A recent court ruling (SafeWork NSW v The Owners – Strata Plan No 93899) has sent shockwaves through owners corporations across New South Wales, especially those with commercial enterprises, including short-term holiday lets, within their buildings. A Wollongong strata scheme was slapped with a hefty penalty of over a quarter of a million dollars following the tragic death of a worker in an avoidable accident. This case underscores the critical need for strata schemes to re-evaluate their compliance with workplace health and safety (WHS) obligations and the adequacy of their insurance coverage.
The Case that Changed Everything
The owners corporation at 161 Berkeley Rd, Wollongong, faced a $225,000 fine for failing to meet their obligations under the Workplace Health and Safety Act. Additionally, they were ordered to pay $44,000 in legal costs for the plaintiff, alongside their own undisclosed legal fees. The incident that triggered these legal actions involved a large, rolling entry gate that had been damaged by a vehicle. Instead of securing the gate until repairs could be made, it was manually operated by a worker, resulting in the gate toppling over and causing fatal injuries.
This tragic event took place in a strata scheme comprising several light industrial premises, highlighting the specific but severe risks associated with non-residential properties. While residential strata schemes are typically exempt from certain workplace safety obligations, those involved in commercial activities could be classified as a Person Conducting a Business or Undertaking (PCBU) under the WHS legislation, making them subject to strict safety regulations.
The Implications for Strata Schemes
The Wollongong case serves as a wake-up call for any strata scheme engaged in commercial activities. Strata schemes could lose their PCBU exemptions if they feature elements such as:
Common property loading docks used for commercial purposes
Common property areas used for visitor parking of commercial vehicles
Short-term letting
Common property concierge desks
These criteria imply that if a strata scheme accommodates any business operations or directly employs workers, the owners corporation could be liable under WHS laws. This liability includes ensuring workplace safety and could result in significant fines and legal costs if obligations are not met. If in doubt, it’s safer to assume your owners corporation is a PCBU and that the WHS Act applies.
What Strata Schemes Should Do Next
In light of this landmark ruling, strata schemes, especially those with commercial activities, must take immediate action to ensure compliance and adequate protection. Here are some key considerations:
Identify Hazards: Regularly inspect common property and the site to identify reasonably foreseeable hazards. This proactive approach helps in anticipating potential issues before they become serious problems.
Risk Management: Strive to eliminate identified risks and hazards as far as reasonably practicable. If elimination isn't possible, take steps to minimise these risks effectively.
WHS Compliance Plans: Develop and implement comprehensive WHS Act compliance plans and procedures. A Work Health and Safety Report is tailored to address the specific needs and operations of your Owners Corporation. It is important to regularly review such plans and procedures.
Owner Education: Educate all owners about the new WHS Act regulations and their obligations. Keeping everyone informed fosters a culture of safety and shared responsibility.
Insurance Coverage: Ensure your insurance policies cover any additional risks imposed by the WHS Act. Note that office bearer's legal liability insurance typically does not cover fines, penalties, or punitive damages. Remember, no insurance can cover jail sentences.
Review By-laws: Revisit your by-laws to ensure they adequately address WHS Act obligations. This includes implementing robust incident reporting systems and ensuring immediate notification of potential risks and safety issues to the strata committee.
Protect Your Community with Compass Strata
This case underscores the urgent need for strata schemes to reassess their safety protocols and insurance coverage. Failing to do so could result in devastating legal and financial consequences.
If you're part of a strata scheme that may not be PCBU exempt, don't wait for an accident to highlight your vulnerabilities. Contact Compass Strata today to ensure your building is compliant and that your insurance coverage is robust and sufficient. Our team can help you develop and enforce effective by-laws and implement comprehensive risk mitigation strategies. Ensure the safety and compliance of your strata scheme—reach out to Compass Strata now.
