Minister for Finance and Services,Greg Pearce announced plans to fast track vital reforms that are needed in WorkCover and the Compensation Authorities. This announcement comes after both Greg McCarthy and CEO Lisa Hunt resigned from their positions.
Pearce stated that his belief that when one considers the current “untenable” scheme of WorkCover, coupled with a growing deficit; it is clear that WorkCover must be reformed.
McCarthy and Hunt allegedly both supported a need for reforms and now the government has decided to move ahead with new reforms under new leadership.
The OHS Harmonisation reforms will be fast-tracked with Deputy Chair, Nicholas Whitlam, and current Chief Financial Officer, Julie Newman. Until replacements are appointed, Newman will be acting as CEO, and Whitlam as Chair. McCarthy has throughout the years, developed various reform options, one of which is the merging of WorkCover and four other compensation authorities; the Motor Accidents Authority, Dust and Diseases Tribunal, Sporting Injuries Committee and Lifetime Care and Support Authority. McCarthy believed the merger of these organisations would be the most economically viable way of ensuring savings.
McCarthy was a vital member of the Board of WorkCover for ten years, where he reportedly worked tirelessly on developing reforms to improve the scheme of WorkCover.
Hunt was CEO since 2010, where she was instrumental in pushing for changes in the workplace by implementing a new Work, Health and Safety regime.
Prime Minister Julia Gillard has warned of the possibility of the Commonwealth withholding $450 million in reward payments for the states and territories that are stalling on reforms for Occupational Health and Safety Laws ( OHS Harmonisation).The failure of the states to implement the OHS laws after a year of delays, was costing the country approximately $43 million a week.
Shorten stated that Victoria and Western Australia had made it disturbingly clear that they wanted no involvement in the national OHS harmonisation.Shorten continued by stating that you can’t be a part of the nation of Australia for some aspects but opt out other times for “petty political reasons”.
Attorney-General Nicola Roxon stated that state governments cannot sign off on certain agreements and then not live up to their end of the deal. Roxon believes that the Commonwealth is completely justified in refusing to make reward payments if aspects of national agreements were not met .
NSW Premier Barry O’Farrell has accused PM Gillard of singling out states lead by coalition governments.
Since July, 2008 the Commonwealth, states and territories all agreed to a harmonisation of OHS laws. The laws were expected to be implemented by December 2011 but various state governments delayed the process.
An employment lawyer has warned that managers at the forefront could potentially be at risk of prosecution for Work Health and Safety (WHS) breaches if the OHS Harmonisation laws commence on January 1, 2012.
The OHS Harmonisation laws will comprise of broader meanings of ‘officer’ responsible for workplace safety. Harsher penalties will apply if an officer fails to comply.
Lisa Berton, a partner for Kem Strang, stated that as a result of the new WHS laws; employers will have to recognize an ‘officer’ within an organization, and make compliance a top priority. Berton, warned that the broader definition of an ‘officer’ potentially means that more employees could be held responsible for workplace safety.
Kemp Strang also recommended that businesses identify who the officers are before training is provided to accountable people under the legislation.
The OHS Harmonisation laws include new definitions of due diligence. This means that officers will have to have updated knowledge of WHS matters, understand dangers and risks of the business and minimise or eradicate them, as well as having a proper system in which information can be received and permit a timely response to incidents.
Berton warned that officers must avoid complacency in ensuring that all due diligence requirements are complied with.
Penalties for breaching officer’s duty can result in a fine of $600,000 and/or five years incarceration.
With the new Work, Health and Safety (OHS Harmonisation) Act about to become effective in the next couple of months it is essential that those working in every industry understand not only the rules and regulations that will be put into place but, also the role that everyone has in terms so making sure that the work environment is safe. To do that the OHS has changed some terms to make understanding who has responsibilities under the new regulations clear. One such term is a person conducting a business or undertaking (PCBU).
In the past, old regulations often used the term employer but, that term often lead to misconceptions regarding exactly what duties and obligations were assigned to whom. In order to clear up any misunderstanding the term PCBU has taken the place of the term employer. Under the Work Health and Safety act a PCBU is any person or entity that conducts a business or undertaking. This may be an individual, a corporation, or a charitable organization.
The PCBU has the primary duty of care to ensure as far as reasonably practicable the health and safety of all workers that it engages. However, it is the duty of each officer of the PCBU to ensure that the PCBU complies with those duties and obligations.
Here are some of the duties of the PCBU.
- The PCBU must share all relevant information on health and safety with the workers.
- The PCBU must provide workers with an opportunity to share their views and express concerns about safety issues with the PCBU and it’s officers.
- The PCBU must advise workers of relevant outcomes in a timely manner.
- The PCBU must involve any relevant health and safety representatives in the process.
In determining what is reasonably practicable the PCBU and it’s officers should consider
The likelihood of a risk or hazard occurring. Would a reasonable person concerned about safety be able to foresee this particular risk or hazard is likely to occur if some preventive measure is not taken?
- The degree of harm that may arise from that risk or hazard
- What the person knows or should know about this risk or hazard and ways of minimizing or eliminating the risk.
The Availability of Ways of Minimizing the Risk
Whether the cost of eliminating or reducing the risk is disproportionate to the risk itself.
The PCBU needs to look at all possible health or safety issues from the point of view of what a reasonable person could predict would happen and how they would try to minimize the dangers. The PCBU is not expected to think of or consider those hazards that are extremely unlikely to occur only those which a reasonable person would “know” are likely to occur.
The Main thing to remember is that while the Person conducting a business or undertaking has the primary responsibility for following all duties and obligations that it is the officers of the PCBU that must be responsible for seeing that the PBCU complies with those duties and obligations or they can incur personal fines and penalties whether or not an incident actually takes place.
With the new Work, Health and Safety Act and all of the changes that go with it about to become effective over the next few months it is important to have a clear understanding of this act as a whole and various parts specifically. One of the areas where corporations and businesses are due to see a big change is the responsibility of the officers of a business to actively ensure that their businesses comply with the new OHS harmonisation laws and regulations. Failure of officers to do so can result in a personal fine of up to $600,000 and/or 5 years in prison.
Therefore it is of paramount importance for businesses to know just who is deemed an officer under the Work Health and Safety act. Under this act an officer is defined as:
- Any director or secretary of a corporation
- Any administrators or Liquidator of a corporation
- All officers in an unincorporated association
- Any other person who makes or participated in making decisions that affect the corporation or business as a whole.
- Any person who makes or participates in making decisions that affect significant part of the corporation or business.
- Any person who has the capacity to significantly affect the corporation or business
- And any person on whose instructions or wishes a business or corporation is used to acting on.
Under the new guidelines all officers must exercise due diligence to make sure that their company complies with all of its safety obligations including:
- Keeping current on all work health and safety matters
- Understand the operations of the business and know and understand the risks and hazard associated with those operations.
- To make sure that the business has the necessary resources to minimize risks to health and safety and that those resources are being used properly.
- Make sure that the business has and implements all the necessary processes for complying with the laws which include: reporting incidents, consultations with workers, ensuring that workers get the the proper training and instruction regarding work, health and safety
- And ensuring that health and safety supervisors get the training they need to perform their job correctly.
By taking the time now to understand just who is deemed an officer under the new laws and making sure that all those who are deemed officers have the training and are prepared to take on their new more active roles in overseeing the safety of the workers and the business you can avoid some costly future mistakes.
Remember under the new guidelines officers may be liable for any breach of safety even if no incidents or accidents occur. This could be costly to both the individual officer and to your company as a whole. So, it is essential that every officer has the training necessary to understand their obligations and how to carry them out before the January 1, 2012 deadline. Being prepared will help your business make a smoother transition.