One of the Victorian Trades Hall Council’s (VTHC’s), and associated unions’, arguments in favour of legislating a new offence of industrial manslaughter is that it will pierce the corporate veil, or layers of management, which the VTHC allege enables company directors to avoid accountability in respect to OHS.

Master Builders Victoria (Master Builders) rejects the premise that company directors structure their businesses in a manner to avoid OHS legal responsibilities. OHS duties are broad, not limiting and absolute. The ‘primary’ duties rightly sit with employers, self employed persons and persons who have management and control of workplaces (principle contractors). Employees have appropriate duties, too. Company officers can be liable, and therefore prosecuted, under Victoria’s existing legislative regime. Upstream duty holders, designers, manufacturers and suppliers, also owe duties under the OHS Act (2004) in Victoria. Everyone fittingly has a responsibility when it comes to safety.

More importantly, 97.4 per cent of Australian businesses are small businesses (0-19 employees)[1]. To put it another way, only 3700 businesses in Australia are classified as large (200+ employees) and large business account for only 0.2  of all Australian businesses. There is no so called ‘corporate veil’ when we consider small business.

The prospect of a new criminal offence of industrial manslaughter will be devastating for the Victorian business sector. It may deter many smart, entrepreneurial persons with a strong sense of corporate social responsibility, from remaining, or becoming an employer in the first place[2].  It is likely to create litigious environments within organisations and regulators which will prevent learning’s from incidents being properly uncovered and adopted[3].

In terms of the likely increased legal risk management or ‘litigious’ environments which would naturally follow if laws like industrial manslaughter were to come in to effect, this would almost certainly result in larger businesses, with greater resources at their disposal, including high calibre lawyers, positioning themselves in such a manner to defend criminal prosecutions[4]. The same is not true for small business, which simply will not be able to access such advice.

The proponents of industrial manslaughter also argue that the introduction of such laws will create a ‘deterrent effect’ and that this will result in a reduction of workplace fatalities. Such positions require closer examination.

For example, when we consider the criminal law, it is designed to work in two ways – specific deterrence and general deterrence. Specific deterrence is designed to ‘deter’ the offender from offending again and general deterrence is designed to send a message to the community that it ought to observe the rule of law.

In respect to specific deterrence, however, in many OHS prosecutions and cases, it seems that there is nothing to be learnt from the prosecution process that would assist an offender improve their safety outcomes. Moreover, litigation simply drains resources which could be better applied to improve workplace safety[5].

When considering general deterrence, more often than not, small and medium sized businesses are not aware that an OHS prosecution has occurred – and general deterrence only resonates with a small proportion of business. This is why Master Builders has long advocated the view that the importance of the safety regulator playing a proactive role in increasing duty holders’ awareness, should not be underestimated.

Master Builders was formed by a group of distinguished builders around 145 years ago intent on raising standards within the industry. Our commitment to safety in the building and construction industry is beyond reproach. Master Builders welcomes the Andrews Government’s appointment of Jill Hennessey, Victoria’s new Attorney General and Minister for Health and Safety.

The creation of a ministerial portfolio titled “Health and Safety” signals the Andrews Government’s likely positive agenda in respect to workplace safety. The concept of industrial manslaughter is not consistent with this encouraging approach. Industrial manslaughter will not improve safety but it will adversely impact Victoria’s small business community.

[1] ABS Counts of Australian Business 8165.0, Feb 2016 and ASBFEO calculations (excludes nano businesses with no GST role)

[2] Johnson, C 2008, ‘Ten contentions of corporate manslaughter legislation: Public policy and the legal response to workplace accidents’, Safety Science,

   vol.46, no.1, pp. 349-370, DOI:10.1016/j.ssci.2007.05.011.

[3] Coroner’s Court, Finding of Inquest, Inquest Number 9/2018 (2071/2014), South Australia

[4] Sarre, R 2011,  'Penalising corporate 'culture': the key to safer corporate activity?', in J Gobert & A Pascal (eds), European developments in corporate criminal liability, Routledge, United Kingdom, ch. 5, pp. 84-98.

[5] Smith, G 2018, ‘The Prosecution Problem’ accessed 7 September 2018, < https://www.waylandlegal.com.au/blog/the-prosecution-problem>