OHS Update

Significant changes to Occupational Health and Safety (OHS) legislation passed the Parliament and received Royal Assent this week, introducing changes affecting all Victorian Public Sector employers. 

The changes include the introduction of greater health and safety obligations owed by public sector employers to labour hire workers and introducing new obligations for host employers to consult, cooperate and coordinate with labour hire agencies about health and safety matters. The effect of the changes is that Victorian Public Sector employers may need to review their labour hire contracts and the processes they have in place surrounding their engagement with labour hire agencies. These changes commence on 22 March 2022. 

In addition, all contractual or insurance arrangements by which OHS duty holders are indemnified against liability to pay penalties for OHS offences are now void and cannot be effective. It will also be an offence from September next year to enter into a contract or insurance arrangement which purports to indemnify a person against OHS fines and penalties. 

The Law

On 21 September 2021 the Occupational Health and Safety and Other Legislation Amendment Act 2021 (Amendment Act) received Royal Assent.

The Act amends:

1. the Occupational Health and Safety Act 2004 (OHS Act) to provide additional protections in relation to labour hire, and
2. various Acts, including the OHS Act, to prohibit insuring or indemnifying a person for a pecuniary penalty for an offence, and
3. various Acts including the OHS Act, in relation to notices, including in respect of issuing notices electronically, and
4. the OHS Act 2004 to give additional powers to health and safety representatives and authorised representatives of registered employee organisations in relation to certain matters, and
5. various Acts, including the OHS Act, to ensure that the forfeiture of seized item provisions work as intended.

Labour hire amendments - labour hire workers are now 'employees'

Labour hire employment is a tripartite arrangement involving a worker, a labour hire provider or agency, and a “host” employer.

In a labour hire arrangement, the worker is directly employed by the labour hire provider. The provider then supplies the worker’s labour to the host employer.

Many provisions of the OHS Act specify that “employers” owe a number of duties to “employees”. The effect of this has been that host employers have, until now, owed some health and safety duties to labour hire workers, but have owed many more specific duties only to people they directly employ. The law has been changed to overcome the perception that this places labour hire workers at a disadvantage.

The Amendment Act extends the definition of “employer” and “employee” in the OHS Act to provide that a labour hire worker performing work for a host is taken to be the employee of the host.

This means that labour hire workers will be treated in the same way as direct employees in relation to OHS matters when at their host employer’s workplace.

Labour hire amendments - a new consultation requirement

The Amendment Act also creates a new duty requiring labour hire providers and host employers to consult, cooperate and coordinate with each other when they share duties under the OHS Act towards labour hire workers.

This duty is based on a similar provision in the model Work Health and Safety Act which applies in other Australian states and territories, and seeks to ensure that when providers and hosts owe the same duties to the same worker, the provider and host are working together to ensure those duties are met.

Breach of the duty is an offence punishable by a maximum penalty of 180 penalty units (currently $32,713) for individuals and 900 penalty units (currently $163,566) for bodies corporate. This matches the penalty for the existing duty of employers to consult with employees in section 35 of the OHS Act.

While these amendments mean that both labour hire providers and host employers owe health and safety duties to labour hire workers, it is not intended to require providers and hosts to duplicate effort. Instead, the intent of the amendments is for providers and hosts to have overlapping duties, but to cooperate with each other on how those duties are discharged.

Insurance amendments

The Amendment Act prohibits the use by duty holders of insurance or indemnity arrangements to avoid direct liability to pay penalties for offences against workplace health and safety law.

The background to the amendments is that contractual arrangements and policies of insurance have sometimes provided for reimbursement of duty holders' payment of fines by a third party or insurer. 

However, any contractual clause or insurance arrangement which insures or indemnifies a person against liability for penalties imposed under the OHS Act or OHS Regulations is now void. This means that contractual clauses which say that another party will pay for all court fines or penalties can no longer be effective. 

From 21 September 2022, it will also be an offence to enter into a contract or insurance arrangement that indemnifies a person for fines in that way. The Amendment Act provides maximum penalties of 300 penalty units (currently $54,522) for a natural person and 1500 penalty units (currently $272,610) for a body corporate.

The purpose of this provision is to ensure that monetary penalties imposed for contraventions of the OHS Act and the OHS Regulations 'retain their deterrent value', and thereby encourage compliance with duties under the law. 

If a contractual term or insurance policy covers legal expenses as well as pecuniary penalties (including the cost of defending a prosecution or court-ordered damages) the new provisions only render void those terms which purport to insure or indemnify the person for the person's liability to pay a pecuniary penalty under the OHS Act or the OHS regulations. The balance of the term is unaffected. 

Other amendments

The Amendment Act also introduced provisions to:

• streamline the electronic delivery of notices and reports by WorkSafe inspectors, including WorkSafe infringement notices
• give Authorised Representatives of Registered Employee Organisations (ARREOs) and Health and Safety Representatives (HSRs) a new power to take photos, measurements, sketches and recordings when they are exercising their functions under the Occupational Health and Safety Act 2004, and
• simplify procedures for disposing of or destroying property which has been seized by WorkSafe, where the owner of the property does not want or need the property returned.

Commencement

The provisions of the Amendment Act with respect to labour hire will commence on 22 March 2022. The offence provisions in relation to the use of insurance or indemnity arrangements will commence on 22 September 2022. The remaining provisions of the Amendment Act came into effect on 21 September 2021.

Contact our team

Please get in touch with our team if you need assistance with OHS and employment matters. 

Frances Anderson
Assistant Victorian Government Solicitor, Workplace Relations and Occupational Health and Safety Branch
Email: frances.anderson@vgso.vic.gov.au

Cassandra Tanner
Lead Counsel, Workplace Relations and Occupational Health and Safety Branch and Inquiries, Prosecutions and Administrative Branch
Email. cassandra.tanner@vgso.vic.gov.au

Craig Newton
Principal Lawyer, Workplace Relations and Occupational Health and Safety Branch
Email. craig.newton@vgso.vic.gov.au