Health and Safety Law for 2014

Dr Heather Mckenzie                 The South Island has been a particularly dangerous place lately. As New Zealand has travelled three years away from Pike River and the Christchurch earthquakes, we have travelled three years towards a new landscape in health and safety law inescapably influenced by the long shadows cast by these two events. This article looks at recent changes in health and safety law and what is yet to come.

Implementation of new health and safety regime

A major change will be the repeal of the Health and Safety in Employment Act 1992 and its replacement with a workplace safety statute based on the Australian Model Law (AML). If AML is enacted in New Zealand as anticipated, it will usher in a higher penalty regime, the concept of duties being framed around a “person conducting a business or undertaking” (PCBU), and the imposition of a positive duty of due diligence on directors and senior managers.

In the meantime, more localised changes are already being seen, such as the establishment of WorkSafe New Zealand in December 2013 and changes to the mining industry. Lastly, sector-specific areas of particular focus would currently appear to include mining and petroleum, forestry, and building standards. 

Independent taskforce

The Independent Taskforce on Workplace Health and Safety found that New Zealand’s health and safety system was not fit for purpose. It made a number of recommendations including:

  • establishing a new workplace health and safety agency (WorkSafe New Zealand);
  • enacting a new workplace health and safety statute;
  • strengthening regulation and the framework for worker participation;
  • providing strong leadership and greater provision of compliance information such as Approved Codes of Practice and guidelines for directors;
  • rewarding businesses for occupational health performance by altering the levy regime to encourage good performance; and
  • ensuring the new agency’s focus is on harm prevention via root cause analyses.

Worksafe New Zealand

WorkSafe New Zealand was established in December 2013. It broadly sits within the Ministry of Innovation, Business and Employment, but is a stand-alone entity charged with regulating health and safety in the workplace. While it has some new incident reporting and administrative processes, in practice WorkSafe appears to operate much as its predecessors did. Together with the Institute of Directors it has released a guideline aimed at directors for good governance practices in managing health and safety risk.

New Health and Safety at Work Act

A new Health and Safety at Work Act is anticipated to be passed in 2014 and to come into effect on 1 April 2015. Where the current Act imposes obligations on multiple duty holders (such as employers (section 6), principals (section 18), employees (section 19) and persons in control of a place of work (section 16)) to take “all practicable steps” to keep people safe from hazards in or near the workplace, the new law will frame duties around a “person conducting a business or undertaking” or “PCBU”.

The Bill as currently drafted does not neatly define “PCBU” but the concept would appear to cover employers, principals, and suppliers. It does not include employees solely working for a PCBU.  

The new Act’s primary duty, placed on PCBUs, is to ensure “so far as is reasonably practicable” the health and safety of people in the workplace. While there are other duties, these broadly mirror the primary duty. In the exposure draft, “reasonably practicable” means that which is, or was at a particular time, reasonably able to be done, taking into account relevant matters including:

  • the likelihood of the hazard or the risk occurring;
  • the degree of harm that might result from the hazard or the risk;
  • what the person concerned knows, or ought reasonably to know, about the hazard or risk and ways of eliminating or minimising it;
  • the availability and suitability of ways to eliminate or minimise the risk; and
  • after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk.

Only time will tell whether the different terminology for both duty and duty-holder alike will see a practical shift in what organisations must do to comply. Rather than substantively change the current duties, the new Act may clarify these by (in summary) a singular statement of duty rather than the several formulations which exist currently and can overlap (or diverge).

Positive duty of due diligence on officers

Section 56 of the current Act provides for the liability of a director, officer, or agent who has “directed, authorised, assented to, acquiesced in, or participated in the failure”. Perhaps because of the effective participation requirement, successful prosecutions in New Zealand have been few and far between. They have tended to succeed where a company is very small and the director is also involved in day-to-day operations. .

Under the new Act, officers of a PCBU will have a positive duty to exercise due diligence to ensure the PCBU complies with their duties or obligations. Exercising due diligence will include taking reasonable steps to be knowledgeable in health and safety law, in the operations of the PCBU, and in the nature of its attendant hazards or risks. It will further include ensuring the PCBU has the appropriate resources and processes to discharge their duty (and uses them) and to receive and evaluate information regarding incidents, hazards, and risks and responds in a timely way.

Higher penalties

A tiered penalty regime under the new Act could see a maximum penalty of $3 million for a body corporate and $600,000 and/or 5 years’ imprisonment for an individual. The offending at this end of the spectrum represents the most serious offences involving reckless conduct exposing people to serious risks.

Corporate manslaughter

The Crimes (Corporate Manslaughter) Amendment Bill would introduce the crime of corporate manslaughter into the Crimes Act 1961. Such a charge would rely on acts or omissions causing a person’s death and a gross breach of a relevant duty of care owed by the organisation to the deceased. The proposed maximum penalty is a $10 million fine for a company or 10 years’ imprisonment for an individual where their acts or omissions contributed materially to the breach. The Bill has several significant hurdles before being passed, including the view that the conduct it targets is punished elsewhere.

New Zealand’s health and safety law is set to change. While enactment of a statute based on AML seems almost certain, the difference it will make to liability in practical terms remains elusive. Catastrophe three years ago ignited these changes – now, we all hope for a quieter three years ahead to let the new law bed in.

Dr Heather McKenzie is a Crown Prosecutor at Raymond Donnelly & Co in Christchurch. She has previously worked at Meredith Connell and Chapman Tripp. She specialises in regulatory prosecutions, compliance advisory services, and proceeds of crime law.

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