Directors can be held liable for their business’s work health and safety breaches, even though they are personally removed from day-to-day operations. In fact, under the Work Health and Safety Act 2012 (SA), Directors have to exercise due diligence in ensuring that management and persons conducting the business (PCBU) comply with their obligations under the Act. Broadly speaking, these obligations are to ensure, as far as reasonably practicable, the health and safety of workers.
This begs the question, what does due diligence mean? Due diligence imposes a range of onerous responsibilities on Directors, which include taking reasonable steps to:
Ultimately, Directors must be proactive in ensuring that their business is operating in compliance with the Act.
To help your Directors and management meet their obligations, there are strategies you can implement within your business to keep on top of things. One basic way to do this is to provide them with coaching on work health and safety, especially if they don’t have much experience in this area. You may also consider getting external advice from an expert if your business is in an industry with high exposure to health and safety risks.
There are also strategies that Directors should consider implementing long-term to cement good health and safety practices. Establishing defined roles within the business specifically focusing on health and safety duties, ensuring these people know their role, and making them accountable are some methods. It must be remembered however that the buck will always stop with the Directors. Ultimately Directors can delegate their duties, but not their responsibility.
Another way a Board can exercise due diligence is to ensure that work health and safety is discussed at Board level. As part of this, the Board can receive reports regarding the business’s work health and safety statistics, discuss future targets and create a plan to achieve them.
Work health and safety is important for a number of reasons. Serious penalties apply to Directors for failures, including personal fines and even gaol time for criminal offences. More importantly however, these failures can result in your employees suffering injury and even death. The damage this can do to a business’s reputation is often irreparable and can arise from situations which are largely avoidable.
This article was written by Partner, Joanna Andrew