Strategy Case

With the number of prosecutions of managers and directors of companies for Safety, Security, Health and Environment (SSHE) offences on the increase, there has been a natural progression toward personal liability. This has been driven by public demands that they be held accountable and not hide behind the wall of corporate structures, which traditionally offered protection from personal liability.

This report will examine the situations where an officer may find themselves personally liable. Although the liability varies across each state and territory, there is a general trend that no matter which jurisdiction the company is based, the officers of the company will be held accountable through criminal prosecutions.

Legislative reform from a national level is attempting to unify the personal liability standards for officers, by increasing the penalties including maximum terms of imprisonment for up to seven years for some offences (Tooma, 2011).

The cases reviewed will show that although the opportunity exists for personal liability through civil action against large corporate company officers, such as public companies, these actions are few, with the majority of personal liability of company officer cases actually focuses on small to medium size enterprises.

Personal liability of a company officer will be an important part of the changing landscape that is SSHE in Australia. Tooma (2011) argues, that if companies are simply given monetary penalties for their officer’s offences, then this will be

passed on through its economic activities such as higher prices to customers. Personal penalties and liability, will assist in acting as a deterrent to the officer, to bring about SSHE governance and remind officers to maintain those standards.

In the final section of the report, management strategies will be discussed to assist officers manage liability incurred through SSHE incidents.

2 - Definition of an Officer and Personal Liability:

The definition of an officer when considering SSHE offences requires reference to several pieces of legislation, case law and tests such as ‘concerned in the management’. In a study by Foster (2005), it was found in cases involving officer liability, 77% concerned formally appointed company directors, contrasting others concerned in the management of the organisation.

Western Australia offers strong protection to officers, whereby officers are only personally liable if it is determined an offence occurred with their consent, or connivance or was due to the officers wilful negligence. The Model Work Health and Safety Act revised