In a significant ruling regarding the duty of care for business executives in work, health and safety (WHS) management, a former managing director of a zipline activity course was acquitted of responsibility for a tragic accident that resulted in a death and serious injury.
The accident occurred five months after the director had left the company and was judged to have been caused by a failure to adequately maintain the wire rope attachments securing the zipline to the platform.
The case against the former executive was based on the assumption that her duty of care extended to the practical implementation of an operational system in line with WHS regulations, which required specialised knowledge of safety factors.
Finding: senior executives may rely on subordinates' specific WHS accountabilities
The decision indicates that it is reasonable for business executives to rely on senior employees who have specific accountability for operational health and safety1.
In this case, the director's role in the business was marketing, sales and administration, while the operations manager, who reported directly to her, was specifically responsible for risk management, WHS and the maintenance of the zipline.
The operations manager had access to the necessary resources and information to fulfil their WHS responsibilities, including relevant Australian Standards, experienced colleagues with extensive experience in the zipline industry and the engineer who designed the platform, plus consultation with the equipment supplier regarding the wire rope attachments which are widely used in ziplines throughout Australia. The prosecution's expert engineer also conceded that other methods of securing zipline cables also involved risks and that complete elimination of risk of failure was not possible.
Judgement absolves managing director of direct responsibility for operational failure
The legal ruling was that the managing director had been proactive in overseeing the safety management system and could not have been expected to know all the details of the business operations.
It was reasonable for the managing director to rely on the operations manager for the practical management of WHS matters, particularly in terms of their different roles, knowledge and expertise, and available resources.
There was no evidence to suggest that the managing director had knowledge of the applicable safety standards or any failings in the safety management structure and processes. In addition, there was no finding that consulting an engineer would have resulted in a different method of securing the zipline.
Case sets D&O duty of care precedent in Queensland work, health and safety
The case is believed to be the first contested prosecution of its kind of a company director or officer's (D&O) liability in a Queensland WHS prosecution2. The outcome indicates some reassurance that senior executives who have structures of delegated WHS responsibilities to a qualified and experienced subordinate with adequate resourcing are acting within reasonable and expected duty of care obligations, but there is a critical obligation to proactively ascertain that safety management systems are fit for purpose.
How Gallagher expertise can help Australian businesses meet WHS obligations
The Gallagher Workplace Risk specialism provides safety education consultation, assessment and advice to businesses across all industries and operational environments.
We design flexible and engaging programs, including online safety training, for employers, employees and contractors, on safe work method statements awareness and implementation, covering all critical areas, including officer due diligence briefing, to ensure worksites are meeting and ideally exceeding workplace safety obligations.
Source
2Section 27 of the Work Health and Safety Act 2011 (WHSA), accessed 4 September 2024
