November 12, 2021

How Does the WHS Act Impact Your Business?

The Work Health and Safety Act 2020 (WHS Act) aims to strengthen worker protection by incorporating modern employment agreements, increasing fines for businesses and people, and introducing the term “person operating a business or enterprise” (PCBU).


How does this change affect businesses?

  • Penalties are increasing: Currently, for industrial manslaughter/gross negligence the maximum penalty for a company is $2.7million. Under the new Act, this is increased to $10million. For individuals, the new Act increases penalties to a $5million fine and can face up to 20 years in prison.
  • PCBU & Worker: This term describes all forms of modern working arrangements. A PCBU can be any corporation, association, partnership, sole trading or government department. Under the Act, a PCBU has an obligation to ensure the health and safety of its workers.
  • Industrial Manslaughter: The same elements apply to convicting someone for industrial manslaughter under the WHS Act as they do under our present gross negligence statute. However, under the WHS Act, prosecutors are no longer need to convict the firm in order to convict individual corporate officers.
  • Positive due diligence: The new legislation has made it a lot easier to prosecute corporation officers on an administrative level. When faced with a WHS investigation, the majority of businesses go into liquidation which meant your company can’t be prosecuted. Under the new Act, if a corporate officer has not met their obligations of due diligence, they can still be prosecuted.
  • Insurance: When the WHS Act takes effect, your insurance will still cover your legal bills, but company officials and PCBUs will not be able to use their insurance to cover fines for violations. Employees are not covered by their employers, so if you’re fined, you’re on your own.


How to Prepare:

  1. Communicate with key stakeholders. Keep them updated about changes and what’s coming up.
  2. Conduct an audit to ensure your business meets the requirements of the new legislation.
  3. Create an action plan from the audit. Identify the positive, negative and gaps in your workplace and work on ways to fix these issues. Doing nothing won’t help you.


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