Business fatality case sets precedent

Business fatality case sets precedent | Insurance Business Australia

Insurance News

Business fatality case sets precedent

It is believed to be the first contested prosecution of its kind

Insurance News

By
Grant Funtila

In a key ruling on the duty of care for business executives in managing workplace health and safety (WHS), a former managing director of a zipline company was acquitted of responsibility for an accident resulting in death and a serious injury.

The accident, which occurred five months after the director left the company, was attributed to a failure to adequately maintain the wire rope attachments that secures the zipline to the platform.

The case against the former director was built on the assumption that her duty of care extended to overseeing the implementation of an operational system in line with WHS regulations, which required specialized safety knowledge.

This ruling also indicates it is reasonable for business executives to delegate WHS responsibilities to senior employees with specific operational accountability.

In this case, the director’s role was marketing, sales, and administration. The operations manager was responsible for risk management, WHS compliance, and the zipline’s maintenance.

The operations manager had access to the necessary resources and information to fulfill their WHS duties, including relevant Australian Standards, experienced industry colleagues, the platform’s design engineer, and consultation with the equipment supplier on the wire rope attachments. The prosecution’s expert engineer also acknowledged that other methods of securing zipline cables carried their risks and that eliminating all of them was impossible.

The court ruled that the managing director had overseen the safety management system and could not be expected to know every operational detail.

It was deemed reasonable for the managing director to rely on the operations manager for the practical handling of WHS matters, given their distinct roles, expertise, and the resources available.

There was no evidence to suggest the managing director was aware of any shortcomings in the safety standards or processes. Furthermore, there was no indication that consulting an engineer would have led to a different method of securing the zipline.

This case is believed to be the first contested prosecution of its kind in Queensland, addressing the liability of company directors or officers in WHS matters. The outcome offers some reassurance that senior executives who delegate WHS responsibilities to qualified subordinates with adequate resources are meeting their duty of care obligations. However, they must still ensure that safety management systems are fit for purpose.