The Changing Paradigm: Freedom, Jobs, Prosperity
A Commentary on the Victorian Crimes (Workplace Deaths and Serious Injuries) Bill 2002
Ladies and gentlemen
I've produced a reasonably detailed analysis of the Victorian
corporate manslaughter Bill, which is available for attendees
at this conference along with copies of recent newspaper articles.
In this paper, I want to focus on the core structure of the
Bill and why it is of concern. Please note that this is a lay
person's attempt to understand what appears to be a contortion
of commonly understood ideas of criminal liability and justice.
But a lay understanding is perhaps what is needed. Every day,
people in business make multiple commercial decisions believing
that they act legally. If the nature of criminal law changes,
what does that do to the decision-making processes? Have no doubt:
this Bill is squarely aimed at the boardrooms of Australian business
and the executives who run them. In fact, however, its legal reach
is much wider than its stated intent.
The Victorian corporate manslaughter legislation is morally
flawed. It is based on a sound objective, namely, to reduce workplace
deaths and injuries, but its method runs the very real risk of
increasing deaths and injuries.
The Bill's greatest moral danger is that it can lead to people
going to jail for crimes committed by someone else. It legalizes
the creation, prosecution and persecution of 'fall guys'. The
outcome is likely to be severe distortion of behaviour in workplaces,
with a related increase in deaths and injuries as a real possibility.
Why the Bill? What drives the motivations?
The Victorian Bill needs to be seen within the broader context
of the global assault against, and demonization of, corporations.
Anti-corporate campaigning is now a multi-billion-dollar global
industry run by activist non-government organizations (NGOs) whose
main claim to moral authority is that they are non-profit. The
objects of their disaffection---profit-focused corporations---they
describe as amoral at best, but mostly immoral.
NGO anti-corporatist campaign methodology has as its local
level the brand-name destruction of specific companies (such as
the recent Fairwear campaigns against well-known Australian clothing
labels) while, in its global application it focuses on the demonization
of corporations. The process has had high success over the last
10 years to such an extent that at the most recent WTO conference
public comment was made that no CEO of any corporation dare any
more to defend capitalism.
Globally and locally, corporations are 'on the nose'!
In the most complete demonstration of the success of anti-corporate
campaigning, some corporations, frozen with fear, have turned
to paying off NGOs in what amounts to acceptance of brand-name
blackmail. Globally, anti-corporate NGOs now receive billions
of dollars in funding from government, philanthropic business-funded
organizations and from corporations themselves. Capitalism truly
is in a public relations crisis because corporations have waved
the flag of defeat.
It is this environment of corporate demonization that has made
the Victorian corporate manslaughter bill possible.
The Structure of the Bill
A lay person's understanding of criminal law is that a person
is held responsible for the actions over which they have direct
control. As drivers of cars we will be held criminally liable
if we cause the death of a person by negligent driving. We will
go to jail, but our passenger will not go to jail on our behalf.
The Victorian corporate manslaughter bill breaks the tie between
criminality and personal actions. It creates a new and different
type of criminality.
This is achieved through two key steps. First, the Bill suggests
that a collective of persons is capable of criminal activity.
In this instance, the Bill chooses one legal form of a collective---the
corporation---and declares that a corporation can act criminally.
It does not include other collectives such as partnerships, trusts,
the public service, not-for-profit bodies or unions. By omitting
these other collectives, the Bill declares that only a collective
organized as a corporation can act criminally.
For example the Bill's second reading speech states, 'It is
the collective or organizational nature of corporate activity
that will be included....' The Explanatory Memorandum states,
'The focus is on the organizational responsibility of the body
corporate.' And '... offence involves derivative rather than direct
So the Bill looks at the organization and culture of a corporation
and says that culture and organization commit criminal acts. The
first step in prosecutions under the Bill is to demonstrate this
new criminality by a corporate collective. The second step is
that if a corporation is found guilty, then the Bill seeks to
find who it is within the corporation who will be punished (by
way of fine or imprisonment) for the corporation's crimes. This
is where the idea of 'derivative liability' comes into play.
In effect, the Bill declares who will be the 'fall guy/s'
to go to jail for the criminal acts of the collective. The Bill
predetermines that 'senior officers' will go to jail and then
describes how the 'fall guy' senior officers will be nailed.
Common law and transference of liability
The proponents of the Bill say it is necessary because existing
criminal common law does not capture wrongdoers in corporations.
Is this a sustainable argument?
A lay understanding of common law is that there are two broad
categories of law which are relevant to this issue: that of criminal
law and that of civil law. Civil law largely relates to legal
action for recovery of damages and usually involves financial
restitution. Criminal law often involves imprisonment. In the
case of civil actions, the level of evidence and certainty required
to prove a case is much lower than that required under criminal
prosecution. Under civil actions, the courts are frequently prepared
to make an organized collective responsible for financial court
orders. The law, however, is reluctant to make a collective criminally
responsible not only because it seems impractical to jail a collective
of persons, but also because the risk of jailing innocent parties
This is based on sound reasoning accumulated over thousands
of years of legal history and is founded in the distinction between
a natural person and a legal person such as a corporation, church
or trade union. Natural persons can steal, beat up, rape, blackmail,
murder and so on, and they can do so in the context of seeking
to further the interests of a collective, say a church or trade
union or on orders from someone else in an institution. But in
every criminal case, individuals have to be the instruments of
the criminal act.
The doctrine of criminal intent is central to the law, and
only natural persons can have criminal intent.
When a gang commits a crime, like a gang rape for example,
only individuals are prosecuted and only individuals are sentenced.
The courts may impose heavier sentences on people because they
participated in gang rape, but it is not the gang which is committed
for trial and it is not the gang which is punished according to
law. Individuals are held responsible for their individual criminal
The care which the law takes in applying this principle of
criminal intent was demonstrated in a recent case involving a
dispute between a labour hire company and a building union in
Queensland. [Evenco Pty Ltd Australian Building
Construction Employees and Builders Labourers Federation &
Others Supreme Court Qld Appeal numbers 3536 & 3610 of 1999
The case concerned a 10-year campaign by a union to stop a
labour hire company operating in Queensland by preventing the
labour hire workers entering work sites. The labour hire company
took a civil damages action against the union alleging inducement
to breach of contract, won the case and achieved court orders
against the union, restraining the union from action against the
company. The union complied with the orders for some years, but
then ignored the orders and resumed their campaign against the
company. At this point, the issue ceased to be one of civil law
and became criminal. Defiance of a court order is a criminal action
with imprisonment, a fine, or both, as distinct possibilities.
One of the questions the judges had to consider in this case
was whether the actions of the employees of the union (the union
officials) were attributable to the union. That is, was the collective
responsible for the criminal actions of the individual employees
who breached the orders? Or were the individuals responsible and
could the union avoid responsibility?
The court said the following.
'Looking at the doctrine developed in England from the Australian
perspective, on the basis that what is involved is a criminal
or quasi-criminal proceeding, the result arrived at there (England)
is unattractive, insofar as it can make an absolutely blameless
person vicariously liable for the unauthorized act of an employee;
vicarious liability for criminal acts is the exception not the
rule.' And '....making a blameless person liable for contempt
is a surprising interpretation.'
Here the court is clearly reflecting on the fact that criminal
liability should on principle be tied to personal actions.
In further comment, the court observed that a corporation under
criminal law can already be liable for the actions of its senior
officers. '....in some instances the law will test a corporation's
liability on the basis of acts of certain senior officers, so
that their acts are treated as its acts'
Certain principles appear clear as to how the common law already
works. Collectives of any legal type can be held criminally responsible
for the actions of their employees or agents but great care should
be exercised to ensure that liability is not transferred to blameless
persons. In the Queensland case, it was shown that the actions
of the senior officer of the union were attrituble to the union---based
on evidence of lines of communication and knowledge as to the
restraint orders. $85,000 of fines were imposed for breaching
the court orders.
In summary, it appears that existing law will under certain
circumstances hold a collective responsible for the criminal actions
of a person acting on the collective's behalf, but a collective
itself cannot commit a criminal act.
A new idea of criminal liability
The Victorian manslaughter bill operates in reverse. It finds
a collective---but only one organised as a corporation---capable
of a criminal act and then seeks to find individuals in the corporation
who will go to jail on the collective's behalf.
The Bill raises issues of justice. How is it possible for a
collective to have criminal intent? If one type of collective
can be declared by legislation to be capable of criminal intent
or action are other types of collectives also capable of criminal
action? Could legislation be created that declared a specific
religious, social, political or sporting collective capable of
criminal action? Once this Bill is passed, the conceptual extension
into other areas is comparatively small even if political probability
seems remote. For extension to occur, however, all that
is required is sufficient public relations success in demonization
of a targeted group and the group could then become subject to
the same treatment being delivered to corporations under this
With this new and untested form of criminality, can anyone
in an organization know who will be held liable? Can any senior
officers know whether their actions today will be held to have
been criminal in years to come? What are the new rules upon which
one's actions will be judged? What are the new legal principles
being set and what is the long-term impact of these on all persons
On a practical level for example, would any insurance company
be prepared to insure a collective for their criminal risk in
this untested and new area of law?
The Victorian Bill looks very much like a dumping of the critical
principle of criminal intent being tied to the actions of individuals.
The threat to justice must be real. The practical ramifications
can only be imagined.
In this short paper I've only sought to consider the core structure
of the Bill. The Bill has many more problems in the detail than
those dealt with here.
But a core question is paramount: why?
This is a Bill that introduces a quantum leap in criminal law.
Its implications are vast and as yet not fully explained or discussed.
When the Bill is criticized, the reaction of the proponents so
far has been to attack the people asking the questions. Their
responses come close to accusations that critics support bad workplace
practices. But dismissing critics in this way as an attempt to
steer attention away from the issues can only tend to confirm,
rather than address, those original concerns.
The stated objective of the Bill is to reduce workplace deaths
and accidents, an objective we all strongly endorse. The fact,
however, is that existing legal processes already hold corporations
criminally liable, albeit in a particular way. The proponents
of the Victorian corporate manslaughter Bill have neither adequately
educated the community about why the existing common law fails,
nor adequately explained how or why this Bill will improve the
situation. Patient delivery of clear arguments may achieve better
results for them than moral posturing and ritualistic indignation.
People need to know where they stand. People want and deserve
clear and consistent application of comprehensible law. Only when
this is in place can we sensibly turn our attention to reducing
workplace deaths and injuries.