A sobering reminder of the consequences of failing to prioritise occupational health and safety measures has recently been provided by the Court of Appeal in Victoria. In a landmark prosecution involving LH Holding Management Pty Ltd, the Court of Appeal more than doubled the fine imposed in the first instance thus setting a clear benchmark for what constitutes unacceptable risk in the workplace and increasingly severe consequences for employers that are found to have engaged in negligent conduct.

Director of Public Prosecutions (Vic) v LH Holding Management Pty Ltd

This case is the first one under the workplace manslaughter provisions of the Occupational Health and Safety Act 2004 (Vic) (OHS Act) since the provisions were first introduced in July 2020.

In February 2024, a stonemasonry business, LH Holding Management Pty Ltd (Company) pleaded guilty to a charge of workplace manslaughter under section 39G of the OHS Act. The Company was convicted and a fine of $1.3 million was imposed by the Supreme Court at first instance.

The Victorian Director of Public Prosecutions appealed the decision on the basis that it was manifestly inadequate given what was submitted to be the highly negligent conduct of the Company. The Court of Appeal determined that, in the circumstances, the fine imposed on the Company should be more than doubled to $3 million. The Court of Appeal accepted that the Company’s fatality-causing conduct was grossly negligent, the objective seriousness of the offending was very high and the fine imposed by the sentencing judge at first instance was manifestly inadequate.

The company’s sole director, Laith Hanna, was also convicted and sentenced to a 2-year community corrections order and ordered to undertake 200 hours of unpaid community work and a forklift course. Additionally, Mr Hanna and the Company were ordered by consent to make a joint payment of $120,000 in restitution to the sister of the deceased worker.

The incident

On 21 October 2021, Mr Hanna was operating a forklift with a raised load (a large A-frame rack) on a sloping driveway at a company factory in Somerton. A nearby subcontractor (25 year-old Michael Tsahrelias) was attempting to stabilise the load when the vehicle tipped over and its mast fatally struck Mr Tsahrelias.

Although Mr Hanna’s evidence was that he had told Mr Tsahrelias to move prior to the incident and believed he was out of the way while operating the forklift, the Court of Appeal found that the Company’s conduct, by way of Mr Hanna’s operation of the forklift, was grossly negligent and involved a very significant departure from acceptable safety standards for the following reasons:

• the mast extended high into the air, with the A-frame rack raised approximately 2 metres off the ground;
• the mast was in that position for 50 seconds and the A-frame rack was swinging freely;
• the forklift was driven forwards down a slope, rather than in reverse;
• the forklift was turned across a slope; and
• the forklift was operated while Mr Tsahrelias was standing at a point dangerously close to it.

Mr Hanna did not avoid personal liability in this case as he was a sole Director of the Company and therefore was responsible for making decisions regarding safety measures at the Company. He was also the individual operating the forklift, was aware of the risks at the workplace, and the Company’s serious contravention of the OHS Act was not attributable to an act or omission by any other person.

While the Court of Appeal accepted that the fine imposed would be “ruinous” for the Company, it nevertheless determined that it was necessary to fulfill the aim of general deterrence, and it was important to send a message to the community more generally.

Director liability and key takeaways

Safety regulators are making a point of pursuing negligent employers including by bringing charges of workplace manslaughter where, in their view, such charges are appropriate in the circumstances. Regulators are also arguing for harsher penalties on both companies and their directors. In light of the above decision, it is highly likely that Courts will now be more punitive in their approach to sentencing offenders and will give greater weight to the principle of general deterrence in relation to negligent conduct in the workplace.

This case constitutes a timely reminder to all employers and directors, regardless of their size and industry, to ensure that their OHS practices are meeting required standards and that they are being diligently enforced and complied with. Sole company directors should be aware of potential personal liability in cases where they are directly involved in workplace incidents, they are aware of the potential risks of the work, and they fail to take reasonable steps to prevent harm to workers.

If you are concerned about your business’ compliance with the OHS Act, please contact our Workplace Relations & Safety Team for assistance.

This article was written by Tony Lawrence, Partner, Nick Zavattiero, Solicitor, and Marwa Karimi, Law Clerk.