More changes to Health and Safety reforms

Introduction

I was interested to receive a copy of the ‘Business Insider’ from MBIE on Friday, announcing that changes to Health and Safety (“H&S”) laws are a step closer, with a Select Committee reporting its recommendations back to Parliament. The Health and Safety Reform Bill is expected to be passed later this year and there will be some months before it comes into effect.

The aim of the reforms to H & S laws contained in the Bill is to reduce the number of New Zealanders killed or hurt at work. On average 73 people die on the job each year and 1 in 10 is harmed (these numbers are much higher than in Australia and the UK).

In announcing the Select Committee report, Workplace Relations and Safety Minister Michael Woodhouse underlined the objectives of the proposed law changes and the need to:

“…strike the right balance between safe workplaces for workers and unnecessary red tape on businesses…”

The Minister also noted that:

• the amended Bill takes a risk-based approach to focus effort on what a business needs to do, what is “reasonably practicable” for it to do, and what is in its sphere of control; and
• the Bill also supports more effective worker engagement and participation and will allow businesses to take a flexible approach to this in a way that suits their business size and needs.

Whilst the scale of the amendments proposed by the Select Committee appears extensive, the Minister signalled that the Government will make some further changes by Supplementary Order Paper (“SOP”).

Key changes

A summary of some of the key changes, based on the material published by the Minister’s office at the end of last week is as follows:

The duty of officers

The Bill has a new duty for an officer of a Person Conducting the Business or Undertaking (“PCBU”) (such as a director, board member or partner) to exercise due diligence to ensure that the PCBU complies with its duties. This places a positive duty on people at the governance level of an organisation to actively engage in H & S matters, to underline that H & S is everyone’s responsibility.

The changes proposed by the Select Committee clarify how far down an organisation this duty applies and the extent of the duty. Specifically:

• Other than those named persons holding specific roles in an organisation (such as directors or partners), the officer duty will apply only to other persons who have a very senior governance role in the organisation that allows them to exercise significant influence over the management of the business or undertaking (for example a chief executive).
• To avoid doubt the Bill expressly recognises that this does not include a person who merely advises or makes recommendations to an officer of the organisation.

The Minister also noted that the Government will also make the following changes to the Bill (by SOP):

• Making it clear that the extent of the officer’s duty takes into account the nature of the business or undertaking, the position of the officer and the nature of their responsibilities.
• Making it clear that officers must only do what is within their ability to influence and control when managing risks.

Duty of a PCBU who manages or controls a workplace

In keeping with the clarifications in the Select Committee report to focus on the workplace (and the role of the PCBU in relation to the workplace):

• The PCBUs who manage or control the workplace, fixtures, fittings or plant at workplaces do not owe a duty to people who are there for an unlawful purpose.
• For farming situations, the duty of the PCBU applies to a workplace which:

o includes farm buildings (but excluding the farm house as the family home) and structures necessary for the operation of the business or undertaking and the areas immediately surrounding them.
o but otherwise excludes parts of the farm when work for the business or undertaking is not being carried out.

Multiple PCBUs

Where the duties of PCBUs overlap with the duties of other PCBUs (e.g. in shared workplaces or where workers work for more than one PCBU) the Bill requires them to consult, cooperate and coordinate with each other, so far as is reasonably practicable. The need for duty holders to work together to meet their duties is not new and is required under the current law. However, the Bill (unlike the current law) makes it clear how this should happen.

The changes proposed by the Select Committee are designed to further clarify some provisions that relate to overlapping duties to make it clear how PCBUs must work together to discharge their overlapping duties. Specifically:

• PCBUs must discharge their overlapping duties to the extent they have the “ability to influence and control the matter” (the previous wording talked about “capacity” to influence or control).
• The changes proposed by the Select Committee are said to clarify that the duty to consult, cooperate and coordinate activities sits with the PCBU, not with all duty holders.

The Minister also noted that the Government will also make the following additional changes (by SOP):

• A duty holder’s obligations to manage risk are limited to doing what is in their ability to control and manage, along with what is reasonably practicable for them to do to manage the risk.
• Courts must consider death or harm (both actual and potential) caused by a breach of duty in their sentencing.

Volunteers

The changes to the Bill’s provisions on volunteers are said to recognise that volunteers contribute greatly to New Zealand communities and will ensure the new law will not negatively affect volunteering.

A purely volunteer organisation where volunteers work together for community purposes and which does not have any employees is known as a ‘volunteer association’ under the Bill. A volunteer association is not a PCBU so the Bill will not apply to it.

A volunteer organisation which has one or more employees is a PCBU and will have the same duties as a PCBU to ensure, so far as reasonably practicable, the H & S of its workers and others.

The changes proposed by Select Committee mean:

• Coverage of volunteers remains as it is under the current law – which distinguishes between casual volunteers and volunteer workers.
• Volunteer workers are people who regularly work for a PCBU with its knowledge and consent on an on-going basis and are integral to the PCBU’s operations. The responsibility of a PCBU for the H & S of volunteer workers is the same as that for any other worker – so that such volunteers are afforded the protection of having the appropriate training, instruction or supervision need to undertake their work safely.
• For casual volunteers (those that do not fall under the definition of a volunteer worker) their H & S will still be covered by the PCBU’s duty to other persons affected by the work of the business or undertaking.
• People volunteering for the following activities will not be volunteer workers:

o Participation in a fundraising activity.
o Assistance with sports or recreation for an educational institute, sports or recreation club.
o Assistance with activities for an educational institution outside the premises of the educational institution.
o Providing care for another person in the volunteer’s home.

(Like casual volunteers, the volunteers doing these activities won’t be ‘volunteer workers’ – but their H & S will still be covered by the PCBU’s duty to other persons affected by the work of the business or undertaking).

Worker engagement and participation

The Bill strengthens existing requirements for worker engagement and participation in work H & S matters – underlining the expectation that everyone in the workplace is responsible for workplace H & S, and that workers are empowered to intervene when they see an unsafe situation.

The Select Committee has recommended that there are two overarching worker engagement and participation duties for all PCBUs:

• All PCBUs –whether they are small or large, low-risk or high-risk –will still be required to engage with their workers on matters of H & S that affect them.
• All PCBUs must also have to have worker participation practices that give their workers reasonable opportunities to participate effectively in improving work H & S.

(Note: It is not mandatory to have H & S representatives as part of the required worker participation practices –this is one way to support worker engagement on H & S matters. But when one worker requests an elected H & S representative, a PCBU must initiate the election of one or more H & S representatives.)

The Select Committee proposed:

• Small businesses with fewer than 20 workers in low-risk sectors are excluded from the requirement to have a H & S representative when requested by workers.
• All other businesses, including small businesses in high-risk sectors, will still have to initiate an election for a H & S representative when requested by workers or a H & S representative – but the PCBU must decide whether to establish one. It can decline this request if it is satisfied that its existing worker participation practices meet the requirements of the new law (and it has to explain why, and advise workers that they may raise the matter under the issue resolution process in the new law).
• H & S representatives will have the power to direct unsafe work to stop where there is a serious risk. Their powers are limited to the particular work group that they represent – and WorkSafe NZ must assist in resolving an issue in relation to the cessation of work as soon as practicable after it has agreed to a request for help.

(Note that new regulations will outline in detail which high-risk sectors would be subject to these requirements for small businesses.)

Concluding comments

Whilst the Sunday papers as well as various interest groups wish to characterise the Bill as a political football – the Government (whilst taking some care to explain a number of changes made by Select Committee or to be made by SOP on the basis of a “risk-based approach” (i.e. practical)) continues to signal that these reforms are still a significant stepchange for businesses and those undertaking a governance role. This, coupled with the myth-busters material and the liberal use of labels such as “proportionality” and underlining that:

• the Select Committee changes seek to clarify that a duty holder’s obligation to manage risk is limited to doing what is within their ability to control or influence; and
• an officer’s duties will take into account the role the officer has in the business, their position and the nature of their responsibilities,

signal how the Government sees its role.

Further information

If you would like more information about any of the matters discussed in this note, please contact me.