A recent NSW work health and safety (WHS) case has highlighted the critical importance of WHS compliance in property ownership and facility management.
In this landmark case, three persons conducting a business or undertaking (PCBUs) - an owners corporation (opens a new window) of an industrial complex, the strata manager (opens a new window) of the complex, and an employer (opens a new window) operating within the complex were each separately prosecuted and fined for breaching the Work Health and Safety Act 2011 (NSW) (WHS Act) following a fatality on the site in 2020.
The combined fines from the prosecutions total $750,000.
Significantly, NSW law prohibits insurance coverage for WHS-related offences, meaning these substantial fines are not insurable.
This case serves as a stark reminder of the imperative for all stakeholders in property management and facility operations to ensure rigorous adherence to WHS regulations to not only save lives, but also to avoid severe financial and legal repercussions.
Case Summary
This tragic incident involved a gate at an industrial complex that was hit by a van and partially knocked off its track.
Although a request for repairs had been made, the repairs were not promptly actioned.
Temporary repairs were insufficient, increasing the risk.
Eight days later, the gate fell on a worker, causing fatal injuries.
Key lessons from the incident
1. Shared duties for managing WHS risk: The case underscores the overlapping responsibilities within the WHS Act for property owners and facility managers.
Even if a property owner or manager does not oversee day-to-day operations, both owners and managers must ensure effective WHS practices are in place.
2. Establishing clear obligations: Establishing clear WHS obligations and agreements between property owners and facility managers is crucial.
This clarity helps ensure that all parties understand their responsibilities and are held accountable for maintaining safety compliance.
It also ensures that safety risks are managed effectively and prevents misunderstandings.
3. Immediate action required: Property owners and/or strata managers must take immediate action to address safety risks to ensure they are effectively managed in the short term.
This may involve implementing temporary measures, such as tagging out defective equipment or erecting barriers to restrict access to hazardous areas, until permanent repairs can be completed.
Any delays or reliance on inadequate temporary solutions can significantly escalate risks, potentially leading to serious incidents.
4. Timely resolution of serious safety risks: Timely resolution of safety risks goes beyond simply addressing the immediate hazard with temporary measures.
While quick, temporary solutions may be necessary to mitigate an immediate threat, they are not sufficient for long-term safety.
It is crucial to resolve the underlying safety risks promptly and effectively to prevent reoccurrence or escalation.
Establishing effective WHS assurance programs in property management
For property owners, implementing a robust assurance program is crucial to verify that the facility manager, whether internal or external, is satisfactorily meeting WHS obligations, thereby helping to prevent tragic incidents such as the one that occurred in the case above.
Property owners should establish an audit and inspection program of the WHS management of each property at a suitable frequency to help provide assurance of effective WHS management.
The frequency will depend on the size of the property, the maturity of the WHS system and previous audit performance of the property.
The audit and inspection program should check and verify the following, as a minimum:
WHS Management System: A comprehensive WHS management system is established and effectively implemented.
Hazard and Incident Reporting Systems: Hazard and incident reporting systems are robust, enabling timely reporting and escalation of worker, property, and liability incidents to the property owner. Investigations should be conducted thoroughly, with corrective actions implemented promptly to prevent recurrence and mitigate future risks.
Risk Register: A detailed site risk register is in place and maintained up to date that identifies ongoing hazards and specifies the controls needed to manage and mitigate these risks.
Risk Assessments: Risk assessments are in place for specific hazards such as plant and equipment, chemicals, falls from height, traffic management, cooling towers, radio frequency hazards, confined spaces, and hazardous building materials, such as asbestos.
Contractor Management: Effective contractor management processes are in place including contractor WHS pre-qualification, induction, and site management.
Permits to Work: Permits for high-risk activities are issued and managed, including hot work, fire system impairments, roof access, and confined spaces.
Public Liability Risks: Regular checking and inspection of public liability risks such as housekeeping, slip testing, wet weather, and air quality, especially in high-traffic properties like retail and commercial spaces.
Emergency Management: Emergency management systems and essential services maintenance are up-to-date and effective.
Corrective actions, continuous improvement and reporting
Any identified failings in the assurance process should prompt corrective action plans to clarify expectations and rectify issues.
In between assurance assessments, property owners should establish WHS reporting requirements for their properties to hold facility managers accountable for WHS performance and meeting the agreed WHS obligations.
Progress against the rectification of issues or opportunities for improvement identified in the assurance assessment should form part of this regular reporting.
For more information
For more information on enhancing WHS practices in property management or developing an effective WHS management system, including establishing a robust assurance process, please reach out to Lockton’s Head of WHS, Kristy Nicholson, or contact your Lockton broker.
The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication.
