When do you submit an EU to the Regulator?

Here’s the next requested insight from my time as WHS Regulator and something that seems to have mystified senior leaders for a while. Sorry, not a short one (again).

What’s an Enforceable Undertaking (EU) and, more importantly, when do you lodge it?

As a WHS Regulator, I considered many EU’s and this post intends to help you to not only understand the tool but more importantly, debunk when to use it and when to lodge. As always, these are my personal experiences and are not legal advice or reflective of other Regulators.

If you want specific advice, email me (I’m cheaper than a Court penalty!, mostly 😊)

The EU tool is founded in the WHS Act with specific triggers.

The first thing to understand is that the EU process is triggered by the PCBU, not the Regulator. You need to apply to the Regulator for an EU; they will not request it. If you don’t ask, you don’t get!

There is an option for a Court to trigger an EU, but this is not as commonly used.

An EU is accepted in lieu of a prosecution, so it makes sense that you only consider it if the Regulator is investigating you and you think there is a probability of charges being laid. If they are investigating you for a WHS incident, you’ll know about. Tip #1 is – this is your trigger to start thinking of EU options!

The decision for any Executive of a PCBU, in lodging an EU, is to assess the risk of prosecution. If you think you'll be charged, then an EU is an alternative to that. Tip #2 – an EU is not a cheaper option to prosecution!

If you are being investigated for a likely Category 1 offence, it’s highly unlikely a Regulator will accept any EU. Cat 1 offences involve reckless behaviour, insomuch that, you knew of the risk but went ahead with the act regardless. No Regulator will accept an EU on a Cat1 as a matter of policy. If your investigation relates to a potential Cat 1 breach, lawyer up.

If your breach is a likely Cat 2 or 3, then this is what we are talking about.

Don’t submit something that is significantly less value that a Court fine. A Regulator will reject it. EU’s are not cheap alternatives to a day in Court.

To determine what a fine is likely to be, look at previous cases from similar circumstances. It’ll give you a rough rule of thumb for a likely penalty. This is from where you base the total value of your EU. What makes up the elements of that value is for the PCBU to decide and offer.

When I first became a Regulator in 2017, I would often receive an EU application after charges were laid. Some of the EU applications had merit and a strong argument for consideration, but lodging after charges were laid was too late. It looks like you’re trying to get an easy option to stay out of Court.

Early in my tenure, I made it publicly clear that I encouraged PCBU’s to start EU discussions with me very early, usually through a lawyer, and In-Confidence. In-Confidence legal discussions are a great way to test the water so both sides can openly share expectations.

I would talk to legal representatives about what I considered, in broad terms, acceptable in those circumstances. I was looking for value add safety initiatives to worker and workplace safety. I wasn’t looking for initiatives that made you compliant with the law, you have to do that anyway. I was looking for things that went beyond compliance.

I was receptive to suggestions from lawyers on various topics, events and initiatives as they ‘tested the water’ about what was acceptable to me. This allowed me to shape the EU in broad terms, ensuring value was added to workplace safety in a meaningful and sustainable way.

I made it clear that I valued EU’s enormously one main reason. Court penalties go to the Treasury, never to be seen again. Regulators don’t see the money and victims or their family’s definitely don’t see the money. However, EU’s are returned to the business, workers, industry and/or the community for the benefit of safety for all. For me, this is the golden opportunity to ensure sustainable safety benefits for workers and workplaces. I wanted long term value add, not short term wham bam!

To conclude.

Consider early EU discussions with your Regulator for Cat 2 or 3 breaches. Think broadly about the long term value of what you offer.

Make it sustainable.

Consult your workerson what they want. They'll know where teh pain points and failures are.

Think about industry and community benefits, not just internal to your business.

Consult with your workers on what they need. After all, they are the people who know where your risks are, as they do the work everyday.

I encourage you to think about EU submission very early in the investigative process. In-Confidence legal discussions will not bind you.

If you don't consider an EU option as part of your investigative response strategy, I think this is a missed opportunity for a PCBU. I guarantee though, a Court case is significantly more expensive than an EU, if convicted will come with a conviction, and significant legal fees (often substantial if you engage Counsel).