Proposed WHS bill brings harsher penalties & insurance bans for NSW

Published:12/12/2019

Proposed WHS bill brings harsher penalties & insurance bans for NSW


A work health and safety bill has been introduced to Parliament which may result in increased penalties and insurance bans in NSW if passed. This could be a serious issue for business owners and directors, particularly those in the construction sector.

The NSW Minister for State Better Regulation and Innovation has introduced the Work Health and Safety Amendment (Review) Bill 2019 ("the Bill") into NSW Parliament proposing a series of amendments following SafeWork Australia's 2018 review of the Work Health and Safety Act 2011 (NSW)("WHS Act").

The proposed amendments could see an increase in the likelihood of Category 1 prosecutions being commenced in NSW, as the state looks at targeting the ongoing issue of workplace deaths and injuries and getting better clarity for workers on components of the WHS Act.


What are the key amendments?

Penalty Unit System

The proposed Bill introduces a penalty unit system to ensure that the maximum penalties charged to offenders reflect changes to the consumer price index. The value of a penalty unit for 2019/20 is set for $100, with increases to happen every year.

Through this penalty system, there will also be an increase in maximum fines for a Category 1 breach*.

  • For a corporation, there is an increase from $3 million to $3,463,000 and a maximum penalty of 34,630 penalty units.
  • For a company officer or an individual who is a PCBU, there is an increase from $600,000 to $692,500.
  • For an individual, there is an increase from $300,000 to $346,500.

*Category 1 breach - a serious breach where a duty holder recklessly endangers a person to risk of death or serious injury.


Use of Insurance or Indemnity Arrangements

The Bill also proposes to make it an offence for a person to enter into, provide or benefit from insurance or indemnity arrangements that cover WHS penalties under the WHS Act.

The new offence will apply to company officers, entities offering the insurance and/or indemnity, those entering into an agreement to benefit from the insurance or indemnity, insurers and businesses that take out insurance.

Management liability and statutory fines insurance currently offered by insurers will be affected. Policies that cover for legal fees for safety investigation and prosecutions are not captured by the Bill.


Gross Negligence

Under the new Bill, "gross negligence" has been added as a fault element to Category 1 offences. This will make prosecuting serious offences and WHS breaches easier, particularly following a workplace death.

SafeWork NSW will be able to prosecute grossly negligent duty holders for a Category 1 offence where it has been found their behaviour has exposed persons to a risk of death or serious injury or illness.

While the NSW State Government has confirmed they will not be introducing industrial manslaughter laws, the proposed Bill will facilitate work-related manslaughter prosecutions. Offending duty holders run the risk of prosecution to manslaughter under the NSW Crimes Act 1900.


How Coverforce can help

Our experienced Coverforce Workplace Services (CWS) team can assist your business with embedding safe working processes and the identification of risks and hazards in your workplace. Contact them directly on (02) 9376 7979.

Your local Coverforce Insurance broker can provide your business with sound risk advice and quality insurance cover at competitive rates. For personalised advice, find your local broker here or by calling 1 3000 COVER.


The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.


References

  • OHS Alert - "WHS Bill increases penalties and bans insurance in NSW"
  • Master Builders Association (MBA), e-circular Issue 34 of 2019 - "NSW State Government moves to amend WHS laws"
  • https://www.holmanwebb.com.au/blog/nsw-bill-recommendations-safe-work-australia-2018-review-model-work-health-safety-laws

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