Accused found not to be an "Officer”
Note: this is about a court case that occurred in 2015.
Background
A very recent court case may help to guide managers and leaders on whether they are, or are not, a duty holder called Officer as defined in the WHS Act, and in relation to Section 9 of the Corporations Act 2001.
Many Managers have given serious consideration to this question in their workplace. Are they an Officer? It is very important to get it right. An Officer’s “due diligence” responsibilities and the penalty for being in breach are considerable.
The Case
The case involved a fatality on a construction site in the ACT. The PCBU (business entity) went into liquidation.
WorkSafe ACT prosecuted the Project Manager in late February 2015. They claimed that he was an Officer of his PCBU and that he had failed to exercise the due diligence required by the WHS Act.
The case centered on the definition of Officer. WorkSafe had to prove that the Project Manager (the person being charged) was a person who “makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation or entity.”
In court, the Industrial Magistrate focused on determining the Project Manager’s role in the business.
The Industrial Magistrate concluded that she was not satisfied beyond reasonable doubt that the Project Manager’s role involved making or participating in making decisions that affected all or a substantial part of the PCBU’s business. Therefore, the accused was not deemed an Officer. The case was dismissed.
Useful Facts and Conclusions
The following facts considered, and conclusions made, when deciding that the Project Manager was not an Officer of his PCBU, are from the Industrial Magistrate’s Reasons for Judgment, 3 August 2015:
He could identify potential employees but was not responsible for hiring or firing them
He could not commit corporate funds without approval
There was no evidence that he had direction over the type, or the specific contracts that were to be pursued by his PCBU
He did not sign off on tenders for projects
There was no evidence that he attended board meetings, met any of the PCBU’s legal obligations such as ASIC returns or establishing quality assurance compliance
There was no evidence that he determined corporate structure, established company policy, the type of business to be pursued or which projects should be entered into
He undertook all of the work that one would expect of a Project Manager
The prosecution did not establish that the Project Manager had control or responsibility for the business or undertakings of the company; rather he had operational responsibility for delivery of specific contracts which had been entered into. His role was to implement these projects. It would be speculative to say it went beyond that to be organisational.
The Project Manager managed large projects on behalf of his PCBU but that role was not so significant when compared to the whole structure of the PCBU’s business
He was involved in making decisions that affected the PCBU’s business but there were clear limitations to his decision-making power. And it was not clear that he did make decisions that affected either the whole or a substantial part of the PCBU’s business