This article is written to provide some basic understanding on the new system and how it may impact on bodies corporate (strata schemes, bodies corporate, community schemes and so on). It has been necessary to provide some legislative framework around the article interspersed with practical applications.
The provisions relating to Work Health and Safety were amended as a result of nationwide legislative intervention because all States have agreed to the Inter-Governmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety.
Where is the legislation at?
Whilst the final legislation for each State has not been officially announced (as at the date of this article) it is our view that the landscape of OH&S requirements will change dramatically as it applies to bodies corporate.
With the commencement of the Commonwealth Work Health and Safety Bill (WHS) which was introduced into the House of Representatives on 6 July 2011 each State (or jurisdiction) is currently developing legislation to give effect to the Model WHS, with an intended focus on harmonising Occupational Health and Safety arrangements through the implementation of uniform legislative measures.
The WHS commences on 1 January 2012 and is accompanied by the Model Work Health and Safety Regulations (MWHSR). The MWHSR is supported by a number of model Codes of Practice which were agreed to by all Ministers in December 2009.
Though the purpose of the Work Health and Safety Act 2011 is for a nationally harmonised standard, achieving this is still a while away. As at 31 January 2012 the new laws have only been adopted in Queensland, New South Wales and Northern Territory with further debates to occur throughout 2012 in Victoria, Tasmania, South Australia and Western Australia.
Who has obligations to comply under the act?
Any Person or Persons Conducting a Business or Undertaking (PCBU) has requirements under the Act. The difficulty for bodies corporate is to determine whether you are a PCBU or not.
What is a PCBU?
A PCBU is defined in section 5 of the Act as follows:
(1) For this Act, a person conducts a business or undertaking—
a. whether the person conducts the business or undertaking alone or with others; and
b. whether or not the business or undertaking is conducted for profit or gain.
As can be seen this definition on its own is far reaching in implementation. Curiously under Section 5(6) the regulations may exempt certain types of operations (these are yet to be finalised).
Section 7 of the MWHSR also provides a form of exemption for a “strata title body corporate”. The clause relevantly provides:
7 Meaning of a person conducting a business or undertaking – persons excluded
- For the purposes of section 5(6) of the Act (the WHS), a strata title body corporate that is responsible for any common areas used only for residential purposes may be taken not to be a person conducting a business or undertaking on relation to those premises.
- Subregulation (1) does not apply if the strata title body corporate engages any worker as an employee.
- In this regulation, strata title body corporate means [……………..]
Strata title body corporate is defined in, for example, the NSW model and would appear to include most strata corporations. Apart from this the section attempts to exempt complexes that are entirely residential. The problem then is, are we entirely residential?
What seems to be in or out?
In plain English, to understand what the legislation describes as a PCBU, it’s easiest to look at what activities are likely to happen within bodies corporate which are likely to meet the definition of a PCBU.
PCBUs may include:-
- Owners
- Occupiers or tenants working from home (which can include web based businesses, like selling items on eBay) however this category does not appear clear in the WHS/MWHSR
- Directly employed workers like cleaners or baby sitters
- A strata, community, body corporate manager
- A caretaker or onsite manager
- An executive committee
- Volunteers doing work in the common property area
It seems that the residential complex which does not employ any person, has no home businesses and no working bee to fix common areas may be the only set up that is excluded from the requirements.
How does this affect the bodies corporate?
Under the new legislation, the PCBU or responsible person is required to implement control measures to minimise or eliminate risks to the health and safety of workers, self-employed persons and members of the public.
The bodies corporate must ensure that the common property is a safe environment for workers (including those conducting maintenance and repair), tenants, owners and visiting members of the public. The Committee and the Managers must ensure, so far as reasonably practical, that health and safety of workers engaged is not put at risk.
Also under the legislation “officers” as defined are also responsible for non compliance. In the cases of bodies corporate that would include members of the committees and any person who makes decisions on their behalf (i.e. managers).
What do we need to do to comply with the new legislation?
Under the new system, the PCBU or responsible person is required to identify and assess hazards and implement control measures to minimise or eliminate risks to the health and safety of workers, self employed persons and members of the public.
To comply with the new legislation each building will need to regularly identify and assess hazards and risks and ensure the following are up to date for each building:
1. Fire and Evacuation/Emergency Management Plan
2. Asbestos Management Plan
3. Contractors’ Safe Work Method Statements
4. Contractors’ Site Facilities Schedule
Hazards and risks which may apply to the Committee can include pools, storage of hazardous material, slips, trips and falls. This will require bodies corporate to keep registers, discuss issues with tradespersons, have adequate training for risks and have adequate documents displayed advising of risks.
What is the impact on the management industry?
The management industry will need to have a proactive role in some respects to ensure bodies corporate are advised of the requirements and then that any action approved is undertaken. You need to review your management agreements to ensure that you either do not have authority or where you do you have sufficient power to ensure compliance before exercising that power/obligation.
In our view the management industry needs to ensure that issues are raised in the appropriate forum with clients, which may include engaging a professional compliance reporting company to inspect the building and complete a safety or compliance report.
A report should identify any potential hazards within the property and apply a risk assessment management plan and control measures for each.
This report should include an assessment for:
- Vehicle access ways
- External pathways, stairways and walkways
- Electrical items and switchboards
- General building
- Balustrades and railings
It should also identify whether the required reports and plans, such as the emergency evacuation plan, are available onsite or are accessible to the relevant persons.
How do bodies corporate keep compliant?
Under the duty of care obligations, a PCBU must take reasonable steps to ensure the safety of all workers and contractors onsite.
In order to do this decisions must be made at meetings to obtain reports, keep registers up to date and ensure contractors are advised of any risks etc. A process for obtaining the reports and making the documents available should be approved by a resolution at either a general or committee meeting. It is suggested as part of this process that the best practice would be to have either a by-law (or rule) entrenching the process to be adopted and/or a range of resolutions passed at each Annual General Meeting.
There may be occasions where decisions are made not to comply with the requirements (and the motions may fail). In these instances bodies corporate (and potentially managers) will need to be apprised of the risks for that non compliance.
What are the fines for non-compliance?
As with any legislation the sting is in the tail, under the Work Health and Safety Act 2011, the maximum fines for non-compliance are severe and exhaustive. There are certain penalties that range up to $3 million for a body corporate found guilty, $600,000 for individuals such as committee members/owners or in some instances jail terms.
Whilst these are the maximum fines under the proposed laws the non compliance by bodies corporate of even the simplest issue may result in fines and/or claims against it.
What do we do now?
After you have calmed down the following is a suggested list of things to consider:
1. Obtain as much information from relevant sources that you can
2. Consider a newsletter to all clients outlining the obligations (or a copy of this article)
3. Discuss the issues with the committees and determine an implementation strategy
4. Consider drafting motions or by-law (rules) for consideration at meetings
5. Obtain professional advice where needed
6. Ensure your client’s comply with the new system
SCA wishes to thank Mr James Freestun (Managing Director - Solutions Group of Companies) and Mr Colin Grace (Lawyer Director – Grace Lawyers) for providing this article which also appears in the February 2012 edition of Inside Strata.
