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New laws put companies at risk

New laws put companies at risk

Directors of companies may be at increased risk of being personally prosecuted under new draft work safety legislation, legal experts warn.

DIRECTORS of companies may be at increased risk of being personally prosecuted under new draft work safety legislation, legal experts warn.

Under the draft Safe Work Act released by the federal government, officers will now have a duty to exercise due diligence to ensure that their company or organisation has complied with its safety duties, law firm Blake Dawson work safety specialist Lea Constantine said. 

This duty is owed at all times when a person is an officer, and doesn't just become an issue in a legal defence when a workplace incident occurs, she said. 

The proposed work safety legislation, which intends to make individual laws across the different States uniform, will potentially expose a broader class of executives to liability due to the way in which the draft law has defined the term "officer".  Failure to comply could result in hefty penalties and/or potentially jail time.

Constantine said the new laws turn a spotlight on the personal steps that officers must take to ensure safety.


"Under the draft Safe Work Act, officers will need to demonstrate to a safety regulator that they have personally exercised due diligence to ensure the safety of workers and others.  The legislation does not tell us what 'due diligence' means, so each officer will need to devise and implement appropriate due diligence steps."

The issue has been highlighted as Blake Dawson starts a national road show, advising clients about how the new laws will affect their business.

Constantine said executives need to start preparing for the new laws. 

"Given the requirement for officers to exercise due diligence, many officers, particularly of large corporations, will need to start preparing now. Those officers will need to be able to answer a regulator's question about what due diligence they have personally undertaken."

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