NSW increases penalties for WHS breaches and bans indemnity insurance

In an important step this month, the NSW Government has introduced amendments to the Work Health & Safety Act (NSW) to implement some key recommendations from the 2018 National WHS Review.

By Michael Selinger

In an important step this month, the NSW Government has introduced amendments to the Work Health & Safety Act (NSW) to implement some key recommendations from the 2018 National WHS Review.

One immediate change to affect all businesses and individuals will be the shift from fixed maximum fines to penalty units. The practical effect will be a significant increase in potential maximum fines as well as annual increases of the value of the penalty unit, now set at $100. For example, the maximum penalty for a PCBU convicted of a Category 1 offence will increase from $3,000,000 to $3,463,000.

Another important change is the prohibition of insurances or other indemnity arrangements with respect to penalties. It will now be an offence to enter into or provide such arrangements and a separate offence to take the benefit of such arrangements, with a maximum fine in the case of the latter offence being $250,000 for a PCBU and $50,000 for an individual. To ensure that officers of corporations are alert to this issue, the legislation also provides a separate offence for officers who are knowingly involved in any such breach, with maximum fines of up to $125,000.  There is no such prohibition in respect of indemnity for legal costs incurred in defending a WHS prosecution or during an investigation.

Importantly, the NSW Government has declined to introduce separate industrial manslaughter laws, such as those introduced by Victoria this month. By contrast, the amending legislation includes a note that the standard criminal laws apply and may be relevant in considering any WHS incident that results in a death.

The proposed amendments also include:

The amendments will take effect upon assent of the legislation so may be in force early next year. 

And while this is NSW, it is likely that other jurisdictions may follow soon.