Citation: SafeWork NSW v Chess Engineering Pty Ltd [2020] NSWDC 638
Court: District Court of New South Wales
Date: 23 October 2020
Judge(s): Scotting DCJ
Background
Chess Engineering Pty Ltd is a Sydney-based metal fabrication company employing approximately 117 workers across New South Wales and Western Australia. It engaged labour hire workers through a third-party provider, one of whom was an experienced fitter and machinist with 20 years post-trade experience. That worker was assigned to operate a conventional metal turning lathe at the company's Padstow premises.
In February 2017, the worker was tasked with reconditioning large metal rollers from Sydney Airport's luggage conveyor system. The task required hand-polishing the rollers using a strip of emery cloth wrapped around the rotating piece, a technique known as the "overhand underhand" method. The company had no documented safe work procedure for this task, had not conducted a risk assessment for it, and had not formally assessed the worker as competent to perform it.
On 13 February 2017, while wearing gloves and polishing a roller, the worker's hands and arms became entangled in the moving parts of the lathe. He sustained severe crush injuries to both arms and hands, including multiple fractures requiring surgical fixation.
Legal Issues
- Whether Chess Engineering Pty Ltd failed to comply with its primary health and safety duty under section 19(1) of the Work Health and Safety Act 2011 (NSW), thereby exposing the worker to a risk of death or serious injury contrary to section 32 of that Act
- What penalty was appropriate having regard to the objective seriousness of the offence, relevant aggravating and mitigating factors, the company's capacity to pay, and the need for general deterrence
- What discount, if any, was warranted for the guilty plea
Decision
The company pleaded guilty to the charge. Scotting DCJ accepted the Agreed Statement of Facts and proceeded to sentence. The court assessed the objective seriousness of the offence as falling below the mid-range. Several systemic failures contributed to this assessment: the absence of a risk assessment for the linishing task, no documented safe work procedure for it, contradictory written instructions about glove use, the use of a supervisor not assessed as competent to train others, and the failure to consider practicable safer alternatives such as mechanical sanding belt holders.
On the subjective case, the court found meaningful mitigating circumstances. The company had no prior convictions, cooperated with the SafeWork NSW investigation, and took remedial steps after the incident by reviewing its safe work procedures and retraining staff. The CEO gave evidence of genuine remorse and contrition. The court also noted the company's status as a good corporate citizen with apprenticeship programs and charitable activities, and acknowledged the financial impact of the COVID-19 pandemic on the business.
The court applied a 25% discount to the fine to reflect the utilitarian value of the guilty plea, consistent with the principle in R v Thomson & Houlton that earlier pleas attract greater discounts. The court set the pre-discount fine at $60,000, reducing it to $45,000. Although the company's revenue had fallen significantly due to COVID-19, the company did not contend it lacked capacity to pay an appropriate fine. The court noted that capacity to pay is relevant but not decisive, and that a substantial fine may still be warranted by the seriousness of the offence and the need for general deterrence.
Orders Made
- Chess Engineering Pty Ltd convicted of the offence under section 32 of the Work Health and Safety Act 2011
- Fine of $45,000 imposed (reflecting a 25% guilty plea discount from a base fine of $60,000)
- Prosecutor's costs of $55,000 to be paid by the offender
- Pursuant to section 122(2) of the Fines Act 1996, 50% of the fine to be paid to the prosecutor (SafeWork NSW)
Key Takeaways
- A company with no prior convictions, genuine remorse, and a strong subjective case may still attract a meaningful fine where the objective seriousness of a workplace safety offence demands it and general deterrence is a sentencing consideration.
- Systemic failures, including the absence of a documented safe work procedure, the failure to conduct a risk assessment for a new task, and the use of a supervisor not competent to train others, each contributed to the court's assessment of objective seriousness even where the offence was placed below mid-range.
- Under R v Thomson & Houlton, the timing of a guilty plea is the primary factor in determining the size of the discount; the court applied 25% here, consistent with a plea that carried utilitarian value and indicated remorse.
- Where a new task is introduced to a workplace, the absence of any risk assessment or updated safe work procedure is a significant factor in establishing a failure to comply with a primary health and safety duty.
- Capacity to pay a fine, as required to be considered under section 6 of the Fines Act 1996, is relevant but not determinative; pandemic-related financial hardship was acknowledged but did not substantially reduce the penalty.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 21A(3)(k), 21A(3)(m), 22
- Fines Act 1996 (NSW), ss 6, 122(2)
Cases
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- Jahandideh v R [2014] NSWCCA 178
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Youkhana [2004] NSWCCA 412