are you prepared? :: Hayes Knight

By Brendon Cutler – 6 October 2014

Some of the biggest changes in 20 years are about to take place to New Zealand’s Health & Safety Law. Do you know how these changes will affect you and your business and are you ready?

The Health & Safety Reform Bill expected to be passed into law by the end of this year and come into force on 1 April 2015 will replace the current Health & Safety in Employment Act 1992.

To many, the overhaul can’t come soon enough. New Zealand has a workplace fatality rate of 4 deaths per 100,000 workers. Twice the rate of Australia and three times the rate of Britain.  It took the tragic events of Pike River Mining disaster and the loss of 29 lives, to put health and safety on the agenda.

The government has now set goals to reduce workplace deaths and serious injuries by at least 25% by 2020.  Worksafe NZ, was established in late 2013, with the sole mandate to ensure compliance with the Health and Safety Employment Act.

The major changes will affect business owners, directors and senior managers.

Broader Obligations

The new bill introduces the term “persons conducting a business or undertaking” (PCBU). Primary health and safety duties under the bill fall on the PCBU.  This is a large step away from the current legislation and is much broader than an employer or person who manages and controls a workplace. Of particular note are contractors, installers or persons who commission plant or structures are considered a PCBU.  Other examples include:

  • Employers
  • Persons who manage or control a workplace
  • Suppliers, designers, manufacturers and importers of plant or structures
  • Persons who manage or control fixtures and fixings or plant at workplaces

There are a number of primary obligations required by the PCBU’s under the bill including the primary duty of care.

The bill also imposes a due diligence duty on officers of the PCBU.  An officer is a director of a company and includes any persons who make decisions as a whole, or a substantial part of the business of the PCBU (eg CEO).  The duty of due diligence for officers is very broad.

Risk vs Hazards

The bill requires PCBU’s and other duty holders to eliminate risks to health and safety so far as is reasonably practicable (as well as hazards).  If it is not reasonably practicable to eliminate risks then they have a duty to minimise risks so far is reasonably practicable.   While risk is not actually defined in the bill, this is a much lower threshold than the current legalisation of identifying, minimising and eliminating hazards.

Worker Engagement

A critical focus of the bill is around worker engagement.  The focus here is to facilitate the development and implementation of health and safety practices.

The bill allows for the election of Health and Safety Representatives.  Upon request the PCBU must establish workgroups to facilitate the representation of workers. The health and safety representatives are elected by the workers and are in a position of significant responsibility.  These persons must be given training if required which could amount to a considerable amount of time away from the workplace. Any time off to attend training must be paid at the normal rate paid to those workers.

A Health and Safety Committee must also be established by a PCBU once a Health and Safety Representative has been elected or if requested by five or more employees. There are obligations on the PCBU to consult with the Committee and provide time off to attend to duties, meetings and functions and provide relevant information.

There are significant penalties to individuals and companies for non-compliance with obligations owed to Health and Safety Committees and Representatives.

Penalties

A clear message has been sent by government with significant increases in penalties for breaches to those in place under the current Health & Safety Employment Act. The maximum penalties are listed below:

  1. Breaches arising from reckless conduct – $600,000 for a PCBU or PCBU officer and/or five years imprisonment  / $3m for a company
  2. Failure to comply with duty exposing to risk of death or serious injury – $300,000 for a PCBU or PCBU officer / $1.5m for a company
  3. Failure to comply with health and safety duty – $100,000 for PCBU or PCBU officer / $500,000 for a company

What do you need to do?

  • Take appropriate steps now to ensure you and your place of work is ready once the bill is passed into law
  • As a director and business owner you need to be proactive in understanding risks and hazards in your place of work
  • Start now by identifying risks and hazards including ensuring working hours are safe, consider worker fatigue for shift and night works and also risks associated with workers not following instructions
  • Consider what resources are required to meet your obligations for training of officers and workers, expert and specialist information on risks and keeping updated
  • Health & Safety policies must be in place. These polices need to be sound, regularly reviewed to ensure ongoing compliance and have training provided in relation to the policies
  • Start considering how to gain worker engagement. Effective risk management  will involve workers and representatives given their knowledge and experience to potential risks and hazards
  • Take a look at this article written by Hayes Knight Audit – whilst it has been compiled with charities and NFPs in mind, there is some helpful guidance around mitigating and managing risk that are equally applicable for most organisations.

As a business owner or director you have the opportunity to take a proactive approach to the changes.  Developing a culture where health and safety is taken seriously and incorporating health and safety into governance frameworks are two ways this can be achieved.

Hayes Knight will be running breakfast briefings over the next few months on the new health and safety obligations under the Health and Safety Reform Bill. To register your interest please email kathryn.buchanan@hayesknight.co.nz or for more information please contact your Hayes Knight Advisor.