By Harold Downes, Partner and Elias Jeha, Senior Associate

Officer prosecutions under the WHS Act in every model jurisdiction have exclusively been of sole or Managing Directors. To date, there are no examples of non-executive directors being prosecuted. The closest NEDs have come, as far as we are aware, is a coerced interview of a NED by the resources regulator in Qld.

This note does not address in any detail, the many officer convictions based on guilty pleas. We will summarise two, Doble[1], decided in NSW on 8 March and Walshaw[2], decided in Qld on 17 May 2024.

Both matters resulted in acquittals. While the outcome will be pleasing for the defendants, they both problems as precedents.

The matter of SafeWork NSW v Doble involved a serious injury to a contracted truck driver when he was struck by a forklift at a transport depot operated by the company of which Mr Doble was the sole director.

The prosecution alleged that Doble failed to discharge his due diligence duty by failing to ensure “the PCBU had appropriate resources and processes, and verifying that those resources and processes were implemented”.

The Judge in the matter found that summons did “not particularise the ways in which Mr Doble failed to exercise due diligence, beyond essentially saying that he should have done something to ensure that Miller complied with its duty. What that something was is not elucidated”. He then found:

Mr Doble was the managing director and indeed the sole director, of Miller. That does not mean that he had to do everything that the PCBU had to do to ensure safety. The WHS Act required him… to have processes and resources in place to ensure that the PCBU complied with its duty under the WHS Act. Miller was a medium-sized operation. It had eight depots spread throughout the State. It used a large number of transport drivers operating over a wide area. Unlike a one or two person business,… a managing director in the position of Mr Doble cannot know everything that is going on at any given moment. To run a corporation there must be a level of delegation.

The Judge found that the evidence did not support a failure on the part of Doble to comply with his duty of due diligence. The evidence showed that Doble was a “hands on” director in relation to health and safety. He visited the depots and was involved in the resolution of safety issues on a regular basis.

The rationale for the decision is concerning for a few reasons;

1. It invites or encourages directors to be “hands on”. The whole idea of the s.27 duty is to get the highest level of authority in a PCBU to think “on the business” and leave management (sometimes the same or overlapping people) to think “in the business”. And what does that mean for NEDs?
2. It suggests that the duty is somehow delegable. It is not. It does not have to be met the same way by every director, but every director must meet it.
3. The suggestion of a distinction between Doble’s PCBU and a one or a two person business is problematic.

Walshaw involved the failure of a zipline cable in North Qld which resulted in the death of a patron while using the zipline on 22 October 2019. The prosecution alleged that Ms Walshaw, who ceased being a director on 1 May 2019, failed to do a number of things while she was in the role as an officer of the relevant PCBU in the lead up to the incident. The alleged failures included:

1. Putting in place and implementing a policy or safe work procedure requiring an advanced rigger or an engineer to install… the cables.
2. Directing Gallon to engage an advanced rigger or engineer to install… the cables.
3. Supervising or checking that Gallon had engaged an advanced rigger…
4. Making reasonable enquiries by consulting the Work Health and Safety Regulations 2011, and AS 3533.2-2009 Amusement Rides and Devices or AS 2076 Wire Rope Grips for Non-Lifting Applications, or Workplace Health and Safety Queensland or an engineer to…

The prosecution ran a confusing case by focussing on the PCBU’s failures, rather than the omissions of Walshaw.  Magistrate Priestly summarised the prosecution case as “Asserting due diligence required Ms Walshaw be involved at an operational level in the construction and cabling of the Grandstand … so as to influence the outcome.”

Walshaw placed reliance upon a worker (Mr Gallon) to ensure the company complied and the Magistrate found “The Prosecution adduced no evidence to suggest Ms Walshaw’s reliance on Mr Gallon was misplaced.”

As said above, it is concerning that delegation seems to be creeping in. The role of the WHS Managers is extremely important. After all, we have yet to see any regulatory investigation into the officer duty other than after an incident. No incident – no officer compliance investigation is how it appears. That is wrong.

A PCBU could be in perfect compliance but if the officers do nothing, they are in breach. These two decisions make that a difficult message to impart to boards.

Walshaw has been incorrectly described as the first contested prosecution of an officer in Queensland. There are at least two other prior examples, WHSQ v Wayne Cullen and Guilfoyle v Simon Newitt. Cullen was acquitted and Newitt convicted.

The first thing that a lawyer, inspector, prosecutor or even Magistrate must do when considering the officer duty under s.27 is to treat the duty differently to the general duty of the PCBU. The officer duty is positive non-delegable stand-alone duty to ensure the company complies with Act. The failure of the PCBU to comply with its duty, is not of itself evidence that the officer failed. We see numerous examples via s.155 Notices and the multiple officer prosecutions that result in guilty pleas, where regulators, prosecutors, defence lawyers and magistrates, conflate the duties of an officer (s.27) with the duty of a manager (s.28) even the PCBU’s duties (s.19).

The officer duty is at its essence, a ‘reviewing’ duty. The company duty is a ‘compliance’ duty. That might seem over-simplified but it’s the core of understanding the difference between the two duties and how as an officer you can protect yourself from prosecution.

What are the lessons to be learned from the three cases? The key takeaway is that officers must clearly understand their role in a company. They must understand what the duties of an officer really are for their company. It will be different in every circumstance.

Once you have worked out who your officers are, the things they need to do to comply with the duty, are, in our view, not hard or complicated.

And the best news is that once directors, even executive directors, get the right data and know how to support and hold the C-suite to account, the WHS outcomes of the PCBU, improve.

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[1] SafeWork NSW v Miller Logistics Pty Ltd; SafeWork NSW v Mitchell Doble [2024] NSWDC 58

[2] Guilfoyle v Walshaw MAG-00149166/21(1)