Company Director WHS Duties and Officer Due Diligence

s.27 WHS Act 2011

Due Diligence Section

$600,000 + 5 years imprisonment

Category 1 Max Penalty

Up to 25 years imprisonment (QLD)

Industrial Manslaughter

1 July 2026

Section 26A Commencement

1 December 2026

WEL Transition Date

6 mandatory elements

Due Diligence Elements

Section 27 of the WHS Act 2011 imposes a positive duty on every officer of a PCBU to exercise due diligence to ensure the PCBU complies with its duties. The legislation defines six elements of due diligence that directors must satisfy. First, the director must acquire and keep up to date knowledge of work health and safety matters. Second, the director must gain an understanding of the nature of the operations of the business and the hazards and risks associated with those operations. Third, the director must ensure the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks. Fourth, the director must ensure the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards, and risks, and for responding in a timely way. Fifth, the director must ensure the PCBU has and implements processes for complying with any duty. Sixth, the director must verify the provision and use of resources and processes. Each element is assessed independently, and failure on any single element can result in prosecution.

The personal liability exposure for company directors has increased substantially with the introduction of industrial manslaughter provisions across most Australian jurisdictions. Queensland, Victoria, the ACT, the Northern Territory, and Western Australia all have industrial manslaughter offences that can apply to officers of a PCBU. The maximum penalties include imprisonment of up to 25 years in Queensland and 20 years in Victoria. Even in jurisdictions without a specific industrial manslaughter offence, directors face category 1 penalties under section 31 of the WHS Act 2011 for reckless conduct that exposes a person to a risk of death or serious injury. The maximum penalty for an individual officer under category 1 is $600,000 and five years imprisonment. Directors cannot delegate their due diligence obligation. A director who relies entirely on the safety manager to handle WHS matters without personal engagement in the six due diligence elements will not satisfy section 27. Insurance cannot cover criminal penalties, and director indemnification clauses do not extend to WHS criminal liability.

The WHS Regulation 2025 introduces obligations that directly affect the scope of director due diligence. The binding codes of practice regime under Section 26A, commencing 1 July 2026, means directors must ensure the PCBU either follows the applicable code or can demonstrate an alternative that provides an equivalent or higher level of safety. The transition to workplace exposure limits by 1 December 2026 requires directors to verify that the PCBU has allocated budget for updated monitoring equipment, laboratory analysis, and potential engineering controls where current exposures exceed the new WEL values. Psychosocial hazard obligations under Regulation 55C require directors to ensure the PCBU has systems for identifying and managing psychological risks including bullying, harassment, excessive workload, and poor organisational change management. Directors should request quarterly WHS reports that demonstrate compliance with each element of section 27, maintain a board WHS committee or equivalent governance mechanism, and document their personal engagement with WHS matters through meeting minutes, site visit records, and training attendance.

Courts have consistently found directors liable where they failed to take an active role in WHS governance. In SafeWork NSW v ACN 151 402 735 Pty Ltd (2024), a director was prosecuted personally under section 27 after a worker was fatally injured in a plant entanglement incident. The court found the director had never reviewed the risk register, had not attended any WHS training, and had not verified that the safety management system was operational. The personal penalty exceeded $200,000. Common failures identified by regulators include directors who cannot describe the top five risks in their business, directors who have never attended a site visit or WHS committee meeting, boards that do not include WHS as a standing agenda item, and directors who have not completed any WHS training since their appointment. The due diligence obligation requires ongoing engagement, not a one-time compliance exercise. Directors should maintain a personal due diligence file that records their WHS activities, training, site visits, and responses to incident reports as evidence of continuous compliance with section 27.