Enforceable undertakings under WHS legislation

Regulators in non-mining industries have for some time now accepted where considered appropriate, enforceable undertakings as a means by which valuable contributions can be made to WHS in lieu of pursuing prosecution action. For businesses in the mining and resources industries, it may be worth considering the option of an EU, and its availability. It could be a positive alternative to pursue where an incident has occurred and has been investigated by the relevant regulator.

An EU can be an attractive proposition for a business. If an EU proposal is accepted, a business can protect and enhance its reputation, and avoid a WHS prosecution, costs of litigation, and potentially, a criminal conviction.

While each business will need to consider the particular WHS legislation and regulator policies in the jurisdiction concerned, there are a number of general issues likely to arise when considering an EU wherever available in the relevant jurisdiction.

What is an EU?

In NSW, the regulator for mines is the head of the Department of Planning and Environment, often referred to as the Resources Regulator.

Where an incident occurs at a mine, the Resources Regulator may investigate the incident, and, if it considers that there has been a breach of the WHS Act, it may commence proceedings against a business (or an officer or a worker).

Alternatively, the Resources Regulator may accept an EU given by a business. An EU is a written, binding commitment by a business to “implement initiatives designed to deliver tangible benefits for the industry and broader community”. An EU proposal does not amount to an admission of guilt by a business.

However, an EU cannot be accepted for an alleged contravention of a category 1 offence (ie, where it is alleged a person is reckless as to risk of death or serious injury or illness). Further restrictions apply in Queensland (including category 2 offences, being a contravention exposing an individual to a risk of death or serious injury or illness, and industrial manslaughter offences).
The business must comply with the EU once it is accepted by the regulator. A failure to comply with an accepted EU may result in a maximum penalty of $250,000 for a business and $50,000 for an individual.

However, once an EU is in effect, no proceedings may be brought against a person in relation to the alleged contravention of the WHS Act with which the EU is concerned. If proceedings already have been brought, the Resources Regulator must take all reasonable steps to have the proceedings discontinued as soon as possible.

Approach of the Resources Regulator

In determining whether an EU will be accepted, the proposer must demonstrate to the satisfaction of the Resources Regulator that the EU will be the most effective and appropriate regulatory outcome.

In making this assessment, the Resources Regulator will take into account the nature of the alleged contravention, any impacts of the alleged contravention on any worker, the industry, the community, and the compliance history of the company or individual involved. A proposal for an EU needs to include details about strategies that will deliver benefits to workers, industry and the community. It will also need to highlight how these benefits will be linked to the EU.

If the matter involves a fatality or very serious injury, the Resources Regulator is unlikely to accept that an EU is more appropriate than pursuing a prosecution action, unless exceptional circumstances can be shown.

The Resources Regulator provides a pre-proposal advisory service which aims to explain the proposal and submission process, the factors considered when evaluating the proposal and the negotiation and acceptance process that will be followed. This service may be a useful forum in which to obtain initial feedback and guidance as to the thinking of the Resources Regulator, particularly where a fatality or very serious injury is involved.

The Resources Regulator also is likely to ask that its costs be paid as part of any agreement to enter into an EU, being:

• costs of conducting the investigation into the incident giving rise to the alleged contravention; and
• any legal costs it has incurred in commencing a prosecution action (which may be significant and so may make defending a prosecution a more commercial approach than an EU).

Information to be included in an EU

In addition to the information and details already referred to, and information about the parties, incident and contravention, an EU proposal is to include information such as:

• an acknowledgement that the Resources Regulator has alleged a contravention has occurred
• details of any injury or harm that arose from the alleged contravention
• details of any notices issued that relate to the alleged contravention
• details of the type of workers’ compensation provided (if applicable)
• the support provided, and proposed to be provided, to the injured individual(s) to overcome the injury/illness
• any consultation undertaken within the workplace regarding the proposal of an EU
• any rectifications made as a result of the alleged contravention
• a commitment that the behaviour that led to the alleged contravention has ceased and will not recur
• a commitment to the ongoing effective management of WHS risks
• a commitment to disseminate information about the EU to workers, and other relevant parties (which may include WHS representatives, and in the annual report (if applicable)); and
• a commitment to participate constructively in all compliance monitoring activities of the EU. 

Examples of enforceable undertakings

Examples of EUs that have been accepted by the Resources Regulator include:

Authors:  Stephen Nettleton, Partner; Brett Elgar, Counsel; and Cindy Lam, Graduate.