News

9 May 2011

NSW moves to limit directors’ liability

NSW company directors and officers could still face prosecution in cases of industrial manslaughter, but WorkCover will now have to prove their case before action is taken.

The newly sworn in NSW Coalition Government last week moved through State Parliament new occupational health and safety laws and amendments that remove controversial measures that could be taken against directors and officers.

Attorney-General Greg Smith says the amended Miscellaneous Acts Amendment (Directors’ Liability) Act 2011 will remove the imposition of liability for certain offences and lower the level of others from “deemed” to “accessorial” liability.

He says the move will help to reduce complexity and assist efforts to promote effective corporate compliance and risk management, while providing more certainty and predictability for individual directors and managers.

But the new occupational amendments have kept the controversial law that could see directors serving a jail term in the event of an employees’ death.

Allens Arthur Robinson partner Peter Arthur says there will now have to be strong evidence that proves a director or officer was reckless in the circumstances that caused the fatality.

The workplace relations expert says changes to the health and safety law aims to bring NSW into line with other states and territories. To completely move away from the industrial manslaughter laws would be a shift away from the mainstream.

“And that is not this government’s intention,” he told insuranceNEWS.com.au.

Mr Arthur says the changes will see the onus of proof being placed back on WorkCover authorities to prove their case before taking legal action against a director or officer.

“They now have to prove that there were measures the company and director could have taken to prevent injury but didn’t take,” he said.

Previously the law did not require the regulator to explain what they believed an employer should have done before taking the matter further.

Source: InsuranceNews

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