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Group CEO Liable For OH&S Breach |
A CEO of an international public company has been found guilty of an offence under the Occupation Health and Safety Act. The CEO was based overseas and only spent 1 day a month at the site where the worker was killed while cleaning a tank. |
The employee died in an explosion when cleaning a tank with solvents. The company and the general manager pleaded guilty. The CEO of the group, overseeing 1,600 staff in Australia, NZ and the USA, pleaded not guilty. |
If a corporation breaches the OH&S Act then each director and manager is deemed to have contravened as well. You can only escape this deemed liability if you can show that you were:
- not in a position to influence the conduct of the corporation in relation to the contravention or;
- you were in a position to influence the corporation but used all due diligence to prevent it.
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| The CEO said he was relying on local manager to influence the conduct of the corporation. The court said, as a director, the CEO was in a position to influence the conduct of the corporation and did not need to be involved "hands on" in the operations. He could have directed safety audits, reports, policies and appointment of experts. He did not.
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The judge also said that the CEO had not used all due diligence to prevent the contravention. The judge was critical of the CEO's ignorance about operational matters and said that the systems were inadequate. |
The lesson for CEOs and directors is that they need to be active and diligent in demanding information about OH&S business risks and ensuring that advice from experts is obtained about removing risks and ensuring the safety of employees. |
All CEOs should put OH&S on the agenda at monthly board meetings and demand that their subordinates report on risks, policies and give assurances that experts are in place to supervise OH&S. |
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