Commercial property owners who are unaware of their obligations under work health and safety (WHS) laws in Australia risk potential liability and prosecution.
Some owners may assume that hiring a property manager removes their responsibilities under WHS laws, but this isn’t the case. While property managers have their own obligations under WHS laws, owners still retain legal duties for their properties that cannot be transferred.Recent case law demonstrates that fatal risks may arise from commercial and industrial property and that WHS duties apply to owners corporations in respect of common areas used as commercial or a mix of residential and commercial purposes.
It is important that owners are aware of the duties they owe under WHS laws, ensuring that proactive risk management frameworks are in place to eliminate or minimise any risks to health or safety arising from their property.
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Owners and their duties under WHS laws
Using the Work Health and Safety Act 2011 (NSW) (NSW WHS Act) as an example, the NSW WHS Act establishes duties owed by a person conducting a business or undertaking (PCBU).
Relevantly, a PCBU who has management or control of a workplace is responsible for ensuring, so far as is reasonably practicable, that the workplace, the means of entering and exiting the workplace, and anything arising from the workplace, are without risks to the health and safety of any person. Multiple PCBUs may have management or control of a workplace, in which case each PCBU will owe the same duty at the same time. Duties under the NSW WHS Act cannot be transferred or delegated, despite multiple parties carrying the responsibility.
Owners are PCBUs and are likely to be considered to have management or control of a workplace, therefore owing duties in respect of their properties under WHS laws.
For completeness, we note that, if an owners’ corporation is only responsible for common areas used only for residential purposes, it will generally not be a PCBU in relation to those premises. However, this changes if the body corporate employs any worker as an employee. Additionally, if common areas are used as a mix of residential and commercial purposes, WHS laws will apply.
Owners Corporation found guilty of breaching WHS law in NSW
On 11 July 2024, in one of the first prosecutions of its kind, an owners corporation of an industrial complex was charged and ultimately convicted and fined $225,000 plus costs for breaching its obligations under the NSW WHS Act. Although the appropriate fine was assessed at $300,000, this was reduced to reflect an early guilty plea.
Strata Plan No 93800 (Owners Corporation) had a work health and safety duty pursuant to s 20(2) of the NSW WHS Act (the duty of a PCBU involving management or control of workplaces), but had failed to comply with that duty, exposing persons to a risk of death or serious injury, contrary to s 32 of the NSW WHS Act.
The incident occurred in 2020 and involved common property, being property owned by the Owners Corporation. The perimeter fence and gate at the industrial complex were damaged when they were crashed into by a van, rendering the gate inoperable. Makeshift repairs were undertaken the following day to facilitate the manual operation of the gate, although the stopper on the gate remained displaced, allowing the gate to travel past its intended resting place and become unsupported. On 12 June 2020, a worker arrived at the site and attempted to open the gate manually, as he had done in days previous. Tragically, the gate became unstable and fell on the worker, resulting in fatal injuries (Incident).
The Owners Corporation, a strata manager, and the worker’s employer were all separately prosecuted, convicted and fined for breaching their obligations under the NSW WHS Act.
Although the Court found the worker’s employer guilty for failing to alert the Owners Corporation or strata manager to the dangers posed by the damaged gate, or anything to do with its manual operation, the Court also found the Owners Corporation and its strata manager failed to take steps to guard against the risk that arose from the gate not being repaired. Despite the Owners Corporation’s prompt notification to the strata manager of the damage to the gate and follow up regarding its repair, this was insufficient to discharge their independently owed safety duty under the NSW WHS Act, given that both the Owners Corporation and the strata manager had the power and obligation to make the site safe.
The strata manager’s initial fine was assessed at $200,000 but reduced to $150,000 plus costs, and the employer’s initial fine was $500,000 but reduced to $375,000 plus costs, each reduction being to reflect an early guilty plea.
Takeaways for owners
Owners owe duties under WHS laws, whether they are aware of them or not. This will include owners corporations in respect of common areas used as commercial or a mix of residential and commercial purposes.
Prior to the Incident, the Owners Corporation relied heavily upon the strata manager and were unaware they had any obligations under the NSW WHS Act. Consequently, no risk assessment was conducted, nor was there a Safe Work Method Statement or safe work procedure in place for the manual operation of the gate. The Court observed that the likelihood of the risk was not only foreseeable, but that there were simple no-cost steps available to eliminate the risks, which contributed to the Owners Corporation’s sentence.
Following the Incident, the Owners Corporation implemented proactive measures to identify and manage risk. However, these measures were only put in place after the Owners Corporation became aware of their duties under the NSW WHS Act, highlighting the importance for all duty holders to understand the extent of their duties.
What can owners do when considering these duties?
More broadly, it is important for owners to be aware of their duties under WHS laws. To effectively meet their obligations, owners should implement health and safety systems and procedures to identify, address and report on risks to health and safety.
This may include, among other things:
- Undertaking risk assessments and building safety inspections.
- Encouraging the prompt reporting of incidents and hazards to minimise any risks to health and safety.
- Acting promptly once hazards are identified to eliminate them so far as is reasonably practicable.
- Ensuring safety training is delivered and adhered to.
- Including safety as an agenda item for meetings.
- Implementing effective contractor management systems.
It is the responsibility of owners to ensure they are across their WHS obligations in respect of each property, noting that the above measures are only examples and achieving compliance in practice will involve considering the type of property, type of management and any leasing arrangements.
Contact our experienced WHS team for further guidance on owners’ duties under WHS law.
