Directors' criminal liability for harm to employees
All company directors are in some way responsible for a company’s safety standards and can be found criminally liable.
In a recent decision, the court stated that once an offence is proven against a corporation, the directors are considered guilty of the same offence, unless they make a successful defence.
In the case in question, an employee in a tank-washing facility was killed while attempting to remove residue resin from a tank using a highly volatile and flammable cleaning agent. The tank exploded, catapulting the man seven metres through the air. A CEO was found liable.
The court rejected the CEO’s first line of defence that he was not in a position to influence conduct in the company in relation to the safety issue and that his remoteness from the day-to-day activities of the company absolved him of liability. By virtue of their very position, most directors will have some influence in a company.
In relation to the second possible defence, that one had demonstrated all due diligence in attempting to prevent the breach, the question essentially becomes what is the required due diligence for each director. The answer to this necessarily depends on the type of influence that the particular director has.
In this case the court rejected the director’s argument that his obligations were discharged merely by reviewing OHS reports that kept him up-to-date on the company’s safety concerns and making inquiries about safety when visiting sites, as he regularly did; and he was found guilty.
A CEO should ensure the presence of stringent reporting structures within a company to keep informed of all safety risks and the best ways of minimising them to avoid liability.
Contact Blackwell Short Lawyers if you are in any doubt about your rights or liabilities concerning this article.