OHS Risk Management and Corporate Governance
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The case is a reminder that employers may be prosecuted for risks to the occupational health and safety of their employees, even where one of their staff introduces unsafe work practices contrary to existing safe work practices and without the knowledge and approval of management. Employers need to develop robust corporate governance regimes to manage this risk.
This article outlines the case and then considers appropriate OHS risk management steps, as part of robust corporate governance regimes, to uncover and prevent the development of unofficial work practices.
Inspector Barber v Viscount Rotational Mouldings Pty Ltd
The recent Industrial Court of New South Wales case of Inspector Barber v Viscount Rotational Mouldings Pty Ltd emphasised that employers can still be responsible for the unsafe work practices of their employees, even where the employer did not create, authorise or endorse those practices.
Two employees at Viscount Rotational Mouldings (VRM), a plastic mouldings manufacturer, were killed when they attempted to release a plastic water tank from its metal mould by inserting compressed air through a breather hole in the tank, causing it to eject and strike them. The work practice was one that the production supervisor had used at a previous employer and introduced to VRM after he joined it. The production supervisor subsequently trained the staff in the work practice, which he had been using without incident since 1995. The method was not one which VRM had authorised. In fact, VRM had in place a number of steps to deal with a plastic mould which had become stuck in a metal mould. These steps were to: allow extra time for cooling; rotate the arm until the mould releases; wriggle the product using hand force; hit around the perimeter of the tank using a nylon mallet; cool the product by having cool air circulate around it using compressed air; and use a saw to cut out the plastic product from the mould. However, while VRM had these processes in place, none of them was written down, and each was conveyed verbally from a supervisor to the other workers. On the day of the fatal accident, the employees concerned used none of these procedures in the removal of the water tank from its mould.
VRM was prosecuted for failing to ensure the health and safety of its employees. It pleaded guilty and was convicted and fined $162,500. The Court stated that it was “difficult to comprehend” how the technique of using the air pressure hose to de-mould product, utilised openly in the workplace on many occasions prior to the incident, was able to escape scrutiny and remedial action. That is, VRM should have taken greater care to inform itself of the real practices its employees used to perform the work.
The Court mitigated the penalty imposed on VRM, partly based on extensive steps VRM had taken since the accident. These included reviewing and revising all standard work procedures for the production of products using the moulding machine, discussing with employees the system of work for the removal of finished products from the moulding machine, discussing with employees their training needs and providing training to all employees on the safe operation of equipment, and prohibiting the use of compressed air to aid in the de-moulding process, in the manner the deceased employees had adopted. The Court also took into account the fact that VRM pleaded guilty.
Corporate Governance and Risk Management
It should be obvious is that employers ought to have effective systems in place to prevent such incidents occurring in the first place. The VRM case is illustrative of the risk of ‘resting on your laurels’. Having determined safe work procedures, an employer cannot simply assume that they are being followed. In the VRM case, it appears that, on many occasions, they were not being followed at all.
Due diligence, including ongoing risk management, is required for an employer and its directors and managers to meet their occupational health and safety obligations and minimise their exposure to significant fines, imprisonment or both. Effective OHS risk management is a part of good corporate governance.
What can be learnt from the VRM case and the remedial steps VRM took? What risk management processes should be followed?
A number of key failings are apparent from the VRM case. These include: a failure to identify the hazard of an unsafe work practice being introduced contrary to existing safe work procedures; a failure to properly induct, train and supervise the production supervisor; a failure to review work practices and procedures and risk management control measures on an ongoing basis; and a failure to have a properly trained manager responsible for co-ordinating OHS risk management. However, the Court did acknowledge the remedial steps VRM had taken. These remedial steps form a useful basis for other employers to act, through effective risk management, to prevent incidents occurring in their own workplaces, as a result of the adoption of unauthorised work practices.
At the outset, a thorough risk assessment must be conducted at the place of work. In VRM’s case, there was a failure to identify the risk, inherent in allowing the production supervisor to train staff in an unauthorised procedure and have employees follow that unauthorised procedure. VRM should have ensured the production supervisor was appropriately trained in VRM’s safe work procedures and overseen him, at least initially, in his training of other staff. VRM had relied on the production supervisor’s extensive experience as a moulder and trusted him to train its employees, without ensuring that his own work practices were safe.
Employers must consider in advance the potential hazards arising out of the duties they will require their employees to perform. Particular regard should be had to any informal practices employees may have adopted. Processes to identify hazards include job safety analyses, workplace inspections, injury and incident investigations, exposure assessments, and process safety and system safety reviews.
VRM could have used a range of strategies to prevent any unsafe work practices being introduced by a new, apparently experienced employee. It could have tested the production supervisor’s knowledge before allowing him to train others. It could have required him to demonstrate how he would carry out various procedures to determine whether he had been trained in safe work procedures to carry out the work and to identify any practice or procedure used by him which was unsafe. This would have identified the hazard inherent within his work practices for releasing moulded plastic products from their moulds.
Comprehensive instruction and training must be provided on an ongoing basis. Job-specific training must be provided for specific jobs and hazards. Employers must be able to show that the recipients of their training understood what was taught to them. Where employees have a first language other than English or have literacy issues, then these must be dealt with by ensuring that the policies and procedures for health and safety are communicated in a manner the employees can comprehend. Employers need to be able to show that their employees applied the policies and procedures successfully in their work, whatever their language needs.
Regular and ongoing communication with employees with regard to their knowledge and application of safe work procedures is required. Any changes to tools, equipment, materials, processes and / or procedures should be communicated to employees prior to their introduction. Supervision and checking must occur to make sure the system of work is safe and appropriate for the work being carried out.
Proper records must be kept, responding to all actual and potential hazards and incidents in the workplace. Records should be kept of the occupational health and safety qualifications and training of appropriate persons such as the general manager(s), human resources manager(s) and safety officer(s).
Employers must train appropriately qualified staff members to oversee the work systems. There is a danger of a collective abrogation of responsibility where no individual staff member is required to oversee particular systems of work.
However, an employer must do more than train employees regarding safe work practices, communicate with them, ensure records are kept and designate and train individuals responsible for overseeing systems of work. It must monitor and audit work practices systematically to ensure that they remain safe. This requires a review of the employer’s entire health and safety system. Key in the VRM case was the fact that VRM had many, safer, systems in place for releasing plastic moulds. However, VRM should have had systematic audit processes in place to make itself aware of the real way in which the employees were doing the work.
Trained employees such as human resources or occupational health and safety managers can be used to conduct internal audits. However, external auditors may also be used. External auditors are useful for providing an outside view, and they may not bring the same assumptions with them when conducting the audit. An external auditor may be more likely to uncover unsafe work practices than a member of a company’s senior management team, who may wrongly assume the company’s supervisors are training staff in appropriate and safe procedures.
Once unauthorised work procedures are identified, remedial steps should be taken immediately to stop the unauthorised practices. All employees should be encouraged to report problems as they arise. All incidents should be reviewed. That is, ‘near misses’ should be reviewed in the same way as accidents and occurrences.
This article has considered some of the many risk management steps employers should take to avoid workers being injured as a result of unauthorised work practices, in light of the VRM case. While the risk management steps employers should take will vary depending on the nature of the risks involved at their workplace, the above steps provide a useful starting point for employers to consider what measures must be taken within their own workplaces.
OHS Risk Management and Corporate Governance - To learn more about this author, visit John Stanton's Website.
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