Following the decision in Attorney General for the State of New South Wales v Ceerose Pty Ltd (2019), employers should now be on alert that fines will be substantially increased on appeal in circumstances where the foreseeability of risk of serious injury or death was ‘plain’, the foreseeability of the consequences materialising was ‘obvious’ and the availability of measures to eliminate the risk were ‘simple’.

Facts

The Respondent, Ceerose Pty Ltd (Ceerose), was the principal contractor of a building refurbishment project in Camperdown, which involved the demolition and construction of the internal structure of the building. Ceerose contracted DSF Constructions Pty Ltd (DSF Constructions) to design, manufacture, supply and install structural steel work at the site.

In April 2013, a skylight structure manufactured by DSF Constructions Pty Ltd (DSF Constructions) was being erected and installed on site as part of the construction of the roof.

Prior to the commencement of building works, Ceerose’s site manager spoke to each of the labourers on site about relevant precautions, as per the Australian Standard AS 3828-1998.

During the lifting and positioning of the skylight structure, an exclusion zone was enforced in the area where the crane was operating. However, the permanent fixation of the skylights had not yet been undertaken when workers were permitted to return to the area.

Mr Linares-Lopez, a worker contracted to Ceerose by labour hire company Stop 1, was standing directly under one of the skylight frames which fell and directly struck him. The mechanism which caused the frame to fall could not be determined, however a crane was being operated within the fall zone at the time of the incident.

At the District Court, Ceerose was charged with and pleaded guilty to an offence under the Work Health and Safety Act 2011 (NSW) (WHS Act) for failing to comply with its health and safety duty, thereby exposing workers to a risk of death or serious injury.

His Honour found that the offence belonged in Category 2, falling in the mid-range of objective soundness, and a $300,000 fine was imposed after allowing a discount of 25 per cent for Ceerose’s early guilty plea.

Judgment

Manifestly Inadequate Penalty and Objective Seriousness

The Court ruled that it was a sentencing error for the judge at first instance to conclude the offence was mid-range.

The Court confirmed the earlier decision which held that serious derelictions of duty, which do not meet the threshold of reckless disregard under Category 1, will constitute the high end of objective seriousness for Category 2 offences.

One judge noted that were it not for the agreed fact that the defendant did not have knowledge or awareness that the skylights were untethered and unembraced, a penalty closer to the maximum penalty would have been open.

The penalty was increased to $600,000. This was despite the fact that the appeal came 18 months after the original judgment, and also 18 months after a failed appeal by the prosecutor to increase the fine imposed on DSF Constructions.

Lessons for employers

The Court of Criminal Appeal is setting the new standard for penalties in the jurisdiction.

Employers must be mindful of the likely high penalties that will be imposed if they do not take simple remedial steps to eliminate the risk of potentially fatal hazards.