Based on the 2011 Australian Model Work Health and Safety Act, New Zealand’s Health and Safety at Work Act 2015 (HSWA) passed into law on 4 April 2016. New Zealand’s historically high rate of workplace deaths and near misses (notably the 2010 Pike River Mine tragedy where 29 miners died due to substantial health and safety failures) was a key motivator for the overhaul of our health and safety laws.
During Parliament’s readings and consultation over the HSWA, business people and the general public voiced concerns that the HSWA was a step too far and would unreasonably and fundamentally affect the way New Zealand businesses operated. However, the lawmakers cited our poor health and safety record in pushing the HSWA through.
Prior to the enactment of the HSWA, between 40 and 60 people were killed in workplace accidents each year. According to Worksafe New Zealand, this number is more than three times the annual workplace deaths in the UK and double those in Australia. The HSWA seems to be having an effect; with the deaths in the agriculture and construction industries dropping during 2016.
Under the HSWA, Persons Conducting Business or Undertakings (PCBU) have a duty to ensure that, so far as reasonably practical, the workplace is without risks to the health and safety of any person. PCBU’s are usually business entities such as companies, but also includes sole traders, self-employed persons, contractors and certain volunteer organisations. The HSWA also places obligations on persons to whom responsibility for health and safety has been delegated (Officers) and persons working at a workplace (Workers).
In general terms, a PCBU’s underlying obligation is a duty to ensure that all reasonable measures have been taken to protect the health and safety of Workers and other persons who are at the workplace. Officers (individuals who are in positions that allow them to exercise significant influence over the management of the business or undertaking) are responsible for exercising due diligence to ensure that the PCBU complies with its duties. Workers must take care of themselves and ensure that they do not affect the safety of others and comply with all reasonable directions, policies and procedures.
A Worker who commits an offence of reckless conduct will be liable to pay a maximum fine of $300,000 or serve a maximum term of imprisonment of five years. For the same offence, a PCBU or an Officer may pay a maximum fine of $600,000 or serve a maximum term of imprisonment of five years.
If a Worker is convicted of failing to comply with a duty that exposes an individual to the risk of death, serious injury or illness, they will be liable to pay a maximum fine of $150,000. In the same instance, a PCBU or an Officer will be liable to pay a maximum fine of $300,000.
If a Worker fails to comply with a duty (that does not also expose an individual to a risk of death or serious injury) he or she will be liable to pay a maximum fine of $50,000. In the same instance, a PCBU or Officer will be liable to pay a maximum fine of $100,000.
Decisions by the Courts
The press followed the prosecution of Pike River Coal Limited (PRCL) closely and many considered the sentences to be lenient. In that matter, PRCL was convicted under the old Act and therefore faced lesser penalties than those set out in the HSWA. The Department of Labour brought three charges against PRCL (each carrying a maximum of a fine under the old Act of $250,000) and it pleaded guilty to all three charges. In its judgement, the Greymouth District Court fined PRCL $46,800 in total for unsafe work practices.
Although there have been no convictions under the HWSA yet (as the incidents currently before the Courts and at a stage where decisions are being made occurred prior to 4 April 2016), recent decisions by the Courts under the old Act have suggested that a harder line (than in PRCL) seems to have been taken since the introduction of the HSWA.
In November 2016, the Court was asked to determine penalties relating to an incident that involved an employee who was killed when a substance was being transferred from a transport tank to another tank under pressure. The company involved was charged under the old Act and pleaded guilty. The penalties levied on the defendant in this matter were more severe than those in the PRCL case. Here, the company was ordered to pay $140,319.80 in reparation to the victim’s family. Reparation was ordered instead of fines so that the affected persons were compensated as the company was in liquidation and did not have the resources to pay both reparation and fines. However, the Court found that an appropriate fine, in this case, would have been $73,800.
If New Zealand Courts adopt an Australian approach, we can expect fines and penalties such as these:
Despite there being no decisions by the Courts under the HSWA, it is clear that New Zealand businesses, their owners and key staff will face higher penalties in future. If you have questions about how this could affect you and your business, get in touch with our employment specialist Simon Greening.