WHS enforceable undertakings on the rise15 June 2016
A noticeable trend is emerging in jurisdictions governed by the model WHS legislation. Notably, enforceable undertakings (EUs) are increasingly being proposed and accepted as an alternative to prosecution and potential conviction for WHS breaches. In effect, this signals an appreciation and willingness by regulators to accept agreeable initiatives that will bring about improvements to WHS in the workplace, following incidents where a WHS breach may be alleged.
What is an enforceable undertaking?
An EU is an agreement between a WHS regulator and a person (whether an individual and/or organisation), binding the person to carry out specific and ongoing initiatives that deliver benefits to the workplace, industry and community.
Under the model Work Health and Safety Act (WHS Act), which now applies in all jurisdictions except Victoria and Western Australia, a person (including an individual or corporate entity) may enter into an EU for alleged or actual breaches. Undertakings may also be entered into under the applicable Victorian and Western Australian legislation, however, they have differing application and features.
EUs are not used to avoid ramifications flowing from an alleged or potential WHS breach, in the sense that:
- immediate "reasonably practicable" steps must still be implemented (irrespective of an EU being in place) to address any issues that resulted from the risk in the workplace
- the regulator may still use their powers to conduct an investigation and take enforcement action such as issuing prohibition or improvement notices, and
- in certain circumstances, the regulator may still pursue a prosecution at a later date (more on this below).
If a person would like to put together an EU proposal, the regulator should be contacted to express this interest. A meeting will be arranged to discuss the requirements of any EU proposal and to consider initiatives. A written EU proposal can then be submitted to the regulator for consideration, feedback and potential acceptance. Ultimately, it is at the regulator's discretion on whether to accept an EU proposal.
In many jurisdictions, EUs in the WHS context are a relatively new phenomenon and have gained popularity in recent years. Some notable trends and observations are:
- In the past two years, a number of EUs have been accepted by the various WHS regulators, including 21 EUs in Queensland, 15 in NSW and three in the ACT and South Australia.
- The number of EUs being pursued and accepted has reduced the number of WHS prosecutions that proceed to an arbitrated court outcome.
- EUs are not inexpensive alternatives to prosecution and require a significant financial and organisational commitment. Since EUs became available in NSW in 2012, more than $4.5m has been collectively spent on EU initiatives. A recently accepted EU involved initiatives with a total estimated value of $1m.
- To date, it is primarily corporate organisations, as opposed to individuals, that have pursued and entered into EUs. This is likely due to the difficulties for individuals to meet the required criteria of demonstrating benefits to the workplace, the industry and the community. The associated costs and resources required to meet these objectives may also be a major obstacle for individuals.
- EUs that have been accepted to date generally include six to eight initiatives within a single EU.
- WHS regulators are strongly encouraging organisations considering EUs to be creative and innovative when looking at developing safety solutions or initiatives.
What does an EU look like?
An EU proposal needs to be presented in the appropriate form, which addresses the regulator's specific criteria and links proposed safety initiatives to tangible benefits to the workplace, the industry or the community. WHS regulators have also published guidelines on how to prepare an EU proposal and about their general considerations in exercising their discretion.
Some common initiatives in recent EUs are:
- developing a standardised induction/ training process for workers and suppliers
- developing written procedures for a particular risk area or task
- refresher course or specific training for senior management
- auditing a WHS management system (and checking compliance with AS/NZS 4801:2001 WHS Management Systems)
- producing a safety media campaign on the dangers of a particular activity
- sponsoring a research project in the industry, and
- donating to charity and/or not-for-profit organisations.
Some of the more creative and novel safety initiatives that have been proposed and accepted in EUs are:
- developing an injury/near-miss hazard reporting mobile app for workers
- training to enable workers to achieve certification in WHS management through recognised tertiary courses
- hosting a family day at a workplace to emphasise safety awareness and management, and
- developing a regional television advertising campaign or educational video about a particular hazard.
Why would I enter an EU?
Despite the significant financial and organisational commitment, there are some notable benefits from entering an EU.
A WHS prosecution in the courts may be avoided, meaning there is no conviction recorded against the person. If a prosecution has been commenced, entry into an EU will result in the proceedings being discontinued. If a prosecution hasn't begun, the regulator is precluded from initiating one for this issue, subject to certain conditions detailed below.
The workplace that is subject to the EU has an opportunity to reform and reinforce its ongoing commitment to WHS. It may also have a broader impact on enhancing the workplace's safety culture and provides a practical example of a lesson learned from a WHS incident or risk.
The fine print
There are some important facts worthy of serious consideration before going down the EU path. If accepted, EUs are subject to ongoing compliance monitoring by the regulator, with the possibility of unannounced visits to verify the progress of initiatives. If an EU is not complied with, a court may order compliance and impose a hefty fine of up to $250,000. The regulator may also seek to prosecute the original alleged contravention.
An EU must also be published on the regulator's website, meaning that any alleged contravention that prompted the EU (and the initiatives being implemented) is public knowledge, so there is the potential for public scrutiny and reputational impacts.
An EU is not an easy way out, nor is it an opportunity to avoid all the consequences that may flow from an alleged WHS contravention. However, it is an opportunity for persons to enter into a dialogue with the regulator and seek an alternative to prosecution that facilitates ongoing WHS commitments.
It is anticipated that EUs will continue to be a popular method to ensure WHS compliance. It is strongly recommended that any proposed pursuit of an EU is well thought-out, in terms of the practicality of ongoing commitments and anticipated cost.