The Health and Safety at Work Act: Take steps now to ensure your business complies

On 4 April 2016, the Health & Safety at Work Act 2015 (Act) comes into force. The Act provides a significant change to New Zealand’s current Health & Safety legislation whose reform was precipitated by the Pike River Mine tragedy.

The Act will impose personal liability for Directors and other Officers of “Persons Conducting a Business or Undertaking” (PCBU) should they breach obligations to exercise reasonable due diligence to ensure that the PCBU complies with its duties and obligations.

Significant changes under the Act are as follows:

  1. Persons conducting a business or undertaking: This new key term of PCBU is a broad concept and encompasses employers, those who manage workplaces, manufacturers, importers and suppliers. Individuals (except employees) can also be a PCBU. The PCBU’s core duty is to ensure, so far as reasonably practicable, the Health and Safety of all workers (including employees of other businesses and members of the public).“So far as reasonably practicable” requires a weighing up of relevant factors including:
    1. Likelihood of a hazard or risk occurring. This means that if there is a higher risk of a hazard occurring then the PCBU must do more to prevent it.
    2. Degree of harm that might result from hazard or risk.
    3. What was known/ought to have been known about hazard or risk and ways of eliminating or minimising that hazard or risk.
    4. Availability and suitability of ways in eliminating or minimising hazard or risk.
    5. Whether costs associated with available ways are grossly disproportionate to the hazard/risk.

    It is possible for multiple PCBU’s to have the same and/or overlapping duties. From this the PCBU has a duty to consult, co-operate with and co-ordinate activities with other PCBU’s who have duties in relation to the same manner. Examples of this would be the Landlord and Tenant relationship and Building/Constructions sites where there are multiple contractors and subcontractors;

  2. Officers and Due Diligence: Officers are defined as Directors, any person in a position comparable to that of a Director or any other person occupying a position in a PCBU that allows the person to exercise significant influence over the management of the business (eg a Chief Executive).Officers will have a positive due diligence obligation to undertake a process as set out under the Act. In essence the Officer is to understand the nature of the business, associated risks and hazards and ensure compliance of their PCBU obligations under the Act. This means that Directors have to have a more hands on approach and fully understand Health & Safety requirements for the business.The concern here is for the “silent” Director who may have no direct input into the day-to-day running of the business. This may be because they are:
    1. An overseas Director; or
    2. A small company where both husband and wife are Directors but only one operates the business.

    The obligations under the Act are placed on all Directors with failure to complete the due diligence obligation being an offence.

  3. Health & Safety Representatives: Worker engagement is a high priority under the Act. It is essential therefore that policies and practices reflect these new obligations as PCBU’s had a duty to engage with workers on Health and Safety matters.Under Part 3 of the Act, all workplaces must now have an elected Health & Safety representative with this representative offered training (at the cost of the Employer). These representatives have increased powers under the Act and are able to enter and inspect workplaces, request information from the PCBU necessary to perform their function, make recommendations, and issue provisional improvement notices.PCBU’s with less than 20 workers and not in a high risk sector or industry are excluded from the obligation to have a Health & Safety representative.
  4. Penalties: The maximum penalties under the Act have significantly increased as shown in the table below. A PCBU is unable to indemnify and insure against these penalties, in fact it is a criminal offence to try and do so.
    Maximum Penalty
    Offence Individual (excluding Officers and self employed persons) Officers and self employed person Any other person (including companies)
    Reckless breach, exposing an individual to risk of death or serious injury 5 years’ imprisonment and/or $300,000 fine 5 years’ imprisonment and/or $600,000 fine $3,000,000 fine
    Breach – exposing an individual to risk of death of serious injury $150,000 fine $300,000 fine $1,500,000 fine
    Breach $50,000 fine $100,000 fine $500,000 fine

The new regime comes into force from 4 April 2016. There is no transition period with businesses and Officers expected to be compliant with the Act. You should be taking the time now to review your Health & Safety regimes to ensure they comply.