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Safeguard OSH Solutions - Thomson Reuters

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OSH Tracker

Department of Labour v Millard Manufacturing (1977) Ltd (DC, 14/12/05)

OSH Tracker

Defendant:
Millard Manufacturing (1977)
A metal casting company and its director have been convicted on three charges relating to gradual process injuries suffered by former employees.  Millard Manufacturing (1977) Ltd was convicted on two charges under s6, and ordered to pay $16,000 in reparations to two workers who developed musculoskeletal injuries following prolonged exposure to machine vibrations. The director, Howard Mervyn Millard, who worked alongside the men, was convicted under s7(1)(a) and ordered to pay $4000 in reparations ( Wellington DC, December 14). The payments were divided equally between the victims. 
The men both worked for the company – which makes small cast metal pieces – for more than a decade, but ended their employment in 2004 following injury problems. 
One of men was a linisher, grinding small imperfections from finished pieces, gripped between thumb and forefinger. In 2000 he experienced numbness and pain in his hands, and a doctor suggested he had carpal tunnel syndrome caused by his work. His employer disputed that the problem was work-related, and no changes were made to his work practices. 
A specialist later confirmed the diagnosis and recommended surgery, which was carried out in late 2003 and early 2004. The man returned to his previous job, but left five months later on medical grounds. 
The other employee was a buffer and polisher. He first consulted a doctor about wrist pain in 1996, and by 2004 had developed a tremor that his doctor attributed to work-related nerve damage. 
Millard knew of the problem, but did not amend the man’s working conditions until a second doctor diagnosed carpal tunnel syndrome and hand-arm vibration syndrome in late 2004. Shortly afterwards the man left his job. 
The Department of Labour was not notified of the serious harm injuries suffered by the men until April 2005. 
Industry:
Manufacturing
Sub-Industry:
Metal Product Manufacturing
Risk:
Musculoskeletal
Harm:
Injury
Penalty Amount:
$16000.00
Reparation Amount:
$16000.00
Appeared in Safeguard issue 96

Judgment Text

NOTES OF JUDGE D R W BARRY ON SENTENCING 
Judge D R W Barry
[1]
The defendant, Millard Manufacturing (1977) Limited is charged with two charges, pursuant to s 6 of the Health and Safety in Employment Act 1992, in its role of employer failing to take all practical steps to ensure the safety of two separately named victims, (one in each charge) while in the workplace. Namely that it failed to ensure those two people were not exposed to hazards arising out of linishing and fusion welding, industrial processes carried out at the workplace. The two victims affected are Mr Sutrisna and Michael Clark. 
[2]
Mr Howard Millard, at the relevant time the hands on working director controlling the company, has also been charged personally and pleaded guilty to failing to ensure there were effective methods for systematically identifying existing hazards to employee's work, and by doing so was a party to that failure. The charges have maximum penalties of fines up to $250,000. 
[3]
A brief outline of the facts will follow. In Mr Galloway's submissions there was notice of non-acceptance of an element of the summary of facts. Through helpful discussion between counsel this has resolved itself to the point that the written summary of facts provided has had an addendum inserted. That conflict related to the time that the company officers were told by Mr Clark about pain in his hand. It being claimed for the informant that this would have happened some time in 1997. The amendment to the summary has been by the addition of the note that Mr Millard does not recall that advice. It is common ground that by September 2003 the company was aware of it and Mr Clark, by that stage, was seeking medical attention for the pain. 
[4]
The second matter related to the charge referring to Mr Sutrisna. It is accepted by the informant that an occupational therapist was consulted and changes made at the workplace following notification of that condition by Mr Sutrisna. 
[5]
The company produced items such as badges and other small cast metal objects from Wellington premises. In June 2004 ownership was transferred to a new company. Mr Sutrisna was an employee of the defendant company from 1992 to 2004. He spent much time carrying out linishing on metal objects which involved them being applied while held between thumb and forefinger, to a mechanically driven abrasive wheel. This was repetitive work and it generated mechanical vibration. 
[6]
In May 2000, Mr Sutrisna consulted his GP with numbness and pain in both hands. Possible carpal tunnel syndrome was diagnosed. Mr Millard expressed disquiet that the injury could have resulted from work at the factory and Mr Sutrisna carried on working. Then specialist medical opinion was obtained, that there was bilateral carpal tunnel syndrome requiring surgery to both wrists. Surgery was carried out in December 2003 and January 2004. Mr Sutrisnra returned to work in 2004 but in July 2004 ceased employment on medical grounds relating to ongoing effects of that injury. 
[7]
Mr Clark was employed with the company from 1990 to December 2004. Again his tasks involved linishing, polishing and buffing. About 1997 he noticed pain in his hands. By September 2003 he was having medical attention for this condition and by August 2004 there is a GP's opinion that there could be nerve damage caused by this work. In September 2004, a second opinion from a GP suggested carpal tunnel syndrome and hand arm vibration syndrome. That led to Mr Clark ceasing employment by December 2004. 
[8]
In respect of Mr Millard personally, the informant summary notes that he was a working director at all material times, actively involved in day to day interaction on the job with both victims, and that he was in effect a participant in the defendant company's failure to address matters appropriately. 
[9]
I have victim impact statements before me showing Mr Sutrisna is 52 years old. He had been employed with the company for over 13 years. It confirms surgery for carpal tunnel syndrome in 2003 with permanent right hand disability with attendant constant pain. There have been financial burdens with loss of income and extreme stress on Mr Sutrisna's marriage. 
[10]
Mr Clark at 32 years old had been employed for I5 years. He has been on ACC since December 2004. He suffers ongoing weakness in his hands, ongoing pain and ongoing attendant stress. 
[11]
I have helpful submissions from both counsel. For the informant the relevant principles and authorities are provided me. Up until May 2003 the proper criteria on assessment of sentence were those spelt out in Department of Labour v de Spa & Co Ltd (1993) l ERNZ 339. As well there now are Sentencing Act 2002 considerations. 
[12]
For the informant it is noted that while there are two separate sets of charges in respect of the two victims, this relates to failures that were common to both. The informant submits that deterrence is the prime focus, both specific deterrence, because at some point the defendants were put on notice by the reporting of symptoms and protective steps were not effectively taken to minimise exposure. There is also, the informant submits, an element of general deterrence for the industry employing such processes in the workplace in New Zealand. The informant submits the culpability is at the upper medium range with moderate to serious injury reflected. 
[13]
It submits that the aggravating factors are particularly that the defendants were put on notice of the physical conditions being manifest by these two workers and did not minimise any of those effects. Secondly, that the degree of harm or injury is in the moderate-serious category. The informant submits, that as far as penalty range is concerned, that the totality principle predominates. It cites various authority including the Department of Labour v Otago Polytech where one charge of failing to take all practical steps to ensure employee safety involved a $12,000 fine, with $8,000 to the complainant. The informant submits that that was pre-May 2003, as are most of the authorities that it has cited, and that the penalty has increased five fold from $50,000 to $250,000 since that time. 
[14]
The informant submits that bearing in mind the totality principle, in respect of the two charges against the company, total monetary impost of between $20,000 and $28,000 would be appropriate, and in respect of Mr Millard personally, an impost of between $5,000 and $8,000 appropriate. The informant goes on to point out that the consideration of reparation/fine balancing involves firstly, assessing any proper level of reparation, and fitting the fine element within that. 
[15]
For the defendants, Mr Galloway has provided me with full detailed and helpful written submissions. He has fleshed those out in submission today. He submits that the defendants acknowledge responsibility. Mr Millard manifests that acknowledgement with his presence here in court today. That acknowledgement was that inadequate systems were put in place despite notice of problems and that the guilty pleas reflect that acknowledgement and are deserving of significant credit. Also that the guilty pleas are, effectively, at the first appropriate opportunity. 
[16]
Mr Galloway makes the submission that this offending must be looked at in the context of the knowledge that was abroad in both the industry and the Department of Labour at the time in respect of the possible dangers or injurious effects of using this type of machinery. He notes that in the late 1990s the only publication that touched these possible injuries really did not take into account their occurrence in the light industrial processes involved in this company. In other words, that there was little or no knowledge abroad of the likelihood of such injury or of minimisation steps that would be available at the time in the industry. 
[17]
Mr Galloway points out the defendants have throughout this matter been co-operative with the department and have taken remedial action that can be seen in the context of current knowledge. He submits it would be manifestly unfair if, as a result of processes used during the 1990s, this sentencing exercise was totally dominated by the five-fold increase in penalty that was legislated in 2003 for actions and processes put in train and accumulating in their effect during a time earlier than that penalty, even though that penalty is applicable to these charges. 
[18]
Mr Galloway submits that rehabilitation is seen by the defendants as their prime role in this exercise, as a positive way of giving something back to the victims, and that effectively rehabilitation of the victims predominates over issues of punishment. His submission is that the company's culpability might attract a total penalty of between $10,000 and $15,000, and in respect of Mr Millard a fine of something around $5,000 would be appropriate. 
[19]
I find that the principles that predominate are firstly rehabilitation of victims and then hand in hand must be an element of accountability for the harm, deterrence and denunciation. I consider the aggravating features are the harm that was actually done. Secondly, the failure to take effective steps to minimise that harm and the duration of that failure. 
[20]
On the credit side of the ledger there is, and has got to be recognised by way of significant credit, the guilty pleas that mean the victims do not undergo the ordeal of giving evidence in a court hearing and also the co-operation and remedial action that has been undertaken by the defendant company and its managing director. Also, I recognise there is no previous history of any offending by either the defendant company or Mr Millard. All that I consider attracts credit by way of discount of penalty of one third of what would have been imposed. I take account of the financial circumstances. Counsel confirms they do have the ability to pay significant penalties. 
[21]
As far as the breakdown between reparation and fine in the total exercise, my view is that reparation by way of amends to the victims is the greatest consideration and it eclipses the interests of imposing fines in a case such as this where the effects are ongoing and there is an element of disability that will be permanent for both men. 
[22]
Although the ongoing effects on Mr Sutrisna seem to be marginally more serious I consider as far as allocation of reparation that both men should be treated equally. In terms of allocating penalty for the company I look at both charges and apply the totality principle to both in assessing the financial imposition. 
[23]
I consider that a starting point of $24,000 is appropriate. I then factor into that a credit of one third, which reduces that to $16,000. I accordingly order the company to pay reparation of $16,000. That will be allocated equally between Mr Sutrisna and Mr Clark. 
[24]
In respect of the charge against Mr Millard, I consider a starting point of $6,000 is appropriate. Then again there is a one third credit, which means that I order reparation of $4.000. Again that is allocated equally to both men. 
[25]
In respect of all three informations there will be $130 court costs also. 

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