[2007] AIRCFB 438 [2007] AIRCFB 438 PR977233 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.120 appeal against a decision issued by Vice President Lawler on 23 February 2007 [[2007] AIRC 136] Telstra Corporation Limited (C2007/2566) Occupational Health and Safety Review Authority Telstra Corporation Limited (C2006/3159) and Comcare JUSTICE GIUDICE, PRESIDENT SENIOR DEPUTY PRESIDENT WATSON COMMISSIONER HARRISON MELBOURNE, 30 MAY 2007 DECISION Appeal against issue of improvement notice – whether contractor in control of workplace – whether employer under a duty to notify of accident causing serious injury – Occupational Health and Safety Act 1991 ss.14,16(4),47,48(1)(f)&(h) and 68. Introduction [1] Comcare is a body corporate established by s.68 of the Safety, Rehabilitation and Compensation Act 1988. Comcare has responsibility for the administration and observance of the provisions of the Occupational Health and Safety Act 1991 (the OH&S Act). 1 Section 68 of the OH&S Act requires an employer to notify Comcare of an accident which arises out of the conduct of an undertaking and which causes serious personal injury. Regulation 37A(b) of the Occupational Health and Safety (Commonwealth Employment) Regulations 1994 requires that such notification be made within 24 hours of the accident. There is an exception to these requirements. The employer is relieved of the duty to notify Comcare if the workplace at which the accident occurred is under the control of a contractor. This appeal is concerned with the circumstances in which the exception operates. [2] On 7 August 2006 Silcar Pty Ltd and Transfield Services Pty Ltd formed a joint venture (the contractor) and successfully tendered for the provision of maintenance services to Telstra Corporation Limited (Telstra). The contract is entitled “Facilities Management and Telepower Services Agreement” (the contract). On 21 August 2006 an employee of an air-conditioning sub-contractor engaged by the contractor was seriously injured while working in the plant room of the Lidcombe Telephone Exchange. The Lidcombe Telephone Exchange is one of a number of Telstra installations covered by the contract. [3] Telstra notified Comcare of the injury on 28 August 2006, some seven days after the accident occurred. As already mentioned, an employer covered by the OH&S Act is obliged to notify Comcare within 24 hours of an accident. On 19 September 2006 Comcare issued an improvement notice to Telstra, pursuant to s.47 of the OH&S Act, for failure to notify it of the injury within the time prescribed. The improvement notice was in these terms: “To: The Chief Executive Officer, Telstra Corporation Limited. I, Nigel Docker an investigator appointed under section 40 of the Occupational Health and Safety (Commonwealth Employment) Act 1991 (the Act), am satisfied that the person named above as the responsible person is contravening or has contravened and is likely to contravene section 68 of the Act and 37A of the Occupational Health and Safety (Commonwealth Employment) (National Standards) Regulations 1994 at: Burwood Telephone Exchange , 1 Taylor Street, Lidcombe, NSW. The reasons for my opinion are: On 21 August 2006, a subcontractor employed by Trilogy and contracted by Transfield to provide maintenance services to Telstra, severed three of his fingers whilst working on an air-conditioning compressor at Burwood Telephone Exchange. Comcare was notified of the serious personal injury on 28 August 2006. Appropriate guarding has now been put in place on the item of plant in question and other like plant. Having conducted an investigation into this incident, including an examination of the procedure in place for notifying Comcare of work related incidents, and of guarding of the plant, I am of the opinion that Telstra Corporation Limited has failed to notify Comcare of a serious personal injury within the timeframe prescribed by regulation 37A of the Act, as required by s 68 of the Act. You are required to take action within 30 days of the date of this notice to prevent any further contravention or likely contravention of that section or regulation. The following action must be taken by the responsible person within the period specified above: Ensure that Telstra employees responsible for notification and reporting of incidents at the Burwood Telephone Exchange are reminded of the requirement of notifying accidents, serious personal injuries and dangerous occurrences to Comcare within the prescribed timeframe.” [4] Telstra appealed against the improvement notice. Vice President Lawler dealt with the appeal pursuant to ss.48(1)(f) and (h) of the OH&S Act. On 23 February 2007 the Vice President dismissed the appeal and affirmed Comcare’s decision to issue the improvement notice. This is an appeal, for which leave is required, against the Vice President’s decision. It is common ground that such an appeal may be brought pursuant to s.120 of the Workplace Relations Act 1996 (the WR Act). The appeal raises important issues of construction of the OH&S Act which have not been dealt with by a Full Bench of this Commission before. The matter is of such importance that, in the public interest, leave should be granted to appeal. We grant leave. [5] There is no dispute concerning the essential facts or the statutory provisions. The issue before the Vice President and before us, however, is whether Telstra was obliged to notify Comcare of the injury. If it was not obliged to do so then of course the improvement notice was wrongly issued and should be quashed. Statutory Provisions [6] It is unnecessary to set out all of the relevant provisions of the OH&S Act, most of which can be found in the Vice President’s decision. Critical to our consideration, however, is the construction of s.14 of the OH&S Act. Section 14 provides: “ s.14 Application of Act to workplaces controlled by contractors (1) Despite anything in this Act, if a workplace is controlled by a contractor for construction or maintenance purposes: (a) this Act, other than section 20, does not apply to that workplace while it is so controlled; and (b) this Act, other than section 20, does not apply to work performed by contractors at that workplace while it is so controlled; and (c) this Act, other than Parts 1 and 2 and section 82, applies to work performed by employees at that workplace while it is so controlled: (i) only if the regulations so provide; and (ii) subject to such modifications and adaptations (if any) as are set out in the regulations. Note: For the meaning of contractor, see subsection 5(1). (2) For the purposes of subsection(1), a workplace is not taken not to be controlled by a contractor simply because of the presence at the workplace of a Commonwealth employee if that employee has no right to direct the work of the persons working for the contractor.” [7] If a workplace is controlled by a contractor for construction or maintenance purposes the OH&S Act, including the requirement to notify Comcare of accidents causing serious injury within 24 hours, does not apply to that workplace or to work performed by contractors at that workplace. It is evident that s.14 is intended to exclude an employer from the operation of the OH&S Act if the relevant workplace is not under the employer’s control. It is common ground that, leaving the contract aside, the OH&S Act applies to Telstra. It is also common ground that the joint venture contract was for maintenance purposes. There is no doubt that the Lidcombe Exchange is in an overall sense controlled by Telstra. The question, however, is whether the relevant area in the Exchange was under the control of the contractor for maintenance purposes at the time of the accident. That question involves the construction of the term “controlled” in s.14(1). [8] “Workplace” is defined in s.5(1) of the OH&S Act to include any Commonwealth premises (other than a private dwelling). “Premises” is defined in the same section to include “a part of premises . ” These definitions make it plain that it was not necessary that the whole of the Exchange be under the control of the contractor for the exclusion to operate. In this case the accident occurred while the employee was engaged in cleaning the plant room and caught his hand in the pulley system of a piece of air-conditioning plant. Was the air-conditioning plant under the control of the contractor for maintenance purposes at the relevant time? [9] The Vice President’s decision is comprised of a number of elements. Adopting, as his Honour described it, a purposive approach to the notion of control in s.14(1), he found that the section is concerned with “ultimate control in the sense of ‘directing action’ or ‘command.’” 2 He went on to find that the terms of the contract were such that although Telstra had vested a level of control in the contractor Telstra nevertheless retained ultimate control. [10] Whether the contractor had control for the purposes of s.14 is a question to be answered primarily by reference to the terms of the contract. Before turning to those terms, however, reference should be made to s.16 of the OH&S Act. That section imposes an obligation on employers covered by the OH&S Act to take all reasonably practical steps to protect the health and safety of their employees at work. Section 16(4) deals with the employer’s responsibilities in relation to contractors. It reads: “SECTION 16 Duties of employers in relation to their employees etc. … (4) The obligations of an employer in respect of the employer's employees that are set out in subsections (1) and (2) apply also in respect of persons who are contractors of that employer but only in relation to: (a) matters over which the employer has control; or (b) matters over which the employer would have had control but for an express provision in an agreement made by the employer with such a contractor to the contrary, being matters over which the employer would, in the circumstances, usually be expected to have had control.” [11] It can be seen that the employer’s OH&S obligations to its employees also extend to a contractor in relation to matters over which the employer has control or would usually be expected to have control and regardless of any contractual term to the contrary. We note for completeness that the term “contractor” is defined widely in s.9A of the OH&S Act and also includes employees of contractors. It is apparent that where a contractor is involved, but the workplace is not controlled by the contractor for the purposes of s.14(1), an employer’s duty in relation to the contractor under s.16 is limited by reference to the concept of control pursuant to s.16(4). The issue before us is whether s.14 deprived the OH&S Act of any application to Telstra at the time of the accident. If it did not, and the OH&S Act applied to Telstra with respect to the accident, Telstra’s liability pursuant to s.16 is a further and separate issue with which we shall deal only briefly at the conclusion of this decision. The Terms of the Contract [12] We start from the proposition that the plant room at the Lidcombe Exchange, and the air-conditioning plant in particular was, absent the contract, controlled by Telstra. The extent to which Telstra ceded control to the contractor is governed by the terms of the contract between them. So far as relevant the contract consists of general terms and what is described as a “Maintenance and Operations Module.” The contract provides that any maintenance and operations services will be the subject of a separate order and each such order will be a separate contract incorporating the general terms. The types of services to be provided are specified in Schedule 1 to the contract. The structure of the contract is set out in cl.1: “ 1 Structure of the Agreement 1.1 Agreement The Agreement consists of: (a) these General terms; and (b) the following Modules: (i) Design and Construction Module; (ii) Maintenance and Operations Module; (iii) Direct Materials Module. 1.2 General Terms These General Terms and the Modules set out the terms on which any: (a) design and construction services; (b) maintenance and operations services; and (c) Direct Materials, will be provided by the Contractor. Any such services will be the subject of a separate Order. Each such Order will be a separate contract incorporating these General Terms. The types of services to be provided under each type of Order are set out in Schedule 1 (“Services Description”).” [13] The contractor’s general responsibilities are dealt with in cl.3.5 of the contract. They include a duty upon the contractor to: “(c) comply with, and ensure its subcontractors comply with, such safety, security and general Site rules as may be reasonably specified by Telstra when attending a Site.” [14] Clause 7 entitled “Site” is relevant. It provides, where relevant: “ 7 Site 7.1 Possession (a)In accessing a Site, the Contractor must at all times comply with all Legislative Requirements, clause 8 (“Powers under the Telecommunications Act”) and any agreements, codes of practice or memoranda of understanding entered into by Telstra with third parties, the contents of which have been previously made known to the Contractor. (b)Provided the Contractor has complied with clause 19.2 (“Proof of insurance”) and clause 7.1(a), Telstra must from time to time: (i) provide to the Contractor access to a Site to the extent it is owned and fully occupied by Telstra which is sufficient to enable it to fulfil its obligations under a Module and any Order; and (ii) provide consent to the Contractor accessing portions of a Site which is either owned or partially occupied by Telstra. (c) The Contractor must use its best endeavours to obtain access sufficient to enable it to fulfil its obligations under a Module and any Order for all portions of a Site other than those under clause 7.1(b)(i). (d) Possession of the Site confers on the Contractor a right to only such use and control as is necessary to enable the Contractor to carry out the Services and excludes camping, residential purposes and any purpose not connected with the Services, unless approved by the Telstra Representative. (e) The Contractor acknowledges and agrees that it: (i) will have non-exclusive possession and use of a Site and may be required to share possession and use of a Site with others including Telstra, its agents, employees, consultants or other contractors; and (ii) will make arrangements required for the performance of the Services on those portions of a Site not owned and fully occupied by Telstra, subject to its obligations under clause 7.1(a). 7.2 Access for Telstra and Others Telstra and Telstra’s employees, consultants and agents may at any time have access to any part of a Site for any purpose. The Contractor will permit persons engaged by Telstra to carry out work on a Site other than the Services and will co-operate with them.” [15] Schedule 7 deals with the health and safety of employees. It provides in part as follows: “ Schedule 7 – HSE … 1.3 Risk Management Before performing any Services, the Contractor must implement appropriate risk management plans in relation to all HSE risks. The development of the plans must include, as a minimum, carrying out the following risk management steps, in accordance with relevant industry standards: (a) identify the environmental aspects and impacts, and any hazards to health or safety associated with its performance of the Agreement and any Order to ensure that all potential or actual HSE risks have been identified; (b) ensure that the risks associated with all of the environmental aspects and impacts, and the health and safety hazards identified under paragraph (a) are assessed, included as part of the Contractor’s procedures and effectively managed though the development and documentation of appropriate HSE risk management plans; and (c) ensure its employees, agents and subcontractors are appropriately inducted, trained and supervised in relation to: (i) the risks identified and assessed under this clause; (ii) the procedures they need to follow and manage those risks; and (iii) their HSE obligations under the Agreement and any Order; including the Relevant Obligations. 1.4 Incident Reporting (a) Subject to paragraph (b), the Contractor must as soon as practicable and in any case within 24 hours of becoming aware of the incident notify Telstra and of any Incident that occurs during the performance or non-performance of its obligations under an Order. (b) If a Legislative Requirement requires an earlier response, the Contractor will provide notice to Telstra of any Incident to ensure that Telstra is able to comply with the Legislative Requirement.” [16] Furthermore Telstra retains the right to audit the contractor’s performance, in cl.1.5 of Schedule 1 and the right to direct rectification, in cl.1.7 of Schedule 1. The Question of Control [17] Against this background we return to the question of whether the plant room, and more particularly, the air-conditioning plant in it, at the Lidcombe Exchange was controlled by the contractor at the relevant time. Section 14(2) provides that a workplace is not taken to be controlled by a contractor simply because of the presence at the workplace of a (Telstra) employee if that employee has no right to direct the work of the contractor’s employees. In this case Telstra has reserved various rights, but the right to direct the work of the contractor’s employees is not one of them. There is nothing in the contract which prevents Telstra employees from entering any part of the Lidcombe Exchange. To the contrary the contractor is only permitted such entry to the premises as is “ sufficient to enable it to fulfil its obligations.” 3 [18] There are other indications that Telstra maintained control of the premises. It retained the right to audit the contractor’s occupational health and safety procedures and to direct that its health and safety plans be altered. While it may be argued that by these provisions Telstra simply sought to ensure that it was not in possible breach of any statutory obligations itself, the provisions might also be an indication that Telstra reserved the right to direct the contractor in relation to health and safety issues generally. [19] A further consideration favouring the conclusion that Telstra remained in control is the requirement in cl.1.4(a) of Schedule 7 that the contractor notify Telstra as soon as possible, and in any case within 24 hours of becoming aware, of an occupational health and safety incident. There is a further requirement in cl.1.4(6) of Schedule 7 requiring the contractor to notify Telstra of an incident at such time as to ensure Telstra is able to discharge its statutory obligations in that regard. These are indications that the parties contemplated that the statutory obligation to notify a health and safety incident would remain with Telstra. [20] It appears, on the other hand, as we have mentioned, that Telstra did not have the right to direct the manner in which the contractor’s employees performed the work on the premises. To the extent that control of employees is part of the concept of control of premises, and s.14(2) of the OH&S Act indicates that it is, Telstra’s lack of control in this regard supports the conclusion that the contractor was in control of the air-conditioning plant at the relevant time. [21] It should be emphasised that what is in contemplation in s.14 is control of premises. While control of work and the way in which work is performed is bound up in the concept of control of premises, they are not the same thing. Section 14 excludes from the operation of the OH&S Act premises controlled by a contractor and work performed by the contractor on those premises, subject to the exceptions in the section itself. As the Vice President pointed out, where the exclusion operates the premises, and the work performed by a contractor on the premises, are governed by State occupational health and safety laws. 4 Section 14 marks the boundary for the operation of the OH&S Act in cases involving contractors. Unless the employer has unambiguously relinquished control of the premises to the contractor, the exclusion does not operate and the case falls inside the boundary. [22] In this case Telstra retained wide rights of entry to the premises. It had the right to direct the contractor in relation to heath and safety matters, presumably extending to matters affecting the premises. The contractor was obliged to notify Telstra of health and safety incidents which might require to be reported by Telstra. More particularly, the contractor did not have exclusive possession of the air-conditioning plant at the Lidcombe Exchange. The contractor only had possession to the extent necessary to carry out the maintenance required by the contract. Telstra was able to operate the plant, inspect it and, if necessary, modify it, provided it did not interfere with the maintenance work. We have therefore concluded that the contractor was not in control of the air-conditioning plant on the relevant date and the exclusion in s.14 did not operate. It follows that the workplace and the work performed by the employees of the contractor were covered by the OH&S Act. Telstra was not exempt from the requirement to notify Comcare of the injury. Conclusion [23] For these reasons we agree with the Vice President’s conclusion that the improvement notice was valid. We dismiss the appeal. [24] Before concluding we wish to make some brief observations about the Vice President’s findings concerning s.16(4) of the OH&S Act. His Honour found that at the relevant time Telstra was in control of the relevant part of the Lidcombe Exchange and accordingly was bound by the obligations in s.16. We should indicate that in our opinion the concept of control of a workplace in s.14 may not be co-extensive with the concept of control in s.16(4). Certainly there are differences in the text of the two provisions. Nevertheless it is unnecessary and inappropriate that we rule on the application of s.16(4) to Telstra in the circumstances of this case. His Honour was apparently asked to deal with the issue. No doubt that is why he did so. It appears nevertheless that His Honour’s finding was not necessary to the determination of the appeal before him because the improvement notice did not deal with the obligations in s.16. Nor does the determination of this appeal depend in any way upon the construction and application of s.16(4). Furthermore we are not satisfied that the submissions and the evidence to which we were referred provide a compelling or even an adequate basis for deciding those important questions. BY THE COMMISSION: PRESIDENT Appearances: HJ Dixon QC and L McManus of counsel for Telstra Corporation Limited. I Neil SC and D Chin of counsel for Comcare Australia Pty Ltd. Hearing details: 2007. Sydney. April 26. 1 Formerly the Occupational Health and Safety (Commonwealth Employees) Act 1991 2 [2007] AIRC 136, at para [33] 3 Contract chapter 7.1 (b)(i) 4 [2007] AIRC 136, at paras [27] and [28] Printed by authority of the Commonwealth Government Printer <Price code C>