On 15 August 2023, the Work Health and Safety Amendment Bill 2023 (Bill) was introduced to Tasmania’s Parliament. The Bill proposes to amend the Work Health and Safety Act 2012 (WHS Act) so that it more closely aligns with other states’ model work health and safety laws.
Two key changes proposed in the Bill are:
- the prohibition of insurance and indemnities for the payment of penalties under the Act; and
- the addition of ‘gross negligence’ as a fault element to the category 1 offence under s31 of the Act.
Prohibition on insurance and indemnities
If passed in its current form, the proposed amendments would bring Tasmania into line with several other of the ‘harmonised’ states’ WHS laws (and Victoria). This follows the Marie Boland Review published in early 2019 which recommended the banning of insurances that cover payment of WHS fines. While such policies have always been available and are widely utilised, there has always been a theoretical argument that they are unenforceable as being contrary to public policy, though as best we can tell, that argument has never been made in a court.
The effect would be that directors and officers insurances and indemnities given by companies to its directors that purport to indemnify individuals against WHS fines, will be void. Moreover, as drafted, the prohibition would also apply to ‘arrangements’, which is broad enough to encompass non-contractual arrangements to pay fines. Serious fines will apply where a person tries to take the benefit of such an agreement.
An individual will face fines of up to $50,000 and a body corporate of up to $250,000, if they enter into such an agreement whether that be as the donor or the recipient of insurance / indemnity or take the benefit of such a contract or agreement which already exists.
In addition to these penalties, an officer of a body corporate who is involved in contravening this prohibition, may personally face fines of up to $50,000.
If this amendment passes, it will be important to be alert to any contract, indemnity or any other arrangement which purports to insure or indemnify a person against penalties under the Act, or otherwise shift liability for their payment. This would include deeds of indemnity that may have been given by a company to its own directors.
Expansion of Category 1 offence to include conduct involving ‘gross negligence’
Additionally, if the Bill passes in its current form, the Category 1 offence under s31 will be amended to have greater application and scope by expanding it to also cover circumstances of ‘gross negligence’ in conduct that exposes a person to a risk of serious injury or death.
The proposed amendments highlight the importance for individuals, be it as a PCBU, Officer or Worker, to be aware of duties under the Act and putting the appropriate strategies, policies and procedures in place to comply with those duties.
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Published: 22 January 2024