What Is A Code Of Practice In Business? Everything You Should Know.
Below we answer the question of what is a code of practice and explore the importance of having one in your business.
Within this guide, we also highlight the essential facts and common questions to assist you in improving your business practices and staying compliant with your operations.
The purpose of this article is not to make you an expert in occupational health and safety; it is to give you a basic understanding as a business owner, and to answer the question, what is a code of practice?
A code of practice is a framework designed to help your business operate at a certain standard to meet its legal obligations for health and safety.
Are you starting a business? Check out our step by step: How to set up a business.
What Is A Code of Practice In Business?
Note: A Code Of Practice should not be confused with a Code Of Ethics; they are different things.
A WHS Code of Practice is a practical guide prepared by various WHS regulators (both at state & federal levels) across Australia containing comprehensive information on specific tasks performed at work.
The image below shows that they are designed to help businesses meet the standards required under WHS legislation.
Work Health and Safety Acts apply in each state and territory and are enforced by each state WHS regulator.
WHS Codes of Practice are not substitutes for WHS legislation, but they do assist in helping businesses understand what they must do.
WHS Codes of Practice are also not mandatory to follow. Your business may have a much better way of dealing with any particular WHS issue.
However, you should ensure that the method your business uses provides the same or an even higher standard of WHS that the code suggests.
The Codes are admissible as evidence in court proceedings (such as if a WHS regulator decides to prosecute your business).
WHS inspectors can refer to them if they ever issue a business with an Improvement or a Prohibition Notice.
What Is A Code Of Practice Duty Of Care?
Under the various WHS legislation, there is a duty for a person conducting a business or undertaking to ensure, so far as is reasonably practicable, the health and safety of:
- Workers engaged, or caused to be engaged by them.
- Workers whose activities in carrying out work are influenced or directed by them.
WHS Codes of Practice can assist in determining what precisely is “reasonably practicable” in certain circumstances.
There is a vast range of WHS Codes of Practice, and it is essential to check with ones that apply in your state. In New South Wales, for example, WHS Codes of Practice cover the topics of:
- Confined spaces
- Construction work
- Demolition work
- Excavation work
- First aid in the workplace
- Hazardous manual tasks
- How to manage work health and safety risk
- How to safely remove asbestos
- Labelling of workplace hazardous chemicals
- Managing electrical risks
- Managing noise and preventing hearing loss at work
- Managing psychosocial hazards at work
- Managing risks of falls at workplaces
- And more.
It is important to note that work health and safety law differs across each State and Territory in Australia, and which law or Code of Practice applies will depend on the circumstances of each case.
Nothing in this blog constitutes legal advice, and you should seek advice from a WHS consultant or lawyer for your specific circumstances.
You can read more about each State and Territory’s Code of Practices here:
- SafeWork NSW Codes of Practice
- WorkSafe Victoria Compliance Codes and Codes of Practice
- WorkSafe ACT Codes of Practice
- WorkSafe Queensland Codes of Practice
- SafeWork SA Codes of Practice
- Commerce WA Approved codes of practice
- WorkSafe Tasmania Codes of practice
- NT WorkSafe Codes of Practice
Why Is A Code Of Practice Important?
A WHS Code of Practice is essential for your business if a WHS Code of Practice covers the work you engage in.
This is because they are the minimum safety standards the WHS regulator will expect you to comply with.
Below, we’ve outlined in more detail precisely why a WHS Code is essential.
They Make Your Workplace Safer.
Put simply, WHS Codes of Practice are designed to keep your workplace safe for everybody involved – your workers on-site and the general public.
For example, the Code of Practice developed by SafeWork NSW on managing the risk of falling at workplaces is there to help businesses eliminate or minimise the risk of falling at several stages during the workplace.
It provides a detailed outline on how to identify the hazards involved, assessing and controlling the risks.
It outlines how your business can approach work on the ground or solid construction, different fall prevention devices, work positioning systems and fall arrest systems.
They also outline administrative controls, the role of ladders and emergency procedures for falls.
Following the guidelines prepared in WHS Codes of Practice will help your business identify, manage, control and hopefully eliminate risks.
They Keep Your Business Operating Smoothly
If you follow WHS Codes of Practice correctly, your business will be much less likely to experience WHS incidents (which ultimately disrupt your business operations).
Despite what many business owners may think, a safe business is ultimately a productive and profitable business.
Investing in safety management and following WHS Codes of Practice in the early stages can save your business many headaches in the long run.
It is much more expensive and disruptive to manage the fallout of a safety incident (and potentially defend yourself in a WHS prosecution) than it is to read a WHS Code of Practice and implement its recommendations in your business operations.
How Can A Code Of Practice Help My Business?
A WHS Code of Practice can help your business in the ways outlined above, including:
- Making your workplace safer
- Ensuring your business operates smoothly
- Keeping WHS Regulators off your back
There are other ways a WHS Code of Practice can help your business, outlined below.
Preparing A Risk Assessment.
Note: Before preparing your assessment, check out our guide: What Is A Risk Assessment? A Complete Guide
WHS Codes of Practice can also help you prepare comprehensive risk assessments.
These are specifically designed to identify the primary risks your business faces and provide measures and controls to reduce the impact of those risks.
They are beneficial if you need to prepare a site-specific risk assessment, which is supposed to delve into exactly how your business operates at a particular site.
Preparing A Code Of Ethics
Note: Before preparing your code, check out our guide: What is A Code Of Ethics? A Helpful Guide
Codes of ethics refer to your business’ document stating your organisation’s position on matters that affect its operations.
They are generally helpful to reflect the values of your company standards.
This may include how you treat your customers, how you choose your suppliers and – critically – how much importance you place on safety standards.
If your business is committed to upholding the best safety standards in your industry, then following a WHS Code of Practice is a sure way of sticking true to that commitment.
Risk Of Not Following A Code Of Practice
If you don’t follow a WHS Code of Practice, your business may experience:
- Safety incidents (including the death or injury of a worker)
- Disrupted business operations
- Business losses
- Legal hot water (such as a prosecution by the WHS Regulator if a safety incident occurs).
Work-related illness, injuries and deaths impose high costs on a business, including:
- Workers’ compensation premiums
- Lost productivity in the workplace
- Lost current and future earnings
- Legal costs in defending any subsequent legal proceedings
SafeWork Australia found that, in 2012-2013, work-related injury and disease cost Australia’s economy approximately $61.8 billion, representing 4.1% of the country’s Gross Domestic Product (GDP).
The costs of legal proceedings after a safety incident (which could result from the failure to follow a WHS Code of Practice) can also be a high cost.
This is especially if a business does not have insurance (although, note now in NSW, insurance for WHS penalties are now unlawful).
These legal proceedings could include a lawsuit brought by a worker who is injured.
A worker’s family member if the worker died, and/or a criminal prosecution brought against the company or its directors by a WHS regulator under WHS legislation.
Real Life Example
Director personally fined after failing to follow WHS Code of Practice
In one recent NSW case, the District Court of NSW convicted a director of failing to comply with his obligations as an officer under WHS legislation.
He ran a business that grew greenhouse truss tomatoes and instructed one of his employees to remove some plastic sheets from a roof of a hothouse located at the workplace.
The employee climbed onto the roof using a ladder and stood on the gutter while removing the sheets.
Unfortunately, the employee lost his balance, fell, suffered significant injuries, and died in hospital for 17 months.
The court found that the director had failed to provide this employee with any training, prepare a safe work procedure or provide adequate supervision.
The court commented on how the director had failed to follow the relevant WHS Code of Practice on managing the risk of falls, stating:
In December 2011, Safe Work Australia published a Code of Practice entitled: ‘Managing the Risk of Falls at Workplaces Code of Practice.
The Code of Practice set out the obligations of employers to manage the risk of employees falling including, that risk assessments be conducted, training be provided in respect of tasks where there is a risk of falling, that fall prevention or arrest devices are used where reasonably practicable. That, where possible, such tasks are carried out on a solid construction. …
Mr Lam failed to exercise due diligence by taking reasonable steps to comply with the Code of Practice.
The risk posed by workers falling from the roof of the hothouse was foreseeable and so. The Code of Practice set out how that risk could be minimised, which was readily available to both offenders if any inquiries had been made.
As a result, this director was personally fined $15,000, and the business was fined $150,000 for breaching the WHS Act.
This decision illustrates what can go wrong if your business fails to follow a WHS Code of Practice.
Hopefully, this article has helped answer the question, what is a code of practice in business? You should now have a better understanding of your obligations.
Remember, this is not a substitute for professional legal advice. We would recommend finding a professional in this space for a consultation should you want to learn more.