Our current Occupational Safety and Health Act 1984 will soon be replaced by the WHS Act 2020. This Act will harmonise WA with other Australian states and bring several significant changes to the table. So, how will this impact your business and what can you do to prepare?
Key Changes
First, you need to understand the key changes coming into play. Here’s a quick overview, but you can find a complete guide here:
1. Penalties are increasing. Some slightly, some dramatically.
2. Introduction of ‘PCBU’. This stands for “person conducting a business or undertaking” and extends duties beyond the traditional employer-employee relationship.
3. Broadening the term “worker”. “Worker” now includes people such as volunteers, contractors, trainees etc.
4. Industrial manslaughter penalties. Fines and prison sentences have increased, plus prosecutors no longer have to convict the company to prosecute a company officer.
5. Positive due diligence. If a company officer shows they have not met their obligations of due diligence, they can be prosecuted – even if an incident hasn’t occurred.
6. Insurance can no longer pay penalties. But it can still pay your legal fees.
7. External WHS advisors are now liable. They can be prosecuted in the same way as a business owner.
“The penalty increases plus the administration changes to make it easier to prosecute company officers have generated a lot of conversation amongst the small to medium business in WA,” says Jake Cole, Co-Director of WHS consultancy, Epigroup.
And they have good reason to be concerned.
“Every single company officer who has ever been prosecuted under health and safety legislation in Australia – ever - has been a small business owner, a working director with day-to-day involvement in the business,” says renowned WHS Lawyer and Director of Wayland Legal, Greg Smith.
This is particularly prevalent in isolated, family-run businesses who do not have the understanding or expertise of what they need to do from a due diligence point of view. “Larger businesses with dedicated personnel are more proactive in making sure they are compliant.
The good news is that this is the ideal time for businesses to revisit their WHS and ensure procedures are up to scratch, something Epigroup is noticing already amongst its clients.
“We’re already seeing firsthand that company directors and executives are taking an increased interest in getting visibility of how their business is managing risk operationally, and more importantly whether the management is effective. The sheer level of enquiries we have received to complete external due diligence audits and management system reviews is testament to this,” says Cole.
These changes are expected to bring in several cultural changes within the industry, but not all are positive.
Positive Outcomes
“I hope that the increase in penalties creates continued and collective focus on risk management within an organisation,” says Cole. “The introduction of PCBU extension of duties and the broadening of the term ‘worker’ also creates an environment where every voice matters and PCBUs listen and act on what frontline workers have to say regarding risk management.
“Furthermore, the changes around positive due diligence mean process failures are addressed immediately and completely, and when working with critical safety risks, businesses get creative when imagining how things could go wrong.” This is important to ensure our people engage with uncertainty, not just the risks and problems we know.
A proactive approach is key to understanding what can impact your business. If you don’t know where to start, get input from a mixture of people from all levels of the business to contribute their insights. A collaborative approach will allow you to look a lot deeper at the risks and the possible practical solutions to control these.
Another opportunity that arises from such a large change in the legislation is that companies will become (re)familiarised with what is actually required and what isn’t. In safety, so many cumbersome rules and regulations that provide no benefit (and are in fact detrimental) to safety outcomes have been created by industry and essentially become adopted as ‘law’. This is a chance to reset and create lean, resilient systems.
Negative Outcomes
Just as the opportunity is there to hit the reset button, the risk is there that things could go the other direction.
Time and time again we have seen the WHS industry guilty of overcomplicating processes, focusing on achieving zero incidents and stripping back responsibilities when incidents occur, as opposed to making their people risk competent.
Cole is concerned this new Act may strengthen this negative approach. “People may put systems or processes in place that don’t actually have any impact on reducing risk,” he says. “We will cause ourselves a lot of grief if we’re thinking about every possible low risk outcome or ‘low hanging fruit’, as it will dilute all the critical risks and the procedures and documents around avoiding that.”
“If people are panicked, they could go down the rabbit hole of creating all these processes to feel like they’re meeting their due diligence requirements. But documenting something doesn’t mean you’re safe. All you’re doing is documenting an argument of compliance rather than communicating a process, creating value and reducing risk,” says Cole.
As well as disrupting procedures, this can have a detrimental psychological impact on workers.
“Over the years, we have often seen the thought process of: ‘We don’t want to be prosecuted, so let’s make sure there is no ability to make a mistake.’ But this creates a damaging safety culture. One of the worst-case scenarios is an environment is created where incidents are swept under the rug and people don’t learn from them,” says Cole.
It also creates a ‘leave your brain at the gate’ mentality, where employees lose capacity to make decisions because they are never given the opportunity. Research has shown that companies and supervisors that exhibit autonomy-supportive behaviours foster employee wellbeing and job performance (Haas et. al, 2018). This also fits within the broader framework of safety climate, which highlights the role leadership plays in creating worker autonomy and self-efficacy, in turn driving safe behaviours (Casey et. al, 2017).
Instead, we need to provide opportunities for them to make decisions and give feedback so they can improve those decisions.
How to Prepare
1. Educate workers on risk competency. Industry needs to get better at capturing people’s tacit knowledge – the deeper knowledge about their work that might be harder to articulate. This requires us to take advice from the boots on the ground about what processes need to change, rather than going off explicit knowledge, or what the procedure tells us.
2. Only document processes if you’re going to communicate them with the rest of your team. Having them sit in a folder will not work in your favour if an incident occurs.
“The biggest source of legal liability for most organisations when it comes to health and safety prosecution are your own documents; because you have all this paperwork that says you’re going to do all this stuff and it’s not what you do in practice,” says Smith. “And if you don’t do it in practice, you will be convicted on the basis of your documents.”
3. Audit your business regularly against the current requirements and the new. Update any outdated documents, interview staff about current processes, assess your equipment, and – most importantly – report on the results and create an action plan.
The ultimate question remains: Will this new Act reduce workplace injuries? The jury is out. Only time will tell.
