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Officer liability under Occupational Health and Safety Legislation

Employment Law: 23 March 2019

Each Australian State and Territory has occupational health and safety ('OHS') legislation which imposes certain obligations on companies. In any workplace OHS is a significant issue because when an accident or injury occurs there can be serious reputational and commercial repercussions for a company.

Under section 21 of the Occupational Health and Safety Act (2004) (Vic) a company must ensure, so far as it is reasonably practicable, the health and safety of its workers while they are at work.

The definition of worker is not just limited to employees but may also include contractors and sub-contractors depending on the level of control that a company may exert over how they undertake their work.

Court's approach to what is 'reasonably practicable'

The court uses an objective test to ascertain whether a company has done all that is reasonably practicable to ensure health and safety in the workplace. The court does not require that employers ensure that accidents never happen but rather that they take such steps as are practicable to provide a safe working environment. To satisfy the test of what is reasonably practicable a company is required to have had an active, imaginative and flexible approach to potential dangers in the workplace and how to address those dangers. This requires more than just having a policy that looks good on paper.

Officers Liabilities

Officers of a company may also be held personally liable under OHS legislation where the company has been found to have contravened its duty to provide a safe working environment.

Who is an officer?

  • Director; or
  • Secretary; or
  • a Person:
    • who makes, or participates in making, decisions that affect the whole, or a substantial part, of the company; or
    • who has capacity to affect significantly the company's financial standing; or
    • who in accordance with whose instructions or wishes the directors of the corporation are accustomed to act.

The OHS legislation places a significant obligation on officers to make themselves aware of the OHS policies and procedures in places within the company. The obligation extends beyond ticking a box or reading a policy. All officers of a company should be aware of how the company OHS policies are enacted, whether they are followed and any potential concerns workers may have.

Having a strong policy on paper that in practice is not used is of no benefit and leaves the company and in turn an officer liable for potential contraventions of their duties under the Act.

What is considered when deciding if an officer is personally liable?

In determining whether an officer is personally liable courts will consider:

  • what the officer knew about the matter concerned; and
  • the extent of the officer's ability to make, or participate in the making of, decisions that affect the company in relation to the matter concerned; and
  • whether the contravention by the company is also attributable to an act or omission of any other person; and
  • any other relevant matter.
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