The Health and Safety Reform Bill

The enactment of the Health and Safety Reform Bill is expected to occur in April 2015.  Significant changes to the workplace health and safety framework will require preparation now to ensure compliance.

The Health and Safety Reform Bill (“the Bill“) is expected to be passed in late 2014. Once passed, it will create the Health and Safety Reform Act 2014, and repeal the current Health and Safety in Employment Act 1992.

The Bill introduces wider duties, and stronger penalties with the aim of improving New Zealand’s poor health and safety record.

The PCBU

The Bill introduces the concept of a new duty holder, known as a “Person Conducting a Business or Undertaking” or PCBU.

A PCBU is a person who alone or with others conducts a business or undertaking, irrespective of whether the business or undertaking is for profit or gain.

This is a broad definition, and will include employers, principals, persons in control of work places, managers, and designers, manufacturers and suppliers of equipment, plant, substances and structures.

A PCBU does not include a worker or a director of a company, as these persons hold separate duties under the Bill (discussed below). PCBU’s will hold the primary duty of care and must ensure, so far as reasonably practicable, the health and safety of its workers.

A PCBU will also have obligations to any “other people” who may be at risk from work carried out by the business or undertaking, for example members of the public who enter a work site.

A PCBU must comply with their obligations “so far as is reasonably practicable”, which is a departure from the familiar “all practicable steps” test under the current Act.

What is “reasonably practical” is to be assessed against what was reasonably able to be done to ensure health and safety taking into account the likelihood of harm, the degree of harm that could result, what the person concerned knew or should have known about the hazard or risk, the availability of measures to eliminate or minimise a risk or hazard. The cost of any measures will not be used to assess what is reasonable unless it is grossly disproportionate to the risk.

Workers

A “worker” is also broadly defined, and will include any person who carries out any work, in any capacity for a PCBU. A worker will include employees, contractors, subcontractors, employees of contractors or subcontractors, apprentices, trainees, volunteers and employees of a labour hire company assigned to work for the PCBU.

A worker holds duties to ensure that their actions or omissions do not harm or risk the health and safety of themselves or other people. Workers must also comply with the reasonable directions or policies of a PCBU. We suggest that this is a suitable time to update your health and safety policies, including, for example, your drug and alcohol policy, or bullying and harassment policy.

Officers

A key change from the current Act is the imposition of duties on an “officer”. An officer includes a company director and any other persons who make decisions which affect the whole or a substantial part of the business of the PCBU, for example managers or supervisors.

The primary obligation of an officer will be to exercise “due diligence” to ensure the PCBU complies with their duties and obligations. Accordingly, all officers will need to be familiar with and keep up-to-date with all operations of the business, the hazards and risks of those operations, and then be able to demonstrate that they have implemented the appropriate processes to discharge a duty or obligation held by the PCBU.

Officers will need to have an active involvement in the management of the workplace health and safety.

Significant Increase to Penalties

The Bill introduces stronger penalties, and wider enforcement provisions for non-compliance. The level of the penalty imposed will be determined against whether the conduct was reckless, and the seriousness of the consequence following from the exposure to risk or harm.

The penalties for offences include maximum fines of up to $3,000,000.00 for companies, and up to $600,000.00 or five years’ imprisonment for individuals. In addition, a Court will be able to make adverse publicity orders, restoration/remedial orders, or order the offender to undergo a specific project to improve work health and safety.

The penalties represent a significant increase from those that can be imposed under the current Act. The Bill indicates to the Court that the penalties that must be imposed following a successful prosecution must be higher than those imposed under the current Act. It remains lawful to insure against any reparation orders made after a prosecution, however, individuals and businesses are unable to obtain insurance against any fines imposed.

In light of the significant changes, we recommend that you reassess your health and safety procedures and policies in advance of April 2015.

If you would like further assistance or advice please contact:

James Turner | Partner | (09) 966 3602 | jturner@mcveaghfleming.co.nz

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