Corporate Accountability: Why Imprisonment is Now a Key Feature of NSW WHS Laws

The introduction of imprisonment as a potential penalty under the Work Health and Safety (WHS) Act in New South Wales (NSW) has sparked significant debate. While similar provisions have long been enforced in other Australian states, the recent decision by NSW—the last state to adopt this measure—has still managed to catch many by surprise. What some perceive as a drastic shift in regulatory enforcement is, in reality, a reflection of a national movement towards stronger accountability for workplace safety violations.

This legislative change addresses a persistent issue: despite the significant human toll of workplace incidents, no corporation in NSW has ever been adequately punished for recklessly causing the death of workers. Historically, even when substantial financial penalties were imposed, they were seen as insufficient given the gravity of the offences—particularly when lives were lost.

For instance, the largest fine ever issued in NSW for a workplace fatality was $2,025,000 in the case of SafeWork NSW v A1 Arbor Tree Services Pty Ltd and Anor [2023] NSWDC 256. This case involved gross negligence, with the company’s failure to follow proper safety protocols resulting in a worker's death. By contrast, one of the lowest fines for a similar violation was $100,000 in SafeWork NSW v Stitt [2024] NSWDC 255, a fine that underscores the variability in penalties depending on the specific circumstances of each case.

While these fines may seem substantial, they do not adequately reflect the value of the lives lost. This raises an important question: Are financial penalties alone enough to deter corporations from engaging in reckless conduct?

When compared to broader corporate misconduct, such as the infamous Purdue Pharma case in the U.S., NSW’s fines for workplace fatalities appear even more reasonable. In the Purdue settlement, the pharmaceutical giant paid a minimal amount per life lost to opioid overdoses after they largely created the US opioid crisis—a stark illustration of how corporate wrongdoing can be severely underpunished. In that case, Purdue paid an estimated $12 per death as part of a civil settlement in the U.S. (In re Purdue Pharma L.P., Case No. 19-23649 Bankr. S.D.N.Y.).

The disparity in penalties between workplace fatalities and broader corporate negligence highlights an ongoing concern: Is the current system of fines really enough to drive accountability, both in workplace safety and in cases of corporate malfeasance?

The introduction of imprisonment as a penalty under the WHS Act, effective from June 2024, represents a potential game-changer. However, with existing backlogs in both SafeWork NSW and the NSW District Court, it is likely that the first imprisonment case under this provision may not materialize until 2027. Despite this, the option is now firmly on the table, and regulators may be keen to set a strong precedent—perhaps even at the expense of forfeiting the 50% commission they receive on fines.

As NSW prepares for stricter enforcement of workplace safety laws, this legislative shift sends a clear message: Non-compliance will no longer be tolerated. With imprisonment now a viable penalty, regulators are empowered to pursue more meaningful punishments for those who fail to prioritize the safety of their workers. For business leaders and directors, the stakes have never been higher.