If the worst should happen – Part 2

Part 2: What happens after an investigation of serious workplace injury?

In Part 1 we looked at the scope of powers held by the statutory authorities SafeWork SA and WorkCover, along with their limitations, in the event that they launch an investigation into a serious workplace injury incident at your place of business.

Now in Part 2 we’ll turn our attention to the critical facts you’ll need to be aware of post-investigation.

SafeWork SAWorkCover Corporation of SA
Applicable legislationWork Health and Safety Act 2012 (SA) (WH&S Act)Workers Rehabilitation and Compensation Act 1986 (SA) (WRC Act)
Penalties/ClaimsSuch investigations should not be taken lightly. The WH&S Act provides significant penalties for safety breaches of individuals (up to $300,000 and/or 5 years imprisonment), and for individuals conducting a business or undertaking (up to $600,000 and/or 5 years imprisonment), whereas body corporates may be fined up to $3,000,000 for offences.Depending on the injury, the level of compensation paid to a worker may be significant, ranging from income maintenance payments to hospital and medical expenses, ongoing future care and lump-sum payments for permanent impairment.Claims will cover past and future payments.
Prosecutions/ClaimsUnder the WH&S Act a “person who conducts a business or undertaking” (PCBU) has a duty to ensure, so far as is reasonably practicable, the health and safety of workers.The concept of a PCBU broadens the scope of people who are subject to the WH&S Act.

A PCBU may be an individual or company, and also includes unincorporated bodies and partnerships.

The WH&S Act imparts a duty towards “workers” as opposed to employees, and includes an employee, subcontractor, employee of contractor, employee of subcontractor, labour hire, out-worker, apprentice, trainee, student on work experience and volunteer.

As such, a broad group of people (PSBUs) now have a duty to an even wider group of people (workers) and may find themselves being prosecuted under the WH&S Act.

SafeWork SA Inspectors are empowered to investigate contraventions of the Act and assist in the prosecution of offences. Such offences are criminal offences.

While a SafeWork SA Inspector is generally on the scene quite quickly following an alleged contravention of the WH&S Act, the investigation itself may take months and sometimes years.

Once a person (or entity) has been charged under the Act, he/she will receive a Summons to appear at the Magistrates Court.

There will generally be a number of court hearings and the person subject to prosecution may either enter a plea of guilty, not guilty or no plea – in which case the matter will be referred to trial.

Recent amendments to the Criminal Law Sentencing Act 1988 (SA) provide for a reduction in sentences where persons plead guilty within certain timeframes.

Historically speaking, guilty pleas may well result in reduced financial penalties under the WH&S Act.

A prosecution under the WH&S Act is a criminal matter and requires the State to prove its case “beyond reasonable doubt”.

Improvement/Prohibition/Non Disturbance Notices

SafeWork SA Inspectors may issue Improvement Notices, Prohibition Notices or Non Disturbance Notices.

However, it should be remembered that, even if you’ve complied with the Notices issued, you may still be subject to prosecution and criminal charges under the WH&S Act.

If a SafeWork SA Inspector believes a person has contravened, or is contravening, the WH&S Act, he/she may issue an Improvement Notice.

An Improvement Notice must show which part of the Act is being contravened, how it is being contravened, and the day by which the subject of the Notice must remedy the contravention.

Timeframes for remedying Improvement Notices must be reasonable in all circumstances.

You may ask for an extension of time in which to comply with an Improvement Notice.

Failure to comply with Improvement Notices may lead to fines of up to $50,000 for an individual and $250,000 for a corporation.

A SafeWork SA Inspector may issue a Prohibition Notice if he/she reasonably believes :

  • An activity is occurring at a workplace that involves, or will involve, a serious risk to the health or safety of a person emanating from an immediate or imminent exposure to a hazard; or
  • An activity may occur at a workplace that, if it occurs, will present a serious risk to the health or safety of a person emanating from an immediate or imminent exposure to a hazard.
  • While written Prohibition Notice must be given as soon as is practicable, a SafeWork SA Inspector may first give oral directions. Prohibition Notices must state:
  • That the inspector believes that grounds for the issue of the prohibition notice exist and the basis for that belief; and
  • Briefly, the activity that the inspector believes involves or will involve the risk and the matters that give or will give rise to the risk; and
  • The provision of this Act that the inspector believes is being, or is likely to be, contravened by that activity

A Prohibition Notice may include directions on how to remedy the contravention.

Failure to comply with Prohibition  Notices may lead to fines of up to $100,000 for an individual and $500,000 for a corporation.

A SafeWork SA Inspector may issue a Non Disturbance Notice if he/she believes it is necessary to preserve their powers.

This normally occurs in situations where a serious injury or death has occurred and the Inspector needs to maintain the site for tests and investigations.

A Non-Disturbance Notice may require a person to preserve a site where a notifiable incident has occurred. This may prevent you from operating machinery.

The Non Disturbance Notice must specify the obligations of the person to whom the notice was issued, the measures to be taken to preserve a site or prevent disturbance and the penalty for non-compliance.

The maximum period of a Non Disturbance Notice is 7 days. However, additional Notices may be issued.

Failure to comply with Non Disturbance Notices may lead to fines of up to $50,000 for an individual and $250,000 for a corporation.

Prohibition, Improvement and Non Disturbance Notices must be displayed prominently at or near the workplace.

If, upon conclusion of the authorised officer’s investigations, the Recovery Unit decides it has enough grounds to recover from you any compensation paid or payable to the injured worker, it will send you (usually via its claims agent) written notification of its intention to do so.The notification will include details such as the worker’s name, date of birth and occupation, details of the injury and the incident, compensation paid to the worker to date and compensation payable (if appropriate).

Following the initial notification, generally quarterly or bi-annual updates will be provided to you, confirming the compensation paid (and payable) to the worker.

WorkCover has a 3-year time limitation in which to file a recovery action in the District Court, but which is heard before the Workers Compensation Tribunal.

Tribunal proceedings are often stayed pending the outcome of the injured worker’s own common law claim, if such a claim has been initiated.

However, WorkCover may still seek recovery even if the injured worker does not make a common law claim.

A recovery action is a civil action and is proved on the balance of probabilities.

WorkCover’s recovery is a statutory right. However, because the injured worker can also make a common law claim direct against the wrongdoer, there is a further provision in section 54 of the WRC Act which prevents “doubling up”.

The effect of this provision is that where the wrongdoer makes a payment direct to the injured worker pursuant to the worker’s common law claim, WorkCover has a first charge over the payment of such damages to the extent of the amount which WorkCover has paid or has reasonably estimated it would be obliged to pay in the future.

In other words, WorkCover cannot recover more than what would be awarded to an injured worker in a common law action even if the compensation payments made are higher.

In a s54 recovery action you can also scrutinise how the rehabilitation of the worker has taken place.

Being civil proceedings, WorkCover is to prove its case on the “balance of probabilities”.

Helpful hintsIf you haven’t already done so during the investigation stage, notify your insurance broker and/or insurer of the incident circumstances. Safety prosecutions are generally not covered under business liability insurance policies, but may be under a directors and officers (D&O) or management liability policy. A recovery claim by WorkCover may be covered under some liability policies.

Suggested action

Remember that every prosecution and claim is different, so it’s vitally importantly that you’re properly advised. Don’t hesitate to give us a call here at DW Fox Tucker.

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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