Business owners and Directors: Questions to ask yourself

Business owners, company directors and CEOs have a legal requirement to ensure that the business they manage is meeting its primary obligations under Workplace Health and Safety (WHS) laws.

These primary obligations are to provide the WHS management system in the first place (“primary duty of care”), consult with workers on WHS matters before making decisions, and to manage risks. In WHS Law a business or employer is classified as a "Person Conducting a Business or Undertaking (PCBU.) In basic terms, a PCBU is a business entity, i.e. a "name on paper."

"Officers of the PCBU" are the human beings that are responsible for real-world compliance. Collectively, the actions required of officers are termed “due diligence” (slightly different to its usual meaning in business and finance.)

These WHS “due diligence” obligations apply to all officers across all PCBUs, large and small, with both flat and hierarchical structures. 

To help the officers of the PCBU carry out relevant actions that would demonstrate this, the WHS Act 2011 lists 6 broad actions for Officers to actively consider in order to demonstrate their “due diligence” requirements. Including examples, the list becomes 11 routine actions that an officer is expected to take. These actions are stated in Section 27 of the Act.

As directors of the business, officers must consider every one of these points in their ongoing operation of the organisation’s WHS management system. To help with these an officer may need to routinely or periodically ask themselves questions such as:

1.      How do I review the business’ health and safety systems and ensure that they adequately address health and safety risks – on an ongoing basis?

2.      How am I demonstrating active engagement in my due diligence obligations, beyond “oversight”? (Am I a “hands on” CEO?)

3.      Am I relying on the “best” expertise and advice in relation to health and safety matters in my industry? 

4.      Are the actions of my managers and supervisors proof that I am fully accountable for my duties and responsibilities as an officer of the PCBU?

5.      Can I provide hard evidence that I am actively involved in the 13 actions an officer must take as stated in Section 27 of the WHS Act?

These simple 5 questions may help directors and CEOs stay on top of their health and safety duties. The duty to exercise due diligence in this way is not met through “governance or directorial oversight functions” alone – it requires more. The officer must personally acquire and maintain sufficient knowledge to be reasonably satisfied that the PCBU is complying with its duties under the WHS Act.

In SafeWork NSW v Miller Logistics Pty Ltd; SafeWork NSW v Mitchell Doble [2024] NSWDC 58 (Doble) where a worker was killed in a forklift accident, the NSW District Court held that although there had been a failure by the PCBU, the director of the company had not failed to exercise due diligence. In particular, the NSW District Court held that the “duty on an officer to exercise due diligence does not mean that the officer must do everything that the PCBU must do to ensure compliance with its own duty and that a failure by the PCBU does not, of itself, demonstrate a failure by an officer to exercise due diligence.”

An officer may be personally liable for a breach of any of the actions expected of them in Section 27 of the WHS Act. We recommend all business owners, company directors and CEOs, if not done already, partake in a short training session on WHS Law that clearly covers their WHS duties as officers of a business. This is a main service of Courtenell and the training program is only a few hours.

For more information, please feel free to contact us at train@courtenell.com.au or phone us on 02 9552 2066.