HWL Ebsworth’s Sydney Workplace Relations and Safety Team has successfully defended labour hire company, Assign Blue Pty Ltd, in a landmark decision examining the scope of duties for labour hire companies and their ability to influence and control work at host employer sites.
Summary
HWL Ebsworth has successfully defended labour hire company, Assign Blue Pty Ltd (Assign Blue), and obtained a not guilty verdict in respect of safety charges brought by SafeWork NSW.
Assign Blue pleaded not guilty to breaching sections 19 and 32 of the Work Health and Safety Act 2011 (NSW) (WHS Act).
The decision of Judge Scotting, handed down on 7 December 2020 in the District Court of NSW, is the first judgment under the harmonised work health and safety laws that provides clear guidance on the scope of a labour hire company’s work health and safety duties and its ability to influence and control work at client sites.
The case also confirms that the defence of honest and reasonable mistake of fact for strict liability offences is available under work health and safety legislation.
Factual background
Assign Blue conducted a business of supplying the labour of its employees to businesses across Western Sydney, pursuant to contractual labour hire agreements. Charges were brought against Assign Blue following an incident that occurred on 31 August 2017 at the site of a host employer, Bullock MFG Pty Ltd (Bullock). The incident resulted in the partial amputation of an Assign Blue employee’s fingers, whilst using a power press to cut sheet metal at a Bullock site. Bullock is a business that manufactured sheet metal components for use in air conditioning systems out of a factory in NSW.
In his evidence before the Court, the injured worker did not recall how the incident occurred and there were no witnesses to the incident. The press was fitted with finger guards that were adjustable so that protection could be provided to the operator in different configurations.
In the Summons, SafeWork NSW pleaded the following risk:
“The risk was the risk of a worker….suffering serious injury, in particular having his fingers crushed and/or amputated, as a result of his fingers coming into contact with moving parts of the Press (the risk).”
In his analysis, Judge Scotting found the likelihood of the risk to be low to moderate. The press had finger guards fitted to it which, if properly adjusted, would have eliminated the pleaded risk. Further, there was no evidence raised, other than the occurrence of the incident, to suggest that the finger guards were improperly adjusted on occasions prior to the incident.
Judge Scotting determined that the safety consultation process was seriously compromised by representations of the host employer where Assign Blue employees would be working, and the roles that they would perform at Bullock sites.
Failure to prove the elements of the offence beyond reasonable doubt
The particulars of the asserted breach, as set out in the Summons, included failures in the alternative to:
- Consult with Bullock on health and safety matters;
- Undertake, or require that Bullock undertake, a risk assessment for the task of operating the press that identifies the risk;
- Require Bullock to adequately guard the press;
- Require that Bullock develop and implement a safe operating procedure;
- Require that Bullock provide for its inspection maintenance schedules for the press;
- Require Bullock to provide supervision to employees operating the press; and
- Provide, or required Bullock to provide, adequate information, instruction and training to workers to inform them of the risks associated with operating the press.
Assign Blue had entered into a written agreement with Bullock relating to the supply of labour hire workers (Terms of Business). Under the Terms of Business, Bullock agreed to a number of work health and safety obligations and was contractually obliged to take a number of steps with respect to its workplace activities, as well as to provide information to Assign Blue while its workers were assigned to Bullock sites.
In relation to each of the elements listed at (b), (c), (d), (f) and (g) above, his Honour found that the Terms of Business contained appropriate contractual obligations in relation to the steps to be taken by Bullock, and that by securing those promises from Bullock contractually, Assign Blue did not breach its primary duty of care under the WHS Act.
Consultation and misrepresentation by Bullock
In relation to consultation (particularly referenced at (a) above), it was held that Assign Blue had consulted with Bullock regarding the work health and safety system in place. That consultation process was however seriously compromised when Bullock’s Operations Manager told Assign Blue that the labour hire workers would not be required to operate machines on the factory floor.
Evidence was provided by Assign Blue that Bullock’s Operations Manager made representations that the Assign Blue employees would only work in assembly or warehouse areas on the Bullock site.
Judge Scotting accepted that Bullock had communicated to Assign Blue that it only required unskilled workers. In three documented work health and safety site visits conducted by a representative of Assign Blue, Assign Blue was informed that the labour hire workers would only be required to work in assembly, warehouse areas and as delivery drivers at the Bullock site.
Assign Blue did not know that the injured worker was going to be asked by Bullock to operate the power press on the day of the incident or at all. The recorded communications between Assign Blue consultants and the labour hire worker was that he was working in Bullock’s warehouse. Bullock did not notify Assign Blue that there was to be a change in the work performed by the labour hire worker, as it was required to in accordance with its contractual obligations.
That consultation process was seriously compromised because Bullock’s Operations Manager told Assign Blue that the labour hire workers would not be required to operate the machines on the factory floor.
It was accepted by Judge Scotting that Assign Blue did not specifically consult with Bullock about the power press because it was told that the labour hire workers would not be required to use the machines on the factory floor.
Judge Scotting found that it was not reasonably practicable for Assign Blue to consult with Bullock in relation to the specific operation of the press.
Influence and control
In his decision, Judge Scotting specifically considered Assign Blue’s capacity to influence and control work at the Bullock site.
Section 16 of the WHS Act provides that more than one person can concurrently have the same duty In this case both the host employer Bullock and labour hire provider had concurrent safety duties. This is qualified by section 16(3)(b) of the WHS Act which provides that where more than one person has a duty for the same matter, each person “must discharge the person’s duty to the extent to which the person has the capacity to influence and control the matter…”
Whilst Judge Scotting emphasised that both Bullock and Assign Blue owed a duty of care to labour hire workers, and was required to ensure the health and safety of workers so far as was reasonably practicable, he accepted that Assign Blue’s capacity to influence and control the work of its labour hire workers at the site was different to that of Bullock as it:
- Did not have day-to-day supervision of the labour hire workers;
- Was not in control of the workplace;
- Did not have any experience in operating the machines on the factory floor;
- Did not have the expertise in operating the machines sufficient to identify the hazards posed by them or to identify and implement appropriate control measures;
- Did not have the knowledge required to formulate appropriate training and instruction to be provided to the operators of the machines; and
- Did not have access to the machines to ensure that they were configured in a way that was safe for use, by ensuring that the interlocking guarding was operating correctly.
The prosecution alleged that Assign Blue breached its health and safety duty by failing to take a number of reasonably practicable steps relating to the power press. The Judge however found, that it was unreasonable for Assign Blue to have ensured that Bullock had in place a safe system of work relating to each of the 37 – 52 different machines located on the factory floor and stated:
“It would not have been reasonably practicable to embark on such an onerous task where [the operations manager] represented, on behalf of Bullock, that: the labour-hire workers would not be using the machines, the machines were adequately guarded, there were safe operating procedures in place and that adequate instruction, training and supervision would be provided.”
Honest and reasonable mistake of fact
As an additional defence to the charges brought by SafeWork NSW, Assign Blue raised the defence of honest and reasonable mistake of fact. It is a defence to an offence of strict liability where the accused honestly and reasonably, but mistakenly believed a set of facts, which if they existed would have rendered his or her conduct innocent.
Assign Blue argued that because of the misrepresentations of the Bullock Operations Manager, Assign Blue honestly and reasonably (but mistakenly) believed that its workers would not be asked to operate machines on the factory floor. Assign Blue asserted that because of this, it was under no obligation to take any reasonably practicable steps relating to the operation of the machine at the premises.
While accepting the availability of such a defence in respect of the charge, Judge Scotting determined that while the Assign Blue representative honestly believed what she was told by the Bullock Operations Manager, this was not a reasonable mistake of fact in the circumstances. This was because it did not take into account all of the relevant information known to Assign Blue.
Costs
On 5 February 2021, Judge Scotting made orders for SafeWork NSW to pay Assign Blue’s professional costs in the Proceedings.
Bullock prosecution
Bullock was separately prosecuted, convicted and fined $165,000 in respect of the incident. The District Court found that Bullock assigned an inexperienced labour hire worker to a machine that was not properly guarded, set up, checked or maintained for use.
For more information please contact Peta Tumpey, Lily Schafer-Gardiner or Stephanie Lambros.
This article was written by Peta Tumpey, Partner, Lily Schafer-Gardiner, Senior Associate and Stephanie Lambros, Solicitor.
