Citation: Safe Work NSW v Extrusion Machine Co (Australia) Pty Ltd [2017] NSWDC 192
Court: District Court of New South Wales
Date: 31 July 2017
Judge: Judge AC Scotting
Background
The defendant was a family-run engineering business with over 45 years of experience in aluminium extrusion, operating from premises in Bankstown. It employed a specialist in plastic and rubber extrusion who worked semi-autonomously, attending customers' sites as required to repair and service extrusion machinery.
In July 2014, the specialist attended a customer's premises in Botany to repair an extruder used in the manufacture of synthetic grass. Without the employer's knowledge or any formal risk assessment process, he sourced a PVC-based purge material from a chemical supplier and ran it through the extruder, which was designed for polyethylene or polypropylene only. When PVC purge material is used in such machines and overheated, it can produce solid carbon residue and release hydrochloric acid gas.
Over two days, the specialist ran large quantities of the purge material through the machine, which began emitting fumes and eventually became blocked. While workers attempted to clear the blockage with the machine still operating, a discharge of steam and molten material struck one worker in the face. That worker suffered serious burns, underwent multiple skin grafts, and was unable to work for four months.
Legal Issues
- Whether the employer, as a person conducting a business or undertaking, had breached its health and safety duty under section 19(2) of the Work Health and Safety Act 2011 by failing to comply with that duty and thereby exposing workers to a risk of death or serious injury (contrary to section 32 of the Act).
- What the appropriate penalty was, taking into account objective seriousness, mitigating and aggravating factors, the employer's capacity to pay, and the principles of specific and general deterrence.
- Whether a discount for an early guilty plea was warranted and, if so, at what level.
- Whether the employer's financial position justified reducing the fine.
Decision
The employer pleaded guilty to the charge. The District Court found that the business had failed entirely to implement a safe system of work governing how its specialist employee operated when attending customer premises. Specific failures included: no process for obtaining and reviewing material safety data sheets (MSDSs) for chemicals; no training in risk assessment; no safe work procedure for cleaning extruders or removing die filter apparatus; and no mechanism to ensure the employee only carried out work within the scope of the original quote.
Judge Scotting assessed the objective seriousness of the offence as falling in the lower to middle range. The worker's experience and the semi-autonomous nature of his role reduced the employer's culpability to some degree. However, the court noted that the hazards associated with accessing a die and filter on an operating extrusion machine were well known in the industry, and the absence of any safe system of work was a significant failing.
On penalty, the court accepted a 25% discount for the early guilty plea, consistent with the principles in R v Thomson & Houlton and R v Borkowski, noting the plea also indicated remorse. The court rejected the employer's argument that it had a limited capacity to pay, finding it held substantial bank balances and an unused overdraft facility of $400,000. The agreed costs contribution of $13,000 (later ordered at $20,000) was taken into account in setting the fine.
The court imposed a conviction and a fine of $45,000 (discounted from a base of $60,000), with 50% of the fine directed to the prosecutor pursuant to section 122(2) of the Fines Act 1996.
Orders Made
- The offender was convicted.
- A fine of $45,000 was imposed (reflecting a 25% discount from $60,000 for the early guilty plea).
- Pursuant to section 122(2) of the Fines Act 1996, 50% of the fine was directed to be paid to the prosecutor.
- The offender was ordered to pay the prosecutor's costs in the agreed sum of $20,000.
Key Takeaways
- The District Court confirmed that an employer's health and safety duty extends to the activities of a semi-autonomous, experienced employee working off-site at a customer's premises. The employer's reduced control did not eliminate its duty.
- Where a defendant seeks to reduce a fine on grounds of limited capacity to pay, the evidentiary burden rests on that defendant. Available bank balances and an undrawn overdraft facility were sufficient to satisfy the court that the employer could meet an appropriate penalty.
- A 25% discount for an early guilty plea was applied, consistent with established sentencing principles that the earlier the plea, the greater the discount, and that the plea itself is taken as an indicator of remorse.
- The absence of basic systems including MSDS review processes, risk assessment training, and safe work procedures for on-site repairs were identified as central to the employer's culpability, even where a highly experienced worker was involved.
- Under section 122(2) of the Fines Act 1996, the court directed that half the fine be paid to the prosecuting authority, a mechanism applicable in work health and safety prosecutions that practitioners in this area should be aware forms part of the sentencing regime.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(2), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3, 3A, 21A(2)(g), 21A(3)(e), (f), (g), (i), (k), (m)
- Fines Act 1996 (NSW), ss 6, 122(2)
Cases
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Borkowski (2009) 195 A Crim R 1
- Environmental Protection Agency v Barnes [2006] NSWCCA 246
- Jahandideh v R [2014] NSWCCA 178
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- R v Youkhana [2004] NSWCCA 412
- R v Tuala [2015] NSWCCA 8