Michael Byrnes Partner and Emily Capener Solicitor, provide an overview of the Work Health and Safety Amendment (Review) Bill 2020 (the Amendment Bill) which on 4 June 2020, the NSW Parliament passed.
WHS Laws: A Brief Overview
On 4 June 2020, NSW Parliament passed the Work Health and Safety Amendment (Review) Bill 2020 (the Amendment Bill) which introduced various changes to WHS laws under the NSW Work Health and Safety Act 2001 (the Act). These changes, the most significant of which are briefly outlined in this article, will take effect once the Amendment Bill receives assent.
Expansion of Category 1 Offence - Gross Negligence
First, the Amended Bill has expanded Category 1 offences (the most serious category) under the Act to include Persons Conducting a Business or Undertaking (PCBU) who engage in conduct with gross negligence. This is in addition to the current test, which requires proof that a PCBU had been reckless as to the risk of an individual of death, serious injury or illness. The 'gross negligence' standard will be easier for prosecutors to establish than the higher 'reckless' standard (which requires a conscious choice to take an unacceptable risk).
Prohibition on Insurance Arrangements
Insurance purporting to cover WHS penalties under the Act has been the subject of debate and controversy. It has been argued such insurance products undermine the policy objectives of the Act by removing or mitigating the financial consequences for breaches. Under the Amendment Bill changes, the Act now prohibits certain insurance arrangements in relation to WHS penalties. It is now an offence, without reasonable excuse, to enter into or benefit from a contract of insurance or other indemnity arrangement that covers liability for a monetary penalty under WHS laws. Significant penalties apply for breaches of these sections, and officers of a body corporate can also be held liable for this offence.
Increase in Penalties
The Amendment Bill also saw the introduction of a penalty unit system indexed to CPI, meaning that the penalties for fines under the Act will increase on an annual basis. Additionally, a number of penalties for WHS breaches were significantly increased, specifically:
- penalties for category 1 offences increasing to $3,463,000 from $3 million;
- penalties for category 2 offences increasing to $1,731,500 from $1.5 million;
- penalties for category 3 offences increasing to $577,000 from $500,000.
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