Determining penalties in Victorian OHS prosecutions
Dotmar Epp Pty Ltd v R  VSCA 241
On 9 September 2015, in a decision that will be of significance to insurers of defendants in occupational health and safety (OHS) prosecutions, the Victorian Court of Appeal clearly outlined the sentencing approach in OHS prosecutions in Victoria: namely, that Courts will impose penalties based on the seriousness or gravity of the risk caused by the relevant safety breach and not instead on the consequences of a safety breach (i.e. whether someone was injured or killed).
Understanding this approach will assist in settling appropriate penalty reserves, which may now need to be substantial even if the claim does not involve a fatality.
Dotmar Epp Pty Ltd (Dotmar) engineered plastic products at a factory in Dingley, Victoria.
One of its machines was a lathe that was equipped with a switch for interlocking guard doors which, if enabled, fully enclosed, and thereby prevented access to, the dangerous moving parts of the lathe. Dotmar had purposely overridden the interlock switch, which meant that employees could put their hands near the moving parts to clean it while those parts spun at high speed (the Practice).
In 2006, WorkSafe Victoria issued an Improvement Notice requiring the Practice to cease. Dotmar complied with this Notice for two months and then reverted to the Practice.
In October 2009, a worker was trying to remove waste product from the lathe with his right index finger while it was operating. The tip of his finger was crushed and he received lacerations. Dotmar continued to allow the Practice and, less than 12 months later, a second worker was injured in a similar way to the first. The second worker suffered serious injuries, including a broken thumb which required surgical repair.
In a separate, third, incident, a worker’s leg was trapped and severely lacerated after it became trapped by a machine with a moving tabletop. Before the worker was injured, he had raised a concern with Dotmar’s OHS manager about the risk of being bumped by the table. Dotmar took no steps to control or eliminate the risk, as the OHS manager did not consider there was a risk.
Dotmar was charged under section 21 of the Occupational Health and Safety Act 2004 (Vic) (OHS Act) with two counts of failure to provide or maintain safe plant and systems of work.
Dotmar pleaded guilty and the County Court imposed total penalties for the two charges of $375,000.
Dotmar appealed, arguing that a breach of the OHS Act involving a death should always be treated more seriously for sentencing purposes than a breach that does not and that, as such, the penalties were “manifestly excessive” in comparison with cases in which employees had been killed.
Dotmar sought to rely on the decision of DPP v Coates Hire Operations Pty Ltd (2012) 36 VR 361, in which a fine of $500,000 was imposed (and upheld on an appeal) following a fatality, to base its “manifestly excessive” argument.
The Court of Appeal was highly critical of Dotmar knowingly tolerating the Practice, which was a serious risk to health and safety. Priest JA stated that Dotmar was “apparently disdainful of WorkSafe’s intervention” and acted “‘in plain disregard for the safety of its employee”’.
His Honour, with whom Maxwell P and Kaye JA agreed, held it was a “fallacy” that the seriousness of an offence is to be gauged by whether death or injury (or the absence of these) has been caused. The gravity of the consequence of a breach of the OHS Act is not determinative of the appropriate penalty; rather, the gravity or seriousness of the breach itself, and the appropriate penalty, is determined by the risks to health and safety caused by the breach, being measured by:
- the potential consequences of the breach;
- the extent of the evidenced disregard for the safety of employees; and
- the risk of the potential consequences of the breach materialising.
Other Australian jurisdictions also have risk-based Workplace Health and Safety legislation.
The Court’s strong confirmation of the proper basis for assessing appropriate penalties under the OHS Act may mean that there will be much less of a distinction between penalties for fatalities and non-fatalities in the future. Defendants to OHS prosecutions in Victoria (and elsewhere) should therefore not assume they will receive a lower penalty for a non-fatality.
In turn, insurers of such defendants should set reserves for penalties based on the gravity and seriousness of the risks caused by the breach of work health and safety legislation, rather than the consequence.
Date: 23 September 2015