Many boards are refocussing their efforts on safety governance following the introduction of national workplace health and safety legislation in Australia, which includes a positive duty of due diligence for directors and officers.

Here we provide a handy ‘due diligence’ check list to assist directors and officers fulfil their legislative duties.
Governance of workplace health and safety has come to the fore of directors’ minds since the introduction of the national harmonised work health and safety (WHS) laws in January 2012.  The new WHS legislation has been enacted in all states and territories except Victoria and WA, who still continue with their previous OHS legislation.

Key aspects of the new WHS legislation include:

  • a primary duty of care requiring persons conducting a business or undertaking (PCBU) to ensure, so far as is reasonably practicable, the health and safety of workers and other persons who may be affected by the carrying out of work
  • a positive personal duty on officers of the PCBU to exercise due diligence to ensure the PCBU complies with their duties and obligations under the WHS Act
  • significant penalties for breaches for officers and PCBUs.

Due diligence within the harmonised legislation can be summarised as taking reasonable steps to:

  • acquire and keep up-to-date knowledge of WHS matters
  • understand the nature of the business, hazards and risks
  • ensure the PCBU use resources and processes to eliminate or minimise WHS risks
  • ensure the PCBU has processes for receiving, considering can responding to information on incidents, hazards and risks
  • ensure the PCBU implements processes for complying with duties and obligations under the WHS Act
  • verify the provision and use of the above resources and processes

Guidelines on how to meet due diligence and interpret ‘reasonably practicable’ have been released by Safe Work Australia and the state and territory WHS regulators.  There have been no prosecutions in Queensland under the new WHS legislation to date, which will in the future help to guide business decision-making as precedents are set.

Kitney Occupational Health and Safety suggests key considerations for officers to meet due diligence.  First and foremost is a look at the organisational structure and a clear understanding of who the duty holders are (the officers and the PCBUs) and their duties.  The size and structure of the organisation will determine whether there are a group of officers (such as the CEO, Company Secretary and Board) or an individual officer who may also be the business owner and PCBU.

Having established who the duty holders are, considerations for meeting due diligence include:

  • ensuring a good understanding of the legislation and obligations
  • being aware of the hazards and risks of the organisation
  • including WHS within strategy, business planning and budgeting
  • ensuring the PCBU has an effective WHS management system that meets legal requirements and provides the controls needed to manage the hazards and risks of the organisation
  • ensuring the organisation has access to WHS knowledge and expertise that is relevant to the industry and business activities
  • including WHS within Board and/or management meetings
  • receiving and reviewing WHS performance reports.

Officers need to ensure that the PCBU has assessed the circumstances, hazards and risks of the organisation and taken action based on what they are reasonably able to do, along with periodically reviewing risk controls.
Key documents needed by officers to assist them in meeting due diligence include a hazard and risk register for the organisation, a legal or external references register, WHS strategy and plans, budgets that include WHS and WHS performance reports.

Along with the actions above, support that officers can give to the PCBU to meet their obligations include a visible interest and commitment to WHS.  This may be during meetings, visits within the organisation and during contact with key stakeholders.

Clear and visible commitment to WHS sets the tone and culture for the organisation and will strongly influence the behaviours of managers and workers.  It is the combination of systems and culture that will ensure the duties of the PCBU are met and thus the due diligence of officers.

For further information regarding safety governance in your organisation, contact Directors Australia at 07 3221 5107 or Kitney Occupational Health and Safety at www.kitney.com or 07 3910 1117.

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