National Research Centre for 
Occupational Health and Safety Regulation
Regulatory Institutions Network (RegNet)
Research School of Social Sciences
1st Floor Garden Wing, University House
The Australian National University
Canberra ACT 0200
Ph (02) 6125 1506   Fax (02) 6125 1507
Email richard.johnstone@anu.edu.au   
Web http://ohs.anu.edu.au	  

The Productivity Commission
PO Box 80
Belconnen  ACT 2616

4 June 2003

Dear Commissioners

National Workers’ Compensation and Occupational Health and Safety Frameworks

I am responding to the above Inquiry on behalf of the National Research Centre for Occupational Health and Safety Regulation. Most of the issues outlined in the Inquiry’s Terms of Reference appear to address compensation issues (workers’ compensation and common law damages), which is not the focus of the Centre’s work. We do, however, strongly recommend that the Inquiry consult with Mr Alan Clayton, Australia’s leading expert in workers’ compensation legislation, if Mr Clayton has not already made a submission to the Inquiry.

A common definition of worker/employee.

The Scope of the Commission’s Inquiry includes “(a) a consistent definition of employer, employee, workplace and work-related injury/illness and fatalities relevant to both workers’ compensation and OHS that could be adopted consistently across Australia.” In relation to this issue, we make three comments.

First, a recent Centre project involved a careful analysis of the current definitions of “worker” and “employee”, “injury” and other notions of “work-relatedness” in the Australian workers’ compensation and OHS statutes. The fruits of this project were published in a recent issue of the Australian Journal of Labour Law (see A Clayton, R Johnstone and S Sceats, “The Legal Concept of Work-Related Injury and Disease in Australian OHS and Workers’ Compensation Systems” (2002) 15 Australian Journal of Labour Law 105-153, copy attached). This article should save the Inquiry time in analysing these complex provisions.
Second, as recent work in the long haul trucking industry and the clothing industry indicates, major OHS risks are can be linked to the inadequacy of the Federal and state industrial relations systems’ coverage of contractors and sub-contractors. In other words, contractors performing work at the bottom of long contractual chains often do so for minimal remuneration, and are induced into work practices posing significant risks to their health and safety. (We refer you to Professor Quinlan’s Report, Safety Inquiry Into Long Haul Trucking, 2001 and the attached paper I Nossar, R Johnstone and M Quinlan, “Regulating supply-chains to address the OHS problems associated with precarious employment: The case of home-based clothing workers in Australia”, prepared for the 6th International Congress on Work Injuries Prevention, Rehabilitation and Compensation, which was to have been held in Rome, June 2003). As both the Quinlan report and the Rome paper show, these issues can only be effectively addressed by ensuring adequate remuneration to the persons actually performing the work, and this requires ensuring that these workers are deemed to be employees for the purposes of minimal wage provisions in collective agreements or awards. 

Third, again as the Rome paper by Nossar, Johnstone and Quinlan paper shows, merely extending the definition of employee to include “deemed” employees or workers not included in the common law definition of the contract of employment is not sufficient from a prevention perspective (ie an OHS regulatory perspective). The duty to “persons other than employees” or “others” is also an essential provision, because it has the potential to (and we argue it should) impose duties on all parties in the contractual chain to ensure the OHS of everyone lower in the contractual chain (see R Johnstone, “Paradigm Crossed? The Statutory Occupational Health and Safety Obligations of the Business Undertaking” (1999) 12 Australian Journal of Labour Law 73, copy attached). In our view, the provision found in section 22 of the Victorian Occupational Health and Safety Act 1985, and/or the new provisions in the Queensland Workplace Health and Safety Act 1995 (section 28 to 29A) should be the national model in this regard.

Australian OHS Regulation for the 21st Century Conference

In regard to OHS law, the matters under consideration by the Productivity Commission will be addressed in depth at the conference Australian OHS Regulation for the 21st Century on 21-22 July, 2003. This conference is co-hosted by the National Occupational Health and Safety Commission and the National Research Centre for OHS Regulation. The program of speakers is designed to contribute the insights of leading-edge OHS regulation researchers and regulators from overseas and Australia. We urge the Productivity Commission to take full account of the proceedings of this conference, in recommending on future directions for OHS law.

From an Australian perspective, two conference presentations will deal with issues that are crucial to the Productivity Commission’s deliberations. Professor Neil Gunningham and Ms Elizabeth Bluff of the National Research Centre for OHS Regulation will present on future directions in OHS law in the paper Principle, process, performance or what? New approaches to OHS standards setting. Centre Director Professor Richard Johnstone will present on OHS enforcement policy in the paper From fiction to fact – rethinking OHS enforcement.

While it would be imprudent to pre-empt the outcomes this conference, we will briefly highlight here some of the matters to be canvassed at the conference, which are fundamental to the Productivity Commission’s assessment of possible models for establishing national frameworks for OHS arrangements. In particular, the matters that we want to highlight here are the issue of “national consistency” and the form and mix of OHS standards under OHS law.

National Consistency

In the Australian context, OHS law making is a Commonwealth, state and territory based function, although the National Occupational Health and Safety Commission has a statutory function to declare national model standards and codes of practice (National Occupational Health and Safety Commission Act, 1985, s 8). In the often protracted processes involved in determining regulatory reforms, there is plenty of opportunity to introduce jurisdictional variations in OHS standards, even where the starting point is a nationally agreed model standard. The most notable attempt at national uniformity so far in Australia’s OHS regulatory history was the “national uniformity” process spearheaded by the National Occupational Health and Safety Commission in the mid-1990s. By implementation of national model standards and codes of practice it was intended that there would be a convergence of provisions to create a regime that was at least nationally consistent (E Emmett, 'Occupational health and safety in national development - the case of Australia' (1997) 23 Scandinavian Journal of Work, Environment and Health 325 at 327). Despite this, through multiple variations in adoption of the national model standards and codes, OHS legislation continues to retain many state/territory determined features because intrinsically state/territory concerns consistently predominate in OHS standards setting. There are also matters regulated under the jurisdictions’ OHS law, which do not derive from the national priorities, which further adds to the diversity. A state/territory identity in OHS regulation is clearly evident and it is a painstaking and time consuming process for anyone who cares to try to sort out the differences and take account of the requirements of different regimes.

The national uniformity process of the mid-1990s primarily focused on seven priority standards which were implemented under regulations and codes of practice in the Australian jurisdictions. It is clear that at the level of the OHS statutes themselves, there is surprising inconsistency. One of the members of the Centre is the author of a leading text on OHS law and policy. As that work shows (see R Johnstone, Occupational Health and Safety Law and Policy, LBC, Sydney, 1997), while it is possible to argue that, at least on an abstract level, the Australian OHS statutes conform to a common “shape” (see pages 80-84), in fact, when it comes to examining the actual provisions in the statutes there is a remarkable lack of uniformity. For example, there are very few instances where the author is able to say that a provision in any OHS statute is the same as the corresponding provision in another! If anything, recent developments in OHS regulatory reform suggest that, rather than pursuing a common model, as they amend their OHS statutes the Commonwealth, States and Territories are developing increasingly idiosyncratic OHS statutory provisions. Each time the State, Territory or Commonwealth jurisdictions amend their statutes, rather than head towards constancy, they seem to say “how can we be different?” One example will illustrate this. In the recent Stanley Review of OHS and Workers’ Compensation in South Australia, the Review, in examining the “general duties to non-employees” (discussed above) canvassed both the Victorian (section 22 of the Occupational Health and Safety Act 1985) and New South Wales provisions (sections 8(2) and 9 of the Occupational Health and Safety Act 2000(NSW)). These provisions are essentially the same except that the New South Wales provisions are far narrower because they limit the scope of what is otherwise a significant and extensive duty to persons who are “at the employer’s place of work.” The South Australian Review suggested a combination of these duties which, as the description of the duties suggests, is not really possible, and might show a misconception of the scope of the duties. In any event the provision in the recently released South Australian Occupational Health, Safety and Welfare (SafeWork SA) Amendment Bill 2003 reproduces neither of the Victorian or New South Wales provisions, but appears, in paragraph 22(2)(a), to be a paraphrase of sections 8(2) and 9 of the OHSA(NSW) and, in paragraph (b), to paraphrase section 22 of the OHSA(Vic), although in a way that seems to reduce the scope of the latter duty. As a result the South Australian Bill produces a provision which resembles provisions in two other State OHS statutes, but which is uniquely worded, quite distinct and difficult to interpret.

These statutory inconsistencies are exacerbated, rather than reduced, by the enforcement policies and practices followed by the jurisdictions (for a very superficial illustration of these differences, see R Johnstone,“Occupational Health and Safety Regulation in Australia: Overview and Reflections”, WorkCongress 5 Conference, Working Safely in a Changing World, Adelaide, March 2001 (attached)). The inconsistencies between the Australian OHS statutes extend to enforcement provisions. Some, but not all, of the statutes include provision for inspectors to issue “on-the-spot fines”, and specify quite different circumstances under which such sanctions can be used; the corporate officer provisions vary considerably from jurisdiction to jurisdiction; the level of maximum fines differ significantly from jurisdiction to jurisdiction; the availability of sanctions other than fines varies considerably; and so on). Similar inconsistencies can be found in relation to provisions for workplace arrangements. For example, only Queensland makes provision for “workplace health and safety officers”, and provisions for health and safety representatives and committees show huge variation (compare, for example, the provisions in Victoria, New South Wales, Tasmania and the Northern Territory).

A co-ordinated national response
In contemplating the shape of OHS law, it is crucial to address this fundamental problem of national (in)consistency. It is counter-productive to the goal of preventing work-related death, injury and ill-health to have legal requirements that are difficult to make sense of, simply because of jurisdictional variation. A much more effectively coordinated national response is required. This is needed across all elements of the legislative framework, that is, the OHS statutes, OHS regulations and evidentiary standards (Codes of Practices and Advisory Standards), as well as for the powers of inspectors and enforcement policy. There are three key strategies for achieving genuine consistency: template legislation, national legislation and referral of state/territory powers to the Commonwealth. We consider that the strategy with the most potential for achieving national consistency is template legislation.
The principle of a template is that it is used to reproduce the same features many times, in different contexts. With template legislation, legislation is passed in one jurisdiction and then adopted consistently and comprehensively as law in all jurisdictions. The process requires governments to resolve differences of approach and drafting before the law is adopted (R Johnstone Occupational Health and Safety Law and Policy. Text and Materials, Law Book Company, Sydney, 1997, pp 98-99). The template is adopted in its entirety by all jurisdictions. Consistent legal requirements are established but given effect under Commonwealth, state and territory law. In 1995, the Industry Commission (Industry Commission, Work, Health and Safety: Inquiry Into Occupational Health and Safety, Volume 1, Commonwealth of Australia, Canberra, pp 53-68) proposed this approach to achieve national consistency and mapped out the elements of a new enabling Act (although this did not deal comprehensively with upstream duties - that is duties on designers, manufacturers, suppliers and importers of plant and substances, and designers and constructors of buildings). To date, as noted above each jurisdiction has pursued OHS statutory reforms independently. In other areas there are successful examples of template legislation, for example the nationally consistent road transport legislation and uniform companies and securities legislation. 

Rethinking OHS Standard Setting

In developing nationally consistent template legislation, we envisage drawing on the best features of existing OHS law but also reflecting on and reforming the balance of different types of standards, recognising the different character of work and organisations that emerged in the late 20th century and is likely to continue into the 21st century. As the Productivity Commission has noted “frameworks/models should also deliver better outcomes for businesses of different sizes, employees and the general community, while recognising the differing economic characteristics of the states”. There is also a need to recognise key shifts in employment away from "blue collar" sectors towards the service sector; the fragmentation and downsizing of organisations with the break up of larger business units into smaller businesses or networks of production, and devolution of managerial responsibility (but not necessarily managerial authority); the rise in self-employment as a proportion of total employment; and the increase in contingent workers including casualisation, sub-contracting, short term employment and use of agency labour; an increase in business system franchising with at least 750 franchisors and 50,000 business franchises in Australia (according to a survey undertaken by C McCosker and L Frazer (Griffith University) for the Franchise Council of Australia, there are at least 750 franchisors in Australia, involving nearly 50,000 business franchises and employing some 650,000 people. See www.franchise.org.au). For an excellent discussion of the OHS and workers’ compensation issues arising from changing business structures and working relations, see Professor Michael Quinlan’s report on Developing strategies to address OHS and workers’ compensation responsibilities arising from changing employment relationships, for the WorkCover Authority of New South Wales, Sydney, 2002.

The considerable changes in organisations and the nature of employment provide both a challenge and an opportunity to consider whether there is a more optimal form that OHS standards can take, to suit the diversity of work and organisations. While many larger organisations are pursuing strategies of systematic OHS management, many SMEs still prefer greater clarity about what OHS law expects of them. Current OHS law does not deal well with this diversity. The OHS statutes provide rudimentary provisions covering some aspects of OHS management but do not provide solid underpinning for this. Moreover, for organisations seeking greater clarity about what is expected, key features of the current law, general duties and process requirements, can be rather vague. Although contemporary OHS law is often described as “performance-based”, in fact limited use is made of performance outcome and performance target standards. These are standards that define the OHS outcome to be achieved but permit flexibility about the action to achieve them. We suggest a different mix of standards be adopted under OHS law.

We suggest that the general duties be retained under the OHS statutes but that they be framed to cover all key duty holders. As discussed above, in particular there is a need to cover franchising arrangements and contractual chains that have become common features of business organisation. The value of general duties is that they establish the broad goals of OHS law to be achieved by the principal duty holders. However, they can be usefully strengthened by process-based standards, designed to promote the systematic management of OHS by each of the different duty holders. The rationale for this is to lay down the elements of successful OHSM with the aim of moving OHS from an ad hoc and piecemeal function, as it still is in many organisations, to a proactive and systematic approach in which OHSM is integrated with other aspects of business management. Incorporating these provisions under the OHS statutes would obviate the need for the current repetition of process steps, in relation to different OHS hazards or problems, under OHS regulations or in codes of practice.

Further to this we propose that greater use be made of performance outcome and performance target provisions. These performance-based standards have the advantage of providing flexibility to choose the most cost-effective solution for the organisation but focus attention on specific hazards or problems that need to be addressed. It is clear that this kind of direction is desirable for many small organisations and others less experienced in managing OHS risks. It is intended that greater use of OHS performance outcome standards would bridge the gap experienced by some organisations that find the current emphasis on general duties and process requirements is not sufficiently transparent. 

Specification standards also have a crucial place in two particular contexts: (1) where there are specific, significant risks and particular solutions required to prevent or control them, for example the high risk activity of confined spaces work; and (2) to provide technical standards for safe design, for example, for high risk plant and installations. Finally, for industries and sectors preferring greater prescription, for example because of a high proportion of SMEs, industry or sector specific codes of practice can provide the desired prescription. These evidentiary standards should apply the proposed performance-based standards to identify suitable preventive measures for the specific industry or sector.

In essence, we envisage a different mix of standards under OHS law in which: (1) the OHS statutes comprise general duties and systematic process-based standards, relevant to each duty holder, as well details of enforcement and sanctions, and other statute administration and policy arrangements; (2) OHS regulations define performance outcomes and performance targets, and risks requiring specification; and (3) evidentiary standards are the vehicle for industry and sector specific guidance, as well as for some technical standards, where both a clear benchmark and flexibility are desirable features.

In developing a template model for uniform OHS Regulation in Australia, we suggest that a starting point be a model OHS statute that adopts the best provisions from current OHS statutes (ie a “race to the top”). Anticipating the obvious question begged by this suggestion, this would, in our opinion, entail adopting:
•	The employer’s duty to employees in sections 26, 28, 29B and 37 of the Queensland Workplace Health and Safety Act 1995, supplemented by section 21(4)(c) of the Victorian Act (which requires employers to engage persons with OHS expertise);
•	The duty to non-employees in section 22 of the Occupational Health and Safety Act 1985 (Vic) (perhaps bolstered by section 29A of the Queensland Act, and adopting the Queensland approach to absolute duties with specific defences 9ie section 37 of the Queensland Act));
•	Section 10 of the Occupational Health and Safety Act 2000 (NSW); and
•	The duties on designers, suppliers etc in the Occupational Health and Safety Act 1985 (Vic) and/or Occupational Health, Safety and Welfare Act 1986 (SA);
•	The Victorian provisions for workplace arrangements (ie Occupational Health and Safety Act 1985 (Vic), sections 26, 29 to 37 and 54);
•	And the New South Wales inspection and enforcement provisions.

This composite Act would provide a starting point for the template statute. Gaps and inconsistencies could then be identified, and filled by thoughtful drafting and/or adoption of provisions which have been shown to work well elsewhere.

Specific Provisions in Regulations, Codes of Practice and Standard Setting to Clarify Duties in relation to New Organisational Forms and New Work Relationships

As we suggest above, the general duty provisions (particularly those in relation to “non-employees” or “others” are a crucial part of any OHS regulatory regime because they ensure that business organisations owe OHS duties to all of their workers, whatever the nature of their relationship with workers carrying out work for their enterprise (see again Johnstone, 1999, cited above). The weakness of these provisions, however, is that they lack detail – indeed recent history shows that even OHS inspectors may not be aware of the breadth and subtlety of the application of the duty to others. Consequently, we suggest that the general duty provisions must be accompanied by appropriate examples (see the example following section 29A in the Workplace Health and Safety Act 1995(Qld)). 

We also suggest that regulations made under the OHS statutes need to particularise more clearly the different organisational forms (holding and subsidiary companies, franchising, outsourcing and so on) and work relationships (home working, contracting, sub-contracting, labour hire, and so on) in a modern economy. The regulations need explicitly to outline the general OHS obligations of those in control of the work processes involved, and to provide for the co-ordination of OHS management efforts of all of the parties involved. For example, it is not sufficient for there to be a statutory duty on each entity (for example, principal contractors, contractors and sub-contractors) involved in a work process if those parties do not co-ordinate their work processes and OHS measures. The OHS statutes should include obligations on all business entities involved in a work process to develop their own OHS policies and procedures, to discuss these with all other parties involved in the process, and to co-ordinate the work process and the OHS measures required.

OHS regulatory authorities should also develop codes of practice and guidance material which fill out the general duty and regulations, and make it clear to all those operating a business that they owe duties to all kinds of workers. A recent review of these provisions (see Quinlan, 2002, cited above) found that there were significant gaps in the coverage of guidance materials for precarious and similar forms of work. Only Victoria to date has produced generic information to advise employers of their responsibilities in relation to temporary workers, and there is little material covering responsibilities for home-based workers. Quinlan found that the situation was slightly better in relation to sub-contracting, labour hire and telecall centre work. Quite detailed guidance material has been produced in some industries (for example government, construction, hospitality and agriculture), but in the main the coverage of guidance material is patchy. OHS regulators need to develop codes of practice and advisory standards for each type of work arrangement (labour hire, contracting, home-based work, franchises) to provide guidance for the implementation of the general duty in each case. What is needed is a comprehensive array of both generic guidance material and more detailed industry/sector specific guides (that take account of the particular configuration of work arrangements in that industry) (see M Quinlan, “The Global Expansion of Precarious Employment: Meeting the Regulatory Challenge,” Keynote paper prepared for the 6th International Congress on Work Injuries Prevention, Rehabilitation and Compensation, Rome, June 2003).

As Quinlan (2003) argues, OHS regulatory agencies will need to produce more guidance material on the OHS effects of downsizing/restructuring. Although such changes would usually fall within the general duty provisions, in general employers fail to consult workers adequately and often such changes led to a serious deterioration in OHS.

If these suggested reforms are introduced, the general duties can then remain, as a ‘catch all’ to ensure that new forms of work organisation will be covered as and when they emerge. 

Conclusion

We have, in this letter, canvassed a range of issues that might be considered by the Inquiry. We have also noted that many of these issues will be considered in great detail at the July OHS Regulation for the 21st Century Conference.
We would be very happy to assist the Inquiry further, if required.

Yours Faithfully

Professor Richard Johnstone
Director, National Research Centre for Occupational Health and Safety Regulation