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OHS and SRC Legislation Amendment Bill 2006

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2004-2005-2006

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

OHS AND SRC LEGISLATION AMENDMENT BILL 2005

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

Amendments to be Moved on Behalf of the Government

 

 

(Circulated by authority of the Minister for Employment and Workplace Relations, the Honourable Kevin Andrews MP)

 

 

 

 

 



OHS AND SRC LEGISLATION AMENDMENT BILL 2005

(Amendments to be moved on behalf of the Government)

OUTLINE

The Government’s amendments to this Bill propose to amend section 4 of the Occupational Health and Safety (Commonwealth Employment) Act 1991 (the Act) to exclude State and Territory OHS laws from applying to employment covered by the Act except where those State and Territory laws are specifically prescribed by Commonwealth regulation.

Section 4 of the Act presently enables State and Territory OHS laws to operate concurrently with its provisions.  The original intention of section 4 was that State and Territory legislation would fill any gaps in Commonwealth OHS regulation and so ensure comprehensive protection for Commonwealth employees.  This amendment addresses concerns which have been raised about the potential for section 4 to in fact generate an unnecessary duplication of effort by requiring employers covered by the Act to comply with both Commonwealth and State and Territory OHS laws on the same subject matter. 

 

FINANCIAL IMPACT STATEMENT

The proposals in these amendments are budget neutral.



REGULATION IMPACT STATEMENT

 

Background

 

The Occupational Health and Safety (Commonwealth Employment) Act 1991 (the Act) provides a legal basis for the protection of the health and safety of Commonwealth employees in Departments, Statutory Authorities, and Government Business Enterprises (GBEs).  The Act imposes responsibilities on employers, employees, manufacturers and suppliers of plant and substances, and persons erecting or installing plant in a workplace.  The Act also establishes a framework for cooperative workplace arrangements and a criminal and civil enforcement regime.

 

The Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) establishes both a premium based and licensed self-insurance based workers' compensation scheme for employees of the Commonwealth and certain private sector corporations who are injured in the course of their employment.

 

Both the Act and the SRC Act are administered by the Commonwealth's regulatory body, Comcare.

 

The SRC Act provides scope for certain corporations to apply for a licence to self-insure and/or manage their own workers' compensation claims.  The Minister for Employment and Workplace Relations may declare a corporation eligible to be granted a self-insurance licence under the SRC Act.  Eligible corporations include former Commonwealth authorities, existing Commonwealth authorities that are about to be privatised, and private sector corporations operating in competition with an existing or former Commonwealth authority.  The Safety, Rehabilitation and Compensation Commission has the power to grant a licence under the SRC Act to an eligible corporation.

 

The licensing arrangements enable Commonwealth authorities to maintain SRC Act coverage as licensed corporations following privatisation.  This ensures continuity of workers' compensation arrangements for employees of former Commonwealth authorities. In order to maintain a 'level playing field', these provisions also enable private sector corporations in competition with existing and former Commonwealth authorities to access the SRC Act licensing arrangements.

 

It is proposed that section 4 of the Act be amended.  Section 4 currently provides that the Act does not affect the operation of a State or Territory law promoting OHS that is capable of operating concurrently with the Act.  The amendment to section 4 will support the amendment on coverage because it will give certainty about whether, and to what extentState and Territory laws apply to employment covered by the Act. 

 

Objective

 

To provide for optimum levels of health and safety by providing a single OHS regulatory framework for employment covered by the Act and by removing current uncertainties about the extent to which State and Territory OHS laws apply to such employment.

 

The Problem

 

Section 4 of the Act provides that

 

It is the intention of the Parliament that this Act is not to affect the operation of a law of a State or of a Territory that promotes the occupational health and safety of persons and is capable of operating, whether of its own force or as an applied provision within the meaning of the Commonwealth Places (Application of Laws) Act 1970, concurrently with this Act.

 

When the Act was passed, section 4 was considered to have a relatively narrow operation.  There was an absence of Commonwealth regulation on specific OHS issues.  Section 4 was therefore originally intended to ensure that there were no gaps in protection for Commonwealth employees until the Commonwealth had made regulations on specific OHS matters.  The Commonwealth has subsequently introduced OHS regulations on a number of specific issues, in particular to implement various National Occupational Health and Safety Commission (NOHSC) standards.

 

Concerns have been expressed, almost since the commencement of the Act, about the potential for section 4 to require the Commonwealth to comply with both Commonwealth and State and Territory laws on the same subject matter unless there is a direct inconsistency.  This potential was highlighted by the decision of the High Court in Re Residential Tenancies Tribunal of NSW and Henderson; Ex parte Defence Housing Authority (1997) 146 ALR 495 which made it clear that Commonwealth immunity from State and Territory laws is not as wide as previously thought.  The implications of this decision are that a wider range of State and Territory OHS laws apply to the Commonwealth than previously thought.  Where there are both Commonwealth and State and Territory laws on the same matter, the State and Territory laws will apply to the Commonwealth unless there is direct inconsistency.  The same situation would apply to private sector corporations that gain a licence under the SRC Act if coverage under the Act is extended to such corporations.  The result is that employers covered by the Act are in a position where there is uncertainty about whether, or to what extent, particular State and Territory OHS laws apply to them.

 

Some examples of the areas where practical difficulties have occurred from the interaction of Commonwealth and State and Territory laws are as follows:

 

·          confusion arising from differences between Commonwealth and State and Territory plant regulations (where not all jurisdictions have adopted the full scope of the NOHSC standard).  Differences between plant licensing requirements have also led to confusion;

·          administrative difficulties arising from overlapping Commonwealth and State and Territory provisions in relation to pressure vessels;

·          problems arising from differing Commonwealth and State and Territory provisions in relation to licensing of fork lift drivers;

·          uncertainty as to legal obligations arising from differences in the level of prescription in workplace hazardous substance regulation across jurisdictions has resulted in Commonwealth employers considering that they have no option but to comply with State and Territory standards to avoid the possibility of breaching those laws; and

·          confusion and difficulties in relation to asbestos removal where some State and Territory regulators have applied State and Territory licensing requirements to the contractors performing the removal, even though the work has been undertaken in accordance with Commonwealth provisions and the necessary approval had been obtained from the relevant Commonwealth authority.

 

There are 5 options for amending section 4:

 

Option A - exclude State and Territory laws;

Option B - apply State and Territory laws unless specifically excluded;

Option C - exclude State and Territory laws unless specifically prescribed;

Option D - apply the laws of one State and Territory unless specifically excluded;

Option E - exclude State and Territory laws except to the extent one State’s or Territory’s laws are specifically prescribed.

 

The advantages and disadvantages of each option are as follows:

 

Option A - exclude State and Territory laws

Under this option, no State or Territory OHS laws would apply to employers covered by the Act.  Any gaps in Commonwealth coverage would need to be filled by Commonwealth legislation, regulations or codes of practice made under the Commonwealth Act.  This would establish an intention that the Commonwealth Act covers the field of OHS in relation to employment covered by the Act.

 

The advantages of this option are;

o    simple legislative implementation;

o    compliance with, and enforcement of, OHS laws in Commonwealth employment would be simple; and

o    it would enable Commonwealth laws to apply to employment covered by the Act and State and Territory laws to apply to other areas of employment.

 

The disadvantages of this option are:

o    specific areas of OHS which are covered by State, but not Commonwealth laws, will not apply to employment covered by the Act.  The work involved in the Commonwealth making laws itself on those specific areas, or alternatively making appropriate codes of practice, could be very resource intensive and would take some time to achieve;

o    some major stakeholders, especially employee’s representatives, could claim that this option would create a scheme of OHS regulation which is less extensive than that which currently applies.

 

Option B - apply State and Territory laws unless specifically excluded

Under this option, section 4 would be amended to expressly provide that State and Territory OHS laws are to operate, unless they come within a subject matter prescribed by regulations under the Act.  This option would leave State and Territory OHS laws generally to apply but exclude the operation of laws dealing with particular subject areas already dealt with by Commonwealth laws.

 

The advantages of this option are:

o    relatively simple legislative implementation;

o    compliance would be easier by removing duplication;

o    enforcement would be simpler by removing duplication.

 

The disadvantages of this option are:

o    excluding one State and Territory law may interfere with the operation of another State and Territory law which is not excluded if the two laws are interdependent in their operation;

o    identification of all relevant State and Territory laws to be excluded could be complex and some could be missed.

 

Option C - Exclude State and Territory laws, unless specifically prescribed

Under this option, State and Territory OHS laws would not apply to employers and employees covered by the Act except where this is specifically provided. 

 

The advantages of this option are:

o    relatively simple legislative implementation;

o    compliance and enforcement would be easier because of the removal of duplication;

o    excludes State and Territory laws dealing with specific matters dealt with in Commonwealth laws;

o    provides the clearest demarcation between Commonwealth and State and Territory OHS laws;

o    provides flexibility to fill gaps in Commonwealth coverage by enabling State and Territory laws to be prescribed by regulations to apply.  It would be easier to identify the gaps to be filled than to identify the laws to be excluded, as in Option B.

 

The disadvantages of this option are:

o    it could give the appearance of denying Commonwealth employees the benefits of State and Territory OHS laws.  However this option need not involve the removal of any real benefits provided relevant subject areas are prescribed to save State and Territory laws or Commonwealth regulations are made to cover those areas;

o    as for Option 2, the exclusion of one State and Territory law may interfere with the operation of a prescribed State and Territory law if the two laws are meant to operate interdependently. 

 

Option D - apply the laws of one State, unless specifically excluded

Under this option, the laws of one State or Territory (say, New South Wales) are applied to employers covered by the Act throughout Australia, unless specifically excluded.  This is a variation of Option B.

 



The advantages of this option are:

o    employers covered by the Act would be required to comply only with Commonwealth laws and the laws of one State or Territory;

o    compliance and enforcement would be simpler through the removal of some duplication.

 

The disadvantages of this option are:

o    the OHS laws of one State or Territory would be applied throughout Australia;

o    employers in all States would have to become familiar with the laws of one State or Territory;

o    this option may meet strong resistance from State and Territory Governments because it would mean the laws of one jurisdiction apply in another jurisdiction, albeit to a limited extent, to the exclusion of laws on the same subject in those other jurisdictions;

o    there would be a lot of confusion for State or Territory inspectors enforcing laws for the Commonwealth because they would have to be familiar with not only the Commonwealth law and their own jurisdiction’s law but also the laws of the default jurisdiction;

o    there could be practical difficulties in enforcing the laws of one jurisdiction in another jurisdiction.

 

Option E- exclude State and Territory laws except to the extent one jurisdiction’s laws are specifically prescribed

This is a variation of Option C.  The difference is that only the laws of a single State or Territory would be prescribed to apply.

 

The advantages of this option are:

o    employers covered by the Act would have to comply with only Commonwealth laws and prescribed laws of one State or Territory;

o    compliance and enforcement would be simpler through the removal of duplication.

 

The disadvantages are the same as for Option D.

 

Consultation

 

Consultations have been undertaken with all Commonwealth authorities and private sector corporations which have obtained a licence under the SRC Act. 

 

Licensees strongly supported the proposed amendment to section 4 to ensure that they would only be subject to one OHS regulatory regime and that the change to coverage would not be adding a further layer of regulation to what they regard as a costly and burdensome obligation of having to comply with the requirements of multiple jurisdictions.  Licensees supported the inclusion in the amendment of the flexibility to enable coverage under specific OHS laws where this is needed to fill gaps in Commonwealth coverage.

 



Conclusion and recommended option

 

The Australian Government considers that an amendment to section 4 is necessary to provide a clear demarcation between federal and State and Territory OHS laws in employment covered by the Act and therefore provide certainty for employers and employees covered by the Act, together with the Australian Government and the States and Territories as to whether and the extent to which State and Territory OHS laws apply to employment covered by the Act.  There are also obvious advantages in ensuring that time and resources are devoted to improving health and safety at the workplace rather than to resolving issues of jurisdictional boundaries.  Option C is the preferred option.

 

Implementation and review

 

Implementation of the proposed changes would involve four stages:

(i)      legislative amendment to the Act;

(ii)     preparation of guidance material by Comcare to advise Commonwealth authorities, applicants for licences which are former Commonwealth authorities and competitors of existing and former Commonwealth authorities of the legislative amendment;

(iii)     preparation of advice by Comcare to the OHS authorities in each of the States and Territories advising of the legislative amendment; and

(iv)     while no formal review is planned, a review of the effectiveness of the proposed legislative amendment would be undertaken by Comcare on a continuing basis and reported to the Safety, Rehabilitation and Compensation Commission which would advise the Minister if a change to the arrangements were necessary.

 

 

 



NOTES ON AMENDMENTS

 

Amendment 1 - Schedule 1, page 5 (after line 20), after item 3, insert:

 

Amendment 1 inserts a new item into Schedule 1 (Extending the coverage of the Occupational Health and Safety (Commonwealth Employment) Act 1991 ) to the OHS and SRC Legislation Amendment Bill 2005. 

 

Item 3A - Section 4

 

New item 3A repeals the existing section 4 of the Occupational Health and Safety (Commonwealth Employment) Act 1991 (the Act) and replaces it with a new section 4 which excludes the application of some State and Territory laws to employers and employees under the Act.

 

1.1       Subsection 4(1)  Exclusion of State and Territory laws

 

Section 4 of the Act presently enables State and Territory occupational health and safety laws to operate concurrently with its provisions.  This item excludes the application of all State and Territory laws, that deal with matters concerning occupational health and safety, to employers and employees and their employment covered by the Act.  The exclusion is intended to extend to any fee, charge or tax imposed by a State or Territory that relates in any way to occupational health and safety. 

 

This general exclusion is subject to subsection 4(2) which preserves the operation of State and Territory laws in certain circumstances.

 

This general exclusion can be displaced where a State or Territory law is prescribed to otherwise apply to employers, employees or to the employment of employees covered by the Act under subsection 4(3).

 

The note following subsection (1) alerts the reader that employer and employee are terms defined in section 5 of the Act.

 

1.2       Subsection 4(2)  State or Territory laws not excluded from applying to situations not covered by this Act

 

The Act currently provides for State and Territory OHS laws to apply in the following situations:

 

·          where a contractor is in control of the premises; or

·          where one Commonwealth employee normally works on State or Territory premises.

 

Subsection (2) maintains the application of State and Territory laws in these situations.

 



1.3       Subsection 4(3)  Allowing certain State or Territory laws to apply

 

This item provides a regulation-making power to prescribe a State or Territory OHS law where that law deals with an OHS matter not dealt with by or under the Act.

 

1.4       Subsections 4(4) and 4(5)  Interpretation

 

Subsection 4(4) provides that a reference to a State or Territory law includes a reference to State or Territory law that is an applied Commonwealth law under the Commonwealth Places (Application of Laws) Act 1970 .

 

Subsection 4(5)   provides that a reference to law in section 4 includes a reference to a provision of a law.  It is intended to include a formula or a part of a law or formula.  It is also intended to extend to provision of a law, or part of a provision or formula, which imposes or calculates a State or Territory fee, charge or tax relating to occupational health or safety.