OH & S Update
• July 2006
Workplace Fatalities and Franchisees
In 2000 the New South Wales Industrial Relations Commission found McDonald’s Australia Limited and McDonald's Properties (Australia) Pty Limited ("McDonald's") liable for the death of 19 year old employee Michael Ian Johnston.
Michael was an employee at a Wollongong McDonald's which was operated by Lyndhurst Trading Co Pty Limited ("Lyndhurst"). Lyndhurst was the franchisee and had a licensing agreement with McDonald's to operate the restaurant.
Michael was electrocuted when he was cleaning kitchen equipment known as a ‘clamshell’ grill. He had been employed by Lyndhurst for approximately two weeks and had received on the job training for the cleaning procedure.
The Commission found that McDonald’s exercised a level of control over the franchisee’s operations. This control was "direct and had a practical application. The control ensured that Lyndhurst conformed to a system referred to as the 'McDonald's system' and complied with the operating conditions therein."
It was found that the equipment, design and layout of the premises and maintenance procedures prescribed by the system were defective and subsequently, McDonald's was fined $270,000.
Deaths in the workplace
This case highlights that franchisors who fail to provide a safe environment in a workplace they control face the possibility of prosecution. It is a reminder that employers and business owners must comply with Part 2A of the Occupational Health and Safety Act (2000) which imposes penalties for deaths occurring in the workplace.
Occupational Health and Safety Act Part 2A
Under Part 2A of the Occupational Health and Safety Act 2000, reckless conduct causing death at a workplace by a person with occupational health and safety duties imposes a maximum penalty in the case of a corporation of $1.65 million and in the case of individuals $165,000, five years imprisonment, or both.
Under the Act, a person's conduct causes death if it substantially contributes to the death. 'Conduct' includes acts or omissions and the death is taken to have been caused at the place of work if the person is injured at the place of work but dies elsewhere as a result of the injury.
There is very little guidance as to what constitutes "reckless" conduct. The discussion in the New South Wales Legislative Assembly suggests that "reckless" conduct may include "heedless or careless conduct where the person can foresee some probable or possible harmful consequence but nevertheless decides to continue with those actions with an indifference to, or disregard for, the consequences."
Franchisor's must ensure that premises controlled by them are safe and without risks to health. Under the Act, a person who has control of the premises includes a person who has only limited control as well as a person who has, under any contract or lease, an obligation to maintain or repair the premises.
Whilst it is a defence to any proceedings for an offence against Part 2A if the person proves that there was 'a reasonable excuse for the conduct' that caused the death of another person, the McDonald's case highlights that even where safety procedures are implemented, workplace deaths can still occur and responsibility can be placed on those who control the operations.
To minimise harm in the workplace, it is important that employers and 'controllers' comply with the Occupational Health and Safety Act and the requirements for a safe workplace. The consequences of being found guilty for an offence under the Act are serious resulting in criminal charges.
CONTACT GRECH PARTNERS
Deaths in the work place are unfortunate events and have implications for all involved. Understanding changes to the Occupational Health and Safety Act which have taken place over the last year is important to ensure you minimise risk to workers in your business. Grech Partners will not only provide you with comprehensive advice but will assist you in implementing best practice policies. Should you require our legal expertise in this area please contact us on (02) 9851 2500.
This publication contains general information only. It is not provided as legal advice. Professional advice should be taken before any course of action is pursued, or any information herein relied upon.