Insurance for OHS offences to be outlawed in VIC and other possible changes

The Occupational Health and Safety and Other Legislation Amendment Bill 2021 (OHS Amendment Bill) has been tabled in the Victorian Parliament, which if passed, gives rise to a number of potential new offences and liabilities for businesses, directors and the insurance industry as well as shifting the Victorian landscape when it comes to work health and safety insurance and indemnity. Significantly, and similar to laws already introduced in NSW, if the OHS Amendment Bill is passed it will become an offence in Victoria to insure or indemnify against a fine or penalty under occupational health and safety legislation.

The OHS Amendment Bill seeks to vary the Occupational Health and Safety Act 2004 (Vic) (OHS Act), the Dangerous Goods Act 1985 (Vic), the Equipment (Public Safety) Act 1994 (Vic) and the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) (Collectively, the Acts) to:

• expand the definitions of employee and employer in the OHS Act to include host employers and labour hire employees
• prohibit insuring or indemnifying a person against a penalty under the Acts and void any such arrangements entered into (and making it a criminal offence to do so)
• allow for notices issued under the Acts to be provided electronically
• amend the OHS Act to give additional powers to health and safety representatives (HSRs) and authorised representatives of employee organisations (e.g. unions) in relation to taking photos, measurements, making sketches or taking recordings when they attend site, and
• amend the Acts to allow for ownership of seized items during workplace inspections to be forfeited to WorkSafe Victoria and empower WorkSafe Victoria to dispose of these forfeited items.

Practically businesses, directors and insurers must start preparing for these changes now as they:

• make it clearer that host employers, who engage labour hire companies to provide workers, owe safety duties to those workers
• render void existing insurance or indemnity arrangements that cover the payment of penalties under the Acts (to the extent that they offer the prohibited indemnity or insurance)
• make it a criminal offence to either have insurance or indemnify another party for liability to pay penalties under the Acts, or to be a party to such an arrangement
• require insurers and underwriters to assess whether current offerings or existing policies may be covered by these laws and potentially give rise to an offence, and
• clarify the powers of right of entry for HSRs and unions, meaning internal guidance material and instructions for site management will need to be updated to reflect these powers.

Importantly, the new insurance provisions will not prevent companies and officers from insuring against defence and investigation legal costs, only any potential penalties imposed.