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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Department of Labour v Sleepyhead Manufacturing Co Ltd (DC, 22/02/11)

OSH Tracker

Defendant:
Sleepyhead Manufacturing Company Ltd
Sleepyhead Manufacturing Company Ltd was fined $39,000 and ordered to pay reparation of $15,000 after an employee was injured when he attempted to remove waste foam from the out-feed side of a foam peeling machine. The company was charged under s6 and s13 (b) of the HSE Act. He was not properly trained or signed off as competent to operate the peeler unsupervised. His right hand became caught between the drive roller and the blade and fingers were badly damaged. Judge J.C. Moses in sentencing uplifted the fine by $5000 due to nine previous HSE Act convictions. The victim underwent eight operations involving skin grafts from his arm, suffered physical and mental trauma, and will never regain full function of his hand ( Manukau DC, February 22). 
Industry:
Manufacturing
Sub-Industry:
Other Manufacturing
Risk:
Machinery (trapped, crushed, cuts)
Harm:
Injury
Penalty Amount:
$54000.00
Reparation Amount:
$15000.00
Appeared in Safeguard issue 131

Judgment Text

NOTES OF JUDGE JC MOSES ON SENTENCING 
JC Moses Judge
[1]
Sleepyhead Manufacturing Company Limited (“Sleepyhead”) pleaded guilty at the first practicable opportunity on 1 December 2010 to failing as an employer to take all practicable steps to ensure the safety of an employee in relation to the operation of a foam underlay peeling machine. Up until 3 May 2010 any waste caught in the peeler was manually pulled from the machine either from the out-feed side or in-feed side. While the peeling process was in operation, the peeler operators usually stood at the out-feed side of the machine. Access in the in-feed side of the machine required operators to walk through or reach over an interlocked gate. 
[2]
The Sleepyhead was the employer of Mr Junior Sauniga Sulusi. 
[3]
The agreed summary of facts shows that on 3 May 2010 Mr Sulusi worked for. some period on the peeler himself supervised by a Mr Ngata. He was subsequently joined by Mr Siu. They worked on the peeler together still being supervised by Mr Ngata. Mr Ngata however was working in a different section of the premises driving a forklift and therefore not closely supervising either employee while they operated the peeler. Neither Mr Sulusi or Mr Siu who had been operating the peeler had been signed off by Sleepyhead to use the peeler unsupervised. Whilst Mr Siu had received training to operate the peeler unsupervised, due to a change in supervisor he had not been signed off as competent. At some point during the morning, Mr Sulusi reached in to the peeler from the out-feed side with his right hand to remove jammed foam. The blade was still running. Mr Siu pressed a button on the control panel that caused the drive roller to rise up towards the blade at which stage Mr Sulusi's hand became caught between the drive roller and the blade. He suffered serious injury to the top of his right hand and three fingers. This included the loss of skin, muscle, bone and blood vessels and tendon damage. He spent one month in Middlemore Hospital, and underwent six major operations. He has since undergone two more major operations. 
[4]
This case is slightly unusual in that not only is there is an agreed summary of facts, there is an agreement which the Court does not think inappropriate that in all the circumstances the starting point of penalty is a fine of $75,000. 
[5]
Section 51A of the Health and Safety in Employment Act 1992 (“Act”) refers to the sentencing criteria for the Court to consider. 
[6]
Both counsel for the informant and the defendant accept that the leading case of Department of Labour v Hanham & Philp Contractors Limited & Others [2008] 9 NZELC 93, 95 sets out an appropriate approach to sentencing under the Act and that it should involve three main steps. First, is to assess the amount of reparation to be paid to any victim. Here the informant submits that in terms of emotional harm, the victim impact statement has made it clear that Mr Sulusi has suffered a great deal of physical and mental trauma as a result of his accident. The medical advice is that he will never regain full function of his right hand. He has undergone eight operations which involve skin grafts from his left arm. The Department submits that an award for reparation for emotional harm is appropriate and referred to three cases namely Department of Labour v Taylor Preston Limited, Department of Labour v Downer EDI Works Limited where sums of up to $15,000 were seen to be appropriate for victims who had suffered severe muscle, nerve and tendon damage to their hands. 
[7]
The defendant takes no issue with this being a case where emotional harm reparation should be imposed and agrees to pay the sum of $15,000. I consider that in these circumstances that is an appropriate figure and I set emotional harm reparation at $15,000. 
[8]
In terms of setting the starting point for the fine as earlier indicated there is agreement that the starting point should be that of $75,000 taking into account all the identification of the operative acts and omission, the nature and seriousness of the risk of harm occurring as well as the realised risk, the obviousness of the hazard, the degree of departure from industry standards and the availability of cost and effectiveness of the means necessary to avoid the hazard. I therefore take as agreed by the parties a starting point in the middle or the medium band of culpability ($50-$100,000) referred to in the Hanham & Philp decision and therefore the starting point for the fine will be $75,000. 
[9]
The informant refers to the fact that Sleepyhead has a total of nine previous convictions under the Act, including six under s 6 of the Act. Five of those convictions occurred from 2005 onwards. As such, the informant submits that an increase of 10% to that starting point is appropriate. The defendant disagrees with a 10% uplift pointing out that the organisation had operated for a long period of time and has 260 employees. 
[10]
I am concerned with the number of recent convictions that the defendant has incurred including similar convictions for breaches under the same section of the Act. I consider that an uplift from a starting point of $75,000 to that of $80,000 is appropriate in the circumstances taking into account Sleepyhead's previous convictions as an aggravating feature. 
[11]
In terms of mitigating factors there is an acceptance on behalf of the informant that the defendant was cooperative with the informant throughout the investigation and has taken remedial action. 
[12]
There is also an acceptance that there has been some reparation namely approximately $300 in food vouchers and taxi fares provided by the company to the victim. In respect of remorse, the informant submits that they are unaware of any demonstrated remorse shown by Sleepyhead. Sleepyhead submits that they were genuinely remorseful about what had happened to Mr Sulusi and that the remorse was demonstrated in tangible terms with immediate and ongoing benefits to Mr Sulusi after the accident. In addition to the vouchers referred to previously Sleepyhead had topped up the payments that Mr Sulusi received from ACC to ensure that he received his full wages each week. The company also engaged an occupational therapist to assess Mr Sulusi to ensure he was prepared and ready to return to work. Sleepyhead also referred to steps they had taken including meeting with Mr Sulusi to talk about work options for when he was able to return to work, including retraining and alternative roles. 
[13]
Whilst there have been some hiccups in terms of Sleepyhead's continued contact with Mr Sulusi and the payment of some of the amounts to him, I am satisfied that the company has shown a degree of remorse in practical terms to Mr Sulusi. 
[14]
The one issue where there is some dispute between the parties is the amount to which separate discounts should be given for each mitigating factor present in the circumstances of a particular case. 
[15]
The informant referred to the Hanham & Philp decision where the Court had considered a 10% discount for mitigating features and a further 10% for a discount for reparation to be paid was appropriate levels of discount for those matters. 
[16]
Sleepyhead relies upon a decision of Ballard v Department of Labour (reported, High Court Hamilton, 14 April 2010, Stevens J) where the High Court upheld the defendant's appeal in that case and stated that when relevant mitigating factors exist, the sentencing Judge should not consider them all together and assess a single cumulative discount. In this respect, Sleepyhead also relies upon the recent Court of Appeal judgment in R v Hessell [2010] 2 NZLR 298Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  where Justice Chambers had stated that “those Judges accustomed to bundling all mitigating factors together will need to change their practice.” Whilst the Supreme Court allowed the appeal in Hessell there was no criticism of that statement and the decision was overturned on other grounds. 
[17]
Mr Nicholson for Sleepyhead referred to other District Court decisions which have been decided since Ballard where that approach has been followed. Ms Carr for the informant submitted that the more appropriate approach was that of the Court in Hanham & Philp
[18]
The High Court in Hanham sets out in paragraph 61 and 62 of the decision, mitigating features that the Court should consider as set out in s 51A of the Act. This is also clearly the approach in the Ballard case. The difference appears to be simply that in the Ballard decision Justice Stevens has attributed particular discounts for each of the matters that both Ballard and Hanham decisions indicate as being appropriate to take into consideration. 
[19]
Bearing in mind the comments of the Court of Appeal in Hessell to the effect that such mitigating features should not be bundled together, this seems to be the preferred approach by the Court of Appeal. 
[20]
In Ballard Justice Stevens indicated at paragraphs 41 and 42 of the judgment that the discounts should be: 
a)
an offer to make amends and reparation — 15% discount; 
b)
co-operation with the Department of Labour in its investigation and prosecution — 10% discount; 
c)
remorse shown by the appellant for the offence and the harm caused — 5% discount; 
d)
remedial action taken to prevent the recurrence of the circumstances — 5% discount; and 
e)
a favourable safety record — 10% discount. 
[21]
I find that all those mitigating features other than a favourable safety record are factors in the present case. As a result I reduce the starting point of $80,000 by 35% which reduces the starting point to a fine of $52,000. 
[22]
In terms of the approach in Hanham & Philp which is accepted as being the appropriate approach, the next step for the Court to consider is the effect of a guilty plea. It is accepted in the present case that the defendant pleaded guilty at the first available opportunity and in terms of the recent decision of the Supreme Court in Hessell v R the defendant is entitled to a discount of 25% for the guilty plea. 
[23]
The finishing point for the fine in those circumstances is therefore as follows: 
Starting point: 
$75,000 
Uplift for aggravating factor: 
$ 5,000 
 
$80,000 
Less 
 
The list offer to make amends and reparation: 
15% 
Cooperation with the Department of Labour in its investigation and prosecution: 
10% 
Remorse shown by the defendant for the offence and harm cause 
5% 
Remedial action taken to prevent the recurrence of the circumstances: 
5% 
Total of 35%: 
$28,000 
 
$52,000 
Less 25% discount for guilty plea: 
$13,000 
FINAL FINE 
$39,000 
[24]
There have been no submissions made in respect to the inability of the company to pay the fine and reparation. 
Conclusion 
[25]
In conclusion I find that the defendant be sentenced as follows: 
(a) 
Reparation — emotional harm: 
$15,000. 
(b) 
Fine: 
$39,000. 
[26]
Finally, can I thank both counsel for their careful and thoughtful written and oral submissions. 

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