Flinders Journal of Law Reform
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Flinders Journal of Law Reform |
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RICK SARRE AND JENNY RICHARDS[†]
No one disputes that the rate of workplace death in Australia is unacceptably high.[1] As a result, there has been widespread reform in the occupational health and safety arena in recent years. At the industry level there has been a focus on the management of risk; at the legislative level regulatory legislation has been strengthened; at the administrative level non-compliance with prescribed standards is actively pursued and penalised.
However, a persistent record of workplace death and injury each year[2] has raised new questions and placed other options on the legislative table for consideration by parliamentarians. How should the law respond, for example, to an accidental workplace death where no one particular person can be found to be at fault, but rather it occurred because the state of the workplace was such that there was ‘an accident waiting to happen’? Because the existing common law offence of manslaughter does not adequately suffice in that case, some jurisdictions have introduced a specific offence of ‘industrial manslaughter’, while others are considering it as an option. Still other jurisdictions have, instead, simply increased penalties under their existing occupational health and safety criminal offence regime. This paper explores these options and discusses recent developments in a number of jurisdictions, national and international.
Much of the current push for change in Australia can be linked to failures of prosecutions and perceptions of inadequate penalties in individual cases of workplace death. One particularly tragic example comes from Victoria. On November 12, 1998, 18-year-old Anthony Carrick was crushed and killed by a 5-tonne concrete panel on his first day at work at a bulk livestock feed store in Melbourne. Another man, Barry Ward, was severely and permanently injured. Drybulk Pty Ltd was found guilty of breaching occupational health and safety (‘OH&S’) laws and fined $50,000. Two supervisors were fined $10,000 and $5,000 respectively.[3] The Carrick family, trade union officials and many others were outraged at the apparent insufficiency of the penalty.[4]
More recently in New South Wales, two companies and three individuals were found guilty of breaches of occupational health and safety legislation that led to the death of four workers in the Gretley Mine disaster.[5]
This was the first time any employer has been found guilty of OH&S offences in relation to mining deaths in New South Wales. But while the verdict was welcomed by Mr Tony Maher, the Construction Forestry Mining and Energy Union National President, Mr Maher also called for legislators to introduce a more draconian industrial manslaughter offence carrying penalties of imprisonment for directors of errant companies.[6]
Mr Maher’s views are at odds with employers’ groups, who argue for business self-regulation in relation to workplace safety, suggesting that enticing companies towards diligence and good practice is best done without the heavy hand of the criminal law, least of all any suggestion of individual responsibility and the possibility of condign punishment. Given this choice, the traditional approach of legislators has been to adopt a sliding scale of responses depending upon the severity of the offence.[7]
This paper explores the suggestion that legislators should give prosecutors the option of charging companies with ‘industrial manslaughter’ and making corporate officers (regardless of their direct culpability) candidates for terms of imprisonment in the event of a guilty verdict. But is this the best way that the law can offer protection for workers in potentially dangerous workplaces? To begin to understand the legislative tensions in this area, and to contrast the industrial manslaughter option, it is useful to begin with a review of the nature and purpose of existing Australian occupational health and safety law.
The main focus of Australian lawmakers has been on occupational health, safety and welfare legislation that is designed to prevent workplace injury, not to punish individual offenders per se if there has been an injury or death. The thinking is that severe penalties imposed upon individuals in tragic circumstances do have deterrent value, but they are only one, indeed a supplementary, method of keeping workplaces risk-free. Punishment, or the threat of punishment, is not seen as the primary tool. For this reason, occupational health and safety legislation in each Australian jurisdiction is primarily regulatory in its framework, for example, invoking strict liability for any person who fails to put in place required safe work practices.[8] Employers in each jurisdiction have a duty under the relevant legislation to ensure that conditions in their workplace do not endanger the health or safety of their workers as well as other people who may be at risk. Breaches of these statutory duties are generally punished summarily.[9]
Several jurisdictions have recently reviewed and strengthened their OH&S legislative penalty regimes and broadened the likelihood of individual culpability for corporate turpitude. For example, in Queensland in 2003, legislators increased terms of imprisonment for employers whose acts cause workplace death or serious injury.[10] The new maximum fine is 2000 penalty units and a maximum of three years imprisonment for employers whose breach of their workplace safety obligations causes death or grievous bodily harm to multiple workers.[11]
In South Australia, too, Parliament introduced penalties for aggravated breaches of the Occupational Health, Safety and Welfare Act 1986 which can attract terms of imprisonment for a maximum of five years, in addition to fines. ‘Aggravated breaches’ are defined as being those committed by a person
(a) knowing that the contravention was likely to endanger seriously the health or safety of another; and
(b) being recklessly indifferent as to whether the health or safety of another was so endangered.[12]
In New South Wales,[13] corporations can now be fined a maximum of $550,000 for a first offence or $825,000 subsequently. Individuals face a maximum fine of $55,000 for a first offence and, for repeat offences, a maximum penalty of $82,500 or two years imprisonment or both. The failure of senior officers to ensure that their corporation complies with its OH&S obligations is itself an offence, but then the New South Wales law goes a step further, utilising a concept of ‘reverse’ vicarious liability, that is, by imposing liability on individuals for the liabilities of their corporate ‘parent’. Section 26(1) provides as follows:
If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that:
(a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or
(b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation.[14]
Self evidently, each of these provisions imposes criminal liability on corporations or senior officers of corporations (or both) for workplace deaths. However, broad defences (non-influence, impracticality and due diligence) apply, for example, under s 28 of the New South Wales Act. Moreover, these provisions do not provide power for prosecutors to aggregate fault in order to establish corporate criminal liability,[15] nor to allow for the imprisonment of senior officers in that event. Those advocating the introduction of specific industrial manslaughter offences seek to allow for these possibilities.
Sitting alongside the Australian occupational health and safety legislative provisions are the general provisions of the criminal offence of manslaughter. In Australia, corporate manslaughter[16] prosecutions have been pursued for over a decade. The first case of corporate manslaughter in Australia was probably R v Denbo Pty Ltd.[17] When one of its drivers was killed when a company truck’s brakes failed, Denbo Pty Ltd was prosecuted for manslaughter. It pleaded guilty and was fined $120,000. At the time of its conviction, however, Denbo Pty Ltd was in liquidation and owed creditors over $2 million. The company was wound up six months before sentencing and never paid the fine. Later it was reborn as another company and recommenced operations. The successor company did not pay the fine either.[18]
Assuming that a company the subject of a prosecution remains solvent, the success rate (guilty verdicts) in manslaughter prosecutions against corporations and individual officers is very poor.[19] The reasons for this are self-evident. For a start, the offence of manslaughter[20] was not created to deal with offences committed by non-natural persons such as corporations. Hence, attributing the physical (actus reus) and fault (mens rea) elements of manslaughter to a corporation is an uneasy ‘fit’.[21] In cases involving modern corporations, it is necessary to find an individual person who is the ‘guiding mind’, in order to meet the high degree of negligence required for criminal culpability.[22] Where many people participate in decision-making, it is extremely difficult to trace this negligence to a single individual. As Celia Wells puts it, ‘[c]orporations, whatever they are, are not individuals and do not act as unitary individuals.’[23] A prosecution will thus fail even where it seems that the corporate employer as a whole was guilty of negligence, because the ‘guiding mind’ test focuses only on individuals.[24] For example, in R v A C Hatrick Chemicals,[25] manslaughter charges against senior individuals were withdrawn before committal. Hampel J directed a verdict of acquittal because the allegedly culpable individuals were clearly not the ‘guiding mind’ of the corporation.
In the United Kingdom case of Meridian Global Funds Management Asia Ltd v Securities Commission,[26] it was considered by the court that culpability could extend to individuals who had control over the conduct or situation at issue, rather than being limited to the individuals who could be said to have had control of the corporation, and be acting as the corporation.[27] This approach has been considered favourably in the Federal Court, but has not been specifically adopted in the High Court.[28]
Nonetheless, the issue of attribution of both the mental and the physical elements of manslaughter continues to be problematic in situations where a combination of various events and factors contributed to a death, especially since the criminal law is not only concerned with causal fault, but also criminal culpability.[29] Criminal responsibility at common law requires proof that an individual personally had both the actus reus and the mens rea of the offence. In the case of corporate employers, with many individuals filling particular roles, it is unlikely that one will be able to find a conjunction of the actus reus and mens rea of multiple individuals. The criminal law sees the liability of individuals and corporations as discrete.[30]
Poor conviction rates for corporate manslaughter and community perceptions of injustice in cases like Carrick have spurred reformers to suggest other options for legislators. One such suggestion is to introduce a new offence of ‘industrial manslaughter’. Prosecutions for industrial manslaughter treat corporations as if they were persons.[31] This concept, however, is theoretically and practically difficult, for while a corporation may be characterised as a ‘person’ capable of a crime, basing fault on the same psychological processes as apply to people raises problematic issues with respect to moral turpitude, the mens rea element of offences and defences.[32]
Nevertheless, the suggestion has been made and some reformers have embraced it with enthusiasm. This zeal, however, is not widely shared. In the paragraphs that follow the offence is explored, and the reasons for its failure to capture the attention of contemporary legislators examined.
The starting point for Australian developments is the Criminal Code Act 1995 (Cth). The Criminal Code Act attempts to give greater tangibility to the notion of corporate criminal liability. In terms of its application to an industrial manslaughter offence, it does this by providing for the attribution of physical elements, as well as recklessness and negligence to a corporation in new ways.[33] Section 12.1 provides that corporations may be found guilty of any offence, including those punishable by imprisonment. Additionally, harm caused by employees acting within the scope of their employment is considered to be harm caused by the body corporate.[34] This resolves the recurring problem of attributing the physical element of manslaughter to a body corporate where the actions involved were engaged in by more than one person, who may or may not have met the requirement of being the ‘guiding mind’ of the corporation. Regarding the attribution of mental elements to a body corporate, the Code provides several alternatives. A requisite mental element other than negligence can be attributed to a body corporate under the Code by virtue of s 12.3(1), which provides:
If intention, knowledge or recklessness is a fault element in relation to a physical element of an offence, that fault element must be attributed to a body corporate that expressly, tacitly or impliedly authorised or permitted the commission of the offence.
Two of the ways in which this authorisation or permission may be established are through the state of mind of either the board of directors or ‘high managerial agents’ within the body corporate,[35] which seeks to expand the current common law ‘guiding mind’ doctrine. Additionally, the crucial concept of ‘corporate culture’ is introduced as a further means by which this authorisation or permission may be established, and it is here that a fundamentally different approach to current corporate criminal liability can be seen. ‘Corporate culture’ is defined as including an ‘attitude, policy, rule, course of conduct or practice existing within the body corporate generally …’[36] The body corporate could be deemed criminally liable for having a corporate culture that actively or passively allowed non-compliance with the relevant provision.[37]
Therefore a company with a poor corporate culture may be considered as culpable under this legislation as individual directors (or high managerial agents) might be under the current common law.[38] This change was designed to catch situations where, despite the existence of documentation appearing to require compliance, the reality was that non-compliance was not unusual, or was tacitly authorised by the company as a whole.[39]
The other possible mental element for manslaughter is negligence, but, again, it is difficult to attribute negligence to corporations at common law. A body corporate is held to the same standard of negligence as applies throughout the Code.[40] However, the Code attributes negligence to corporations through the principle of aggregation:
[Section 12.4] (2) If
(a) negligence is a fault element in relation to a physical element of an offence; and
(b) no individual employee, agent or officer of the body corporate has that fault element;
(c) that fault element may exist on the part of the body corporate if the body corporate’s conduct is negligent when viewed as a whole (that is, by aggregating the conduct of any number of its employees, agents or officers).
The Code thus introduces a new basis for liability and one that is markedly different from the common law. Both mental and physical elements can be attributed according to the behaviour of the corporation as an entity, and its principals can be prosecuted and punished both individually and collectively by association with the corporation.
There is a major difficulty for those wishing to use the Code to prosecute the offence of industrial manslaughter. The Code only applies to federal offences, and manslaughter is not a federal offence. In August of 2004, federal Greens Senator Kerry Nettle introduced into the Australian Parliament the Criminal Code Amendment (Workplace Death and Serious Injury) Bill 2004, which was designed specifically to incorporate industrial manslaughter offences into the Commonwealth Criminal Code. The passage of the Bill before July 2005 will require the support of the federal ALP, and is highly unlikely. Apart from this, in order to give effect to these laws, States and Territories would need to adopt similar provisions in their criminal codes or (in the case of common law States) other criminal legislation. While the Australian Capital Territory is in the process of adopting the Commonwealth Criminal Code,[41] the Code has not yet been embraced by any of the State legislatures. However, in addition to federal developments, an offence of industrial manslaughter has been considered by various State enquiries, and it can now be found on the statute books of one territory. It is to these developments that we now turn.
The Australian Capital Territory in 2004 became the first jurisdiction in Australia to introduce the offence of industrial manslaughter, via the Crimes (Industrial Manslaughter) Act 2003. Chapter 2 of the Australian Capital Territory Criminal Code incorporates the Commonwealth Criminal Code notions of ‘corporate culture’.[42] Moreover, the Act provides for both employer and ‘senior officer’ liability for industrial manslaughter, with maximum penalties of fines of up to $1 million for large corporations, $200,000 for individual senior officers, or 20 years imprisonment, or both. ‘Industrial manslaughter’ itself is defined as causing the death of a worker while either being reckless about causing serious harm to that worker or any other worker, or being negligent about causing the death of that or any other worker.[43]
The key to the legislation is s 51:
(1) In deciding whether the fault element of intention, knowledge or recklessness exists for an offence in relation to a corporation, the fault element is taken to exist if the corporation expressly, tacitly or impliedly authorises or permits the commission of the offence.
(2) The ways in which authorisation or permission may be established include
(a) proving that the corporation’s board of directors intentionally, knowingly or recklessly engaged in the conduct or expressly, tacitly or impliedly authorised or permitted the commission of the offence; or
(b) proving that a high managerial agent of the corporation intentionally, knowingly or recklessly engaged in the conduct or expressly, tacitly or impliedly authorised or permitted the commission of the offence; or
(c) proving that a corporate culture existed within the corporation that directed, encouraged, tolerated or led to noncompliance with the contravened law; or
(d) proving that the corporation failed to create and maintain a corporate culture requiring compliance with the contravened law.
(3) Subsection (2)(b) does not apply if the corporation proves that it exercised appropriate diligence to prevent the conduct, or the authorisation or permission.
Negligence of a corporation can be attributed by aggregation,[44] and, similarly, the physical element of the offence (causing the death either by an act or by certain omissions) is not only attributable by the conduct of officers, but also by agents or employees of the corporation.[45]
Mirroring other Code-based proposals, s 5 of the Act allows a court considerable leeway in imposing sanctions on convicted corporations including ordering the corporation to take specific remedial action and to publicise the offence.[46]
Just how these new provisions will be interpreted and applied is a matter of some conjecture.
The Victorian Government has long debated legislatively the notion of ‘corporate culture’ and criminal responsibility. In late November 2001, the Bracks Labor Government introduced the Crimes (Workplace Deaths & Serious Injuries) Bill into the Victorian Parliament, arguably as a response to the Anthony Carrick case.[47] Like the Commonwealth Criminal Code, the Bill was designed to allow a court to look at the conduct of the corporation as a whole in finding culpability and affixing a penalty. A corporation found guilty of industrial manslaughter, that is, where its conduct ‘materially contributed’ to the outcome, would be liable for fines of up to $5 million for a death and up to $2 million for a serious injury. Where serious injury or death occurred, the Bill allowed for penalties of periods of imprisonment of up to two years or five years respectively for senior officers found complicit in the offence. The Bill was rejected in the Upper House in April 2002, following sustained pressure from the Australian Industry Group and the Victorian Employers Chamber of Commerce.
Notwithstanding that it has had control of the Upper House since November 2002, the Labor Government has indicated it has no plans to reintroduce the Bill, focusing reform instead on increasing regulatory penalties within existing occupational health and safety legislation. This has met with support from employer organisations, but opposition and protest from trade unions.[48] The Victorian Trades Hall Council has indicated its support for the provisions and penalties contained in the original Bill to be introduced into OH&S legislation; in particular to consider negligent conduct as a whole rather than requiring proof of negligence on behalf of the ‘guiding mind’ of the corporation.[49]
In South Australia, occupational health, safety and welfare reform is currently taking place as part of a wide-ranging review of employment law generally. Results to date include a report into Occupational Health and Safety co-ordinated by Mr Brian Stanley.[50] The report confirmed that safety is the primary aim of the legislation.[51] In addressing how best to achieve this, the Stanley Report canvassed issues of prosecution and appropriate penalties together with the potential inclusion of an ‘industrial manslaughter’ offence. It was noted in the Report that support for such an offence came from employee groups, but that employer and other groups considered that it was not necessary, and would simply duplicate existing common law manslaughter provisions in the Criminal Law Consolidation Act 1935. The South Australian Attorney-General’s Department also made a submission on this issue, focusing its concerns on the difficulties and potential confusion in having similar offences in two different legislative schemes. The submission stated, ‘No advantage has been identified in enacting a separate offence in the Occupational Health Safety & Welfare Act.’[52] The Stanley Report concluded that it was appropriate not to recommend the inclusion of such an offence.[53]
The South Australian Rann Labor Government, also in 2003, introduced the Occupational Health, Safety and Welfare (SafeWork SA) Amendment Bill 2003[54] to implement some of the recommendations from the Stanley Report. In keeping with the Report, the Bill does not propose an industrial manslaughter offence. However, it does include other recommended non-pecuniary penalties, such as requiring employers (or responsible officers of a corporate employer) to undergo training programs and to publicise their breaches of the Act, for example, by notifying shareholders. These non-pecuniary penalties are designed to provide flexibility in sentencing, and to ensure that the penalty fits the ‘circumstances of the offender.’[55]
Notwithstanding the above developments, Upper House independent Mr Nick Xenophon MLC introduced legislation in 2004 that provides for an offence of industrial manslaughter to be inserted into the Occupational Health, Safety and Welfare Act 1986 (SA). His Bill is modelled on the Australian Capital Territory provisions, and applies to a situation where an employer or a ‘senior officer’ of the employer is either negligent about causing death or ‘recklessly indifferent about seriously endangering the health or safety of [an] employee or any other person at work.’ It also applies to omissions, deeming an omission to act an offence ‘if it is an omission to perform a duty to avoid or prevent danger to the life, safety or health of another.’ The danger may arise from either the act or undertaking of that person or, significantly, ‘anything in the person’s possession or control.’ Penalties are similar in scope to those in the Australian Capital Territory, including substantial fines of up to $500,000 and the possibility of 20 years imprisonment. The Bill will not succeed without the support of the Labor Government, and that support is highly unlikely.
In New South Wales, the Crimes Amendment (Industrial Manslaughter) Bill 2004 was introduced into the Legislative Council by Green MLC Ms Lee Rhiannon, in part as a response to recommendations by the New South Wales General Purpose Standing Committee that offences of industrial manslaughter and gross negligence causing serious injury be enacted into the Crimes Act 1900 (NSW) ‘as a matter of urgency.’[56]
Any chance the Greens may have had in securing the cooperation of the New South Wales Labor Government,[57] however, were dashed when, on October 27 2004, the government introduced a Bill to amend the Occupational Health and Safety Act, and ruled out criminalising industrial manslaughter.[58] Instead, Industrial Relations Minister John Della Bosca indicated that, in circumstances where the risks were reasonably foreseeable and where feasible steps could have been taken to avoid an accident, negligent employers could still be jailed for up to five years[59] and fined heavily, but under existing occupational health and safety law.[60]
Following sustained public pressure over the failure of the courts to secure convictions arising out of the Herald of Free Enterprise sinking,[61] the Southall rail crash in September 1997,[62] and a Law Commission Review in 1996, the Home Office explored the idea of a stand-alone offence of ‘corporate killing’, an offence that would correspond to the (proposed) offence of ‘killing by gross carelessness’.[63] ‘Corporate killing’ would be alleged to have occurred when there is ‘management failure’, that is, where the corporation’s conduct in causing death fell far below what could reasonably have been expected. According to the Law Commission, such a failure should be regarded as causative of death even if the more immediate cause is the act or omission of an individual. In that case, both individual and corporate liability could flow from the same incident. In its consultation paper, the United Kingdom Government, in accepting the thrust of the Law Commission’s recommendations,[64] proposed that any individual who could be shown to have contributed to management failure that fell far below what could reasonably be expected should be subject to disqualification, and that any individual who substantially contributed would be potentially liable for a term of imprisonment.[65]
In May of 2003, the United Kingdom Government again indicated an intention to introduce an offence of corporate killing.[66] Industry and employer groups are divided, however, over the effectiveness and viability of a separate offence.[67]
The Trades Union Congress is in favour of provision being made for terms of imprisonment being imposed on company directors if the circumstances require it, citing the need for deterrence.[68]
But this support appears to be lukewarm, given the potential for companies, worried about more draconian penalties, moving operations offshore, with the attendant potential for job losses and economic downturn.[69] The government does not plan, in the new Bill, to include offences aimed directly at corporate officers. As yet that Bill is still in draft form, although the Prime Minister has confirmed that one is being formulated.[70] The government has, however, already introduced the Health and Safety at Work (Offences) Bill 2004 which would increase current penalties under the Health and Safety at Work etc Act 1974 (UK).
Canadian occupational health and safety law operates at both the provincial and national level, with the same federal anomalies encountered in Australia. For example, in Ontario, corporate employers are vicariously liable for ‘any act or neglect on the part of any manager, agent, representative, officer, director or supervisor’ who breaches any provision of the Act.[71] The Canadian Criminal Code, however, does not impose corporate criminal liability vicariously on employers. Canada continues to use the ‘identification’ (‘guiding mind’) model used in the United Kingdom and in Australia.[72] Corporations found guilty of indictable offences under the Code are penalised by a fine set at the court’s discretion in lieu of imprisonment.[73]
In 2002, the Canadian Standing Committee on Justice and Human Rights reported on the need for reform of Canada’s laws regarding corporate criminal responsibility. Although the government decided that a separate offence of ‘corporate killing’ was not needed, its response to that report concluded that reform should occur, because the use of the ‘guiding mind’ principle as a basis of liability ‘does not reflect the reality of corporate decision-making and delegation of operational responsibility in complex organizations.’[74] Canadian developments do not discount the possibility of criminal liability of corporations for negligence that results in employee death. The Canadian approach allows for liability to individual officers of the corporation. Much of the reform is predicated on an assumption that this will occur in relevant circumstances. Indeed, this is the main reason given for the lack of specific penal provisions allowing for the imprisonment of officers of a convicted corporation.
In considering the appropriate test of liability for negligence, the Canadian Government’s response canvassed the appropriateness of both the United States ‘vicarious liability’ model (below) and the Australian ‘corporate culture’ model (above). The ‘corporate culture’ requirement was criticised as being too difficult to apply with necessary precision. Canada appears to be seeking a middle ground, one that moves away from the narrower (individual) ‘guiding mind’ principle, but one that is not so broad as to risk punishing a corporation which is not, in fact, morally blameworthy for the actions of its officers or managers. The government has thus endorsed an approach for offences of negligence that takes into account the conduct of the corporation’s officers and managers as a whole.[75]
Moreover, Canada has introduced a sentencing regime unique to corporations.[76] Its significant reforms have not, however, included the introduction of imprisonment as a penalty. The government’s position is that individual directors, managers or supervisors whose conduct falls within the general offence of manslaughter are already liable to be charged with that offence and potentially imprisoned under it. Hefty fines will continue to be the basis of the penalty regime. There is also a sentencing structure that includes non-pecuniary penalties similar to those being introduced in Australia.[77]
The approach taken by the United States stands in sharp contrast to that of the other three nations discussed above. The United States imposes corporate liability for negligence according to a variation of the principle of vicarious liability. This effectively circumvents the need to identify either one single ‘guiding mind’ or to combine the actions and attitudes of several corporate officers or managers. It also applies to a wider range of individuals within the corporation. When applied to negligence liability, this test does not turn on subjective awareness. A corporate employer will be vicariously liable for the acts of officers, servants or agents whose actions are within the scope of their employment. Mens rea can also be based on the knowledge of employees as a whole.[78] The different model used by the United States has seen many corporations found guilty of manslaughter offences.[79] The United States model indicates the possibilities of aggregation, best illustrated in the case of United States v Bank of New England. In that case, the court held that what the bank ‘knew’ about a violation consisted of the sum of what was known by its employees.[80]
The fact that many aspects of Australian occupational health and safety legislation generally are not achieving their intended results is undisputed, and is reflected in the current drive for policy development and change in this area. There are many who now believe that directors of companies ought to be personally criminally liable in circumstances where a poor ‘corporate culture’ pervades their organisations, and that they should face severe personal penalties.[81] There are those who would go further and adopt the American model of vicarious liability that would hold a company (and its senior officers) responsible for all negligent acts of any or all of its employees. Indeed, it is arguable that negligence and vicarious liability may be appropriate tests of criminal liability if the harm is great, the risk obvious and the precautionary work poor.[82]
On the other hand, since a corporation’s ‘personality’ is essentially a legal fiction, it may be rather unfair to make company principals culpable by virtue of their status within the company, when, without this association, these principals themselves could not have been prosecuted successfully, due to an absence of the physical and fault elements required for manslaughter.[83] That is, imposing vicarious liability on corporations for regulatory breaches by its senior officers is one thing. Imposing vicarious personal liability on senior officers for cases deemed to be industrial manslaughter is quite another. Finally, is there not the possibility that imprisoned executives could be turned into scapegoats, leaving less than satisfactory organisational attitudes intact?[84]
There are some who believe, in addition, that the penalties for culpable principals should include imprisonment. On the one hand, this possibility sends a strong message of deterrence, namely that culpable conduct will not be tolerated. On the other hand, such an outcome might not suit public expectations. For example, if an otherwise defensible decision by management goes awry, with death occurring, it may be too harsh to expect one person to take full blame for a tragic consequence of a chain of errors. Moreover, how would the mooted imprisonment provisions apply to senior officers of non-corporations (such as partnerships and sole traders), transnational corporations and government-owned enterprises? Indeed, the jury is still out on whether threats of harsh sentences act as a deterrent in the corporate boardroom at all,[85] especially where there are a number of other possible, and potentially effective, sanctions available. Commentators suggest, for example, that there is broad deterrent power in other penal options such as divestment of equity, adverse publicity, disqualifications from certain commercial activities, receiverships (or ordering someone else to run the company), the threat of the loss of limited liability[86] and ultimately winding-up.[87]
A key problem for those promoting industrial manslaughter legislation remains that there is little evidence that scape-goating key individuals is likely to remove endemic risks. Moreover, there is some evidence that the mere mention of industrial manslaughter raises the likelihood that collaboration between employers and employees will stall, and that would be to the detriment of health and safety in the workplace generally.[88]
Bearing these concerns in mind, industrial manslaughter laws in the Australian Capital Territory and under the Commonwealth Code have been crafted to allow company principals to escape imprisonment if senior officers have consistently demonstrated due diligence and made reasonable efforts to prevent negligence.[89] To that extent, there may be less difference between these provisions and the increasingly punitive regimes under amended occupational health and safety legislation (especially in New South Wales) than one may think.
The debate over the value or otherwise of industrial manslaughter laws will continue to feature strongly in employment law and criminal law circles for the foreseeable future. Discussion to date has been hampered by the multi-layered complexities and political tensions involved in drafting laws designed to bring responsible persons to account while remaining faithful to basic precepts of criminal responsibility and punishment policy. There is, nonetheless, growing public support for more appropriate penal responses to corporate conduct that can be described as ‘appalling’, or where conduct ‘conspicuously fail[s] to observe the standards laid down by law.’[90] In that case, one can understand public calls for legislative initiatives that may involve aggregation of both physical conduct and ‘responsible’ minds, together with terms of imprisonment for principals in the worst cases. But simply having the offence of industrial manslaughter on the statute books cannot by itself lower workplace death rates.
Outside of the Australian Capital Territory, legislators in this country remain committed to the use of occupational health and safety legislation as the preferred approach to preventing death in the workplace. They are decidedly nervous of moving too quickly towards a new offence of industrial manslaughter specifically, or the American approach more generally. In the absence of persuasive evidence that aggregating negligent minds and actions, locating corporate criminal liability in faulty organisational ‘culture’, and allowing for the possibility of imprisonment in the most egregious of cases will reduce or eliminate death from the corporate workplace, change to the status quo is unlikely in the short term. To appease critics who may allege that little is being done about workplace death rates, legislators are raising the penalties under existing occupational health and safety laws, and are prescribing terms of imprisonment for grossly culpable behaviour. It may be that those who advocate the OH&S legislative approach and those who favour new industrial manslaughter offences are not now too far apart.
At the very least, if the industrial manslaughter debate has the effect of encouraging companies to promote better ‘corporate governance’,[91] and to pay greater attention to the organisation of their businesses, their ‘culture of compliance’ and their safety procedures and systems, then one of the aims of the exercise for those promoting the offence of industrial manslaughter will have been fulfilled, even if the specific offence fails to find favour with legislators.
[†] Professor of Law and Criminal Justice, University of South Australia and Lecturer at the University of Adelaide Law School, respectively. The authors would like to acknowledge the resources of the Law School, Umeå University, Umeå, Sweden, and to thank especially Jim Gobert of the University of Essex for his critique and the anonymous reviewers for their comments.
[1] The Australian National Occupational Health and Safety Commission’s National OH&S Strategy for 2002–2012 has targeted a reduction in work-related fatalities of 10 per cent by June 2007 and 20 per cent by June 2012.
[2] Workplace death figures have hovered between 200–400 per annum over the last decade, and may be more than 1,500 per annum currently in Australia if occupational disease estimates are factored in.
[3] Carrick (Unreported, County Court of Victoria, Barnett J, 9 March 2001).
[4] ‘My Son’s Bosses Paid Just $65,000 for His Life’, The Age (Melbourne), 22 March 2001.
[5] McMartin v Newcastle Wallsend Coal Company Pty Limited & Ors [2004] NSWIRComm 202. (Unreported, Staunton J, 9 August 2004). Sentencing has yet to take place.
[6] Union Seeks Industrial Manslaughter Charge (2004) ABC NewsOnline <http://www .abc.net.au/news/australia/nsw/newcastle/200408/s1172607.htm> at 17 September 2004. Mr Maher’s argument was based upon the fact that the only available penalties that can currently be imposed for these convictions in New South Wales are fines.
[7] The notion of the enforcement ‘pyramid’ has assisted parliaments in this task. At the base of the pyramid matters are dealt with informally, that is, responded to by cautions, stern warnings, notices, undertakings and the like. As conduct becomes more serious, so do the responses, for example, civil actions for recovery of damages and monetary penalties. Further up still are criminal prosecutions, and, at the top of the pyramid, severe criminal sanctions in the event, say, of a conviction for manslaughter. The enforcement pyramid has been explored in Ian Ayres and John Braithwaite, Responsive Regulation, Transcending the Deregulation Debate (2nd ed, 1995) 35–53. See also Gary Slapper and Steve Tombs’ discussion of the concept in Corporate Crime (1999) 182–83, and also Frank Pearce and Steve Tombs, ‘Ideology, Hegemony and Empiricism: Compliance Theories and Regulation’ (1990) 30(4) British Journal of Criminology 423. On the limits of regulation see the introduction to Richard Johnstone and Rick Sarre (eds), ‘Regulation: Enforcement and Compliance’, Research and Public Policy Series, No 57, Canberra: Australian Institute of Criminology, 2004.
[8] For a discussion of the issues surrounding regulatory enforcement generally, see Richard Fox ‘New Crimes or New Responses? Future Directions in Australian Criminal Law’[2002] MonashULawRw 5; , (2002) 28(1) Monash University Law Review 103, 114–18.
[9] This limits the maximum sentences available under the Acts. Some more serious offences in certain jurisdictions may be classified as indictable offences, however, for example under the Occupational Health and Safety Act 1985 (Vic) s 21. In that event, significant fines may be imposed. In addition, prosecution of senior management or the corporation as an entity, through the criminal law, remains open to prosecutors.
[10] Workplace Health Safety and Other Acts Amendment Act 2003 (Qld).
[11] Significantly, these penalties increase if an incident results in multiple deaths. Workplace Health and Safety Act 1995 (Qld) s 24(1) as amended. An example given by Will Murphy as reported in ‘Industrial manslaughter laws — much ado about nothing?’ by Michelle Lam, CCH, is as follows: An incident causing multiple deaths could result in a maximum fine of $150,000 or three years imprisonment, whereas a breach causing grievous bodily harm would attract a maximum penalty of $75,000 or two years imprisonment.
[12] Section 59(1)(a) and (b).
[13] Under the Occupational Health and Safety Act 2000 (NSW) s 12. There are amendments before the Parliament, dated October 2004, currently out for public consultation that will have the effect of doubling these penalties.
[14] This approach is mirrored in the Environmental Protection Act 1993 (SA) s 129, but similar provisions do not appear in that State’s OH&S legislation.
[15] By ‘aggregate’ we refer to the idea of adding the mental element of more than one person in order to establish the appropriate mens rea for an offence, an idea proposed under industrial manslaughter provisions, see below.
[16] As opposed to industrial manslaughter.
[18] Simon Chesterman, ‘The Corporate Veil, Crime and Punishment: The Queen v Denbo Pty Ltd and Timothy Ian Nadenbousch’ (1994) 19 Melbourne University Law Review 1064.
[19] Simon Bronitt and Bernadette McSherry, Principles of Criminal Law (2000) 157–59. For example, see the failure of the prosecution in R v AC Hatrick Chemicals Pty Ltd (Unreported, Supreme Court of Victoria, Hampel J, 29 November 1995), discussed below.
[20] Note the added complication in that each jurisdiction in Australia has an offence of manslaughter by criminal negligence. These offences are not restricted to particular locations or situations, and thus individual senior officers may be amenable to such a charge in appropriate cases.
[21] This requirement may be less problematic in cases involving a small owner/operator company, but almost inevitably will be a problem for prosecutors in convicting a larger corporation.
[22] Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; [1972] AC 153, followed consistently in Australia, eg Hamilton v Whitehead (1988) 63 Australian Law Journal Reports 80.
[23] Celia Wells, Corporations and Criminal Responsibility (1993) 121, cited in Fox, above n 8, 114.
[24] See the helpful discussion of the ‘attribution principles’ in Karen Wheelwright, ‘Corporate Liability for Workplace Deaths and Injuries — Reflecting on Victoria’s Laws in the Light of the Esso Longford Explosion’ [2002] DeakinLawRw 16; (2002) 7(2) Deakin Law Review 323. For a useful discussion on the imposition of corporate criminal liability generally, see Brent Fisse, Howard’s Criminal Law (5th ed, 1991) 590, also Ken Polk, Fiona Haines and Santina Perrone, ‘Homicide, Negligence and Work Death: The Need for Legal Change’ in Michael Quinlan (ed), Work and Health:The Origins, Management and Regulation of Occupational Illness (1993).
[25] R v AC Hatrick Chemicals Pty Ltd (Unreported, Supreme Court of Victoria, Hampel J, 29 November 1995).
[26] [1995] UKPC 5; [1995] 2 AC 500.
[27] Indeed, in the United Kingdom, a body corporate cannot be convicted of criminally negligent manslaughter unless an individual has also been convicted of manslaughter. See Attorney-General’s Reference (No 2) of 1999 [2000] EWCA Crim 91; [2000] QB 796. Note that this is not the case in Australia, partly due to our statutory provisions; nonetheless it is reflective of the attribution difficulties faced in a corporate criminal prosecution where the identification doctrine remains the basis of liability.
[28] See the extensive treatment of these cases and principles in the Australian Law Reform Commission, Principled Regulation: Federal Civil and Administrative Penalties in Australia, Report No 95 (2002) ch 7. If the approach were to be applied in considering liability for workplace death, such individuals may be more easily identified by the terms of the occupational health and safety legislation itself, which legislation routinely refers to corporate officers.
[29] Fisse, above n 24, 592, n 22.
[30] In other words, the ‘guiding mind’ principle is not one of vicarious liability.
[31] For criminal liability to be established, however, the corporation must still be found to have possessed the requisite fault element, either recklessness or negligence.
[32] Department of Justice, Canada Corporate Criminal Liability Discussion Paper (2002) <http://canada.justice.gc.ca/en/dept/pub/ccl_rpm/discussion/issues.html> at 8 June 2003.
[33] Part 2.5, div 12, which came into effect 15 December 2001. For a useful discussion of this Part, see Tahnee Woolf, ‘The Criminal Code Act 1995 (Cth) — Towards a Realist Vision of Corporate Criminal Liability’ (1997) 21(5) Criminal Law Journal 257.
[34] Criminal Code Act 1995 (Cth) s 12.2.
[35] Criminal Code Act 1995 (Cth) s 12.3(2)(a), (2)(b) respectively.
[36] Criminal Code Act 1995 (Cth) s 12.3(6).
[37] Criminal Code Act 1995 (Cth) ss 12.3 (2)(c), (2)(d) respectively.
[38] Criminal Code Act 1995 (Cth) s 12.3(2).
[39] Criminal Code Act 1995 (Cth) s 12.3(2)(d).
[40] Criminal Code Act 1995 (Cth) s 12.4(1).
[41] By virtue of the Criminal Code 2002 (ACT).
[42] Crimes Act 1900 (ACT) s 7A.
[43] Crimes Act 1900 (ACT) ss 49C, 49D.
[44] Criminal Code 2002 (ACT) s 52, that is, negligent behaviour by the corporation is viewed as a whole. See above n 15.
[45] Criminal Code 2002 (ACT) s 50.
[46] See Workplace OHS, OHS and Workers Compensation in 2004 — Part 1: Challenges <http:// www.ohsim.ocpe.sa.gov.au/view.php?id=109> at 8 June 2003. See also The Age (Melbourne), ACT Passes Industrial Manslaughter Laws (2003) <http://www.theage.com.au/ articles/2003/11/28/1069825956068.html> at 3 December 2003.
[47] Rick Sarre and Jenny Richards, ‘Criminal Manslaughter in the Workplace: What Options for Legislators?’ (2004) 78 Law Institute Journal 58, a paper that arose from Rick Sarre, ‘Legislative Attempts To Imprison Those Prosecuted For Criminal Manslaughter In The Workplace’ (2002) 9(3) Murdoch University Electronic Journal of Law.
[48] ‘Bracks Faces Union Fire Over Backdown’ The Australian (Sydney), 3 December 2002, 1.
[49] Victorian Trades Hall Council, Corporate Accountability Campaign Statement (2003) <http:// www.vthc.org.au/campaigns/20030711_corporate.html> at 12 August 2003.
[50] Former Industrial Court, Industrial Commission and Workers Compensation Appeal Tribunal President and co-ordinator of what is referred to as ‘the Stanley Report’. The report was released on 25 February 2003.
[51] Brian Stanley, Frances Meredith and Rod Bishop, ‘Review of the Occupational Health, Safety and Welfare System in South Australia’ vol 3, 89 at http://www.workcover.com/AboutUs/ AboutWorkCoverSA/SchemeOverview/corpschemeStanley.htm.
[52] Page 7 of the Department’s submission, as quoted in the Review, above n 51, 111. The authors have not had access to the Attorney-General’s submission.
[53] Stanley, Meredith and Bishop above, n 53, 111.
[54] The Bill was read a second time in the House of Assembly, Wednesday 28 May 2003.
[55] Statement made by the Hon Michael J Wright, Minister for Industrial Affairs, during Question Time, SA House of Assembly, Monday 28 April 2003.
[56] General Purpose Standing Committee No 1, Parliament of New South Wales, Serious Injury and Death in the Workplace (2004), Recommendation 26. Refer also to the Advice in Relation to Workplace Death, Occupational Health and Safety Legislation and Other Matters (‘The McCallum Report’ to the WorkCover Authority of New South Wales, June 2004) which also recommended against the introduction of a separate industrial manslaughter offence <http:// www.workcover.nsw.gov. au/publications> at 9 November 2004.
[57] Lee Rhiannon, ‘Greens to Workers: We’ll Push for Industrial Manslaughter Laws’ (Press Release, 11 August 2004).
[58] Tamara McLean, ‘NSW: Govt To Introduce Tougher Laws For Negligent Employers’ (Australian Associated Press Report, 27 October 2004).
[59] Two years only for first time offenders.
[60] Up to $165,000 for individual managers and directors, and up to $1.65 million for corporations.
[61] Rick Sarre and Meredith Doig, ‘Preventing Disaster by Building a Risk-Prevention Ethic into Corporate Governance’ (2000) 15 Australian Journal of Emergency Management 54.
[62] The catastrophe is discussed in Celia Wells, ‘Corporate Criminal Liability: Developments in Europe and Beyond’ (2001) 39(7) Law Society Journal 62, 64. Refer also to Attorney-General’s Reference No 2/1999 [2000] EWCA Crim 91; [2000] 3 All ER 182. In the United Kingdom, like Australia, a corporate manslaughter prosecution must show that someone who represents the ‘controlling mind’ of the company is guilty of the offence. Given that ‘controlling mind’ is such an amorphous term in common parlance, the chances of a corporate conviction in the United Kingdom are always going to be slight.
[63] United Kingdom Home Office, Reforming the Law in Involuntary Manslaughter: The Government’s Proposals, pt 3: ‘Scope of the Proposals — A New Offence Of Corporate Killing’ (2000). See also the discussion of R v Adomako [1994] UKHL 6; [1995] 1 AC 171 in James Gobert and Maurice Punch, Rethinking Corporate Crime (2003) 92. R v Adomako had the effect of replacing ‘recklessness’ with ‘gross negligence’ as the mens rea of manslaughter. The successful prosecution of a holiday company in Dorset arising out of the deaths of four teenagers in 1996 was based upon this standard (R v Kite and OLL Ltd, discussed in Anne Carver, Hong Kong Business Law (5th ed, 2001) 69).
[64] United Kingdom Home Office, above n 63, 19, para 3.4.9.
[65] James Gobert, ‘The Politics of Corporate Manslaughter — The British Experience’, (this volume).
[66] United Kingdom Home Office, ‘Government to Tighten Laws on Corporate Killing’ (Press Release 21 May 2003).
[67] Kathy Sutton, UK Corporate Killing (2003) Ethical Corporation Online <http://www.ethical corp.com/content.asp?ContentID=527> at 12 August 2003.
[68] Trades Union Congress, Corporate Accountability and Real Corporate Responsibility (2003) <http://www.tuc.org.uk/h_and_s/tuc-6546-f0.cfm> at 12 August 2003.
[69] Gobert, above n 65.
[70] United Kingdom, Hansard Debates, House of Commons, 21 July 2004, 326 (Tony Blair, Prime Minister).
[71] Occupational Health and Safety Act RS O 1990 c 0.1, s 66(4). Note that this vicarious liability extends to natural persons charged with offences under the Act also. It is not uncommon for OH&S legislation to impose vicarious liability on corporate employers. However, the penalties for such vicarious breaches are primarily pecuniary only. For an historical perspective refer to Harry Glasbeek and Susan Rowland, ‘Are Injuring and Killing At Work Crimes?’ (1979) 17 Osgoode Hall Law Journal 506.
[72] Department of Justice Canada, above n 32.
[73] Section 735(1)(a).
[74] Department of Justice, Canada, Government Response to the Fifteenth Report of the Standing Committee on Justice and Human Rights — Corporate Liability (2002) <http://canada.justice.gc. ca/en/dept/pub/ccl_rpm/summary.htm l> at 12 August 2003.
[75] Ibid.
[76] Christopher Little and Natasha Savoline, ‘Corporate Criminal Liability in Canada: The Criminalization of Occupational Health and Safety Offences’ (Paper presented at the Annual Filion Wakely Thorup Angeletti Seminar, Toronto, Ontario, June 2003 <http://www .filion.on.ca/pdf/CML%202003%20Paper.pdf> at 12 August 2003).
[77] Following their response to the Standing Committee, the Canadian Government introduced Bill C-45 (Criminal Liability of Organizations) in the House of Commons on 12 June 2003. It incorporated the provisions discussed above, which have now been enacted.
[78] For a comprehensive critique of the United States ‘vicarious liability’ model see the Department of Justice Canada, above n 32.
[79] One such case is Sea Horse Ranch v Superior Court (1994) 24 Cal App 4th 446 in which the corporation’s president was successfully prosecuted for involuntary manslaughter. See also Celia Wells, ‘The Millennium Bug and Corporate Criminal Liability’ (1999) 2 Journal of Information, Law and Technology 4.1.1.
[80] Reported in Gobert and Punch, above n 63, 83.
[81] Sarre and Doig, above n 61.
[82] Gobert and Punch, above n 63, 76, referring to Andrew Ashworth, Principles of Criminal Law (3rd ed, 1999) 199.
[83] Even once the appropriate characterisation of criminal liability has been determined, the issue of a suitable penalty scheme invites an additional set of questions.
[84] Fox, above n 8, 114.
[85] For example, see the discussion in Commonwealth of Australia, Royal Commission into the Building and Construction Industry, Final Report (2003).
[86] An idea explored in Rick Sarre, ‘Corporate Governance In The Wake Of Contemporary Corporate Collapses: Some Agenda Items For Evaluators’ (2003) 3(1) Evaluation Journal of Australasia (new series) (1), 48.
[87] Ideas explored by Brent Fisse, ‘Sentencing Options Against Corporations’ (1990) 12 Criminal Law Forum 211.
[88] Per New South Wales Industrial Relations Minister John Della Bosca as cited by, and reported in, McLean, above n 58.
[89] See Gobert and Punch, above n 63, 114.
[90] DPP v Esso (Australia) Pty Ltd [2001] VSC 296 (Unreported, Supreme Court of Victoria, Cummins J, 30 May 2001) [4].
[91] See this connection made in Jennifer Hill, ‘Corporate Criminal Liability in Australia: An Evolving Corporate Governance Technique?’ in Low Chee Keong (ed), Corporate Governance: An Asia-Pacific Critique (2002) 519.
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