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OSH Tracker

Department of Labour v Grayson Engineering Ltd (DC, 10/11/06)

Sentencing Tracker

Offender:
Grayson Engineering Ltd
Principal Offences:
Failing to take all practicable steps to ensure employee was not harmed while at work (s 18(1)(a) and s 50(1)(a) Health and Safety in Employment Act 1992)
Plea:
Guilty
Non-Custodial Sentences:
$2,500 fine
$3,000 reparation order
$130 Court costs
Mitigating Factors:
Guilty plea
Remorse
Positive attitude
Previous Convictions:
None
Victim:
Male
Offender:
Panama Erection Ltd
Principal Offences:
Failing to take all practicable steps to ensure safety of employee while at work (s 6 and s 50(1)(a) Health and Safety in Employment Act 1992)
Plea:
Guilty
Non-Custodial Sentences:
$2,500 fine
$3,000 reparation order
$130 Court costs
Mitigating Factors:
Guilty plea
Remorse
Positive attitude
Previous Convictions:
None
Victim:
Male

OSH Tracker

Defendant:
Grayson Engineering Ltd
GRAYSON ENGINEERING LTD was fined $2500 under s18(1)(a) and ordered to pay $3000 in reparations after a contractor’s employee had the tip of his ring finger amputated in a ladder hinge. The ladder provided access to a support tower on a construction site, but the ladder base had not been secured and, as the injured man began to ascend, his weight on the lower rungs caused a scissor movement at the hinge, catching his finger. Subsequent inspection found the tower’s internal access system was unsuitable as there were large gaps between ladder rungs, no landings at some of the points where ladders joined, and no perimeter guarding on the landings that did exist. 
At the same hearing the injured man’s employer, PANAMA ERECTION LTD, was fined $2500 under s6 and also ordered to pay $3000 in reparations ( Auckland DC, November 10). 
Industry:
Construction
Sub-Industry:
General Construction
Risk:
Machinery (trapped, crushed, cuts)
Harm:
Injury
Penalty Amount:
$5500.00
Reparation Amount:
$3000.00
Appeared in Safeguard issue 103

Judgment Text

NOTES OF JUDGE S A THORBURN ON SENTENCING 
Judge S A Thorburn
[1]
The Defendants are a contractor and subcontractor engaged in the construction of a parking building. The head contractor is Mainzeal. 
[2]
Grayson Engineering Limited (referred to hereafter as “Grayson”) was the principal responsible for the site. It had a site supervisor, Mr Russell Rhodes. 
[3]
The head contractor, Mainzeal, had provided modulated sections of a steel tower usually used to support the high elevation construction site cranes which are frequently seen in high rise developments. The tower sections can be connected vertically to elevate the crane. There is a climbing ladder built into each section and, clearly, when the sections are bolted together the ladders must connect in a predesignated way, to enable the crane operator to ascend and descend. 
[4]
The sections were provided by Mainzeal not to support a crane, but to be used by the contractor to support girders for a roof that was to be constructed. Photograph 2 in the Informant's material illustrates this. In other words the roof girders needed to be supported at an appropriate height above the ground whilst work on the ground could be continued and the permanent supports for them put in place. Therefore the crane sections were being used for temporary support. Because this use was not what the sections were primarily designed for, the ladder that each section contained was not to be used. Any work to be done at the elevated level of the roof girders was to be undertaken by use of cherry pickers. 
[5]
Panama Erection Limited (referred to hereafter as “Panama”) was subcontracted to Grayson to supply labour and erect structural steel on the site, its employees being riggers and steel workers. 
[6]
One if its employees, Lee Mervyn Kimiora Amai, ascended a ladder in one of the tower sections but, because the ladders had not been fixed in place as would be the case when the sections were providing access to an elevated crane, his weight on the rung of the ladder caused movement which resulted in the tip of his left hand ring finger being amputated by hinged steel outside rails closing over it. He lost about 5 mm (perhaps less) off the tip of the finger. 
[7]
The Defendants are charged with offences against the Health and Safety in Employment Act 1992 (hereafter known as “the Act”). 
[8]
Grayson is charged as a principal under sections 18(1)(a) & 50(1)(a) of the Act that it failed to take all practicable steps to ensure the employee was not harmed while doing work. Panama is charged under sections 6 & 50(1)(a) of the Act as an employer that it failed to take all practicable steps to ensure the safety of the employee while at work. Both charges have a maximum fine of $250,000. 
[9]
Both Defendants enjoy excellent reputations for their records of safety in business, each having at least 30 years of experience. Neither company has convictions. 
[10]
The general submission is made on behalf of both that the level of culpability in the incident was low and a complete discharge under s 106 of the Sentencing Act 2002 is sought for them. 
[11]
In keeping with each company's known diligence and care in the workplace, Grayson designated one of its own, Mr Russell Rhodes, as site supervisor to attend with Panama in respect to the steel work. Meetings were held for hazard identification with Mr Rhodes and representatives from Panama, to work through a “Methodology of assembly of the roof trusses” and other procedures. One of these, a document described as “generic checklist — for remainder roof trusses” contains the direction that … Tower access not to be used. Other documents which set out the methodology sequence and checklists for the assembly of these particular roof trusses make very clear that the placement of the tower frames and the roof trusses was, of course, all to be undertaken by Boomlifts Cranes (Cherry pickers I think). 
[12]
There is a “task analysis” form completed by Mr Holmes and signed off by the site workers, one of whom was Mr Amai. This form identifies potential significant hazards and hazard control that the workers have been appraised of or have themselves noted. Accessing the crane section ladders is not identified or stipulated as a potential hazard. 
[13]
The Informant does not accept that employees attended any meeting with Mr Rhodes and Panama representatives at which items of methodology, sequence and check-list were discussed. The aforementioned “task analysis” form handwritten by Mr Rhodes and signed off by workmen, resulted from a separate process from any meeting with Mr Rhodes and foremen or senior site workers. The Informant does not accept, therefore, that workmen were advised in any specific way of the particular injunction in the “check-list” that the others had, that “Tower access not to be used”
[14]
However, even if the benefit was given to the Defendants on that point, that through the processes of methodology, check list sequences, and identification of hazard potential, ground workers were actually appraised of prohibition on access to the ladders, the Defendants ought to have made sure that such prohibition was signalled by use of hazard tape or a sign. Taping off areas was actually included in the “sequence of steps” document. 
[15]
Obviously, for some reason, Mr Amai felt the need to ascend a ladder to attend to something above the ground. 
[16]
The Defendant companies admit culpability in that there was nothing by way of notice, tagging or warning. It was submitted for the Defendants that there was no mention on the task analysis form that the workers signed of the prohibition upon ascending the ladders because … the structure was never to be used for any other purpose except to support the trusses (counsel's memorandum) … and that the workers knew that the Boomlift crane (JLG Bull lift) had been brought in for the sole purpose of ensuring they were able to work above ground level in safety. 
[17]
This case interestingly shows how important it is for prudent, thorough and carefully documented procedure to be translated into practice. The thoroughness of the Defendants in following careful processes of discussion, analysis, use of templates, check lists, task setting and identification of risks associated therewith etc are commendable but, at the end of the day, are of no effect unless translated into practice. In this case, simply taping off the ladders with the commonly seen vivid coloured hazard identification tape is all that was required. There is a paradox. The omission to do this might seem like a minor matter and therefore understandably overlooked, yet on the other hand, because it is such a simple and basic matter to address, the omission to do so could be regarded as inexcusable. 
[18]
Counsel for the Defendants carefully covered all matters of detail in respect to their prudent practices and, highlighting the excellent reputations and arguing low culpability, submitted that the Court could discharge without conviction. 
[19]
The power under s 106 of the Sentencing Act 2002 to discharge without conviction is subject to s 107 thereof which provides: 
“The Court must not discharge an offender without conviction unless the Court is satisfied that the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence. ”
Section 51A imports the Sentencing Act 2002 into the Health and Safety in Employment Act 1992. 
[20]
Counsel submits that the gravity principle applies in this case and the effects of a conviction upon each company's carefully earned credits, particularly Grayson with the ACC because of its excellent record, would be out of all proportion to the offending. For both Defendants it is generally submitted that convictions will … prejudice its position in the future and its ability to outpace its competitors (counsel's memorandum). 
[21]
No cases were submitted in respect to the discharge sought. 
[22]
The full High Court appeal in Department of Labour v De Spa and Company Limited [1994] 1 ERNZ 339Has Cases Citing which are not known to be negative[Green]  addressed the principles of the newly enacted statute and took the opportunity on an Informant's appeal to promulgate certain factors relevant to sentencing levels. The Court reiterated the principal object of the Act in s 5 at p 341: 
“Section 5 of the Act describes its principal object as being to provide for the prevention of harm to employees at work. For the purpose of attaining that object the Act prescribes and imposes on employers and others duties in relation to the prevention of harm to employees: s 5(2)(b). Section 6 provides that every employer shall take all practicable steps to ensure the safety of employees while at work. There then follow the particular duties, including the duty to take all practicable steps to ensure that plant used by any employee at work is so arranged, designed, made, and maintained that it is safe for the employee to use. ”
[23]
And further at p 341-342: 
“It is obvious from this legislative scheme that Parliament has deliberately placed on employers a positive duty to seek out hazards in order to determine whether they are significant and if t hey are, to eliminate them, isolate them, or minimise them, as the case may be. What is important is that the Act casts on employers these positive duties. The expression ‘all practicable steps’ is defined in s 2. In deciding whether all practicable steps have, for example, been taken to eliminate a significant hazard, one must take into account a number of things as listed in the definition, including the nature and severity of the harm that may be suffered if the hazard is not eliminated. Availability and costs of appropriate remedial measures are also relevant factors. ”
(emphasis mine)
[24]
“All practicable steps” in s 2A is explained as follows (insofar as relevant to this case): 
‘All practicable steps’, in relation to achieving any result in any circumstances, means all steps to achieve the result that it is reasonably practicable to take in the circumstances, having regard to — 
(a)
(b)
(c)
— 
(d)
The current state of knowledge about the means available to achieve the result and about the likely efficacy of each; and 
(e)
The availability and cost of each of those means. ”
[25]
In relation to that in this particular case, practicability to achieve a result of warning or prohibition about access to the ladder would be simple in the extreme and of minimal or negligible cost. 
[26]
Section 7 of the Act imposes a duty on employers to have effective methods for systematically identifying the existing hazards and systematically identifying new hazards. Clearly the Defendants had prudent procedures in place which would meet these duties. Sections 8 and 9 crystallise the duty on employers to first eliminate, if practicable, an identified hazard or, where elimination is impracticable, take all practicable steps to isolate it from employees (s 9(b)). 
[27]
In this case, therefore, the failure is not in the processes but in the implementation of practicable steps to achieve a simple result. The failure is not a complete failure of duty as would be arguable if there was no process in place at all that was designated to systematically identify existing or new hazards. A company which failed in that obligation would be failing at the most basic level in the scheme of the Act. In this case, the failure does not arise from any abrogation of such duty as much as from failure of practicable steps to isolate an identified hazard. 
[28]
The criteria in De Spa are iconic for the assistance they have given courts over the years. Some will now be mentioned. 
(a)
The degree of culpability will be commented on later. 
(b)
The degree of harm would, on the face of it, be serious harm being amputation of a body part as provided for in para 2 of the First Schedule of the Act. Within the category of “amputation” though, this would have to be the most minor. 
(c)
The attitude of the offender(s) is not an issue either. Both Defendants, through their human face, can be taken as unequivocally and utterly remorseful. This is underscored by their plea of guilty. 
(d)
The need for deterrence, it was argued, is low, certainly insofar as specific deterrence is concerned. So it was too in De Spa, but addressing the scheme of the Act, the Court said at p 347: 
“There is no suggestion that there was any particular need for deterrence as regards De Spa itself in the future. There is, however, an undoubted need for the fine to be at a sufficient level to deter others. Deterrence for present purposes requires a fine at a sufficient level to encourage other employers to take seriously their obligation actively to seek out hazards and to deal with them. No room must be left in the community for the view that it is easier to wait until an accident happens, pay a fine, and try to do better in the future. ”
That would be the position clearly with the Defendants in this case. Their good safety record and their attitude combine together to make it clear that they are companies which have no particular need for specific deterrence, but the scheme of the Act, as indicated from De Spa, does nevertheless require significant general deterrence. 
(e)
The safety record of the Defendants is also addressed by De Spa, in which it was suggested by counsel that the absence of relevant convictions was a mitigating factor. It is of interest to know what the court said about that. In considering the scheme of the Act, the judgement states @ p 344: 
“The point is certainly relevant but we regard it as more logical to say that it is really the absence of a circumstance of aggravation. If an employer has a previous relevant conviction that would ordinarily make the instant offence more serious and more culpable. We appreciate that it is conventional to regard absence of previous convictions as a matter of mitigation … However, in this field at least we would prefer to say that the presence of a previous relevant conviction is likely to be a matter of aggravation. ”
(f)
After considering De Spa I have decided that there is a degree of culpability in this case that does require an outcome. The Informant has suggested that culpability was in the medium range, whereas the Defendants submitted the lower range. Assessing culpability is a matter of broad discretion and I have concluded that the level of culpability is not low. Given the scheme of the Act and the positive duties to seek out, eliminate and/or minimise hazards that the Act imposes, a failure to take “all practicable steps” to achieve a result pertaining to a known hazard capable of rectification with minimal effort and nominal cost, is in my view a significant failure supporting more than notional or minimal culpability. 
[29]
I turn now to the main submission of the Defendants that, in all of the circumstances, I should discharge under s 106 of the Sentencing Act. 
[30]
There are two High Court decisions that research counsel have advised me of. In Linework Limited v Department of Labour (Rohloff) [2000] 2 ERNZ 225Has Litigation History which is not known to be negative[Blue]  the Defendant was charged as an employer with having failed to take all practicable steps to ensure safety of an employee. An employee lost his life due to exposure to an electric shock from an overhead high voltage line. 
[31]
The Defendant was known for high safety priority and training, and had systems and programmes in place to safeguard employees and address hazards. It was submitted that all practicable steps were taken and that it had discharged its duties under the Act by having such safe systems and procedures, by conducting regular safety training, and by having suitably qualified and experienced foremen at the worksite (p 231). The charge was defended. The District Court judge found it proven and declined a discharge without conviction as was sought. Whilst the decision on appeal does not elaborate on the reasons for the refusal of the District Court judge, it does make the following reference at p 233: 
“Judge Keane having carefully considered that submission, felt unable to accept it. He held it to be at odds with the sentencing policy set out in Department of Labour v De Spa & Co Limited [1994] 1 ERNZ 339Has Cases Citing which are not known to be negative[Green] , a decision of the Full High Court (Tipping and Fraser JJ), and the leading authority on the penalties to be imposed on this category of case and with Linework's actual level of culpability. He developed his reasons at some length … I also am unable to accept that this was an appropriate case for a discharge without conviction. ”
[32]
I have not seen the District Court decision but it is apparent that consideration was given to the statutory scheme, the policy in De Spa, and the culpability of the Defendant. The view I have formed by the same approach is that it would not be appropriate to discharge without conviction in the case before this Court. 
[33]
The second decision of interest in respect to discharge is Villages of New Zealand (Pakuranga) Limited v Department of Labour (2006) 7 NZELC 98, 074. This was an appeal on the issue of whether or not an injury sustained by an employee was “serious harm” in terms of the First Schedule of the Act. The employee was a cleaner who had brought some crates of milk into the kitchen from outside because it was raining, and slipped on water shed from the crates. The employee hurt her left wrist and it was not until almost a week later she sought medical attention and then a fracture was diagnosed. Where serious harm has arisen, the Statute requires an employer to make a “notification” after the incident. 
[34]
The company was found guilty of failure to notify but its level of culpability was clearly accepted as being very low. On appeal Heath J said at para 71: 
“I do not discern any aggravating features. The company did not fail to report with the intention of hiding something from the Department. The significant mitigating factors are the company's safety record and its recording of the accident for the purposes of the Act. ”
[35]
Paragraph 72 goes on to say: 
“The company's failure to report was based on a genuine (but mistaken exercise of judgment). The nature of the reporting requirement has been aired fully on appeal. It has transpired that the obligation to notify did not arise at the time of the accident, but on learning of the actual nature of Ms Watkins' injury at the time the fracture was diagnosed. ”
[36]
The District Court Judge convicted and fined $5,000. The fine was set aside as being manifestly excessive, on appeal and the company was convicted and discharged. Heath J stated (para 73): 
“ … The offending of the company could have been marked sufficiently by the entry of a conviction only. There was no need to denounce conduct or to deter this company. ”
[37]
On the issue of discharge without conviction he said earlier (at para 69): 
“I raised with Mr Stewart whether the consequences of a conviction might be out of all proportion to the gravity of the offence for the purposes of s 106 and 107 of the Sentencing Act. Apart from referring to potential consequences arising out of audits of the company's business, Mr Stewart could not point to any such factors. ”
[38]
In both Linework and Villages, safety records were impeccable and the company's reputations were excellent. They were also companies for which it might be said (specifically so in Villages) that there was no need for denunciation or deterrence in sentencing for the particular defendant. All of these points apply to the case before this Court. It seems to me, having regard to the positive duties imposed upon principals and employers under the Act, that the cases demonstrate a reluctance on the part of the Court to give complete discharges even when culpability is low, safety records good and discrete deterrence and denunciation not necessary. Although Villages was defended, the facts revealed a very low level of culpability and one could hardly imagine a more deserving case for a discharge. 
[39]
I discern therefore that breaches of duty under the Act are being regarded by the Courts as intrinsically grave, such that it might be a rare occasion indeed for the Court to discharge without conviction on the basis that it is satisfied that the direct and indirect consequences of conviction would be out of all proportion to the gravity of the offence. 
[40]
As in Villages, the main specific consequence that counsel in this case has nominated in the event of conviction, is a loss of status with the Accident Compensation Corporation and some disadvantage against competitors. This was not enough to achieve a complete discharge in Villages
[41]
Accordingly, I will enter convictions on the record and impose fines. I do not consider that the fines need be any more than in the most lower range; that view being in acknowledgement of the positive attributes of these companies and their acceptance of responsibility. 
[42]
I will also make reparation orders in favour of Mr Lee Mervyn Kimiora Amai. Both companies have, through counsel, willingly acknowledged their readiness to receive a reparation order. 
[43]
Accordingly, upon conviction, each Defendant will be fined the sum of $2,500 and I make a reparation order under s 32(1)(c) of the Sentencing Act 2002 of $3,000, against each Defendant. Court costs on each information of $130. 

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