Workplace Safety and Health: Chief Executives and Directors Held Personally Liable

by Johnathan Lee Kui Bao, Chong Yi Mei & Tito Isaac

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Code of Practice launch signals possible active enforcement stance to hold Chief Executives and Board of Directors personally liable for any breach of duties to ensure workplace safety and health

The launch of the Code of Practice on Chief Executives’ and Board of Directors’ Workplace Safety and Health Duties (the “COP”) on 19 September 2022 and its planned elevation to an Approved Code of Practice in October 2022 may signal active enforcement in the near future against top directors for workplace safety and health lapses. Accordingly, companies and their management may wish to seek legal advice on their obligations under the Workplace Safety and Health Act 2006 (“WSHA”). 

By default, directors can be held personally (and criminally) liable for any offence committed by their company under the WSHA unless they can show (a) that the company’s offence was committed without his or her consent or connivance, or (b) he or she had exercised all such diligence to prevent the commission of the offence having regard to the nature of the director’s functions. If convicted, directors can be sentenced to a fine of up to $200,000 or be imprisoned for up to 2 years, or both. The provision makes no distinction between directors located locally and those located overseas.

While the ability of the State to hold directors liable is not new, the COP removes key ambiguities over baseline standards expected in exercising “all such diligence”. In the same stroke, any prosecution brought against directors can leverage on the COP to disprove any such “due diligence” defence by directors should there be non-compliance on applicable practices.

The move to publish factors relating to director due diligence is similar to the approach in jurisdictions such as the United Kingdom (where enforcement policies and factors are published online) and Australia (where “due diligence” is defined in its written law). A scan of the “frequently asked questions” issued alongside the COP shows language that leans towards enforcement. It is foreseeable that Singapore would be keen to prosecute suitable cases in the near future amidst rising workplace fatality rates. Its move to have the COP expeditiously gazetted as an Approved Code of Practice in October 2022 [The ACOP status enables the Prosecution to admit it into evidence for criminal proceedings with increased ease.] can also be seen as a key preparatory move for its use in future prosecutions.

Directors with on-going investigations remain legally exposed to legal liabilities even without the COP.

For the avoidance of doubt, the COP is not law. However, the COP can be taken into consideration by the court in its determination of liability, especially in criminal proceedings. It is trite law that the court will take into consideration applicable regulations and industry standards when deciding whether a person (including a company) had taken all such reasonably practicable measures to ensure safety. Similarly, the court will likely be persuaded that the COP is a recognised industry standard as it is published by the Workplace Safety and Health Council (as opposed to it being a publication by only the Ministry of Manpower).

The four principles and 17 measures in the COP correspond broadly to existing obligations under the WSHA. For example, measure 2 alludes to setting out a Safety and Health Management System under the WSH (Safety and Health Management System and Auditing) Regulations 2009; measure 5 alludes to providing and maintaining a work environment which is safe and adequate as regards arrangements for welfare at work (section 12(3)(a) WSHA). We reproduce a summary of the four principles and 17 measures from the COP in Annex A.

As a corollary, directors who face on-going investigations or prosecutions prior to the publication of the COP continue to be exposed to legal liabilities from WSH breaches committed by their companies.

Essential Next Steps

Prudent chief executives and directors, especially those overseeing operations, should immediately look at improving or setting up the requisite systems in line and beyond what is set out in the COP.

Specialist legal advice would be essential to reduce legal risk and for such executives to understand the deep and far-reaching consequences of non-compliance.

Conclusion

The publication of the COP removes key ambiguities over baseline standards expected of directors in exercising diligence to ensure workplace safety. In the same stroke, any prosecution brought against directors can leverage on the COP to disprove any such “due diligence” defence by directors should there be non-compliance on applicable practices.

The expeditious ascent of the COP to the status of an Approved Code of Practice can be seen as a key preparatory move for its use in future prosecutions. It is foreseeable that the government is looking to hold top executives accountable for WSH breaches in the near future.

The WSHA applies to all workplaces, regardless of whether the work is manual by nature. By extension, the COP applies to directors of all operational companies. Accordingly, companies and their management may wish to seek legal advice on their workplace safety and health obligations.

For legal advice and/or representation, please do not hesitate to contact our team at Tito Isaac & Co LLP.

References

1. Workplace Safety and Health Act 2006.
2. Announcement of Launch of Code of Practice on Chief Executives and Board of Directors WSH Duties on 19 September 2022 at https://www.tal.sg/wshc/media/announcements/2022/launch-of-the-code-of-practice-on-chief-executives-and-board-of-directors-wsh-duties.
3. Code of Practice on Chief Executive’s and Board of Directors’ WSH Duties at https://www.tal.sg/wshc/resources/publications/codes-of-practice/code-of-practice-on-chief-executives-and-board-of-directors-wsh-duties.
4. Frequently Asked Questions: Code of Practice on Chief Executives and Board of Directors WSH Duties at https://www.tal.sg/wshc/resources/publications/codes-of-practice/frequently-asked-questions-code-of-practice-on-chief-executives-and-board-of-directors-wsh-duties.
5. Health and Safety Executive (United Kingdom) – Proceedings against director, manager, secretary or similar officer at https://www.hse.gov.uk/enforce/enforcementguide/investigation/identifying-directors.htm.
6. Section 27 of the Work Health and Safety Act 2011 (Australia).