Home > Small business owners in legal firing line

Small business owners in legal firing line

Supplier News
article image Key speaker: Joseph Ryan.

SIMPLY carrying out company policy could land supervisors and managers in jail, while "alarm bells" should be ringing for small business, warn lawyers due to address The Safety Conference, organised by Australian Exhibitions & Conferences , in Sydney during October.

Small business owners are particularly at risk of personal prosecution, which could result in fines of up to $82,500 and jail terms of up to two years, say Mark Sullivan and Joseph Ryan of Lander and Rogers Lawyers.

The pair believes small business is being targeted for legal action over workplace deaths and injury under the NSW Occupational Health and Safety Act.

"A study of successful prosecutions should set off alarm bells for those involved in small business," said Mark Sullivan.

"The overwhelming majority of prosecutions against directors are against directors of small businesses, where they have regular or frequent contact with the day-to-day operations of the business."

Examples of large fines include $70,000 in 2004 for a director who failed to take precautions when excavating near gas lines. In 2005, a director of a trucking company was fined $42,000 after failing to comply with log book regulations and exacerbating the risk of driving while fatigued, which resulted in a driver's death.

Managers and supervisors, and even non-executive directors, are also in the firing line and, as the law stands, the onus is on the individual to prove his or her innocence.

"Where an employer is found guilty, managers and directors are automatically deemed to have also committed an offence, unless they can prove one of the defences," Mr Sullivan said.

Following company policy is no defence. The Act stipulates individuals must either prove they were not in a position to influence the conduct of the corporation or used all due diligence to prevent the contravention.

New industrial manslaughter provisions have raised the stakes even higher. The penalties for individuals include fines of up to $165,000 and jail terms of up to five years. Any person who owes a duty with respect to the health and safety of others under Part 2 of the Act can be prosecuted.

In practice, Sullivan and Ryan say, this is almost everyone, including employers; self employed persons; controllers of premises, plant or substances; designers; manufacturers and suppliers of plant and substances at work; and employees.

Unlike general manslaughter laws, industrial manslaughter involves more than just conduct that causes death. A 'mental' element also needs to be proven - something that Mr Sullivan believes will make it difficult to secure a conviction against a corporation.

"For this reason, it is likely that the introduction of the industrial manslaughter offence may not have a significant deterrent effect for corporations," he said. "However, it will certainly be possible for an individual to be prosecuted if he or she is reckless by way of an act or omission, especially those with day-to-day control over the operations."

Mr Sullivan said it was "critical" that managers act now to protect themselves against legal action in the event of a workplace fatality.

He and Mr Ryan will present a series of measures to delegates at The Safety Conference during their address on October 17.

The Safety Conference and The Safety Show will run from Tuesday 17 to Thursday 19 October at Southee Complex and The Dome, Hall 2 respectively at the Sydney Showground, Sydney Olympic Park.

Newsletter sign-up

The latest products and news delivered to your inbox