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District Court 30 July 2018

SafeWork NSW v Yan Huai Wu and Zenger (Aust) Pty Ltd

[2018] NSWDC 211

Other
CRIMINAL LAW PROSECUTION WORK HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS DUTY OF EMPLOYERS RISK OF DEATH OR SERIOUS INJURY

Citation: SafeWork NSW v Yan Huai Wu and Zenger (Aust) Pty Ltd [2018] NSWDC 211
Court: District Court of New South Wales
Date: 30 July 2018
Judge: Scotting DCJ

Background

The defendant company operated a business manufacturing woollen quilts and pillow cases. The second defendant was its sole director and shareholder, who exercised day-to-day control over work methods at the site. The company's workforce consisted largely of workers from culturally and linguistically diverse backgrounds, many of whom had limited or no literacy skills in English or their native languages.

A worker employed to operate a pillow filling machine was seriously injured on 4 February 2016. After switching the machine off at the end of the day, she attempted to clean wool from the feed chute by hand. She was unaware that the machine's shredder component took three to four minutes to come to a complete stop after power was cut. The shredder was not guarded, and the machine had not been isolated from its electricity supply before cleaning began. All four fingers and the thumb of her left hand were severed.

Both the company and its director were prosecuted by SafeWork NSW. Each pleaded guilty: the company to failing to comply with its primary duty as a person conducting a business or undertaking under section 19(1) of the Work Health and Safety Act 2011, and the director to failing her officer's duty under section 27(1) of the same Act. Both failures exposed the worker to a risk of death or serious injury, contrary to section 32 of the Act.

  • The objective seriousness of each offence and where it sat within the range of offences of that type
  • The appropriate weight to give mitigating factors, including guilty pleas, no prior convictions, good character, cooperation with the regulator, and post-incident remediation
  • Whether a training order and a WHS undertaking were appropriate sentencing alternatives or additions for the director
  • The appropriate level of fine for the company and the director
  • The allocation of prosecution costs between the parties

Decision

Objective seriousness: The court assessed both offences as below mid-range in objective seriousness, though not at the lower end. Some risk assessment had been carried out, administrative controls were in place, and the worker had operated the machine without incident for about twelve months. However, the failure to guard the moving shredder component was a straightforward and obvious hazard, the relevant Australian Standard (AS 4024.1801:2014) provided clear guidance, and the consequences were severe. The court also noted that warning signs in Chinese characters were of limited utility given that several workers could not read in any language.

Mitigating factors: Both defendants had no prior convictions under work health and safety legislation and cooperated with SafeWork NSW. The company undertook substantial remediation, including installing guarding, creating bilingual safe operating procedures, and introducing pictorial and oral training suited to its workforce. The director expressed genuine remorse and had suffered personal distress as a consequence of the incident. These factors, together with the guilty pleas, warranted a 25% discount on the fine for each defendant.

Training order and WHS undertaking: The court imposed a training order requiring the director to complete 24 hours of training with a named safety consultant concerning her responsibilities under section 27(1) of the Act. The court also imposed a WHS undertaking, adjourning the matter to allow compliance with the training order to be demonstrated. The court rejected the prosecutor's argument that a training order was unwarranted, finding it a proportionate and constructive measure in addition to the financial penalty, particularly given the director's ongoing role in the business.

Costs: The court ordered both defendants to pay the agreed prosecution costs of $31,000. Fifty per cent of each fine was directed to be paid to the prosecutor under section 122(2) of the Fines Act 1996.

Orders Made

  • Zenger (Aust) Pty Ltd convicted and fined $60,000 (being $80,000 reduced by 25% for guilty plea), with 50% of the fine payable to the prosecutor
  • Yan Huai Wu convicted and fined $7,500 (being $10,000 reduced by 25% for guilty plea), with 50% of the fine payable to the prosecutor
  • Yan Huai Wu ordered to complete 24 hours of training with Clark Wright regarding her responsibilities under section 27(1) of the Work Health and Safety Act 2011, on or before 28 February 2019
  • Yan Huai Wu ordered to enter into a WHS undertaking, including not committing any further offence under the Act during the adjournment period
  • Matter adjourned to 25 March 2019 for evidence of completion of the training order
  • Both defendants ordered to pay prosecution costs agreed in the sum of $31,000

Key Takeaways

  • The District Court confirmed that a failure to guard an obvious mechanical hazard, combined with a failure to isolate machinery from its power supply before cleaning, will be treated as a significant (though here below mid-range) WHS offence even where some administrative controls existed and no prior incidents had occurred.
  • Warning signs and training materials are of limited protective value where the workforce has low or no literacy skills; the court took this into account in assessing the adequacy of the safety system in place.
  • A 25% discount for an early guilty plea was applied consistently to both the corporate defendant and its individual officer, in line with established sentencing principles under the Crimes (Sentencing Procedure) Act 1999.
  • Training orders under the Work Health and Safety Act 2011 may be imposed on individual officer defendants in addition to, rather than instead of, a financial penalty, particularly where the officer continues to exercise control over an ongoing business.
  • Substantial post-incident remediation, genuine cooperation with the regulator, and demonstrated remorse are relevant mitigating factors in WHS sentencing, but they operate within the context of objective seriousness and do not displace the need for general deterrence.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19(1), 27(1), 32, 122, 239
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 3A
- Fines Act 1996 (NSW), s 122(2)
- Australian Standard AS 4024.1801:2014 (Safeguarding of Machinery)

Cases
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- R v Borkowski (2009) 195 A Crim R 1
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Youkhana [2004] NSWCCA 412