Enforceable undertakings in work health and safety matters – weighing up the pros and cons

Australian work health and safety (WHS) regulators have developed a broad range of administrative sanctions to supplement formal enforcement of WHS legislation through prosecution. One alternative that has been gaining traction and media attention is enforceable undertakings (EU).

What is an EU?

In the context of work health and safety law, an EU is a legally binding written agreement between an individual employer/business (known as a PCBU) or individual who has been charged with a breach of WHS laws and the regulator of a State or Territory (for example, SafeWork NSW). The EU obliges the PCBU or individual to take affirmative actions to deliver positive safety benefits to the workplace as an alternative to prosecution.

In the workplace setting, EUs are typically used in circumstances where:

• charges have been brought by the regulator following an investigation;
• the PCBU or individual is prepared to take innovative steps to address the particular issues the subject of the alleged breach and to introduce broader safety initiatives; and
• the alleged offence has not involved reckless conduct (known as a Category 1 offence).

Advantages of proposing an EU

Generally speaking, a regulator will consider a proposed EU if doing so is in the public interest and where the PCBU/individual proposing the EU is able to demonstrate that the EU will deliver tangible WHS benefits.

In the right circumstances an EU can provide a number of advantages, including:

• Facilitating positive change – EUs provide an opportunity to commit to significant WHS improvements and initiatives that benefit not only a particular workplace, but the industry generally and the wider community as a whole. In the words of the father of a worker killed in an industrial accident in the Northern Territory where an EU was accepted: “I don’t want my son’s case consigned to a filing cabinet at Darwin Local Court. I want a lasting legacy that we never would have got if we had gone to court and had a court-imposed sanction.”[1] The opportunity to achieve real change is without doubt the greatest benefit of entering into an EU.
• Avoiding prosecution – If an EU is accepted, a PCBU/individual can avoid prosecution and a conviction being recorded. This can be important for several reasons, including maintaining a good reputation and to maintain eligibility to tender for future work.
• Confidential negotiation process – EU’s are handled by a separate section of the regulator to the prosecution section, and nothing that is said during the EU negotiation process can be used against you if the EU is not accepted.
• Accessibility – EUs are available to both individuals and PCBU’s charged with offences.

Disadvantages of proposing an EU

It is important to note that proposing an EU may not be appropriate in all circumstances. Those considering proposing an EU should note the potential disadvantages, including:

• Increased costs – Any strategies, actions and milestones proposed in an EU need to go above and beyond complying with your WHS obligations and this can be costly. For example, the EUs accepted by SafeWork NSW in 2019 (and there have only been 6 so far) have involved total expenditures ranging from approximately $400,000 to $1.4 million – often more expensive than if a monetary penalty is imposed following a successful prosecution, even taking into account legal costs.
• Potential delays – Any WHS prosecution will be put on hold while an EU is being negotiated. While this is a good thing when an EU is ultimately accepted, delays resulting from an unsuccessful EU proposal may count against the maximum discount being applied for an early plea.
• Uncertainty – Whether or not an EU will be accepted is completely in the hands of the regulator. It is possible to spend quite a bit of time and money putting together an EU that is not accepted, leaving you in the position of needing to dedicate further resources to defending or negotiating an early plea in the prosecution.
• Reputational risk – A requirement of the EU process is that the details of the accepted EU must be published on the regulator’s website (and wider dissemination may form part of the EU), so anonymity is not an option. However, to some extent such publicity may also be seen as an opportunity to demonstrate the positive initiatives agreed to as part of the EU.
• No guarantee of immunity – A breach of an accepted EU can result in a further prosecution being brought or the original prosecution being revived.

Deciding what will work for you

If a reportable incident has occurred at your workplace then it is critical that you seek legal advice as soon as possible to ensure you are properly protected throughout the post-incident investigation stage.

If a prosecution is commenced, it is important to carefully weigh up your options, with an EU being just one that you could consider.

Our team has the skills and experience to assist you to develop an effective strategy when responding to allegations of WHS breaches. If you require assistance in navigating these issues, please get in touch with us.

[1] “Exceptional circumstances warrant EU in fatality case”, OHS Alert, published 26 June 2018.