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Industrial Manslaughter Implications for Due Diligence of University Senior Managers

Industrial Manslaughter Implications for Due Diligence of University Senior Managers. Leanne Mumford Senior OHS Officer Risk Management Office University of Sydney 6 June 2003. Outline. Corporations and Criminal Liability Existing OHS Laws in Australia

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Industrial Manslaughter Implications for Due Diligence of University Senior Managers

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  1. Industrial ManslaughterImplications for Due Diligence of University Senior Managers Leanne Mumford Senior OHS Officer Risk Management Office University of Sydney 6 June 2003

  2. Outline • Corporations and Criminal Liability • Existing OHS Laws in Australia • The Victorian Crimes (Workplace Deaths and Serious Injuries) Bill • Robust Due Diligence for University Managers • Conclusions

  3. Corporate Criminal Liability • Corporations and crimes for which the only penalty is imprisonment. • Manslaughter resulting from negligence. • Culpable state of mind – intention, knowledge, recklessness. • The “Guilty Mind” of a corporation. • Systemic fault, aggregation of conduct, organisational decision-making.

  4. OHS Legislation General Duties Two main approaches to employers’ general duties: • take all reasonably practical steps to protect health and safety – Commonwealth, ACT, NT, Victoria, Tasmania, SA & WA • ensure health, safety and welfare of employees – NSW & Queensland.

  5. Typical Specific OHS Duties Specific duties to employees typically include: • safe and healthy systems of work • safe and healthy substances and plant • safe and healthy working environment • information, instruction, training & supervision • welfare facilities • safe access and egress • consultation with employees.

  6. Directors’ & Officers’ Duties • Directors and officers of Bodies Corporate – specific duties, liable for corporate offences • Defences and due diligence: • not reasonably practical to comply (NSW) • outside control and not practical to prevent (NSW) • not in a position to influence corporate conduct (Qld) • exercised reasonable diligence (Qld).

  7. Crimes (Workplace Deaths and Serious Injuries) Bill • Defeated in Victoria’s upper house – June 2002. • Would have created new offences of • corporate manslaughter • negligently causing serious injury. • Would have clearly imposed criminal liability on senior officers of corporations.

  8. Negligence under the Bill Corporate manslaughter – negligence that resulted in death of employee. Corporate negligence would include failure to: • adequately manage, control or supervise conduct of one or more employees, agents or officers • engage reasonably capable contractors • provide adequate information systems. Senior officer negligence would include failure to take reasonable action to remedy a known dangerous situation.

  9. Senior Officer Liabilities under the Victorian Bill Senior officers would be liable for negligent corporate conduct if they: • were organisationally responsible • contributed materially to the offence in performing or failing their duties • knew the organisation’s conduct carried a high risk of death or serious injury • should have acted to avert the risk.

  10. Who are “Senior Officers”? Under the Corporations Act: • Directors are those in control of and responsible for the organisation as a whole • Officers are those who make or participate in making decisions that affect the whole or a substantial part of the corporation’s business. In the University context, directors are equivalent to Council Members, Fellows of Senate, etc and senior officers to VC, DVCs,PVCs, etc.

  11. Penalties under the Bill Offences by senior officers would have carried penalties of imprisonment for up to: • 5 years for corporate manslaughter • 2 years for negligently causing serious injury.

  12. Robust Due Diligence • Directors and officers can be held personally liable for corporate failures. • They need to satisfy themselves that the organisation is acting diligently to prevent workplace death, injury and ill-health. • In some jurisdictions, ignorance is no defence. • Why letter-of-the-law compliance is a risky strategy – the need for robust due diligence.

  13. Due Diligence Activities 1 • Formal compliance policy supported by accountabilities, operating procedures and disciplinary procedures. • Leadership and an appropriate culture. • Risk management approach with board oversight of prime risks. • Reporting systems for breaches, complaints and incidents.

  14. Due Diligence Activities 2 • Facilities maintenance program. • Communications system and consultation mechanisms incorporating unimpeded transmission of “bad news” to the top. • Monitoring and audit programs overseen at board level.

  15. Conclusions • Directors and officers who don’t take an active interest in health and safety legal compliance of their organisation may find themselves personally liable. • Involvement in the activities outlined will help them to diligently discharge their duties and protect themselves. • Be prepared for the tsunami that may follow the earthquake!

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