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Swinburne University of Technology Sarawak Campus

Making companies liable for death in the workplace

July 18, 2016

By Selina Sui Lu Siew

With the increasing number of fatalities in industrial accidents, workplace safety has become a primary concern in the country. Driven by pressure from labour unions and activist groups, lawmakers have been actively working to address this issue. One such effort is to hold a corporation accountable for the death of employees due to negligence on the part of the management, presently contained in the crime of corporate killing.

Traditionally, a corporation is only accountable for the death if its controllers, typically the board of directors, were aware of the occupational hazard its employees faced but intentionally omitted to rectify the threat. Under the new offence of corporate killing, the prosecution will only need to prove that a corporation, which owes members of its staff a duty of care, negligently breached this responsibility which resulted in the demise of employees. In essence, proving that the negligent act of a corporation led to workplace death is all that is necessary to successfully claim for damages. This is a significant contrast and evolution from the conventional approach where the prosecution has to prove mens rea, (guilty mind or intent) of the board of directors, to hold a corporation liable for any crimes including the loss of life.

In recent years, the offence of corporate killing has garnered heated debates amongst academics and participants from the workforce. Despite all the attention, however, it remains at an infant stage especially in Malaysia where no laws have yet to be enacted to capture the offence. Malaysian courts are more inclined to adopt the traditional approach of attributing any breaches to the intent of a corporation’s “controlling minds” to support successful workplace accident claims. As Lord Justice Bingham stated in the case of HM Coroner For East Kent ex p Spooner, “that for a company to be criminally liable for manslaughter, the mens rea of manslaughter must be established against those who were identified as the representatives of the company.”

Nonetheless, due to the increasing number of workplace accidents arising from corporate negligence in the country lawmakers have come under immense pressure to introduce this offence into our legal system, besides relying on the existing occupational health and safety rules and regulations for the workplace. Furthermore, academics pushing for the implementation of the new offence have put forward various propositions to support their stance. One proposition suggests labelling perpetrators as murderers so as to better deter corporations from committing the offence as it might expose corporations to serious public scrutiny following convictions. According to Professor Dr Hasani Mohd Ali from Universiti Kebangsaan Malaysia (UKM), “The charge and conviction of killing under this new offence will have a serious repercussion to the goodwill and reputation of the body corporate involved and therefore, the quantum of punishment and fine imposed may become unbearable and too costly for corporations to sustain.”

Furthermore, there are also arguments that it will be extremely difficult to prove mens rea of the board of directors under the traditional approach. A concrete example would be the case of Yue Sang Cheong Sdn Bhd where the Federal Court of Malaysia specifically stated that, “Mens rea was essential proof of guilt and companies could not be guilty without proof of mens rea.” The prosecution failed to prove the mens rea in the case. Therefore, a less burdensome alternative for the prosecution might be to attribute the fault to corporate negligence especially if the offence is organisational in nature.

Also, the new offence allows for the imposition of heavy fines on convicted corporations. This is likely to be effective in deterring the offence, as suggested by UKM’s Associate Professor Dr Kamal Halili Hassan who believes that, “Though corporate entity cannot be sent to prison but it can be fined and the heavy fine imposed will be a deterrent to other corporations.”

Most importantly, the new offence will be brought before the judge by the prosecution on behalf of victims. This is a stark contrast to the old approach where the kin of deceased employees are required to take legal action on their own, which might be too challenging to most, especially in terms of gathering the necessary evidence as well as having to bear the financial commitment involved.

The development of this new offence has definitely given employees and their families a sense of security and hope as it increases the possibility successfully taking legal action against negligent corporations. Besides, following this, corporations will be more inclined to provide a safer working environment, which will definitely be another milestone in the practice of good corporate governance.

Regardless, the future of the crime of corporate killing still remains uncertain as it is still not legally recognised in Malaysia. Until laws are passed on this offence, there will be no convincing statistics to demonstrate if it will reduce death in the workplace in the country.

Selina Sui Lu Siew is a lecturer with the Faculty of Business and Design at Swinburne University of Technology Sarawak Campus. She is an advocate of the Bar of Sabah and Sarawak and has practised extensively in the areas of commercial litigation, family litigation and conveyancing. Selina is also a legal practitioner of the Supreme Court of Victoria after her formal admission to the Victorian Bar in 2006. She is contactable at slssui@swinburne.edu.my