Paper Based Safety Systems in a Contract Environment

Two recent cases have highlighted the focus that is put on documented safety systems following a serious workplace incident. The cases have also shown that despite the mountains of paperwork deployed in the name of safety, organisations still struggle to understand if health and safety risks are being controlled.

The cases are also instructive because they both arose in the context of contractor safety management.

The first case, Hillman v Ferro Con (SA) Pty Ltd (in liquidation) and Anor [2013] SAIRC 22, examined the perils of contractors creating safety management systems to meet the requirements of the client, rather than the risks of their work.

On 16 July 2010 a fatality occurred during lifting operations at the Adelaide desalination water plant. A rigger employed by Ferro Con (SA) Pty Ltd was killed when he was struck on the head by a 1.8 tonne steel beam.

The Company, Ferro Con, and its Director, Paolo Maione were prosecuted under South Australian health and safety legislation, and in June 2013 were handed fines of over $200,000.

The case has attracted a lot of attention because Mr Maione was able to call on an insurance policy to pay his penalty – effectively avoiding the punishment of the Court. However, the judgement also offers good insights into the weaknesses of “paper based” safety management systems, a compliance mentality and lack of assurance. The judgement also explores some issues in the Principal/Contractor relationship.

It seemed clear from the case that the “safety system”, such as it was, was designed to meet the need of the client, not manage the risk associated with the work:

No detailed JSA’s for different types of lifts, or lift plans, were required by Adelaide Aqua. Ferro Con took its cue for the level of safety planning it would use in its work from Adelaide Aqua, and not from the foreseeable hazards of its work activities. Ferro Con was more focussed on complying with contractual requirements than taking all reasonably practicable steps to minimise the foreseeable hazards its business created.

The inappropriate nature of safety documents in a contracting relationship was also looked at in Nash v Eastern Star Gas Ltd [2013] NSWIRComm 75, only this time, from a Principal’s perspective.

In August 2009, Bruce Austin a working director of a small business, The Saver Guys, died from head injuries after he was hit by a length of pipe that was being extracted from the ground.

There were many different entities involved in the contractual arrangements, and a number of parties were prosecuted. This case, however, looked at the safety arrangements in place between Eastern Star Gas Ltd (ESG) and Austerberry Directional Drilling Services Pty Ltd (ADD).

The case provides some useful insights into the expectations placed on businesses removed from the conduct of the physical work by a contractor. It also demonstrates how an organisations’ own, documented safety management systems (in this case a contractor safety management system) can be used to show that the organisation is not meeting its obligations.

The general “failure” in this case was that:

ADD did not have a documented safe work procedure or method (SWP) for the Activity and no job safety analysis or risk assessment for the Activity was conducted by ADD

However, the criticism of ESG, the defendant in the case, related to both ADD’s system, and ESG’s own system and conduct. The Court noted:

  • ADD OHS documents, including 42 SWPs, were from another job.
  • ESG did not require any documents specific to the job it was doing.
  • ESG did not check if the safety documents were appropriate.
  • No inquiries were made by ESG to check if the safety documents addressed the activities on this job.

The Court also noted that ESG operated in breach of its own contractor safety management system, for example:

  • ESG’s contract representative did not ensure the work was subject to Hazard identification and risk assessment, including that a safe work procedure approved and JSAs were done.
  • There was a requirement to assess contractor performance, but there was no program for that assessment, and no assessment was in fact done.

These were not things that the Court thought were a good idea – these were requirements set out in ESG’s own system.

The Court found that the:

… defendant had, in its paper systems, a roll (sic) for auditing and for checking. However, what it did not do was to comply with its own systems and that included a failure to carry out any checking of safety issues at the site.  If documented safety systems are not complied with, then that failure creates a significantly legal risk. More importantly, however, if the documented safety systems represents what should be done to create a safe workplace, non-compliance far from being a legal risk, means that our workplaces are not safe.

If documented safety systems are not complied with, then that failure creates a significantly legal risk. More importantly, however, if the documented safety systems represents what should be done to create a safe workplace, non-compliance far from being a legal risk, means that our workplaces are not safe.

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