Late last week the NSW Parliament passed the Work Health and Safety Amendment Bill 2023 (Bill). The Bill changes the Work Health and Safety Act 2011 (NSW) and Work Health and Safety Regulation 2017 (NSW) (NSW WHS Laws).
Many of the changes incorporate recent updates to the national Model WHS law published by Safe Work Australia in July 2023. The Bill also makes a number of other changes to the NSW WHS Laws.
What you need to know about the Bill
Increase to maximum penalties
Most significantly, maximum penalties for 'category one' offences under the NSW WHS Laws have substantially increased reflecting increases to maximum penalties introduced to the Model WHS Law in July 2023. This means that in NSW from 1 July 2024* the:
- maximum offence for a person conducting a business or undertaking (PCBU) will more than double - from $3,992,492 to $10,424,983 (from 34,630 to 90,424 penalty units).
- maximum jail term for individuals will double – from 5 years to 10 years.
- maximum fines for individuals who commit a category one offence will increase significantly – from $798,383.25 to $2,168,028.45 (from 6,925 to 18,805 penalty units) for individuals who are also a PCBU, and $399,479.85 to $1,041,991.02 (from 3,465 to 9,038 penalty units) for other individuals.
There will also be smaller increases to category two and three offences from 1 July 2024 (e.g. the maximum penalty for a category two offence for a PCBU will increase from $1,996,246.35 to $2,089,977.12 (from 17,315 to 18,128 penalty units)).
The Honourable Sophie Cotsis MP, Minister for Industrial Relations and Minister for Work Health and Safety, says that these changes mean NSW will be among the first jurisdictions to implement the Model WHS Law penalty increases. The Minister described these changes as essential to discourage unlawful behaviour. Interestingly, Cotsis MP's WHS Ministerial role is a new role created by the Minn's NSW Government elected earlier this year.
Imputing conduct and state of mind
The Bill also extends the existing imputation of conduct provision (s 244, NSW WHS Act).
Previously, the conduct of officers, employees or agents of a body corporate could be taken to be conduct of the body corporate in certain circumstances. Under these changes, conduct engaged in by a board of directors will also be able to imputed to be conduct of the body corporate. The Minister has said that providing for imputation will help to address community expectations that companies should be held accountable for meeting their WHS duties, and prosecuted for failure to uphold them in the same way that individuals are.
The Bill also introduces provisions which provide that where it is necessary to establish a state of mind of a body corporate in relation to an offence, it will be sufficient to show that its board of directors was reckless, or that a ‘corporate culture existed within the body corporate that directed, encouraged, tolerated or led to the carrying out of the conduct’. There is then effectively a defence which may be available where a body corporate can show that it took 'reasonable precautions' to prevent the conduct, or to prevent authorisation of the conduct.
These changes will commence on the day the Bill receives Royal Assent.
New 'asbestos notice' regime
There will also be a new ‘asbestos notice’ regime established in NSW. Under this regime, SafeWork NSW will have the power to issue 'prohibited asbestos notices' if it reasonably believes asbestos is present in the workplace. These notices will contain directions that the PCBU must take in relation to the asbestos – such as directions for the safe removal of the asbestos.
Penalties of up to $118,287.54 (1,206 penalty units) for individuals, and $694,968.12 (6,028 penalty units) for bodies corporate, will apply for any non-compliance with a prohibited asbestos notice
These changes will commence six months after the Bill receives Royal Assent.
Silica worker register
In line with a NSW Government election commitment to screen and track at risk workers, the Bill will also give SafeWork NSW the power to establish a 'silica worker register'. PCBUs will be required to provide SafeWork NSW with information for the register. The register will not be publicly available but SafeWork NSW will be able to share it with iCare and other prescribed government sector agencies.
It appears the register will be used to assist government, insurers, PCBUs and workers to track the risk of illness relating to exposure from silica, however limited details on precisely how the register will be used are available at present. Keeping track of when an at risk worker was working for a particular PCBU can be relevant in apportioning liability among PCBUs in claims arising from exposure to certain forms of silica.
These provisions will commence on the day the Bill receives Royal Assent.
These changes mirror an increasing focus from Safe Work Australia and state safety regulators on respiratory related illness – read our earlier update on recent developments in regulating respirable crystalline silica. The Federal Government's recently introduced Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 also proposes to extend the functions of the Asbestos Safety and Eradication Agency to address silica related diseases.
Among other changes in the Bill, the NSW WHS Act will also be aligned with the Model WHS Law, with a clarification that insurance contract terms that seek to indemnify or insure against liability for monetary penalties under the NSW WHS Act will be void, and stating the accused bears the evidential burden of showing a reasonable excuse. This clarifies previous amendments to the NSW WHS Act relating to limitations on insurance and other indemnities in relation to WHS penalties (s 272A). This is an important consideration in deeds of indemnity provided to officers and others and in insurance policies.
What you need to do
Now more than ever it is time for PCBUs to review their WHS management frameworks and systems to ensure the matters covered in the Bill (and other hot topics such as psychosocial hazards and risk) are adequately covered. As part of this, you will need to ensure, on an ongoing basis, that you are assessing, reviewing and monitoring WHS risks (including asbestos and other respiratory related risks) at your sites – where risks exist, broader actions plans will need to be implemented.
Training for Boards and officers remains critical, including to ensure their behaviour is not imputed to your organisation.
If you have any questions about the impact of the proposed changes on your business, or require any training or other assistance, please contact our team.
* The penalty values are correct as at the date of publication based on the current value of a penalty unit under the NSW WHS Laws – the value increases from time to time.