The price of safety – breaking the rules might break the bank

Work Health and Safety laws have long governed workplaces, particularly in the building and construction industry which remains one of the nation’s highest risk industries. Tragically, fatalities and injuries persist on construction sites each year and most commonly, the risk of death or serious injury in the construction process arises from:

• falls from heights

• contact with electricity

• being hit by falling objects

• moving plant and equipment. 

In response to these ongoing challenges, and repeated offences by businesses in these areas, recent amendments to the Work Health and Safety Act 2011 (NSW) (Act) have toughened the penalties against persons conducting a business or undertaking (PCBU) who fail to ensure a safe workplace.

Notably, the offences under the Act are considered strict liability offences, meaning employers cannot shift responsibility for breach to its agents, other contracting parties or third parties. Safety duties under the Act are not transferrable and more than one person on a construction site may hold the same duty to ensure safety.

In this article, we look at the increase in penalties and other measures being taken to achieve a change in attitude and approach to workplace safety.

How much could you be out of pocket?

The maximum penalties will differ depending on the category of the offence and whether the offender is an individual, officer or corporation.

A category 1 offence, being the most serious offence, involves a duty holder exposing a worker to a risk of death or serious injury where the person engages in conduct with gross negligence and is reckless to the risk to an individual of death or serious injury. A simple example could include requiring an apprentice to work at heights without any safety protection or PPE to get work done urgently. The new penalties are:

Category 2 offences are also serious. It applies when a duty holder fails to comply with their duty exposing a worker to risk of death or serious injury. The penalties now are:

While the increase for category 2 offences is not as dramatic as category 1 offences, the message is clear. Parliament expects compliance with safety duties and have sent a clear message to the courts that repeated avoided contraventions that cause the death or serious injury of a worker are to be dealt with sternly.

In addition to the above, there are also new industrial manslaughter laws that exist. Where a duty holder engages in conduct with gross negligence that causes the death of a worker, the offence of industrial manslaughter is committed. The penalty for an individual is up to 25 years imprisonment or $20 million for a corporation.

Workplace injuries not only impact the victim and their families. The above penalties are designed to deter non-compliance but will have a significant impact on non-complying businesses. Better to invest in safety upfront than after an incident.

Prosecution options

SafeWork NSW, the regulatory body responsible for enforcing work health and safety laws in New South Wales, has a range of enforcement powers to ensure compliance with the Act. These include:

• compliance notices including improvement notices, prohibition notices or infringement notices

• entering into an enforceable undertaking

• prosecution for more serious matters and seeking the imposition of a sentence or penalties.

By using the above enforcement powers, SafeWork NSW is empowered to take swift corrective action to mitigate hazards and improve safety standards on construction sites.

Prosecution will likely occur where the contravention of the Act is serious and it is an area of ongoing non-compliance. Such prosecutions will force courts to order more severe penalties to achieve general deterrence.

Recently in SafeWork NSW v Rahme Civil Pty Ltd; SafeWork NSW v Rabih Rahme [2024] NSWDC 561, the Defendant and its director were convicted of unsafe work practices after requiring a 23 year old worker to clean out sand from new foundations. During this process the sandstone footing supporting a section of a brick wall was undermined, causing the wall to collapse, striking the worker and partially burying him. The worker sustained serious injuries.

“The construction industry is a notoriously dangerous industry, in part because it involves the interaction of humans, large heavy machinery and moving substances such as walls, particularly in the demolition stage as it was in this instance. The circumstance of this offending highlights the need for caution on construction sites, including the obvious need to ensure people are not put in harm’s way when working in and around masonry brick walls during demolition and excavation works”, the Court observed.

Rahme Civil Pty Ltd was fined $400,000.00 and Rabih Rahme, its director, was fined $50,000.00. Accordingly, penalties can be quite severe (and are only likely to increase over time).

The enforceable undertaking

Over the past decade, there’s been a noticeable shift by the legislature and judiciary toward a learning-based regime, rather than being strictly punitive, with the introduction of enforceable undertakings as an alternative to criminal prosecution.

SafeWork NSW has increasingly become open to requests to deal with breaches of the legislation by accepting an enforceable undertaking, providing a more proactive and flexible alternative to prosecution.

Enforceable undertakings also play a role in educating the broader community about the risks and challenges involved in the construction process. These undertakings frequently include components such as seminars, industry forums, training sessions, and similar initiatives aimed at promoting safety awareness among the general public. Examples of companies opting for enforceable undertakings, along with the associated costs, include:

As can be seen, while an enforceable undertaking avoids a criminal prosecution, it is a costly process as well. Often an aspect of the undertaking is doing what you need to do to ensure safety; so, doing it upfront would have been the less costly exercise!

Conclusion

“The requirement … that both large and small employers will comply with safety requirements means that employers must take the obligations imposed by the WHS Act very seriously”, the District Court has said. The new penalty regime reflects this important message.

Stronger penalties for unsafe construction practices aren’t just about compliance – they’re about prevention. In an industry where non-compliance can be fatal, the message is clear: prioritise safety or pay the price.

Bartier Perry’s team is well placed to guide you in respect of safety practices and non-compliances.

Authors: Robert Kalde & Breitil Sulaiman