid., pp.l HIA submission, p.s. 34 Ibid, p MBSA submission, p.s. 36 Ibid p.s. 37 Ibid, p Ibid, pp.4, 5. 23