Putting the Victorian Maxwell Review into Perspective
The application of Occupational Health and Safety laws has long been an important issue for independent contractors. OHS has frequently been used by people who oppose independent contractors in an attempt to vilify them. The argument has been that independent contractors are more incident-prone than employees.
ICA has long held the view that the public policy debate on OHS in relation to independent contractors has been emotive, has had excessive levels of political motivation, was largely run to serve the self-interest of some institutions, was facile, and damaged the cause of improved workplace safety.
The corporate manslaughter debate has been at the far end of the spectrum of this destructive debate. ICA has argued against corporate manslaughter laws. (Click here)
The Victorian government led the charge on corporate manslaughter, attempting legislation in 2002. This has since been withdrawn, but legislation was passed in the ACT in 2004.
In 2003, the Victorian Government announced an inquiry into OHS laws, chaired by lawyer Chris Maxwell. This occurred around the time that the Productivity Commission also conducted an OHS inquiry. Great suspicion surrounded the Victorian Inquiry because of the history of the corporate manslaughter legislation and fears that corporate manslaughter and other aggressive agendas might be introduced via ‘the back door’. This suspicion was re-inforced by the tone of the Discussion Paper released during the Inquiry process and the short time-frame of the Inquiry.
Independent Contractors of Australia made a submission to the Victorian inquiry in November 2003. (Click here)
The Productivity Commission Report was released in mid-2004, but it turned out to be an inquiry which focused mainly on workers’ compensation schemes and on proposals for national scheme options for businesses operating in multiple States.
The Victorian Inquiry released its report, the Maxwell Report, in March 2004. It is 400-plus pages long and a heavy and detailed read. From ICA’s perspective, the Maxwell Report is refreshing, forward-thinking, sensible, non-ideological and comes across as a genuine attempt to grapple with practical issues that affect work safety. It is possibly a leading-edge OHS report in Australia that addresses core issues of policy principle.
There are issues of detail that perhaps give cause for concern and which need to be addressed, but they are issues that could be expected when dealing with such a complex matter as OHS. There is no sense gained from the Report that OHS is being used (or will be used) to deny independent contractors their rights. The Report specifically rejects corporate manslaughter for OHS. Issues that may prove controversial include extension of OHS powers to unions and the inclusion of ‘stress’ as an OHS injury item.
Electronic copies of the Maxwell Report can be obtained from www.dtf.vic.gov.auwww.dtf.vic.gov.au.
ICA has made a follow-up response to the Maxwell Report after an invitation to do so. That response appears below. Our response builds on our earlier submission which focused on the realities of ‘control’ at work, and the appropriate tying of liability and responsibility to control.
Response to the Victorian OHS Inquiry
The ‘Maxwell’ Review Report
11 June 2004
Independent Contractors of Australia (ICA) is pleased to have the opportunity to comment on the Maxwell Report released in March 2004. In November 2003, ICA made a submission in response to the Maxwell Review discussion paper. We asked the following key question: Are the principles of OHS being corrupted?
We raised the following concerns:
The Productivity Commission describes the principles of OHS regulation used by all jurisdictions as those espoused by the Robens Committee in the United Kingdom in 1972:
ICA supports this principle, re-expressed in simple lay language as: ‘any person who has responsibility for a worksite must ensure that all people on the worksite are safe from foreseeable risks.’
ICA believes, however, that this core principle is subject to corruption by the language, concepts, practices and legalities of ’employment’. This tendency to corruption of the Robens principles because of ’employment’, comes through in the Victorian Review’s discussion paper and is the focus of ICA’s submission.
We made the following recommendation:
That the Review investigate the use of legislative language that aligns the obligations and responsibilities of all parties in a work environment to the Robens principles. ICA believes that this can be achieved.
ICA’s full submission is available here.
2. The Maxwell Report. General Comments
In relation to the issues raised by ICA, we are pleased to note that the Maxwell Review report addresses our concerns. In stark contrast to the discussion paper, which contained an underlying tone of presumption of guilt against anyone who was not an employee, the Report focuses on the core objective of OHS, namely, addressing the human interactions that lead to accidents, regardless of the legal status of the people involved.
The Report appears to be a genuine and largely successful attempt to look beyond the policy and debate distortions that often occur because of ideologies and politics associated with most discussions about labour issues (OHS and other).
The Report’s tone, language and approach concentrate on issues of ‘control’. It considers:
- how controlling behaviours can be influenced so as to minimize the incidence of accidents;
- how sanctions for accidents can be better directed against those who had actual control; and
- how sanctions should be apportioned according to the levels of actual control exercised.
This approach is consistent with general community ideas of natural justice and should lead to enhanced community confidence in the integrity of OHS legislation. In this respect, the Report’s rejection of corporate manslaughter legislation is important and welcome. The concept of corporate manslaughter, reflected in the withdrawn Victorian Bill (2002) and the existing Australian Capital Territory Act (2004), presuppose/d guilt on the part of a corporation, automatically apportioned guilt to ‘senior officers’ and thus would/does seriously breach ideas of natural justice and community confidence in OHS regimes. It would also deter investment in those jurisdictions tempted to adopt such legislation.
The Maxwell Report provides a strong platform upon which significantly improved OHS legislation can be constructed. ICA is keen to see that the tone and language of any consequent legislation is consistent with this aspect of the Report and that the legislation maintains a focus on practical considerations of control exercised by ‘duty holders’.
3. Practicalities of ‘control’
The Report discusses control by duty holders and makes a number of important recommendations. ICA has comment on some of those recommendations which we hope will promote even better understanding.
3.1 Employees and independent contractors
Rather than focus on the different status of employees and independent contractors, the Report tends to look at the issue of ‘worker’. This is an approach which the ICA supports. Some comment on the differences between the two (as traditionally conceived under OHS) may nonetheless be useful.
At common law, employers are vicariously liable for their employees. Because of this, there has tended to be a policy drift under OHS in terms of accountability: although employees have, in theory, been accountable for those of their actions that lead to accidents, in practice that accountability has been significantly and systemically ignored. By comparison, independent contractors are fully accountable for their actions both de jure and de facto. ICA believes that, as a consequence, the law creates an environment in which employees may be less likely to behave in a safe manner at work than are independent contractors.
The parallel with car driving is strong. Driving laws do not assume any difference in responsibility for driver actions because of a driver’s legal status. Holding all drivers responsible is considered important for achieving safer roads. The Maxwell Report’s emphasis on considering ‘worker’ responsibility is akin to ‘driver responsibility’. ICA is concerned that, in looking to a generic definition (worker), the responsibilities apportioned to workers for their actions parallels those of independent contractors—that is, that people are held genuinely accountable and liable for their actions.
The idea of transference of responsibility and liability—because of the vicarious liability of employees—is not consistent with the objective of safe work practices.
In relation to ’employers’, we note that the Report shifts the language (and hence the emphasis) away from the legal idea of ’employer’ towards one of who exercises control. This is constructive.
‘Employers’ are better thought of as being a ‘business’ (considered in the broad sense of an entity undertaking an activity). For OHS purposes, in most businesses, control is exercised by delegated employees acting as ‘managers’. This particularly applies in large public and private corporations, and in the public service.
In respect to managers, the Report needs clarification. In one part, the Report asserts that managers should have the same level of responsibility as that of workers. In another part, however, the Report seems to impose additional responsibilities onto managers over and above those of employees. The thrust of the Report is that ‘duty holders’ should be held accountable for those issues and items over which they have control. For managers who are no more than employees with delegated employer authority, it would on the surface seem that the general responsibilities of managers were a matter of fact that do not need additional legislative description. ICA submits that there is merit in further explanation being given about how the Report perceives the differences between manager and employee responsibility being reflected in legislative arrangements. ICA would welcome additional clarification on this point.
3.3 Unions and control
A significant omission in the Report is any discussion on the liability and responsibility of unions for the control they exercise on worksites. This is a surprise. Unions exercise considerable, significant and sometimes near-dominant control of some worksites, yet are not, it appears, currently held liable or responsible (nor are they likely to be made liable or responsible) for the level of control they may demonstrably exercise.
Unions exercise their formal control of worksites by being delegated instruments of industrial relations legislation. Unions can exercise considerable informal control over worksites through their relationships with employees and managers of worksites. Unions rarely have common-law contracts with parties to a worksite, but are normally formal parties to industrial instruments. Through their formal involvement over awards and enterprise agreements, through their positions on OHS committees and through their informal powers, unions can and do exercise considerable power of veto over managers’ actions and options for actions. In effect, unions frequently assume a level of quasi-managerial control.
Normally, unions can be said to exercise a positive control over OHS, but this should not be presumed either within OHS policy discussions, parameters, legislation or systems. The fact is that unions exercise control and this should be recognised and encompassed within OHS legislation and, like all other parties who exercise control, unions and union officials should be accountable and liable for actions commensurate with the level of control they exercise. To exclude unions from the OHS accountability umbrella is to create OHS inconsistency and is likely to diminish the objective of achieving safer worksites.
The Report addresses the essential area of consultation on worksites. It points out that existing OHS consultative processes have not been working as effectively as they should. Reasons include the fact that union membership has declined and that the independent contractor/self employed community has significantly increased in size. This can perhaps be summarised by observing that the practice of the command-and-control organisation model (the post-World War II Taylorist model) has almost vanished.
The Maxwell Report makes a number of suggestions about how new worker OHS consultation/participation models might look, but the Report’s tone creates the impression that formalising effective consultation in the new environment is difficult. ICA agrees and suggests continuous experimentation with alternative models.
In this respect, proposals for roving HSRs, extension of HSRs representation to all ‘workers’ and greater specificity in relation to OHS obligations are all conceptual positives if part of an ongoing review of consultation processes. ‘Consultation’ in the context of the recommendation, however, is looking like ‘control’ under other terminology.
ICA suggests caution on two fronts: (a) Legislated OHS consultation processes are effectively state-imposed control mechanisms on management that remove important aspects of management control. Yet management is assumed to be liable for worksite control. (b) OHS consultation as an effective control mechanism should have tied to it appropriate levels of accountability and liability. Wherever control and accountability are untied, safety systems are diminished.
In this context union right of entry to worksites raises concerns. As discussed in item (3.3) above, union control without accountability must risk diminution of safety systems and processes. The Maxwell Report, however, recommends turning unions into formal instruments of state OHS legislation without recommending any matching liability obligations. Removal of a union official’s authorisation does not amount to an obligation for actions taken. This is a weakness in the recommendation that risks replacing a concern for safety with a concern for power.
3.5 Power to direct work stoppages
It is also puzzling as to why unions, and only unions, (other than Worksafe Victoria) are proposed to be given authority under OHS legislation to direct work stoppages. Unions now only represent 17 per cent of the private-sector workforce yet they are to be given powers under OHS legislation effectively to control all private-sector worksites. If legislative power to direct work stoppages is to be extended beyond officers of Worksafe Victoria, the limitation of that power to unions alone raises potential issues of political patronage and diminishes community confidence in OHS integrity. ICA has an open mind on extending worksite stoppage power beyond Worksafe Victoria. But if extension is to occur, a magistrate’s authorisation should logically also be available to the police, fire, ambulance and other emergency authorities. If union officials are to be privileged in this way, then officials from employer associations and other bodies that may wish to apply should be similarly privileged. However, such authority should have corresponding measures of liability and responsibility tied to it.
4. General Conclusions
OHS considerations tend to be historically bedded in the concepts of industrial organisation. It is cultural preconditioning to assume that the managers of capital control the worksite and, as a consequence, that ‘management’ is assumed guilty until proven innocent for workplace accidents. But work activity is no longer exclusively structured along the simple lines of industrial organisation. Often capital and labour are the same. Many different forms of legislation have diminished the authority and control of management. Changed and changing social and moral expectations create more complex human interplay in organisations than was the case 50 years ago. OHS legislation and systems should recognise that organisational control is now complex, multi-faceted and is exercised by persons both within and external to the organisation.
The Maxwell Report is an appropriate and valuable step in the direction of recognising these new realities, and for looking to systems that may improve work safety within such new realities.
ICA believes that the Report can be further enhanced by ensuring that, at all levels of OHS legislation and systems, a wary eye is kept on every player who exercises control and that, as a matter of principle, every person who has elements of control has appropriate matching measures of responsibility and liability.
5. Summary of recommendations
In this respect, ICA recommends:
- Workers: The OHS liabilities and responsibilities of employees should be real and not theoretic. Vicarious liability should not apply under OHS. OHS employee liability should be on a par with independent contractors.
- Managers: The cultural and legal limitations now imposed on managerial control should be realistically recognised for OHS purposes. Managerial liability should reflect the facts of actual control exercisable.
- Unions: Unions should be recognised as exercising considerable control over worksite management. OHS legislation should formally include unions within the liability and responsibility frameworks commensurate with all other parties that exercise control.
- Consultations: Consultation systems recommended by Maxwell should be considered one model. The OHS authority should look to undertake constant review and experimentation with different consultation models with a view to creating a matrix of consultation.
- Power to direct work stoppages: If it is to be allocated, this power should not be the restricted to unions alone, but opened up more broadly.