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ACT to increase fines over losses in workplace accidents

Posted by Robert O'Neill on Jun 15, 2013 9:49:43 PM
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workplace fineHow much is a life worth nowadays?

The number of workplace accidents in the Australian Capital Territories (ACT) is minimal but it is very costly and burdensome to company employers when an employee is injured or killed in an accident. But compared to other territories, the penalty for death is surprisingly low.

In Victoria, a company can face prosecution and fine of $30,000 over an industrial accident where the victim for example loses a finger. But in the ACT, a company will also be fined with the same amount but the loss is far greater, where the victim dies in an accident. That was the case for the three workplace deaths in the ACT whose companies involved were successfully prosecuted in the past decade.

The ACT, compared to other states and territories, has a really low level of fines relating to industrial manslaughter, safety failures and negligence. Mark McCabe, WorkSafe ACT Commissioner, explained that one of the reasons for the disparity is that the ACT and Tasmania do not have specialized industrial courts that deal with work safety prosecutions. For Mr. McCabe, it is hard to comprehend why a finger in Victoria is worth the same amount as a life in the ACT. It is a shocking comparison when you look at it and it only brings cold comfort to the families of the victims.

WorkSafe ACT Commissioner Mark McCabe was hoping that the ACT court system will soon produce much more substantial fines under the new national occupational health and safety harmonization law. Any company involved can be fined up to $3 million for a serious safety breach. A negligent company director can also be fined separately up to $600,000 or sentenced to be imprisoned for five years. While these penalties were enacted at the start of 2012, they have yet to be tested due to the lag in cases reaching prosecution.

Currently, WorkSafe has a backlog of 12 cases including the four high-profile construction industry deaths that took place between 2011 and 2012. These deaths, combined with a serious injury rate that is nearly double of the national average, make the ACT the most dangerous jurisdiction to work on construction-related incidents. But once these backlog cases reach the court, Mr. McCabe believes that the ACT will most likely implement the new record fines.

Following an accident, fines differ from civil claims for compensation. While most companies have insurance to cover damages, they must pay fines from company profits. Mr. McCabe is very confident that large fines would serve as a deterrent for companies who are not obeying required safety rules and regulations. An industrial magistrate also offered hope that the lag time between the accident and the prosecution could be reduced as it created a single court for all workplace cases under a specialized magistrate.

Since WorkSafe was established in 2002, most cases prosecuted in the ACT took more than six and a half years before conclusion. Only few cases were resolved in less than two years.

Last month, Mr. McCabe received a $5.7 million budget to boost to his inspectorate including special legal staffs to prosecute cases. He plans to increase WorkSafe's current case load from three to four cases every year to up to a dozen. However, the Office of the Director of Public Prosecutions, which has received a budget cut of $110,000, must first be able to staff the actual prosecutions.

Fines are necessary to exceed the level of liquidated damages that the companies are liable to pay if they did not meet a construction deadline. On some jobs, fines amount to $30,000 per day that the project was late. The most recent fine was handed down in February after almost three and a half years of winding through the court system. K-Form Structural Systems was prosecuted and fined a total of $15,000 for taking blame on the concrete slab collapse in 2008 at the Department of Education, Employment and Workplace Relations building in Marcus Clarke Street, Civic.

According to Mr. McCabe, the company would have been facing liquidated damages twice the fine amount for every day that the project was late. He said that tens of thousands of dollars of liquidated damages per day are at stake especially on the big projects, so the imposed fines are really small. Hence, companies are becoming more negligent of their duty of care.

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