Jeffrey Rae, Presiding Commissioner, and Michael Easson, Associate Commissioner, Industry Commission Report on Work, Health and Safety. An Inquiry into Occupational Health and Safety, Report No. 47, Australian Government Publishing Service, Canberra, 11 September 1995, http://www.pc.gov.au/inquiries/completed/work-health-safety
What follows are the Terms of Reference and the Overview Extract from the Report.
The Industry Commission inquiry report, Work, Health and Safety, was signed on 11 September 1995 and subsequently released by the Commonwealth Government in two volumes, Volume 1: Report and Volume 2: Appendices.
The report contains the findings of the Industry Commission public inquiry on the strategies which should be undertaken or continue to achieve optimal outcomes in preventing occupational injury, illness and disease for the next decade.
TERMS OF REFERENCE
|I, GEORGE GEAR, Assistant Treasurer, under Part 2 of the Industry Commission Act 1989: |
1. refer Australia’s approach to occupational health and safety to the Industry Commission for inquiry and report within twelve months of receiving this reference;
2. specify that the Commission report on the broad strategies which should be undertaken or continue to achieve optimal outcomes in preventing occupational injury, illness and disease for the next decade;
3. without limiting the scope of this reference request that the Commission report on: a) the levels, causes and costs of occupational injury, illness and disease in Australian industry, including the identification of differences relating to workforce characteristics (including gender and ethnicity) and workplace characteristics; b) the extent and costs of prevention of occupational injury, illness and disease; c) the costs and benefits of preventive strategies including complementary legislation and educational and promotional strategies; d) the contribution that employers, employees and their representative organisations, occupational health and safety professionals and researchers can make to the prevention of occupational injury, illness and disease in the workplace; e) the implications of incorporating occupational health and safety matters in enterprise agreements; f) the appropriate legislative approaches and roles for National, Commonwealth and State/Territory agencies in promoting occupational health and safety; g) the development and implementation (particularly the extent of acceptance in the workplace and State agencies) of national occupational health and safety standards; h) export opportunities for Australian occupational health and safety services; and i) identification of best practice approaches to occupational health and safety;
4. specify that the Commission report on any relevant implementation strategies;
5. specify that the Commission take into account recent substantive studies undertaken elsewhere; and
6. specify that the Commission have regard to the established economic, social, environmental and regulatory reform objectives of governments.
GEORGE GEAR 23 May 1994
The Overview Chapter, from Vol.1 of the report, pp. xvii-lx, is reprinted below:
We believe that effective safety awareness in industry and commerce can only be developed by an accumulation of influences and pressures operating at many levels — that of the boardroom, the senior management, the supervisor, the trade unions, the worker on the shop floor — and operating in a variety of ways through education and training, through the provision of better information and advice, through practical, cooperative organisation and action, through legal sanctions where necessary, through research, publicity and so on. There is no single panacea and there are no simple short cuts (Robens 1972, p. 1).
There is considerable scope in Australia to reduce the human and economic loss associated with injury and disease at work. All in the community — employers and their associations, employees and their trade unions, as well as governments — can play an important part in achieving this goal.
Success will ultimately be determined where the current failures occur — in the workplace. For their part Australian governments should provide the necessary leadership and support by reforming their policies on occupational health and safety (OHS). In essence they should:
• streamline but strengthen regulation with fewer, simpler rules;
• allow greater flexibility for workplaces to manage injury and disease;
• beef up enforcement of the key legal responsibilities;
• strengthen financial incentives for safer workplaces;
• overhaul co-operation arrangements between Australian governments;
• provide greater contestability and transparency in research funding; and
• make OHS agencies more accountable for their performance.
This Overview begins by setting out the Commission’s findings on the state of health and safety at work. From there it canvasses the case for reform as a prelude to the Commission’s proposals. The Overview then concludes with a discussion of the benefits of reform and of some issues in the implementation of reform.
STATE OF WORK, HEALTH AND SAFETY
Every year in Australia, over 500 workers suffer a traumatic death from work and up to 2200 die of occupational disease. Given that there are about 2000 road deaths, work may be a more important source of premature death than the roads.
In addition, injury and disease from work permanently disable workers. The Commission estimates that, at any one time, about 200 000 people cannot work at all due to an injury or disease sustained from work. Another 270 000 have been forced to change their jobs or permanently reduce their hours of work for the same reason.
Permanent disability imposes significant costs on injured workers and their families — pain and suffering, loss of earnings, reduced leisure and social opportunities, and loss of self-esteem. For example, the loss of income for those who become unemployed due to ill health from work is about $22 000 a year.
Details of the incidence of injury and disease from work and some of its social consequences are set out in Box 1.
Cost of Injury and Disease
The Commission estimates that the total cost to injured employees, their employers and the rest of the community of work-related injury and disease is at least $20 billion a year. This estimate is conservative as it does not include any allowance for pain, suffering and anguish.
The above total is the sum of the losses to all those adversely affected by work related injury and disease. Their losses are often gains to others in the community — for example, the replacement workers, medical practitioners and those who provide services to injured workers. Only when these gains are taken into account can the loss to the economy as a whole be estimated. On this basis a 10 per cent reduction in injury and disease would see our national income (GDP) increase by about $340 million. Workplace health and safety is therefore a significant economic issue.
Box 1 A tally of injury and disease from work
|In each year, workplace injury and disease have a greater impact than many appreciate:|
• around 500 die as a result of traumatic injury at work;
• between 650 and 2200 workers die as a result of occupational cancers — the majority from exposure to hazardous materials;
• up to 650 000 workers — or one in every twelve — suffer injury and illness from work and almost two-thirds will have to take time off work.
Men make up 57 per cent of the workforce but 94 per cent of the traumatic fatalities.
Workers with a non-English-speaking background have a risk of traumatic fatality which is four times that for the workforce as a whole.
The risk of traumatic fatality from work rises with age.
The industries with the highest risk of fatality are mining, transport, construction and agriculture.
At any time, the accumulated effects of work-related injury and ill health mean that:
• up to 140 000 workers cannot work at full capacity; • over 270 000 workers have had to reduce permanently their hours at work, or change their jobs; and
• about 200 000 persons are prevented from working at all.
Of those who are unable to work at all:
• over 85 per cent have been unemployed for more than a year;
• almost 35 per cent have not worked for over five years; and
• their average income is $9500 a year.
Work-related health problems also affect people in their retirement — up to 300 000 persons over the age of 65 are estimated to be suffering from them.
Around 30 per cent of the total cost has to be met by injured workers and their families. Employers bear about 40 per cent in workers’ compensation costs, lost productivity and extra overtime. The community funds around 30 per cent, mostly in social security benefits and health subsidies. However, the community’s share increases with the severity of the consequences — it is about 40 per cent for permanent disability compared with around 10 per cent for temporary disability.
Prevention of Injury and Disease at Work
There is rarely, if ever, a single cause of injury or disease at work. Usually many factors are involved and the contribution of each to the outcome varies considerably. Only some factors are crucial but all interact in complex ways. They can begin to operate well before injury or disease occurs. The ability of individuals or firms to influence each of the factors also varies.
The key to controlling injury and disease at work is to be found in the design and control of the workplace and the activities conducted within it. Only very limited, if any, control is possible by focussing upon the behaviour of those who may be injured.
Design and operational control of the worksite buildings, plant, equipment, materials, work procedures and practices all shape the health and safety risks at the workplace. The quality of this design and operational control is ultimately determined by the workplace management.
Some employers have shown that injury and disease at work can be dramatically reduced by good management. They view injury and disease as waste to be eliminated. Their solution is comprehensive quality management to improve continuously the work environment and the activities conducted within it. As good risk management is usually an essential element of good management generally, improvements in health and safety go hand in glove with other gains in business performance.
Superior risk management requires cultural change at work. Senior management must be dedicated to a ‘culture of care’. This commitment must be backed up by a willingness to invest resources in health and safety, and to hold line managers, supervisors and work teams responsible for outcomes in this regard. The full participation of an informed workforce is fundamental — employees usually know most about how to manage better the risks in their own work. The trade union movement has shown that its co-operation in this process can enhance OHS outcomes.
Unfortunately, there is no reliable basis for comparing Australia’s OHS record, either over time or with that of other economies. However, many participants — including many government agencies — felt that our performance is not improving. Most believed that there is ample scope to do better. This is confirmed by the substantial differences in the health and safety performance achieved by employers of similar size in the same industry.
While the ultimate goal should be to ensure everyone is safe at work, prevention can come at a price. In some cases the risks are costly to abate, at least in the short to medium term, and it may be necessary to mandate minimum safety levels to meet community needs. When doing so, however, the community has to make a choice about whether this represents the best use of the resources which would be required. Most, if not all, human endeavour entails some risk and this is tolerated by the community as an acceptable price for the achievement of its other goals.
CASE FOR REFORM
Those who are responsible for designing and managing the workplace and its activities do not bear all, or even most, of the costs of poor design or poor management — the gap is particularly pronounced in cases of death or permanent disability. These costs fall on those who become injured as well as the rest of the community who have to pay for the social security and other government services extended to the injured.
For these reasons, governments have sought to reduce the workplace risks to health and safety in a variety of ways. They have done so by regulating and enforcing health and safety at work. These activities have been complemented by programs to inform, educate and train people in workplace health and safety, as well as to provide financial incentives for better performance by workplaces.
Currently Australians are contributing $140 million each year to these programs but receive limited information to show they are well conceived or properly executed. If the efficiency and effectiveness of these programs and their administration can be improved, lives and resources will be saved.
The architecture of the regulation of health and safety at work is essentially the same in each Australian jurisdiction. It involves a single statute to cover health and safety in all, or nearly all, workplaces in the jurisdiction. Some jurisdictions have one or more statutes dealing with health and safety in specific industries — for example mining. Most also have statutes which address health and safety in specific areas — for example, the transport and handling of dangerous goods.
The principal OHS statute defines the rights and obligations of those involved with the workplace. The principal statute is supported by subordinate legislation and codes of practice. The subordinate legislation mandates the specific requirements to be achieved at the workplace. The codes of practice seek to advise some practical means for their achievement.
Box 2 The Robens Report
|In May 1970, the UK government appointed a Committee on Safety and Health at Work, chaired by Lord Robens. The Committee was asked to report on ‘the provision made for the safety and health of persons in the course of their employment’.|
The Committee on Safety and Health at Work presented its report to the UK government in June 1972. Its central conclusion was the following: There are severe practical limits on the extent to which progressively better standards of health and safety at work can be brought about through negative regulation by external agencies. We need a more effectively self-regulating system. (Robens 1972, p. 12). The Committee found the regulatory regime in the UK tended to encourage people to think and behave as if work-related health and safety were primarily a matter of detailed regulation by external agencies. The UK regime was an haphazard mass of intricate, detailed law that was difficult to comprehend, amend and keep up to date. Regulation paid insufficient regard to human and organisational factors, did not cover all workers or all hazards and its administration was fragmented.
The Committee identified four factors that contributed to ‘apathy’: • the unco-ordinated proliferation of statutory standards;
• the excessive complexity of many of the standards;
• the failure to keep pace with technological, social and economic change; and
• the failure to formally and consistently involve employers and workers.
The Report proposed changes to policy to create a ‘more effectively self-regulating system’ at both the firm and industry level with greater involvement of workers and their trade unions. It proposed the creation of a single ‘enabling Act’ to:
• lay down the duties of employers, workers and suppliers of materials;
• establish basic rights for workers and their representatives;
• create new structures through which standards may be developed; and
• reform the administration and enforcement of the law by the creation of a single national authority.
This ‘enabling Act’ should be supported by regulations and industry codes of practice. objectives to be achieved.
Regulation can facilitate sound management of health and safety at the workplace. However, there are severe limits on the ability of governments to cut injury and disease by specifying how risks to health and safety are to be managed — without a loss of efficiency at the workplace and in the economy as a whole. Governments have failed to recognise these limits in their regulatory reform, even though they have been known for some time (see Box 2).
Unclear Legal Rights and Duties
Although fundamentally sound, the rights and obligations in the principal OHS statutes are not clearly and unambiguously defined. Moreover, there is redundant elaboration of their requirements. The incorporation of national OHS standards in subordinate legislation has exacerbated the over-elaboration — many merely restate, in other forms, the rights and duties in the principal OHS statutes. This has tended to add to the confusion about workplace health and safety in the community.
Too Much Legislation
In all, there are over 150 statutes which regulate health and safety at work across Australia.
There are nine Commonwealth and State OHS statutes, together with another six enactments with general OHS provisions. The latter include the Factories, Shops and Industries Act and Construction Safety Act in New South Wales, the Labour and Industry Act in Victoria, the Factories and Shops Act in Western Australia and Machinery Act in the Australian Capital Territory. These 15 statutes have 70 sets of regulations amounting to a further 1180 pages of law. There has been considerable progress in every jurisdiction in repealing the statutes and their regulations which were meant to be replaced by the OHS legislation — as proposed by the Robens Committee — but the process is incomplete.
There are another 129 statutes which contain provisions on specific workplace health and safety issues. These include State statutes dealing with dangerous goods and the mining industry in New South Wales, Queensland, Western Australia and the Northern Territory. The statutes dealing with the maritime and offshore petroleum industries are in the Commonwealth jurisdiction.
Regulation should encourage prevention in all workplaces. To do so efficiently it must be sufficiently flexible. It needs to allow for the range of circumstances in workplaces and for the management responses best suited to risk control in each.
The existing regimes do not adequately accommodate the different situations in individual workplaces. They do not allow for different capabilities of employers to develop their own safety management. Nor are they flexible enough to meet the desire of some employers for straight-forward, specified safety measures and certainty in compliance.
‘Best Practice’ Management not Encouraged
‘Best practice’ management of the risks to health and safety at work has greater scope to improve health and safety outcomes than the enforcement of minimum standards. Apart from anything else, best practice is based on continuous improvement in performance. It is inherently difficult for minimum standards to deliver such dynamic improvements.
Despite this, existing regulation provides, at best, weak encouragement to the adoption of quality risk management approaches to health and safety. Many provisions discourage such systems; some are incompatible with them.
Inconsistency Between Jurisdictions
Jurisdictions place different obligations on employers, employees and suppliers. Some exposure limits — such as for noise and asbestos — differ as do some rules for hazardous plant, equipment and work processes. There are differences in enforcement. Such differences mean there are different levels of protection for workers doing the same job in the various jurisdictions — this is inequitable.
Employers with operations in more than one State have to work with multiple OHS regimes. This means additional costs whenever systems of work are changed or staff are moved; they also raise the cost of their internal monitoring of compliance.
Inefficient Mandated Standards
The present approach to mandating health and safety standards does not always produce efficient solutions. Some standards do not directly affect the risks to health and safety. Many standards are not expressed in terms of the desired outcomes but the way they are to be achieved. In doing so they ignore the fact that different solutions will be appropriate in different circumstances and at different times. Other standards are not expressed in measurable terms, thereby detracting from their enforceability.
Inadequate and Unhelpful Codes of Practice
Governments have developed official codes of practice to provide guidance on how to comply with the law. Most focus on how to manage a particular hazard in all workplaces in all industries. Consequently, their advice is inadequate in extent and too general to be of practical help to most workplaces.
The focus on general, hazard-based codes of practice has probably inhibited timely responses to emerging health and safety issues in the workplace. The need for a practical response can vary considerably. If the need is not perceived as being acute everywhere, the recognition of a problem and the development of a code to deal with it in all workplaces can be too slow. A number of inquiry participants are concerned that this was the case with alcohol and drug use, and violence in the workplace. Such issues might be more appropriately addressed at an industry and workplace level.
Enforcement is not directed at preventing injury and disease by deterring non-compliance with OHS law. It tends to rely overly on persuasion — advice is usually the first response when a breach of OHS law is detected. Nor is enforcement targeted where it will have the greatest effect on prevention. Inspectorates tend to react to fatalities and serious injury, rather than to seek to prevent them occurring.
On average, workplaces face a 22 per cent chance of being visited by the OHS inspectorate in any year. If then found to be in prima facie breach of the OHS legislation, they have only a 6 per cent chance of being convicted and fined by the courts. The probability of being penalised is less than 1 per cent in the Australian Capital Territory.
As a consequence, the expected penalty for workplaces which fail to comply with OHS legislation is negligible. The Commission estimates that offenders face an expected penalty of less than $33, averaged over all the jurisdictions. Only two jurisdictions have expected penalties greater than $33. See Table 1 for details.
Even in cases of fatal or other serious injuries, the courts impose low fines. The average fine imposed across the jurisdictions — on-the-spot fines and fines by the courts — is $2480. The average fine for each jurisdiction ranges from $1125 in New South Wales to just over $8000 in Victoria. The level of the average fines reflects two factors — limits on the size of penalties in the OHS legislation and the preparedness of the courts to use the scope offered by these maxima.
Table 1 Expected Penalty Levels by State and Territory
|Jurisdiction||Probability of inspection (per cent)||Probability of a penalty (per cent)||Average penalty ($)||Expected penalty ($)|
Table 7.2 of the Final Report elaborates on the methodology here.
A low expected penalty means that enforcement has little or no deterrent effect. At best it will deter those who have been detected from committing another breach (and this may be questionable). However, it does not deter those yet to be found out because they know that they will be given a second chance.
If legal duties are not enforced, workplaces can face perverse competitive pressures — even well-intentioned employers could be reluctant to comply if it puts them at a disadvantage.
Nationally Uniform Standards
Nationally uniform OHS standards have been a goal since the creation of the National Occupational Health and Safety Commission (NOHSC) in 1984. However, NOHSC made little progress towards that goal until November 1991 when Heads of Government agreed to implement nationally uniform standards through NOHSC by the end of 1993.
Participants generally expressed the following concerns with the development of national standards by NOHSC and their implementation by the States.
• Jurisdictions have legislated ‘national standards’ in various ways with different effects. This is confusing and has reinforced perceptions that governments do not have a clear view of the appropriate approach.
• The content of the standards implemented can differ to a significant degree from those declared by NOHSC. Significant differences in content undermine the concept of uniform standards.
• Despite concerted effort by NOHSC since 1991, many criticised the progress in developing and implementing national standards. Not one of the priority standards has been fully implemented across the country.
In the Commission’s view, the concerns expressed by participants are symptoms of fundamental problems with the national uniformity program. Governments have failed to agree on operational objectives or how they are to be achieved.
Lack of Agreed Objectives
Standards have been developed for the hazards associated with high workers’ compensation pay-outs rather than those which impose the highest costs on the community. Fatality and permanent disability account for almost 60 per cent of total costs of injury or disease at work.
The program has not recognised that hazards can only be successfully managed at the workplace. Much effort has gone into developing national codes of practice but they provide little or no practical guidance to workplaces. As a result, some industries have moved away from the NOHSC codes. For example, the rural sector in Queensland developed its own codes for hazardous substances and plant with the support of and assistance from the Queensland OHS agency.
There has been no agreement on operational objectives because of the difficulty in developing standards applicable to all workplaces in all jurisdictions. Governments have been reluctant to agree to them and have reserved their right to modify declared standards to fit the needs of their jurisdiction.
Lack of Agreement on Implementation
In principle, uniform regulation implies uniform legislation. Governments have attempted to achieve greater regulatory consistency while maintaining flexibility by implementing the ‘common essential requirements’ in national standards as they see fit. As governments have been unable to agree on how to implement the national standards, significant differences in OHS law remain between the jurisdictions. Furthermore, there has been little co-ordination between implementation of national standards and reform of OHS regulation.
NOHSC performs two roles. One is to manage the process of developing national programs in workplace health and safety. The other is to be a forum for consultation with state governments, employers and trade unions on those programs. Worksafe Australia provides administrative and technical support to the National Commission in these roles. Of the programs conducted by NOHSC the most important has been the development of national standards.
The existing arrangements are illustrated in Figure 1.
It is generally agreed that, since its establishment, NOHSC has progressed the standing of OHS in the community. However, a large number of participants were critical of the time and resources required to achieve that change. In the Commission’s view these are symptoms of fundamental problems with the national arrangements.
Unclear Lines of Responsibility
The Commonwealth government funds Worksafe but cannot be held accountable for its performance. Many of the activities of Worksafe are controlled by NOHSC and on most others the National Commission exerts at least some influence.
NOHSC members are appointed as representatives of governments, the Australian Chamber of Commerce and Industry (ACCI) and the Australian Council of Trade Unions (ACTU). Accordingly, it is unclear whether the Minister can hold NOHSC to account for its performance or its supervision of Worksafe. NOHSC members face a conflict between their loyalty to their institutions and their responsibility to manage Worksafe.
Worksafe’s Chief Executive Officer (CEO) is responsible by law to the Commonwealth Minister for the funds provided to the agency. However, in practice, the CEO is responsible to NOHSC to some extent for Worksafe’s use of its resources. This duplication and ambiguity of reporting lines do not provide for strong accountability.
An Ineffective Board of Management
NOHSC has not been as successful as the board of management for Worksafe:
• with 18 members, it is too large to be an effective board of management;
• members are chosen primarily to represent the various interests — not for their ability to manage Worksafe; and
• the ambiguous and divided nature of its responsibility for Worksafe militates against it supervising Worksafe effectively.
Members of NOHSC represent governments, employers and the trade unions. Accordingly, it is not clear that they can be accountable for their performance as a board of directors would be.
Only Some Parties are Represented
NOHSC does not represent all who have a stake in health and safety at work. OHS professional societies are not included. The ACCI is the only employer association on NOHSC. There are other national employer groups that are not affiliated to the ACCI, such as the Australian Minerals Council and the National Farmers’ Federation. While state governments or their agencies are represented, other interested organisations at the State level are not.
Lack of Engagement by the States
The apparent reluctance of the states to implement NOHSC decisions reflects the fact that NOHSC arrangements do not adequately engage all the interests in each State — nor do they recognise that the state governments have the responsibility for, and are essential to, program delivery in OHS.
The state governments have commitments to their own OHS consultative bodies and constituencies. Unless these interests are adequately accommodated by NOHSC, State Ministers face pressure to modify NOHSC decisions before their implementation. The need for states to revisit NOHSC decisions reduces the incentive for state governments and state interest groups to participate fully in developing a consensus within NOHSC.
Worksafe both undertakes research and funds others to carry out specific research projects. The internal research is carried out by the National Institute for Occupational Health and Safety (NIOHS) within Worksafe. The National Institute is the single largest contributor to OHS research in Australia. NIOHS also provides administrative support for the external research program.
The CEO of Worksafe is the Director of the National Institute. By law the Director is responsible to the Commonwealth Minister, but NOHSC exercises a significant degree of practical control. Such a division weakens and obscures the accountability of the National Institute for its performance.
NOHSC has attempted to make the National Institute more accountable by determining a research strategy and monitoring research performance. However, success depends on NOHSC’s ability to act as the board of management for NIOHS — this is questionable for the reasons cited earlier.
The research effort of the National Institute was poorly regarded by many participants. There are problems with the relevance of its work to the needs of workplaces and industries. It has a bias in favour of epidemiological and medical research. Research into risk management seems to be given short shrift considering its importance in achieving superior health and safety outcomes.
Employer associations, OHS professional and scientific groups, and a number of state governments expressed concern over a tripartite institution being responsible for deciding the research to be publicly funded. They feared that the research agenda can be compromised by the interests of the members.
Research has been poorly co-ordinated. This is recognised by NOHSC which has recently developed a strategy to provide a framework for co-ordination.
State OHS Agencies
Outlays by State and Territory agencies on OHS programs were about $117 million in 1993–94. This constituted about 80 per cent of the outlays on OHS programs by all jurisdictions. In addition to the development of OHS legislation, the outlays by the states are used for enforcement — the major part of all OHS outlays — as well as awareness, research, training and education programs. While annual outlays by each jurisdiction vary, outlays per employed person — about $15 to $17 per employed person — are roughly the same in most jurisdictions.
The States do not appear to require their OHS agencies to measure how their policies or their programs perform.The information published suggests that agencies do not have clearly defined and measurable objectives. Published OHS information also provides little indication of the effectiveness of agency programs.
The lack of adequate measurement of OHS performance and of the effectiveness of programs potentially compromise the progressive improvement of these programs. They also impede policy and strategy review. As a consequence, there can be no certainty that the current mix of preventive measures is the right one.
The Commission’s charter requires it to take an economy-wide perspective in advising government on policy reforms. Accordingly, its recommendations are meant to serve the broad community interest, not just the interests of particular groups. The Commission’s approach in this inquiry has been to identify those arrangements that should produce better workplace health and safety outcomes for workers, employers and the community.
In essence, the Commission’s proposals are to:
• streamline but strengthen regulation using fewer legislative rules, in less detail, which focus on the minimum level of protection to be provided;
• allow greater flexibility for employers and their employees to determine the ways to make their workplace safer;
• give greater emphasis to enforcement by relying more on deterring breaches of the law and less on persuading people to comply;
• provide stronger financial incentives to encourage employers to make their workplaces safer;
• overhaul Commonwealth-State arrangements to enable the governments to work together more effectively to improve health and safety at work for all Australians;
• provide greater contestability and transparency in research funding; and
• make the OHS agencies more accountable for their performance.
The proposals seek to recognise and accommodate the great diversity of safety problems, of appropriate management responses and of incentives for employers to ensure work is safe. Finally, they need to be flexible enough to be able to respond to changes in community expectations and as safety management possibilities in the workplace change.
In the Commission’s view, all of its proposals are practical solutions to the problems identified in this report. In virtually all cases, each one has been successfully applied in at least one or more jurisdictions.
Moreover the spirit, if not the letter, of each proposal was put forward in the draft report and discussed with participants in the draft report hearings. There was board support for the proposals, although there were concerns among some participants about certain proposals.
Each of the proposed reforms is canvassed in detail below.
A Better Regulatory Regime
The cornerstone of all OHS legislation is a codification of the common law duty of care. This requires the duty holder to do everything ‘reasonably practicable’ to protect the health and safety of others at the workplace. Jurisdictions place a duty of care on all employers, their employees and any others who influence the risks to health and safety at the workplace. The latter include contractors and those who design, manufacture, import, supply or install plant, equipment or materials used in the workplace.
The principal objective of regulation must be to reduce work-related injury and disease. However, superior outcomes cannot simply be mandated. Rather they are to be found in the application of comprehensive quality management principles by employers and their employees. OHS regulation has yet to fully reflect this and has thus failed to heed the central conclusion of the Robens Report (see Box 2).
The solution to achieving better OHS outcomes is to be found in a more faithful application of the principles for the regulation of health and safety enunciated in the Robens Report. These are:
• a single enabling statute to define clearly the rights and duties of all parties who influence the risks to health and safety at the workplace;
• subordinate legislation to mandate certain minimum health and safety standards, expressed in terms of outcomes as far as practicable; and
• a preference for voluntary standards and codes of practice to provide the practical means of implementing those legal requirements in the workplace.
Regulatory reform is needed to promote best practice. It should take the form of requiring those in the workplace to take greater responsibility for the management of the risks to health and safety, while enabling them to do so. This means changing the approach of much OHS legislation and the programs that support it. Regulation has to shift from imposing solutions towards enabling those at the workplace to make informed choices about best how to reduce the risks to life and limb at their workplace.
The Commission’s regulatory reforms are not aimed at deregulating health and safety at work. They are designed to make regulation work better — by getting rid of those rules that do not improve safety efficiently while improving those that do.
Duty of Care
The codification of the common law duty of care should ensure that it is expressed in an efficient form and that its coverage is comprehensive.
The Commission considers that it is more efficient if it is the duty holders’ responsibility to prove, to the satisfaction of courts if necessary, that the measures they took were reasonable and practicable. In New South Wales the adoption of ‘reasonably practicable’ as a defence has proved successful.
All those who influence the risks to health and safety at the workplace should have a duty of care for everyone at the workplace. The duties should be clearly elaborated to define the essential implications of the duty for each group — employers, employees, suppliers, and others — for the management of risks at the workplace.
For the employer, the elaboration should be confined to providing for the cooperative management of health and safety risks by an informed and trained workforce applying the principles of quality management.
Right to Know and Obligation to Tell
Employees should have a right to know in relation to information held by their employer about hazards and their control. Employers should have an equivalent right in respect of information held by those who supply them with plant and equipment or materials for use at work. These rights should be complemented by obligations to tell on the part of those who hold the relevant information.
Employee Participation and Consultation
Employee involvement is crucial to successful solutions to OHS problems. Specific provisions are required for employees to elect workplace representatives to ensure that their interests are efficiently catered for in this process.
The forms of participation and consultation should be left to the employees in each workplace. In some cases, a health and safety committee may be most appropriate, in others a health and safety representative. Often, both could operate. Trade unions have played a significant role in identifying OHS problems in workplaces and in facilitating better outcomes. Therefore, elected representatives should have the right, but not the obligation, to work with trade unions.
The nature of appropriate powers and responsibilities of committees and employee representatives are controversial. Representatives and committees with quite different powers appear to work successfully in different jurisdictions. That said, there should be uniform minimum rights for employee health and safety representatives in each jurisdiction.
Mandated safety requirements can be efficient ways to regulate health and safety at work. For example where there is uncertainty or where the community has to bear a significant part of the cost of injury or disease. To be efficient though, such requirements need to be enforceable and expressed in terms of broad outcomes. They should avoid prescribing how they are to be achieved or with what. A great many of the mandated requirements currently fail this test.
The present approach to mandating health and safety standards does not always produce efficient outcomes. This is often due to poor assessment and selection of the solution to be mandated. Mandated solutions must be assessed to ensure that they are likely to yield a net benefit to the community. Furthermore, such solutions should be designed and implemented to achieve their goal at least cost.
There should be greater emphasis on individual enterprises and industries developing their own voluntary standards and codes of practice. They are the best ways to promote best practice because they can accommodate well the circumstances of individual workplaces. To date, too much reliance has been placed upon government to lead the development of codes of practice.
There is a need for OHS legislation to encourage actively the development and application of enterprise safety management systems and industry-based codes of practice. They will enable employers and their employees to choose their own process and technical measures.
The reform of OHS legislation outlined in this report could take time to be completed in some jurisdictions. In the meantime, the OHS legislation should allow sponsors of enterprise management systems and codes of practice to adopt substitutes for mandated measures. This option should be available provided the sponsors can show that their choices offer equivalent or better protection. The flexibility provided by this option should promote more efficient outcomes. Moreover, the option should be retained wherever mandated requirements are not confined to those expressed in terms of outcomes.
Employers who choose neither to conform to an industry-based code of practice nor to develop an enterprise safety management system would still be subject to all the provisions of the OHS legislation. Such employers would be expected to be able to demonstrate that they had met their duty of care. Codes of practice developed by others in the same industry would help to define what would be regarded by the courts as ‘reasonably practicable’, whether or not the employer acknowledged those codes.
Implications of Proposals
Regulation that prescribes outcomes — rather than how they are to be achieved — is not only more efficient but also favoured by governments and employers. Other participants, including some trade unions, argued that there are limits to such regulation. The Labor Council of New South Wales supported the performance-based approach but expressed concern about the management of the change to that approach to regulation.
In the Commission’s view, the nature and degree of precision preferred by some is more appropriately provided in industry-based codes of practice. In a practical sense such codes would have the force of law. When the courts consider possible breaches of OHS legislation, they would turn to such codes as representing industry custom and practice.
Mandated safety requirements should generally prescribe outcomes. Nevertheless, there may still be a need for technical or process standards (such as with procedures for handling hazardous substances). Such needs would be best addressed by a combination of the employer’s duties in the OHS statute, and either industry-based codes of practice or enterprise safety management systems.
The proposed reforms address the problems associated with the present regulatory regimes. They will help to clarify the legal obligations of all who have a duty of care. Enterprises which need to develop their own methods for dealing with health and safety will be able to do so. They will cease to be constrained, as they currently are, by regulation.
The reforms will particularly benefit small to medium-sized enterprises (SMEs). They will no longer need to deal with a mass of legislation, but will be able to obtain guidance from a code of practice that is more relevant to their circumstances and more complete in dealing with their needs.
Due to the sheer volume, the Commission was unable to examine in depth every piece of legislation relating to health and safety at work. This is particularly true of the myriad of subordinate legislation. However, the direction that reform needs to take is quite clear. Each jurisdiction should review all legislation related to health and safety at work. The review should aim to ensure that all pre-Robens legislation is either repealed or, if worth retaining, incorporated into the subordinate legislation underpinning the principal OHS statutes. The review should also seek to streamline the mandated requirements in OHS legislation and express all of them in terms of outcomes.
Recommendations for Better Regulation
The Commission recommends that the principal OHS legislation in each jurisdiction place a duty of care on all those who influence the risks to health and safety associated with work. The duty should require the person responsible to do whatever is reasonably practicable to avert any risks under their influence. Such a duty should be placed upon:
• employers, including the self-employed;
• suppliers of plant, equipment and materials, including manufacturers, importers, installers and erectors;
• designers of plant, equipment and materials;
• owners and occupiers of workplaces;
• employees, including those employed by a contractor at other than their normal workplace; and
• visitors to a workplace.
Duties of care should be owed to all those who are exposed to any risks to their health and safety associated with work, including employees, contractors and their employees, visitors and those in the vicinity of the workplace.
The Commission recommends that the principal OHS legislation in each jurisdiction provide all those having a duty of care a specific defence against a prima facie breach of their duty of care. The defence should be that it was not reasonably practicable for them to have done more than they did to reduce risk.
The Commission recommends that the principal OHS legislation in each jurisdiction require all employers, as far as reasonably practicable, to:
• undertake ongoing identification, assessment and management of the risks to health and safety at their workplace, including keeping appropriate records and monitoring the health and safety of their employees;
• consult with their employees and their representatives in the identification, assessment and management of risks to health and safety at their workplace;
• inform employees and others in the workplace about the identification, assessment and management of risks to health and safety at their workplace;
• provide instruction and training for all those at the workplace to enable them to participate in the identification, assessment and management of risks to health and safety at their workplace; and,
• ensure access to appropriate treatment for injuries sustained at their workplace.
The Commission recommends that the principal OHS legislation in each jurisdiction require all employees, as far as reasonably practicable, to co-operate with their employer in the management of risks to health and safety at their workplace.
The Commission recommends that the principal OHS legislation in each jurisdiction require all suppliers of plant, equipment, materials and services, as far as reasonably practicable, to inform purchasers and users about the identification, assessment and management of risks to health and safety associated with their products.
The Commission recommends that the principal OHS legislation in each jurisdiction grant a right to:
• employees and others at or in the vicinity of the workplace to be informed, as far as reasonably practicable, about the identification, assessment and management of the risks to health and safety at their workplace; and
• users of plant, equipment and materials, as far as reasonably practicable, to be informed about the identification, assessment and management of the risks to health and safety associated with their products
The Commission recommends that the principal OHS legislation in each jurisdiction provide employees with a right to elect their health and safety representatives and any employee members of the health and safety committee at their workplace. Health and safety representatives and committee members should have a right to work in concert with trade unions in undertaking their roles. The minimum rights and responsibilities of health and safety representatives should be agreed amongst governments.
• users of plant, equipment and materials, as far as reasonably practicable, to be informed about the identification, assessment and management of the risks to health and safety associated with their products.
The Commission recommends that mandated safety requirements should, as far as possible:
• be economically warranted;
• prescribe measurable and enforceable outcomes; and
• avoid prescribing either the particular inputs into or processes to achieve the outcomes desired, unless it is more efficient to do so.
The principal OHS legislation should provide that particular requirements may be substitutable by alternative measures that can be demonstrated by the duty holder to provide equivalent protection to health and safety.
The Commission recommends that the legislation affecting occupational health and safety in each jurisdiction should be reviewed and amended with a view to:
• rationalising its structure by incorporating provisions under the principal OHS statute;
• removing redundant provisions;
• consolidating and rationalising industry-specific legislation under the principal OHS statute;
• harmonising OHS provisions with those for public health and safety, and environmental protection;
• ensuring mandated requirements are consistent with Recommendation 8; and
• expressing all provisions in plain English.
The Commission recommends that the principal OHS legislation in each jurisdiction explicitly recognise the use of safety management systems by individual enterprises to identify, assess and manage the risks to health and safety associated with the enterprise. The legislation should provide for the adoption of such systems to be granted prima facie evidence that care has been exercised. The criteria for enterprise safety systems to be granted evidentiary status should include that:
• there is adequate ongoing consultation between the employer and, as appropriate, their trade union representatives;
• all the risks to health and safety at the workplace in question are being adequately addressed; and
• relevant mandated requirements are being met or an equivalent level of protection to health and safety is achieved.
The Commission recommends that the principal OHS legislation in each jurisdiction provide for the use of advisory codes of practice to provide different ways for a group of enterprises in a particular industry to identify, assess and manage their risks to health and safety. The OHS agency should be able to co-sponsor an advisory code of practice providing that:
• there is adequate consultation between employers and, as appropriate, their trade union representatives in the formulation of the code;
• nominated hazards are adequately addressed; and
• relevant mandated requirements are being met or an equivalent level of protection to health and safety is achieved.
Governments should agree on a mechanism for the mutual recognition of advisory codes of practice.
Greater Deterrence in Enforcement
The role of enforcement is to improve OHS outcomes by ensuring compliance with the relevant legislation. Enforcement is necessary where other incentives are insufficient to ensure compliance.
A better approach to enforcement would be to move in the direction of greater deterrence. Operationally, this involves adopting measures to increase the probabilities of detecting and penalising non-compliance with the duty of care, and to raise the penalties for non-compliance. There would be a continuing role for persuasion albeit a lesser, but better focussed, one.
Greater deterrence can increase the effectiveness of other OHS programs by enhancing the incentives for workplaces to assume greater responsibility for their own health and safety. The assumption of greater responsibility means that the demand for education and training, information and advice, and research will increase, possibly dramatically.
The objective of enforcement should be to achieve compliance with the duty of care — the primary requirement in OHS legislation. By focussing on the duty of care, enforcement is directed at the objectives of the legislation, rather than at compliance as an end in itself. This enhances the credibility of an approach of greater deterrence in enforcement. Workplaces are more likely to accept — and even welcome — such an approach if it achieves a safer working environment.
In doing so, enforcement should encompass all who hold a duty of care. There is tendency for inspectorates to concentrate on employers and their employees. The other duty holders are often ignored because they are well separated from the discovery of a breach by time and geography.
OHS and the Criminal Justice System
Specialist panels of magistrates or judges should be set up in the court nominated to hear OHS cases. The intention is not to establish a new court. Specialist panels should enable more informed treatment of OHS cases. Panel members would become progressively better informed about health and safety and their practical management in the workplace.
Sentencing guidelines should be established in each jurisdiction to assist the courts when deciding penalties. They should be restricted to setting out the major factors — for example, the absence of a systematic approach to risk management — which are relevant when deciding the severity of penalties. By doing so they would help to ensure consistency in the sentencing process within and across jurisdictions. The intention is not to provide a table of penalties for a range of situations.
Penalties and Sanctions
The maximum penalties should provide the courts with the ability to impose a credible deterrent, after allowing for the probabilities of detection and conviction. The Commission proposes that governments consider maximum fines of at least $100 000 for individuals and $500 000 for corporations.
In the longer run, the appropriate levels are likely to be much higher. These would be best determined after an evaluation of sufficient experience with the Commission’s enforcement and regulatory reforms.
Inspectorates should make greater use of on-the-spot fines. Overseas evidence suggests that they can provide timely deterrence while minimising legal and administrative costs. On-the-spot fines should only be used for offences with a lower risk of harm or those that cause less harm. They must be complemented by an effective appeal system, thorough inspector training and a transparent enforcement policy setting out how they would be used.
Provision for private actions under OHS legislation would allow employees and other interested parties to prosecute breaches in their own right. This would facilitate the useful role played by trade unions in highlighting and maintaining minimum health and safety standards in workplaces.
Jurisdictions should consider a wider range of sanctions to make up for any limitations with monetary penalties. Possible penalties not currently in use are equity fines, publicity orders, internal discipline orders, preventive orders, corporate probation and community service orders.
Recommendations for More Effective Enforcement
The Commission recommends that inspectorates in each jurisdiction give a higher priority to deterrence in the enforcement of their OHS legislation.
The Commission recommends that enforcement in each jurisdiction focus on compliance with the duty of care.
The Commission recommends that specialist judges and/or magistrates be appointed within existing courts nominated to hear alleged breaches of OHS legislation.
The Commission recommends that governments develop sentencing guidelines for use by courts in determining appropriate penalties for breaches of OHS legislation. The guidelines should set out mitigating circumstances to which the courts should have regard in determining penalties.
The Commission recommends that all jurisdictions consider an immediate increase in the maximum penalties in their OHS legislation to the levels in Commonwealth Seafarer OHS legislation. Governments should also consider further increases in their maximum penalties over time.
The Commission recommends a system of on-the-spot fines for breaches of OHS legislation in all jurisdictions.
The Commission recommends that the right to bring private actions be provided in all OHS legislation.
The Commission recommends that governments consider the implementation of a wider range of corporate sanctions in each jurisdiction.
Administration of Enforcement
Changes to the administration of enforcement must accompany more effective enforcement measures. A shift to greater deterrence requires that inspectorate resources be used to create credible deterrence without undermining voluntary compliance.
All jurisdictions should move to greater transparency in enforcement by publishing their enforcement policy in some detail. Transparency would contribute to a community debate on the issues, inform the public about how the government and the inspectorate intend to approach enforcement, and provide a basis for them to account for the outcomes. It would help to confirm the fairness of enforcement and the independence of the inspectorate.
Statutory inspections, and licensing and certification activities — such as registration of boilers and pressure vessels and the licensing of fork-lift drivers — place a heavy load on inspectorate resources. The performance of these tasks by others — other government agencies and the private sector — would free resources for pro-active enforcement.
Targeting of compliance inspections is usually based on data from workers’ compensation claims. This is not very effective. All workplaces should, of course, be exposed to some risk of inspection and prosecution. Nevertheless, inspection would be better concentrated where enforcement can have the greatest impact on the risks to health and safety. This should be determined by an evaluation of the net gains to the community from increased compliance by different types of workplaces.
The application of sanctions by the inspectorate should give workplaces the strongest incentive to reduce the risks of injury and disease. To do so, the expected penalty to the duty holder of a breach must exceed the cost of immediate compliance to him or her. Prosecutions and on-the-spot fines deter all offenders before they are detected. Improvement notices only deter the individuals to whom they are directed, and then only when the breach is detected. For sanctions to provide credible deterrence, there should be an expectation that breaches will be prosecuted and the community informed of the outcome.
Specialised prosecution units within inspectorates — comprising inspectors, prosecutors and program administrators — should increase their ability to mount successful prosecutions. This has proved to be the case in New South Wales.
Greater deterrence in enforcement and a strong focus on the duty of care will place greater demands on the inspectorate. Inspectors will need to be properly trained, so that they can exercise their powers effectively and avoid costly, unsuccessful prosecutions. Inspectorates will also need to establish clear operational policies and procedures to guide inspectors.
Recommendations for Administration of Enforcement
The Commission recommends that the OHS agencies publicise their enforcement policy and practice to make their approach to enforcement explicit.
The Commission recommends that governments consider having statutory inspections, licensing and certification activities provided externally to the inspectorate on a fee-for-service basis.
The Commission recommends that compliance inspections be prioritised by targeting areas of non-compliance where the net benefit in terms of injury and disease prevention is expected to be greatest. There should be regular evaluation of the effectiveness of the targeting strategy.
The Commission recommends that where general deterrence is required to provide an incentive to invest in safety, there should be an expectation that offences will be penalised, in addition to receiving compliance notices.
The Commission recommends the formation of prosecution units within OHS inspectorates.
The Commission recommends that details of occupational health and safety convictions, including a description of the offence and the penalties imposed, be publicised by the responsible agency.
The Commission recommends that inspectorates in all jurisdictions:
• assess the qualifications and skills required to enforce the duty of care under a more deterrence-oriented enforcement regime;
• review the current qualification and skill base of inspectors; and
• implement measures to redress deficiencies where necessary.
Consistency in Health and Safety Protection
The Commission considers that greater consistency between the jurisdictions in OHS regulation should be achieved by a process of co-operative federalism.
Although there can be difficulties in achieving such agreement in a Federation, it is desirable to avoid a Commonwealth–State contest. Such a contest would have debilitating consequences for effective OHS measures at both the national and State levels. Co-operation is preferred as the States have responsibility for OHS and possess the administrative infrastructure and expertise.
Co-operative federalism has worked in other areas to remove regulatory inconsistency between the jurisdictions — for example, the adoption of national standards by the National Food Authority.
The Commission proposes a new approach to national consistency in OHS protection based upon:
• template legislation for the core elements of OHS legislation;
• national standards that are confined to exposure limits and other appropriately mandated requirements for OHS legislation;
• provision for industry-based codes of practice and enterprise safety management systems to be recognised in all jurisdictions; and
• consistency in enforcement across jurisdictions.
The core elements in the template legislation should include:
• the duty of care of employers, employees and third parties;
• the specific duties which elaborate each duty of care;
• any defences given to holders of a duty of care;
• provisions for employee workplace representation; and
• provisions to recognise codes of practice and safety management systems.
This approach would achieve the benefits of greater consistency at least cost to the community.
Employers operating in multiple jurisdictions would benefit from the reduced compliance costs of a single regime. Employees would have the advantage of more equitable protection. Use of the template would allow these benefits to be quickly realised and maintained as the legislation is subsequently amended.
On the other hand, employers who operate in the one jurisdiction should not be disadvantaged. Uniform rights and obligations in the template are unlikely to discourage the regulatory innovation by the jurisdictions which can reduce compliance costs and promote better health and safety outcomes. Most of the scope to do so is likely to be found in the specific requirements in subordinate legislation rather than the general provisions in the principal legislation.
Consistent regulatory outcomes also require consistency in enforcement. Inconsistent approaches to enforcement detract from competitive neutrality among employers. It is also inequitable that some face higher and more frequently imposed penalties than others for a similar offence.
The reforms proposed for the principal OHS legislation should apply to any industry-specific OHS legislation. The preferred approach is to repeal industry specific legislation and extend the principal OHS regime to all industries. Where strong demands for industry-specific arrangements exist, they could be accommodated in subordinate legislation and in codes of practice.
The ratification of Convention No. 155 of the International Labour Organisation (ILO) would be a valuable demonstration of the commitment by the governments to the reform of their OHS regulation. Most States and Territories have already signified their agreement to ratification — those that have not are expecting to do so in due course. Ratification does not have to, and should not, lead to the Commonwealth legislating unilaterally. The Commission strongly favours co-operative implementation of ILO Convention No. 155.
Commonwealth industrial relations legislation can lead to inconsistencies in the protection of health and safety. It does so by allowing enterprise agreements and awards to override State OHS legislation inadvertently or deliberately. Enterprise agreements and awards are not always the most appropriate vehicles for setting minimum OHS requirements. Furthermore, the creation of standards in awards that are not amenable to effective enforcement poses significant problems. Codes of practice and enterprise safety management systems are more appropriate for such issues.
In its ratification of an award or an agreement dealing with OHS, the Australian Industrial Relations Commission should therefore have regard to the possible undesirable, and sometimes unintended, consequences of such awards and agreements.
Recommendations for Greater Regulatory Consistency
The Commission recommends the use of template legislation to achieve a nationally consistent regime for occupational health and safety. The template should be incorporated in the principal OHS legislation in each jurisdiction and should cover:
• the general duty of care of employers, employees, suppliers and others;
• the specific duties of employers, employees, suppliers and others;
• any specific defences given to those having a duty of care;
• the ‘right to know’ of purchasers and users of plant, equipment and materials;
• provision for the recognition of enterprise specific safety management systems and codes of practice;
• the minimum rights and responsibilities of employee workplace health and safety representatives; and
• provision for nationally agreed mandated safety requirements.
The Commission recommends that governments adopt a nationally consistent approach to OHS enforcement.
The Commission recommends that the Commonwealth government ratify International Labour Organisation Convention No. 155, but not proceed to legislate unilaterally.
The Commission recommends that the Commonwealth government amend the Industrial Relations Act 1988 so that State OHS legislation has priority under agreements and awards except where the Australian Industrial Relations Commission determines otherwise, having regard for the protection of employees and enforcement.
Financial Incentives for Prevention
Governments should make greater use of the scope offered by workers’ compensation to prevent work-related injury and disease. The link between the level of workers’ compensation premiums and workplace health and safety can be a strong one. US studies have revealed that ‘experience-rated’ premiums induce businesses to invest in health and safety to reduce their compensable injuries and therefore the size of the premium.
The Commission completed a comprehensive review of workers’ compensation in its 1994 report, Workers’ Compensation in Australia. Accordingly it has confined itself to selected issues raised by participants in this inquiry.
Workers’ compensation agencies provide little encouragement for small to medium-sized employers to reduce the health and safety risks at their workplaces. ‘Experience-rating’ is not statistically valid in these cases. Nevertheless, there may be scope to reward prevention in other ways.
The workers’ compensation agencies should make insured employers more aware of the link between their claims costs and their premiums. They should also publish plain English guides explaining how premiums are determined.
The method of public funding of agencies and programs can nullify the prevention incentive from the experience-rating of workers’ compensation premiums. This is because some funding arrangements fully reimburse workers’ compensation premiums, regardless of how well or badly the agency or program beneficiary performs. They are not penalised for poor performance and consequently have little reason to invest in prevention.
Governments should develop purchasing guidelines for use by their agencies to ensure that tenderers have sound risk management systems and practices. This practice is common in the private sector and has recently been adopted by the New South Wales government for major construction projects.
Greater disclosure by companies of their health and safety performance in their annual reports would raise awareness and help to encourage a more pro-active approach by business generally. Greater disclosure would require directors to acknowledge how their company performs against its policy goals and raise shareholder and public awareness of these issues.
Recommendations for Greater Use of Financial Incentives
The Commission recommends that governments encourage rebates on workers’ compensation premiums for those employers whose premiums are not experience-rated where they follow codes of practice or apply enterprise safety management systems.
The Commission recommends that workers’ compensation agencies ensure that insured employers are regularly informed of the link between their premiums and their claims experience.
The Commission recommends that government expenditure programs that include funding for workers’ compensation premiums, do so on the basis of the average premium for the industry in question, rather than the actual premium charged to the individual recipient of the funding. This principle should also apply to the funding arrangements for all government agencies.
The Commission recommends that government agencies, in awarding major contracts, consider requiring contractors to warrant that their safety management would fully comply with relevant OHS legislation. This may be achieved by requiring the relevant information to be submitted during pre-qualification of tenderers or in tender documentation.
The Commission recommends that the Institute of Company Directors be invited to draft guidelines on the disclosure by companies of their health and safety records in their annual reports.
National decisions should be made by those who have the authority to do so and who are politically accountable for implementing them. This implies that they should be made by the responsible Commonwealth and State Ministers.
The current structure of NOHSC involves an inherent dilemma. Each of its major roles implies a completely different kind of institution for that role to be performed effectively and efficiently. As shown previously, the present structure means that NOHSC is neither effective nor efficient as both a board of management and a consultative forum.
The Commission’s solution to this dilemma is to create two institutions — each specifically designed for only one of the roles — and to structure each according to the needs of efficient execution of its role. The proposed arrangements are illustrated in Figure 2.
A Ministerial Council
A Council of the responsible Commonwealth and State Ministers would increase the effectiveness and efficiency of the development and implementation processes. The Council should determine a genuinely national approach to workplace health and safety. Furthermore, it is desirable that the Council include the Ministers responsible for workers’ compensation and rehabilitation. This would allow the Council to co-ordinate developments of OHS, workers’ compensation and rehabilitation policy, where appropriate.
Establishment of a Ministerial Council would share responsibility for developing and implementing national OHS policy between all governments. Ownership by all is vital for worthwhile national programs.
The Ministerial Council’s role should be to oversee policy development in areas where inter-governmental co-operation would reduce duplication and facilitate better workplace outcomes nationally. It should provide a valuable forum for the development of OHS policy in a range of other areas:
• approving standards and determining priorities for proposed ones;
• overseeing the development of national programs — for example, research, statistics and awareness;
• determining performance benchmarks for Commonwealth, State and Territory programs;
• ensuring that programs are regularly evaluated; and
• ensuring national consistency in enforcement.
The Council’s first major task should be to formulate the details of the template legislation agreed by the Council of Australian Governments (COAG).
The Ministerial Council may need to be complemented by administrative support to assist it in the development of its work priorities and timetables. This support could be provided by the heads of the relevant Commonwealth and State agencies.
A Revamped NOHSC
The Ministerial Council should appoint a new NOHSC of no more than five members. Members should be selected on the basis of their expertise and skills. These should include practical experience of industry, the management of health and safety risks in the workplace, the development of government policy and programs, or the management of consultative processes. Members should cover the range of perspectives in the workplace.
The role of the revamped NOHSC should be to develop recommendations on legislation and prevention programs for the Ministerial Council to consider. Its activities should be in accordance with a corporate plan and work program agreed by the Ministerial Council.
The proposed arrangements would separate management of policy development from consultation with those with a stake in that development. This separation would provide for increased effectiveness and accountability for each function. The intention is not to diminish consultation, but to strengthen it through greater involvement of the various State advisory bodies. If necessary, this could be formalised by a requirement that NOHSC consult with these bodies.
There would be an advantage in all governments sharing the costs of the restructured NOHSC. It would enhance ownership of the national body and its activities by all governments. A typical arrangement for national bodies reporting to Ministerial Councils is for the Commonwealth to meet 50 per cent of the costs, with the States and Territories sharing the remainder on a per capita basis.
A New Consultative Forum
After its proposed restructuring, NOHSC could no longer perform the role of a consultative forum to advise the Commonwealth Minister for Industrial Relations. State members of the Ministerial Council would continue to have the benefit of their State’s consultative body.
To fill this gap, a new consultative forum should be established to advise the Commonwealth Minister on matters to be considered by NOHSC and the Ministerial Council. The new forum should include representatives of the Commonwealth OHS agencies, the ACTU and national employer bodies, such as the ACCI and the National Farmers’ Federation. It should also include representatives of Commonwealth agencies with a major interest in policy in areas related to OHS.
NOHSC should be responsible for managing the development of all national policies and programs, including national standards. Its work in standards development would be facilitated by retaining the Standards Development Standing Committee. The Standing Committee should advise NOHSC on priorities for standards development, and on the content of proposed standards.
The Standards Development Standing Committee should comprise equal numbers of nominated by the Ministerial Council, the ACTU and the peak employer organisations. People who are acknowledged for their expertise in the area under review but not directly affiliated to any of the tripartite partners should be able to be co-opted onto the Standing Committee.
NOHSC should draw administrative support from a restructured Worksafe Australia. However, NOHSC should have the option to contract out development work to State OHS agencies and other appropriate organisations. The National Commission should appoint the CEO of Worksafe who should be responsible to NOHSC. The Ministerial Council should approve the corporate and operational plans of NOHSC and Worksafe.
Possible Use of Incorporation
The Commission suggests that governments consider the possibility of incorporating NOHSC and Worksafe under the Corporations Act.Incorporation could provide a legal structure which was consistent with the philosophy underlying the institutional reforms recommended by the Commission.
With incorporation, the agency would be a company to develop and manage OHS programs on behalf of its shareholders — the Commonwealth and state governments. It would operate under a legal regime which would encourage and facilitate the members of NOHSC acting as the board of directors of the company. The day-to-day operation of the company would be the responsibility of the CEO and the staff of Worksafe. The Ministerial Council could be constituted as a meeting of the shareholders, called from time to time to approve the key decisions on the recommendation of the directors.
Recommendations for Institutional Arrangements
The Commission recommends that the Council of Australian Governments establish a Ministerial Council comprised of the Commonwealth, State and Territory ministers responsible for occupational health and safety, workers’ compensation and rehabilitation in each jurisdiction. The core responsibilities of the Ministerial Council should be to:
• agree on OHS legislation;
• develop nationally mandated safety requirements;
• develop nationally consistent enforcement policies and practices; and
• benchmark the performance of OHS programs in each jurisdiction.
The Commission recommends that the National Occupational Health and Safety Commission be restructured. The National Commission should consist of no more than five persons. It should advise the Ministerial Council, undertake work directed by it, consult with governments and their consultative bodies, employer and employee representatives as necessary. Commission members should be selected on the basis of their expertise and skills. Their expertise and skills should include practical experience of industry, the management of health and safety risks in the workplace, the development of government policy and programs or the management of consultative processes.
The Commission recommends that Commonwealth, State and Territory Governments contribute to funding the Ministerial Council, the new National Occupational Health and Safety Commission and its programs.
The Commission recommends that the Commonwealth government establish an occupational health and safety advisory council with representatives from the peak employer organisations, the Australian Council of Trade Unions, the relevant Commonwealth agencies (including Comcare and the Department of Human Services and Health), and experts in occupational health and safety. The council should advise the Commonwealth Minister on matters before the Ministerial Council.
The Commission recommends that the Standards Development Standing Committee be retained to advise National Occupational Health and Safety Commission on the development of standards. The Standing Committee should comprise equal numbers of nominees of the Ministerial Council, the ACTU and the peak employer organisations. The Standing Committee should be able to co-opt OHS experts. Any dispute between the Standing Committee and the restructured National Occupational Health and Safety Commission should be advised to the Council of Ministers.
Two principles should determine how the national research arrangements are reformed.
First, applied research should be specified by its users — those in workplaces and government — to ensure that it meets their needs. Those responsible for undertaking applied research should not be the sole source of advice on the allocation of research funds. NOHSC does not have to conduct research — applied research to support national programs can and should be contracted out, possibly through State OHS agencies.
Second, research funding should be made contestable as far as practicable. In principle, funding should be open to all who could do the job, unless the costs of allocating funds this way outweigh its benefits. Contestability has numerous advantages — it promotes efficiency in the delivery of research, transparency in funding decisions and flexibility in the allocation of scarce research funds.
To provide for contestability, responsibility for funding research should be separated from the conduct of research. This is necessary to remove any conflict of interest in the decisions on the allocation of research funds.
Separation of National Institute from NOHSC
To ensure that the arrangements for the conduct and funding of research can meet the above requirements, the National Institute for Occupational Health and Safety should be separated from NOHSC. It should be set up as an autonomous research agency to undertake research on a fee-for-service basis.
Centres of Excellence
Research centres should be invited to compete for block funding for a small number of centres of excellence in OHS research. Selection of the centres should be based on predetermined selection criteria and should not be confined to higher education institutions. The criteria should not discourage bids from new centres.
The National Institute should initially be best retained as a centre of excellence. In any event, it should have to compete with other researchers for all of its funding.
Research programs in other areas are delivered through research centres. The Australian Research Council (ARC) funds key centres in higher education institutions and the National Health and Medical Research Council (NHMRC) offers program and block grants to a range of medical research institutions.
Funding of National Research
Commonwealth, State and Territory Governments have to decide whether they want a strong national program of OHS research and whether they are prepared to contribute towards its cost.
The choice of the most appropriate body to allocate any national funding for research depends upon the decisions reached on these two issues. Either the ARC or the NHMRC would be capable of performing this function — they would have the advantage of applying an approach to the selection of OHS research consistent with what is done in other areas of research.
Under the proposed program for centres of excellence, research would tend to be carried out wherever it could be most efficiently conducted. As a consequence, a range of research institutions would tend to emerge. State governments are more likely to contribute to a national approach to OHS research if the research effort is relevant to their jurisdictions.
Role of NOHSC
Until these issues on the funding of national research are resolved, the reorganised NOHSC should decide the allocation of block and project funding for OHS research. The research priorities should be determined by the Ministerial Council on advice from the NOHSC. The priorities should be set out in a published research plan. NOHSC should select the ‘centres of excellence’ and decide the external grants, consistent with the research plan.
The Research Standing Committee should be retained to advise NOHSC — and the Ministerial Council — on research priorities and proposals for funding. Involvement of the industrial parties on such a Standing Committee would help to ensure that funding decisions are relevant to the needs of the workplace. This should lead to greater adoption of research results by industry.
The new NOHSC should also be required to consult with State OHS agencies and State advisory bodies on research priorities and candidates for centres of excellence.
The issue of measuring national performance in health and safety at work requires urgent attention by the Ministerial Council. Relevant, accurate and timely measures are essential for informed decisions on national OHS priorities and for the design of efficient prevention programs.
The National Data Set (NDS) for Compensation-based Statistics does not provide the information required. The NDS is out-of-date, inconsistent and substantially incomplete — data from workers’ compensation claims cannot give a reliable indication of work-related injury and disease.
Soundly based OHS statistics are a prerequisite for sound measures of the performance of OHS programs. There is insufficient information on the causes, levels and costs of work-related injury and disease to assess the effectiveness of prevention strategies and programs.
Recommendations on Research
The Commission recommends that the National Institute of Occupational Health and Safety be established as an autonomous research organisation separate from the National Occupational Health and Safety Commission. The National Institute should be required to compete for funding and be allowed to undertake research on a fee-for-service basis.
The Commission recommends that block funding be provided to a small number of centres of excellence in occupational health and safety research.
The Commission recommends that the Ministerial Council decide the priorities for public funding of national occupational health and safety research on the advice of NOHSC. NOHSC should be responsible for allocating the funds for the centres of excellence and for research projects.
The Research Standing Committee should be retained to advise NOHSC on research priorities and funding. The Standing Committee should continue to be tripartite in character but have fewer members. Any dispute between the Standing Committee and NOHSC should be advised to the Ministerial Council.
The Commission recommends that the proposed Ministerial Council, as a matter of priority, agree on a strategy to improve knowledge of the state of occupational health and safety in Australia and to establish key measures of performance for OHS programs.
The Executive Officer for the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) reports to the responsible Commonwealth Minister through the CEO of Worksafe.
As NICNAS is a purely Commonwealth program, it would be inappropriate for the Scheme to be responsible to the proposed Ministerial Council. Therefore the administration of NICNAS should be separated from Worksafe.
NICNAS would be more effective if priority were to be given to assessments of those chemicals that pose the greatest risks. The Scheme would also be enhanced by more consistent assessment procedures. Selection should be based on estimates of the risk and the extent of the possible harm. Rather than automatically assessing all chemicals introduced to Australia since the Scheme’s inception, a screening process should be used to determine when a full assessment is needed.
Consideration should be given to combining the independent scientific assessments of hazards which are conducted by various Commonwealth agencies. This should be done in such a way as to leave enforcement and administration of the relevant policy, which draws on these assessments, with the agencies in question.
Recommendation for Chemical Assessment
The Commission recommends that the National Industrial Chemicals Notification and Assessment Scheme be separated from Worksafe. The Commission recommends that the Commonwealth government consider creating a single agency to provide scientific advice on hazardous materials.
Improving the OHS Agencies
Accountability of OHS agencies to government and their stakeholders is generally poor, although some perform better than others. There is limited assessment of the benefits and costs of individual programs. The reporting of performance measures in agency annual reports is not very systematic.
As closer ties are formed between the workers’ compensation and OHS agencies in most jurisdictions, the funding of occupational health and safety from insurance premiums has risen proportionately.
There is a case for a mix of funding sources for OHS programs. Workers’ compensation funds are appropriate when the beneficiaries of the OHS program are those who pay the premiums. Awareness and research programs can be targeted in this way. Even so, OHS agencies should regularly evaluate such funding to ensure that its benefits outweigh any costs. Consolidated revenue is to be preferred where the program has a wider impact than workers’ compensation premiums — enforcement is such an activity.
Integration of OHS and Workers’ Compensation
The Commission is unable to comment conclusively on whether integration of the agencies is the best arrangement in all circumstances. There are some potential advantages for the administration of OHS programs — for example, sharing information and access to funding. On the other hand, it would be undesirable if workers’ compensation operations diffused the strong focus on prevention that should be part and parcel of OHS.
What is clear is the need to integrate policy development on occupational health and safety with that for workers’ compensation. This would assist the prevention of injury and disease at work. For example, integration allows full realisation of the potential of workers’ compensation to prevent such outcomes.
There would be benefits from integrating mining inspectorates with the general OHS inspectorates. This would overcome concerns about the possibility of conflicting interests where an inspectorate is located in the department responsible for the development of the industry under inspection. With one larger inspectorate there would be a greater pool of skills and experience to be shared. The opportunities for inspectors to work in a variety of industries would also broaden their experience. However, mining inspection should be conducted by a specialised, discrete unit within the OHS inspectorate.
Integration should not mean a diminution or downgrading of inspection activities in the mining sector. Indeed, there would be administrative savings which could be used to increase the quantity and quality of the inspection.
Recommendations for Improving the OHS Agencies
The Commission recommends that OHS agencies be accountable for their performance. This means that their programs should:
• have clearly defined and measurable objectives;
• be adequately evaluated before implementation;
• have key performance measures; and
• be regularly monitored for their effectiveness and the results published.
The Commission recommends that the funding of OHS programs be from a mix of sources, including fee-for-service. Programs with broad community benefits should be largely funded by the taxpayer. Those that directly benefit employers with workers’ compensation insurance should be largely funded by workers’ compensation premiums.
The Commission recommends that governments integrate their occupational health and safety and workers’ compensation policy making.
The Commission recommends that State and Territory Governments integrate mining inspectorates with the OHS inspectorate. However, a discrete and specialised mining inspection unit should be maintained within the OHS inspectorate.
Health, Safety and the Environment
There is scope to increase the consistency of policies dealing with OHS, public health and safety, and the environment. To this end, the new Ministerial Council could be responsible for facilitating the integration of OHS policy with Commonwealth and State policies in related areas.
More can be done to reduce the scope for administrative overlap, by clarifying and streamlining agency responsibilities. If it is not possible to combine relevant functions in a single agency, a lead agency should be appointed to supervise co-ordination.
Government agencies might also examine the scope to combine service functions. One possibility is joint compliance inspection of workplaces for OHS, public health and safety, and environmental regulation. Another is to combine some research and advisory functions.
The need for co-ordination would be reduced if legislation were rationalised to simplify administration and compliance. This would be facilitated by, wherever possible, the adoption of common regulatory principles, the harmonisation of legal rules and the consolidation of legislation dealing with OHS, public health and safety, and the environment.
In this regard, governments might consider extending the principle of the ‘duty of care’ to the management of the risks to public health and safety, and to the environment. The approach recommended for OHS in this report appears to have some merit in the regulation of these areas. The essence of this approach would involve:
• defining a general duty of care for all who influence the risks to public health and safety or the environment;
• elaborating the general duty with specific duties appropriate to the these areas, including rights to know, obligations to tell and duties to identify, assess and control risks;
• providing for certain mandated requirements as measurable and enforceable performance outcomes, unless it is more efficient to prescribe inputs or processes; and
• providing for risk management at the enterprise level or industry-based codes of practice, based upon the principles underlying the Australian Standards for quality management (the AS 3900 series).
Information, Training and Education
Awareness about OHS — both at the workplace and in the community — is poor. The evidence indicates that many employers and employees are unaware of the causes of workplace injury and disease, or of the potential benefits of reducing them. Often employers are not even aware of their basic legal responsibilities, particularly small to medium-size employers. This is despite the considerable efforts by a number of organisations — notably OHS agencies and the trade unions — to raise awareness of these issues.
Governments can facilitate the achievement of better OHS outcomes by dispelling ignorance about OHS and the control of risks. This could involve information, training and education. Such assistance is most appropriate where employers and employees generally benefit from the particular program.
Currently the effectiveness of information programs is assessed using fairly simple methods, such as audience recall and audience response surveys. These techniques are important components of program design and evaluation.
In some jurisdictions OHS agencies provide information and advice to workplaces that are highly specific to the circumstances of the particular workplace. For example, the Victorian Occupational Health and Safety Authority provides trained officers whose specific role is to provide information to individual workplaces.
Employers should be willing to pay for such advice. However, there may be a justification for governments to subsidise some services where employers are not generally aware of their legal obligations or the benefits of workplace-specific advice. This is more likely in the case of small to medium-sized employers.
The Commission’s preference is for employers to have a duty to train their employees, as far as ‘reasonably practicable’. This duty would not compel each employee to attend a training course. Employers would simply have to ensure that their employees had the required competences. For some, the amount of training needed may be quite modest.
Most jurisdictions require employers to send employee representatives or members of health and safety committees to an approved training course on full pay. Such regulation is inefficient — it concentrates on processes not outcomes. It is at odds with the reforms to the vocational education and training system to focus on attainment of specified competences. Moreover, since OHS training is not part of that system, it remains marginalised even though a lot of effort is put into it, particularly by the trade unions.
The specific OHS competences for employee representatives and committee members should be set out in national industry competency standards, along with the health and safety competences for others in the workforce.
In line with the changes to the vocational education and training system, State recognition authorities should have responsibility for accrediting OHS training programs and providers.
NOHSC should continue to provide training grants to the ACTU and ACCI for the time being, albeit in a modified form. These grants make the best use of existing infrastructure and expertise within the two organisations whilst minimising administration costs. However, the training should ultimately be conducted by the ACCI and ACTU on a bipartite basis. This will encourage joint training of managers and employee representatives where this is appropriate.
There is little need for governments to be directly involved in the delivery of courses for OHS professionals. Although seed funding may have been justified in the past to develop OHS courses, the recent rapid growth in the number of courses suggests that funding is no longer necessary.
Recommendations for Information, Training and Education
The Commission recommends that agencies evaluate the effectiveness of their existing awareness programs in terms of their effects on outcomes before determining the nature and scale of future funding of such programs.
The Commission recommends that OHS agencies encourage the provision of workplace-specific advice on occupational health and safety by third parties. Governments should inform employers about the potential role such advice can play and consider facilitating the establishment of a system of voluntary accreditation within the private sector.
The Commission recommends that national Competency Standards Bodies consider including OHS competences in all national industry competency standards.
The Commission recommends that, for the time being, the National Occupational Health and Safety Commission continues to provide grants to the Australian Council of Trade Unions and the Australian Chamber of Commerce and Industry for workplace training in occupational health and safety. However, these grants should be ultimately used to facilitate bipartite training administered jointly by these two organisations.
BENEFITS OF REFORM
The Commission expects that the proposed reforms will produce significant improvement to workplace health and safety in Australia. Many businesses have been able to make dramatic improvements in their records in preventing injury and disease. This is being achieved chiefly by ensuring that OHS is a key element of a quality management approach to running an organisation.
The Commission’s proposed reforms should have most impact on fatalities and permanent disability — the very outcomes that cause the greatest economic and social disadvantage. These relatively infrequent, but economically damaging, outcomes are rather poorly dealt with by existing policy measures. They are more appropriately addressed by measures which are strongly focussed on the duty of care and which do more to encourage the adoption of quality management of health and safety risks by those in the workplace.
The average saving from preventing a workplace injury or disease is about $27 000 a year (expressed in 1993-94 dollars). This estimate, however, needs to be adjusted for the cost of compliance and implementation and the benefits of reducing pain and suffering by injured workers and their families.
The expected improvements to health and safety at work will reduce social disadvantage and isolation. Many permanently incapacitated workers are forced to subsist on incomes at or below the poverty line. Prior to their injury, most enjoyed stable and remunerative employment. Diseases such as hearing loss, and injuries that reduce mobility such as back problems, contribute to social isolation, especially of the elderly.
Many Australians have to change jobs or permanently cut back their work hours because of workplace injury and disease. They lose income and often must abandon a career after many years of vocational training. Workers who retain their job after a workplace injury or disease often continue to suffer pain and have to cut down their leisure activities.
In the case of migrants, especially those from non-English-speaking backgrounds, injury and disease compounds problems they already experience in the community. Such workers have a significantly higher risk of workplace fatality.
Employers will benefit from the increased flexibility and reduced compliance costs inherent in the Commission’s proposals. There will be fewer, simpler rules focussed on key health and safety objectives. They will be cast in a way that allows workplaces, individually or collectively, to work out the best way to meet their legal objectives.
The benefits are not confined to the larger employers. Small to medium-sized enterprises (SMEs) should gain too. They will be able to develop their own codes of practice. Such codes will meet the needs of SMEs for more, and more practical, advice on meeting their legal obligations. Where it is justified, financial assistance should be provided by government to assist groups of SMEs in developing their codes of practice. Greater transparency in enforcement will be of particular benefit to SMEs given their limited exposure to the inspectorate and their need for more certainty in how enforcement will be conducted. The increased use of workers’ compensation rebates to encourage better prevention will largely benefit SMEs, as experience-rated insurance premiums are not feasible for them.
Unions would be relieved of some of the burden of bringing about improvements to work health and safety. Furthermore, they would be able to play a more effective role in the development and application of workplace solutions to health and safety problems. With their involvement, industry-based codes of practice would establish safety practice benchmarks that are widely recognised and accepted. Beefed-up enforcement would reduce the number of recalcitrant employers with unsafe workplaces.
Better health and safety outcomes are generally linked to better public health and environmental outcomes. Incidents involving hazardous substances can harm workers, the adjacent community and the environment. To the extent that this is the case, improvements in OHS should be associated with improvements in the environment and in public health and safety.
IMPLEMENTATION OF REFORM
The way reform is implemented can have a profound bearing on the likelihood of its success. It affects the capacity of the regulatory regimes and the responsible institutions to accommodate the continual change which is necessary to realise the full benefits of the reforms.
The critical implementation tasks for the Commonwealth, State and Territory Governments are:
• to agree on the template legislation for OHS;
• to monitor progress on reforming OHS legislation in each jurisdiction;
• to establish the Ministerial Council; and
• to reorganise the NOHSC.
Achievement of these outcomes would represent a renewal of the commitment of all governments to improve health and safety at work in Australia. It would also represent a major achievement in advancing microeconomic reform and improving social justice.
Agreement on each of these major reform initiatives would most appropriately be reached in the COAG. This would reflect the national significance of these initiatives and would demonstrate the strength of the commitment of all governments to achieve better health and safety outcomes for every Australian workplace.
Endorsement by Heads of Government is required if the proposed reforms are to be implemented in a fashion which is both timely and commensurate with the importance of the reforms. In particular, it is critical that governments agree that industry-based codes of practice and enterprise safety management systems developed in any one jurisdiction can be recognised in all jurisdictions.
The economic and social cost to the nation of work-related injury and disease are such that the policy changes should be progressed as quickly as possible — without compromising the integrity of the proposed regulatory, administrative and institutional reforms.
Ensuring that workers — and anyone else affected by what happens in workplaces — are safe requires measured assessment of risks and penalties. Some jobs can be inherently more dangerous than others and the rigour associated with what can be done — through safety equipment, training, supervision, mechanical aids and equipment — need the closest attention. A safety culture requires rewards and incentives, including in insurance premiums and other market signals (e.g., lower for a good safety record) and penalties. Controversially, we (Commissioner Jeffrey Rae and I as the Associate Commissioner) recommended crimes for manslaughter and company director responsibilities and obligations be tightened.
The resultant legislation, at the Commonwealth, state and territory levels was a mixed bag. There were concerns that lawyers would litigate and settlements would be made just to avoid trials, and needless legal shenanigans. But the crime of manslaughter is not a commercial tool to be bargained away. It is a criminal standard. We wanted both the market and fear of the law to induce changes in behaviour. In this way, the unjustifiable, inexcusable killing of a human being without due caution and circumspection, would more clearly be seen as the violation of law. Without specific plans, induction, training, the relevant tools, without a company or enterprise health and safety system, superiors would be vulnerable for the consequences. It was not just penalty and stick, but an approach to culture, behaviour, and practices that could contain or limit danger, that motivated us.
 The expected penalty takes into account the extent to which the penalties imposed are discounted by the risks of being detected and then prosecuted successfully by the OHS inspectorate.
 ‘Experience-rated’ premiums relate the extent of the insurance premium to the costs of recent workers’ compensation claims on the employer. The latter is a proxy for the risk of claims in the future.