Labour hire company fined $50k over fatality

The report in last months Shortlist and other publications highlights yet again that if you provide labour hire, you remain responsible for them as their employer for any workplace related incidents and a failure to do all you can to ensure their safety while at your clients can be very costly.

Government bodies have become increasingly stringent regarding Occupational Health & Safety within the workplace.


There are over 5,000 pieces of legislation that can result in a fine or penalty in Australia and approximately 700 of those can find a director personally liable.


As a result, it has become extremely important for recruiters to ensure they not only have the correct procedures to ensure the safety of their on-hire employees, but to also have adequate insurance to protect you and your business from any statutory risks that may arise.


Statutory Liability insurance- usually bought as part of a management liability insurance package- provides cover for individuals and the company for fines and penalties resulting from the operation of the business, including fines related to workers compensation and occupational health and safety (outside of NSW sites where it is no longer legal to purchase such cover since June 2020).


In the event you have been held liable for a breach in legislation, this insurance will assist in covering costs incurred from any resulting formal investigations as well as any fines and penalties issued.


Without such cover, many small businesses struggle to recover financially from incidents as they simply do not have the same financial supports as large companies to cover hefty penalties and fees.


Recent RCSA Insurance client claims example


Client Profile

Construction

3 staff

$95K turnover


Background

Insured contracted to provide earth moving workers as part of a regeneration project.


The Insured’s employee was engaged as a on hire truck operator and was required to drive an articulated dump truck to move topsoil as part of the regeneration project.


He suffered a serious injury as a result of a specific project.


The Regulator and SafeWork inspectors conducted an investigation into the incident.


Outcome

The insureds policy responded to the Investigation and panel lawyers were engaged by the insurer to assist the Insured in the interviews.


Insurer Payment: $15,000.


Client Profile

Construction


5 staff


=$250K turnover


Background

A series of safety lapses and a failure to check due process and procedures led to an incident where an on-hire employee injured his arm.


Outcome

The statutory liability section of their management liability policy was triggered.


They received a $400,000 fine under the OH&S Act and incurred close to $200,000 in defence costs in defending the claim.


Payment: $600,000


Client Profile

Trade Services


4 staff


$750K turnover


Background

A young employee of the Insured suffered a serious crush injury to his hand and at work which resulted in the amputation of four fingers.


SafeWork alleged that the Insured failed to ensure a proper induction had been provided, or that he had had adequate instructions on the operation of a press machine and that correct supervision to the employee was in place.


Outcome

The Statutory Liability section of the Policy was triggered. Indemnity was granted for the fine and for defence costs.


Payment: $50,000.


If you don’t already buy management liability insurance to protect your business, please contact me for a no obligation quote.

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