How to Avoid Having to Pay an Increased WHS Penalty.

This article is a follow-on of our article last week, Continuing Increases in $ Costs of WHS Penalties.


The potential for continuing increases each year in the $ cost of WHS penalties happened when the NSW WHS Act and WHS Regulation were amended on the 10th of June 2020 and declared that one penalty unit = $100 – (WHS Act 2011 Division 2A Penalty units page 113).


The dollar value of a penalty unit will increase every new financial year that the Consumer Price Index (CPI) increases again.


It has already increased to $102 in the current financial year (1/7/2020- 30/6/21), to keep in step with an increase in inflation as measured by a rise in the CPI. The result is that the maximum $ penalty for a PCBU has now increased by $69,260 since the 10th June 2020. As the (CPI) usually increases every year we could probably expect that the dollar value of the penalty unit will continue to rise over time.


How Can You Avoid this Situation?

Obviously you can avoid any penalty by complying with WHS laws. The most basic and important compliance is to ensure the health and safety of workers and others in your workplace by eliminating or minimising all WHS risks in your workplace so far as is reasonably practicable (WHS Act Sections 17 -18). Two important factors in achieving this are risk management and management commitment to WHS.


Risk Management

“Risk management is a proactive process that helps you respond to change and facilitate continuous improvement in your business. It should be planned, systematic and cover all reasonably foreseeable hazards and associated risks.” (page 8, How to Manage Health & Safety Risks – Code of Practice).


The process of risk management includes taking “into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in the case of repetitive work or mundane tasks” (see Ref 1).


Management Commitment

(page 7, How to Manage Health & Safety Risks – Code of Practice)

“Effective risk management starts with a commitment to health and safety from those who operate and manage the business or undertaking. You also need the involvement and cooperation of your workers, supply chain partners, and other businesses you work with. Management commitment is about demonstrating you are serious about health and safety and influencing other duty holders in the workplace.

To demonstrate your commitment, you should:

  • get involved in health and safety issues so that you understand the hazards and risk associated with your operations

  • consult workers and other duty holders on the hazards and risk, and how to control them

  • invest time and money in health and safety

  • ensure you and your workers clearly understand health and safety responsibilities and have the knowledge and skill to do tasks safely, and

  • apply health and safety values and behaviours to your own work practices.”








Reference:

1. Paragraph 83, Andonovski v Park-Tec Engineering Pty Ltd and Barbeques Galore Pty Ltd; Andonovski v East Realisations Pty Ltd (No 6) and Anor [2015] NSWSC 341 (31 March 2015) http://www5.austlii.edu.au/au/cases/nsw/NSWSC/2015/341.html

2. Quotations from the How to Manage Work Health & Safety Risks Code of Practice used in this article are part of SafeWork NSW’s copyright work that is licensed under a Creative Commons Attribution-Non-Commercial 3.0 Australia License. To view a copy of this licence, visit www.creativecommons.org/licenses/by-nc/3.0/au. You are free to copy, communicate and adapt the work for non-commercial purposes, as long as you attribute the work to SafeWork NSW and abide by the other licence terms.




How to Avoid Having to Pay an Increased
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3rd March 2021

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