THE THIRD PARTY SAFETY INTERFACE IN THE HIGHER EDUCATION SECTOR
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1 AUSA CONFERENCE 2015 THE THIRD PARTY SAFETY INTERFACE IN THE HIGHER EDUCATION SECTOR JUNE 2015 Fiona Austin, Special Counsel, ,
2 THIRD PARTIES WHAT IS THE LEGAL RISK?
3 CASE EXAMPLE WORKCOVER (INSPECTOR CALVEZ) V TAFE 2014 NSWDC 108 John McKinnon Glenn Manton TAFE Sarah Waugh 3
4 WHO ARE THIRD PARTIES? Workers Others A person who carries out work in any capacity for a PCBU Includes an employee, contractor or subcontractor, employee of a contractor or subcontractor, employee of a labour hire company who has been assigned to work in the business or undertaking, an outworker, apprentice or trainee, student gaining work experience, volunteer. Everyone else! From the National Review: 6.93 The beneficiaries of the duty of care, in addition to workers, are others. This clearly includes all other persons and no definition is required. 4
5 PCBU DUTIES RELEVANT TO THIRD PARTIES The WHS Act imposes concurrent duties on persons conducting businesses or undertaking (PCBU s) to reduce risk SFAIRP including: Duties as a PCBU to reduce risk to workers (including contractors whose activities are influenced or directed) and to others (e.g. students) arising from its business Duties as a person having management or control of a workplace Duty as a person having management or control of fixtures, fittings and plant Upstream duties (e.g. in relation to design, testing, instruction) in relation to plant, substances or structures Duties to consult with workforce and concurrent duty holders (e.g. the non-controlled entities which are PCBUs) Duties to notify incidents Duties to follow issue resolution procedures Duties to ensure authorisations Specific duties contained in the WHS Regulations (e.g. construction, plant, hazardous chemicals) 5
6 WHAT IS THE RELEVANCE OF CONTROL? KARATJAS V DEAKIN UNIVERSITY [2012] VSCA 53 6
7 SO FAR AS IS REASONABLY PRACTICABLE That which is reasonably able to be donein relation to ensuring health and safety, taking into account and weighing up all relevant matters including: the likelihood of the hazard or the risk occurring; the degree of harm that might result; what the person knows or ought reasonably know about the hazard or the risk and the ways of eliminating or minimising the risk; and the availability and suitability of ways to eliminate or minimise the risk; and after assessing the extent of the risk and the available ways above, the cost associated with the available ways including whether it is grossly disproportionate to the risk. 7
8 CASE EXAMPLE WORKCOVER AUTHORITY OF NSW v EASTERN BASIN PTY LTD - BC Eastern Basin Newcastle Stevedores Gregory Fitzgibbon 8
9 Safety risk SO WHAT IS THE LEGAL RISK? Influence and control 9
10 THIRD PARTY INTERFACE DO YOU HAVE A CONSISTENT APPROACH?
11 THIRD PARTY INTERFACE MODEL We need to address the legal risk. LEGAL RISK = CONTROL x WHS RISK 11
12 THIRD PARTY INTERFACE MODEL Step 6 - Enforce Step 1 - Identify Third Parties Step 5 - Apply Oversight Step 2 - Design a WHS Strategy Step 4 - Establish Interface Coordination Step 3 - Establish Governance Framework 12
13 STEP 1 IDENTIFY THIRD PARTIES
14 WHO ARE THE UNIVERSITY THIRD PARTIES? Who are known third parties? How are new third parties identified? Visitors Students Customers Tenants Subsidiaries Contractors Suppliers Funders Joint venturers Neighbours 14
15 STEP 2 DESIGN A WHS STRATEGY
16 THIRD PARTY WHS STRATEGY Who will have control of plant and equipment used Who will have control of the workplace Who will have control of the work activities Governance + Interface + Oversight 16
17 DIMENSIONS FOR THIRD PARTY WHS STRATEGY Governance Defines the relationship and process for making WHS relevant decisions Can be hands on or hands off selection must be responsive to WHS risk and control Interface Defines the functional operation of the governance strategy Can be active or less active - responsive to residual WHS obligations of University Oversight Assurance and enforcement processes Must be comprehensive depth and timing responsive to legal risk 17
18 CASE EXAMPLE INSPECTOR ROWE V ROADS AND MARITIME SERVICES OF NSW [2012] NSWIRComm 43 18
19 CASE EXAMPLE SMITH V BHP BILLITON IRON ORE PTY LTD [2013] WASCA
20 A MENU OF OPTIONS? One option is to develop a menu of options for contract / relationship managers to select from. These options can be applied whatever vehicle for the relationship is adopted (eg. form of contract, liaison etc.). Consistent terminology throughout the University can be created by use of a common language to describe the options: eg. Mode A, Mode B, Mode C etc. Selection from the menu turns on assessment of WHS risk and ability to allocate control (ie. legal risk). Also may need to select extras for specific obligations (such as upstream duties for supply of plant and equipment or design obligations). 20
21 EG. WHS MANAGEMENT SYSTEM MENU legal risk is low Third party to operate under own HSMS and work procedures not reviewed by University Third party to operate under own HSMS and work procedures but reviewed by University Third party to operate under University HSMS and integrate own work procedures legal risk is high Third party to operate under University HSMS and University work procedures 21
22 EG. WHS MANAGEMENT PLAN MENU legal risk is low No WHS management plan required Third party to have their own WHS management plan not subject to University review Third party to provide own WHS management plan for work subject to University review legal risk is high Third party to work under University WHS management plan 22
23 EG. PRE-QUALIFICATION MENU legal risk is low No prequalification requirements apply Third party must meet industry qualification requirements only eg. licenses as assessed by Third Party Third party must meet industry qualification requirements only eg. licenses as assessed by University Third party must meet University detailed prequalification requirements as assessed by Third Party legal risk is high Third party must meet University detailed prequalification requirements as assessed by University No prequalification requirements imposed because integration is required 23
24 EG. MONITORING MENU legal risk is low No monitoring required Monitoring only by exception if issues arise Third party to conduct audits and provide copies if requested Third party to conduct regular audits and report to University University to conduct regular audits legal risk is high Weekly relationship meetings and regular audits Direct supervision of activities 24
25 EXAMPLE WHS STRATEGY: STUDENTS IN CHEMISTRY LABS Legal risk is HIGH because control cannot be allocated and WHS risks are high Dimension Strategy Governance Student contract Operates under University HSMS and procedures Direct supervision required No prequalification due to integration Interface Full time teaching interface Oversight Direct supervision of activities (with HSMS auditing occurring) 25
26 CASE EXAMPLE INSPECTOR SELBY V UNIVERSITY OF NEW SOUTH WALES [2013] NSWIRCOMM 20 26
27 OTHER STUDENT CASES Workcover Authority of NSW (Inspector Lacey) v University of Western Sydney (1996) Russell v University of South Australia [2007] University of Queensland (enforceable undertaking) Insp Russell v South Australian Department of Further Education [2012] 27
28 EXAMPLE WHS STRATEGY: CONSTRUCTION PRINCIPAL CONTRACTOR Legal risk is MODERATE because control for workplace, plant and equipment and work activities can be exclusively allocated but WHS risks are high Dimension Strategy Governance Service contract Detailed prequalification assessed by University Operates under own WHSMS and management plan not subject to University review Interface Monthly contractor meetings for CCC and contractor performance review No task supervision Oversight Monthly reporting, annual auditing by University for legal and systems compliance 28
29 EXAMPLE WHS STRATEGY: ICT HELPDESK CONTRACTOR Legal risk is LOW because control for work activities can be allocated but WHS risks are low. University supplies plant and equipment so supply obligations are extras. Dimension Strategy Governance Service contract Prequalification self-assessed Third party to operate under University HSMS and integrate own work procedures Supply conditions imposed Interface Contract liaison officer WHS management by exception Equipment supply interface in place Oversight Weekly reporting, contractor to conduct audits and provide copies if requested 29
30 EXAMPLE WHS STRATEGY: CAMPUS VISITORS Legal risk is HIGH because control for workplace is not allocated and WHS risks are moderate. Dimension Strategy Governance Visitor contract Operates under University HSMS and procedures Interface Continuous security functions Oversight Continuous security functions 30
31 EXAMPLE WHS STRATEGY: TENANTS Legal risk is LOW because control for plant and equipment and work activities can be allocated, however University retains control of the workplace (including fixtures) to an extent. Dimension Strategy Governance Tenant to operate under own HSMS and work procedures not reviewed by University Lease contract including authorised activities and notification obligations Interface Tenancy manager in place Oversight University to conduct inspections, enforcement 31
32 CASE EXAMPLE INSPECTOR PAGE V WOOLWORTHS LIMITED; INSPECTOR PAGE V GROWTH EQUITIES SERVICE PTY LTD 1994 ASH
33 STEP 3 ESTABLISH THE GOVERNANCE FRAMEWORK
34 STOP! IS YOUR STRATEGY PLANNED? Most common cause of confusion / challenge is that the governance framework is put in place BEFORE the WHS strategy 34
35 CONTRACT OPTIONS Most third party relationships are governed by contract. Contractual allocation of control is available. WHS Act section 272 states: A term of any agreement or contract that purports to exclude, limit or modify the operation of this Act or any duty owed under this Act or to transfer to another person any duty owed under this Act is void. Contractual allocation of civil risk is available. Contractual terms govern the level of interface and oversight that can be applied therefore they need to be determined early! 35
36 CONSIDERATIONS FOR CONTRACTS Selection and prequalification processes WHS Auditing Handover warranties Site access clauses WHS Reporting and Notifications Indemnities Breach of contract, step-in and termination Plant and equipment supply clauses WHS Management Systems and Plan requirements (and review) Exclusion clauses and consequential loss Incident response and management Design documents and specifications WHS Standards Caps on liability and insurances Cooperation and interface clauses 36
37 STEP 4 ESTABLISH INTERFACE COORDINATION
38 INTERFACE PLANS I know you think you understand what you thought I said but I'm not sure you realise that what you heard is not what I meant. - Alan Greenspan 38
39 INTERFACE: CONSULT what each will be doing, how, when and where what plant or substances may be used who has control or influence over aspects of the work or the environment ways in which the activities of each duty holder may affect the work environment ways in which the activities of each duty holder may affect what others do identifying the workers that are or will be involved in the activity identifying who else may be affected by the activity procedures for consultation and representation, issue resolution what information needs to be exchanged what each knows about the hazards and risks associated with their activity whether the activities of others may introduce or increase hazards or risks what each will be providing for controlling risks what further consultation is required for monitoring and detecting change 39
40 INTERFACE: COOPERATE AND COORDINATE Cooperation Co-operation may involve implementing arrangements in accordance with any agreements reached during consultation with the other duty holder and involve not acting in a way that may compromise what they are doing for health and safety. Coordination The co-ordination of activities requires duty holders to work together so that each person can meet their duty of care effectively without leaving any gaps in health and safety protection. You should plan and organise activities together with the other duty holders. 40
41 STEP 5 APPLY OVERSIGHT
42 CASE EXAMPLE BAUER FOUNDATIONS AUSTRALIA PTY LTD V PRESIDENT OF THE INDUSTRIAL COURT OF QLD & ANOR [2011] QSC
43 OVERSIGHT Once you have knowledge, you have a duty. Stop! What are the boundaries of your business or undertaking? Enforcement must be consistent with the form of relationship in place and the WHS strategy selected. Consider auditing for advice. 43
44 STEP 6 ENFORCE
45 DISCIPLINE Australia post had a traffic management plan which existed but was not enforced. A worker (a contractor) was struck by a forklift in a loading dock. Comcare v Australian Postal Corporation [2011] FCA 1533 Systems fail for many reasons, sometimes because they were not well thought through in the first place: other times, as here, they fail because however brilliant their conception, they are just not implemented. To describe something as a systematic failure is to camouflage individual failings, both at individual employee level, at immediate and supervisory level and further up the chain of command. They are not just systemic failings; they are individual failings. Australia Post of course, is liable for those individual failings of its various employees. 45
46 CASE EXAMPLE WORKCOVER AUTHORITY OF NSW v EASTERN BASIN PTY LTD - BC Dear Mr Beesley. Also consider Wolters v University of the Sunshine Coast [2013] QSC 46
47 OFFICERS DUE DILIGENCE - WHAT IS REQUIRED? ASSURANCE CONTROLS AWARENESS Up-to-date knowledge of WHS matters Resources and processes to identify, eliminate or control hazards and risks Processes to ensure compliance by the company with its legal duties An understanding of the operations of the business and its associated hazards and risks Processes for receiving, considering and timely response to incidents, hazards and risks Verifying resources & processes to manage hazards, risks and incidents and ensure compliance 47
48 PROSECUTIONS WHS ACT A Cairns Scientist The defendant was an officer in a scientific and environmental venture into bats. The venture was also open to the public, allowing feeding of and interaction with the bats. Consequently, workers and the public were exposed to scratches and bites from the bats and to an increased risk of Australian bat lyssavirus infection. Nobody interacting with the bats was notified of the risk of exposure to lyssavirus or how to protect against the risk. There was no warning that, if bitten or scratched, to immediately seek medical treatment. The defendant held duties under s.27 of the Work Health and Safety Act 2011, being an officer of a person conducting a business or undertaking. The defendant pleaded guilty in the Cairns Magistrates Court on 15 January 2014 to breaching s.32 of the Work Health and Safety Act 2011, having failed to meet his work health and safety duties and was sentenced. Magistrate Mr Joe Pinder ordered a 12 month good behaviour bond with recognisance in the amount of $10 000, as well as ordering costs totalling $1079. In reaching a decision, the magistrate acknowledged the defendant failed to comply with his obligations under the Act although it was "an innocent breach". 48
49 BEST OF LUCK ON YOUR JOURNEY! Step 6 - Enforce Step 1 - Identify Third Parties Step 5 - Apply Oversight Step 2 - Design a WHS Strategy Step 4 - Establish Interface Coordination Step 3 - Establish Governance Framework 49
50 HERBERT SMITH FREEHILLS AUSTRALIAN SAFETY TEAM QUEENSLAND Harold Downes Partner T harold.downes@hsf.com Fiona Austin Special Counsel T fiona.austin@hsf.com Asher Lindsay Senior Associate T asher.lindsay@hsf.com Christie Jenkins Solicitor (on mat leave 2015) T christie.jenkins@hsf.com Paul Smith Solicitor T paul.smith@hsf.com Sam Campbell Solicitor T sam.campbell@hsf.com VICTORIA Steve Bell Partner T steve.bell@hsf.com Julie Marotta Senior Associate T julie.marotta@hsf.com Lilly Knorr Solicitor T lilly.knorr@hsf.com Darren Hexter Solicitor T darren.hexter@hsf.com Jessica Brivik Solicitor T jessica.brivik@hsf.com Rachel Loughland Solicitor T rachel.loughland@hsf.com WESTERN AUSTRALIA Anthony Longland Partner T anthony.longland@hsf.com Rowan Kelly Special Counsel T rowan.kelly@hsf.com Sam Witton Senior Associate T sam.witton@hsf.com Grace Caterina Solicitor T grace.caterina@hsf.com NEW SOUTH WALES Miles Bastick Partner T miles.bastick@hsf.com Cormack Dunn Special Counsel T cormack.dunn@hsf.com Michael Cole Solicitor T michael.cole@hsf.com 50
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