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How the Changes in the Work Health and Safety Act 2020 (WA) Can Impact You

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With its finalisation in March 2022, the Work Health and Safety Act 2020 has been upgraded for the first time in around 30 years. Naturally, the changes are at the heart of some confusion as businesses work to be ready for the changes due to the new law.

What is written in the new law will impact all businesses in Western Australia. This single Act will cover all safety aspects in every WA workplace. Some say it is disproportionally hard on small and medium size businesses because the penalties imposed are high enough to drive some companies into bankruptcy.

The Work Health and Safety Act 2020 aims to improve workers’ protection by accounting for modern employment agreements and implementing higher penalties for companies and individuals. The Act is a clear indication that the most significant responsibility for workplace safety lies with the directors and senior officers at the top of the ladder. Also new is the introduction of the term ‘person conducting a business or undertaking’ (PCBU).

The WHS Act 2020 effectively gathers many other individual statutes under one umbrella. Among the acts replaced are:

Current Occupational Safety and Health Act 1984
WHS Elements of the Mines Safety and Inspection Act 1994
WHS Elements of the Petroleum and Geothermal Energy Safety Levies Act 2011

The Six Biggest Changes for You to Watch include:

Penalties Have All Increased – The most noteworthy change comes in the gross negligence/industrial manslaughter penalty. The maximum penalty for a company was once $2.7 million. The WHS Act increases the fine to $10 million. The penalties for an individual found guilty of industrial manslaughter is a maximum fine of $550,000 plus five years in prison. Under the WHS Act, the new penalty is a $5 million fine and up to 20 years in prison. Additionally, if you are charged as an individual in an industrial manslaughter case, you must personally pay the fines
Industrial Manslaughter – The conditions for convicting someone of industrial manslaughter have changed. Prosecutors do not need to successfully convict the company in order to charge individual officers in the company.
Insurance – A significant change in insuring against penalties is also a part of the WHS Act. While your insurance can pay your legal fees, you cannot get insurance to cover fines for breaches. Should you receive a penalty, you must pay it out of pocket. Additionally, under the Act, companies cannot protect employees. There are hefty fines for attempting to get around the letter of the law when it comes to indemnifying persons. Fines of $51,000 for individuals and $255,000 for body corporates apply to those who:

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1. Penalties Have All Increased – The most noteworthy change comes in the gross negligence/industrial manslaughter penalty. The maximum penalty for a company was once $2.7 million. The WHS Act increases the fine to $10 million. The penalties for an individual found guilty of industrial manslaughter is a maximum fine of $550,000 plus five years in prison. Under the WHS Act, the new penalty is a $5 million fine and up to 20 years in prison. Additionally, if you are charged as an individual in an industrial manslaughter case, you must personally pay the fines
2. Industrial Manslaughter – The conditions for convicting someone of industrial manslaughter have changed. Prosecutors do not need to successfully convict the company in order to charge individual officers in the company.
3. Insurance – A significant change in insuring against penalties is also a part of the WHS Act. While your insurance can pay your legal fees, you cannot get insurance to cover fines for breaches. Should you receive a penalty, you must pay it out of pocket. Additionally, under the Act, companies cannot protect employees. There are hefty fines for attempting to get around the letter of the law when it comes to indemnifying persons. Fines of $51,000 for individuals and $255,000 for body corporates apply to those who:
  
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  - Those who are insured or indemnified against fines under the Act
  - Those who insure or indemnify a person against a fine for an offence under the Act
  - Those who pay or accept an indemnity for a penalty for a violation under the Act
4. PCBU – The new term Person Conducting a Business or Undertaking (PCBU) is meant to widen the scope of responsibility to include those who are not employers in the traditional sense but have workers. The term PCBU is quite broad and among those who fall under this category are:
  - Association
  - Corporation
  - Government departments and authorities
  - Independent school
  - Local government council
  - Partnership
  - Sole trader
  - A volunteer organisation that employs people to carry out work
5. PCBUs are obligated to ensure the safety and well-being of visitors, volunteers, and workers.
6. Workers – The WHS Act broadens the meaning of the word worker. It no longer implies that someone is your actual employee or that you only need to look after the health and well-being of your employees. Under the Act, you have the duty of care for all workers. This includes employees and:
  - Apprentice or trainee
  - An employee of a contractor or subcontractor
  - An employee of a labour-hire company
  - Outworker
  - Student on work experience
  - Subcontractors and casual workers
  - Volunteer
7. WHS Act Advisors – A new section added to the Work Health and Safety Act 2020 addresses external advisors for the WHS Act. Advisors are held accountable for any advice they provide to companies regarding health and safety. Advisors must ensure that their guidance does not lead to the creation of hazards in a workplace. If advisors create hazards as a result of their suggested course of action, they can be sued under public liability, sued for negligence, and be prosecuted. It is important to note that being on the receiving end of faulty advice does not absolve the business owner from guilt. It is not an acceptable excuse for hazardous undertakings. Simply falling back on the notion that “I had some bad advice.”
Other Expanded Definitions from the Work Health and Safety Act 2020
- Health: An additional definition set forth by the WHS Act is the definition of the word health. It no longer applies to a worker’s physical well-being. The definition of health expands to include the mental health of workers.
- Officer: A person who makes, or shares in making, decisions that impact the business or undertaking’s entirety (or a substantial part ) of the business
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Due Diligence includes actions that:
- Maintain up-to-date knowledge of WHS Act matters
- Demonstrate a working knowledge of the nature of the operations and of associated hazards and risks that come with those operations
- Ensure that the appropriate resources and processes are used to eliminate or minimise risks to health safety from work carried out
- Make sure there are appropriate resources for receiving information regarding incidents, hazards, and risks
- Responding in a timely way to information about risks, incidents, and hazards
- Ensure implementation processes for complying with any obligation of the PCBU under the WHS Act
- Verify the resources and their use
Three Steps to Prepare for the WA WHS Act 2020 Changes
1. Explain the changes to every key stakeholder and ensure everyone understands how the new regulations will impact the company and how you must do things.
2. You can start by auditing your business against the current regulations. Organise an audit of your company and how it matches the new rules. Next, see how you measure up to the new regulations.
  You will need to purge outdated materials, replace them with current documents, and talk to your staff about the equipment and processes that must change. After doing this, record your results. This is the best way to demonstrate you are working towards compliance.
3. Design a plan of action. All of your reports and policy amendments do nothing without efforts backing them up. Talk with the key stakeholders and make a 90-day plan to put your findings in motion.
As a business owner, you have your plate overflowing, keeping track of your day-to-day projects. The changes in insurance law are not something you give much thought to as you are taking care of other things.

Unfortunately, what you are unaware of can cost you. At Grace Insurance, we understand the law changes and can ensure you have the cover you need. Contact us to discuss more about the Work Health and Safety Act of 2020 or any other insurance concerns.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Grace Insurance, ABN 63 133 156 742, AFSL 233750

This article originally appeared on Grace Insurance Blog and has been published here with permission.