For the first time in a decade, NSW is making important changes to its WHS legislation. On 10 June 2020, the Bill to amend the Work Health and Safety Act 2011 (NSW) (Act) received assent in the NSW Parliament. The changes to the legislation creates new offences and harsher penalties for duty holders.
The Work Health and Safety Amendment (Review) Act 2020 (NSW) introduces new amendments to the existing Work Health and Safety Act 2011 (NSW) (WHS Act) and Work Health and Safety Regulation 2017 (NSW).
So what are the changes?
Increased WHS Act penalties
A penalty unit system will be introduced into the WHS Act, allowing for a yearly increase of the penalty unit to reflect changes to the Consumer Price Index. The maximum penalties for 2020 will be as follows:
|WHS Act Offence||Previous Maximum Penalty||Amended Maximum Penalty|
|Category 1||$3,000,000||$3,463,000 (34,630 penalty units)|
|Category 2||$1,500,000||$1,731,500 (17,315 penalty units)|
|Category 3||$500,000||$577,000 (5,700 penalty units)|
Expansion of category 1 offence to include “gross negligence”
Until now, a Category 1 offence has occurred when a person conducting a business or undertaking (PCBU) has engaged in conduct that has exposed its workers or other persons to a risk of death, serious injury or illness and the PCBU is reckless as to the risk.
Under the amended Category 1 offence, a PCBU also commits a Category 1 offence if they are grossly negligent in exposing workers or other persons to a risk of death, serious injury or illness.
In contrast to “recklessness”, “gross negligence” does not require proof of any intent to disregard a risk of death or serious injury.
Prohibition of certain insurance and indemnity arrangements
A new offence is created of entering into, providing, or benefiting from insurance or indemnity arrangements in relation to the payment of penalties incurred under the WHS Act. Furthermore, the Bill deems officers liable for the same offence where the evidence points to their direct or indirect involvement in the breach.
It is important to note that this only prohibits contracts of insurance or arrangements indemnifying defendants for payment of a penalty – it does not render illegal contracts of insurance or arrangements indemnifying defendants for payment of legal costs associated with a potential WHS breach.
What should employers do in light of the amendments to the WHS Act?
Businesses should review any Directors and Officers insurance policies, ensuring that they are compliant with the recent changes to the WHS Act. Employers and company officers should also review any applicable safety management systems to ensure that they are up to date with the newly amended laws.
You can find out more about the amendments here.