Model OH&S Legislation - IPA submission

The IPA lodged its submission on the Model Safe Work Act on 9 November 2009. A copy of the submission is attached. A number of IPA members gave helpful input into the submission. The IPA will continue to monitor the progress of this important issue.

Michael Murray IPA Legal Director [email protected]

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The Workplace Relations Ministers’ Council has agreed to the release of the endorsed exposure OH&S draft legislation and supporting documentation for public comment. The IPA will make a submission by the due date of 9 November 2009. Member input is invited.

The draft law is at http://www.safeworkaustralia.gov.au/swa/ModelLegislation/Model+OHS+Legislation/

Initial comment

The IPA has made previous submissions on the particular issues that arise when the employer company enters external administration and the need to balance the rights of creditors, including employees, with the OH&S rights of employees.  This is so in particular when for example a liquidator is deciding whether to trade-on a company in order to preserve its value but where issues of OH&S and other factors add costs and liabilities.  The latter may mean that the company's business is closed, to the financial detriment of the creditors and the employees. 

Previous IPA submissions on these issues of 10 July 2008 were never acknowledged in the consultation process.  This is now evident from the Model Act itself, which has, from an insolvency perspective, this regime:

Outline of regime

If a body (a company) has a duty, which a company as an employer does, then “an officer of that body must exercise due diligence to ensure that the body complies with that duty”.

Officer is defined to include a person:

            (ii)        who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business or undertaking of the body; or

            (iii)       who has the capacity to affect significantly the body's financial standing; or

            (iv)       who is a receiver or manager of any property of the body; or

            (v)        who is a liquidator of the body.

It is not apparent why this definition is confined to a receiver or a manager or a liquidator but not for example an administrator; or whether the initial definitions are meant to include external administrators.

In any event, it may be that the law would say that OH&S “due diligence” has to be assessed in the context of the situation, and the due diligence expected of a liquidator appointed to a company would be assessed in terms of the liquidator’s other duties to creditors.

Member comment

IPA members are invited to provide comments to the IPA as soon as possible to allow us to meet the 9 November deadline for our submission.

Michael Murray IPA Legal Director [email protected]