Director not guilty of WHS due diligence offences

On 8 March 2024 the NSW District Court handed down a decision which is one of the first cases to meaningfully consider the conduct of an officer charged with a due diligence offence under work health and safety (WHS) legislation (SafeWork NSW v Miller Logistics Pty Ltd; SafeWork NSW v Mitchell Doble [2024] NSWDC 58 (the Doble decision)).

In November 2020, a worker was assisting a forklift operator load a truck and was hit by the moving forklift suffering serious injuries.

The company, Miller Logistics, was described by the court as a medium sized company which operated over 8 sites. The company was in voluntary liquidation by the time of the hearing, and there was no appearance on behalf of the company, which was convicted.

Mr Doble was the sole director of the company.

The court found that there was a clear risk of workers being struck by a forklift when they were loading vehicles in the workplace, and that the company recognised this risk, but the only precaution it took was to adopt a “3m rule”.

The court found that the 3m rule was totally inadequate, and there was no clarity about what it meant. As described by the court it was a phrase that was used “from time to time” but there was no document to clarify what the rule was. The court said at best,

… it seems to have been an exhortation to workers on foot to stay at least 3m away from a forklift. That unsophisticated ‘rule’ amounted to little more than saying the workers on foot ‘look out for yourself’. This this is always an inadequate precaution to take, when there are reasonably practicable measures of ensuring safety. [239]
The charge against the company particularised that it was reasonably practicable for the company to:

  • provide designated loading and unloading zones;
  • provide designated and clearly marked forklift lanes;
  • provide designated and clearly marked pedestrian exclusion zones; and
  • install physical barriers in the loading and unloading areas to separate pedestrians and power mobile plant.

All these measures were taken after the incident and the court said that the company should have taken “each and every one” of those steps before the incident.

The summons against Mr Doble alleged that he failed to exercise due diligence in two respects. First, he failed to ensure the company had available for use, and used, appropriate resources and processes to eliminate or minimise risk. Part of the summons set out that Mr Doble should have carried out his duty of due diligence by “requiring, instructing or directing” the company to take the reasonably practicable steps which the company should have taken to ensure safety.

Second it was alleged that Mr Doble failed to verify that one or more of the resources or processes were actually provided, implemented, and used by workers when undertaking work for or on behalf of the company.

However, the court said that the allegations against Mr Doble did not set out what he should have done to exercise due diligence:

Having said that, the Doble Summons does not actually plead what Mr Doble should have done to discharge his duty of due diligence. To put it in terms of the legislation, the Doble Summons does not particularise the ways in which Mr Doble failed to exercise due diligence, beyond essentially saying that he should have done something to ensure that [the company] complied with its duty. What that something was is not elucidated… [261]
The court found that there were specific steps taken by Mr Doble that show he exercised due diligence. These included:

  • weekly management meetings were WHS was an agenda item;
  • if a WHS matter needed to be dealt with it was attended to quickly;
  • Mr Doble was in contact with the staff member responsible for WHS, Mr Hayter, and kept himself informed about what was being done by him;
  • new safety measures were raised and discussed at management meetings;
  • if a safety matter was raised and a task set to address it there was discussion at the next meeting ensure it had been completed and the steps were minuted;
  • Mr Doble attended different work sites from time to time and if he observed a problem he asked for it to be fixed;
  • Mr Doble took an active interest in ensuring WHS was complied with;
  • if there was an urgent matter Mr Doble would get involved; and
  • there was evidence that there was no budgetary constraint to fixing WHS matters.

The court said that:

… a managing director in the position of Mr Doble cannot know everything that is going on at any given moment. To run a corporation there must be a level of delegation.
In the context of delegation, the court noted that Mr Doble was entitled to rely on Mr Hayter, who was specifically employed to deal with WHS:

The evidence in the case shows that Mr Hayter was specifically employed to deal with work health and safety. This required Mr Hayter to not only update policies and procedures, but to deal with any issues which arose from time to time. There was no suggestion in the evidence that Mr Hayter was anything other than conscientious. There was no suggestion in the evidence that Mr Doble had any reason not to place confidence in Mr Hayter carrying out his work health and safety duties. The engagement of Mr Hayter was the primary process or resource which Mr Doble used to ensure that the PCBU carry out its duty under the WHS Act. [265]
Ultimately the court said that:

  • Mr Doble was not a “hands-off” director in relation to WHS and he took an active interest in ensuring that WHS and compliance were attended to;
  • there was a system to identify and manage safety risks and to ensure that these were addressed; and
  • there were resources and processes and verification steps to ensure that the system was followed.

The court held that these steps were sufficient to meet Mr Doble’s due diligence obligations.

The decision is interesting from several different perspectives when considering due diligence obligations under WHS legislation.

The extent to which an officer can rely on their health and safety personnel to demonstrate they are discharging their obligations under WHS legislation is a common theme in due diligence prosecutions.

For example, in the Western Australian Supreme Court decision, Morrison v Winton; Morrison v Atlas Group Pty Ltd (Unreported judgement BC9606040 dated 12 December 1996) the court noted that the managing director was entitled to rely on his “competent” health and safety manager, and the evidence was that when health and safety matters were brought to his attention, the manager responded to them.

Source: Lexology

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