My ferry is always late – and other effects of health and safety changes

8 March 2016

Urban myth

With the changes to the health and safety regime less a month away, and despite the educational efforts of MBIE, Worksafe, the IoD and others – it seems that the myths about the impact of the new law on the role of directors are multiplying.

After more than a decade of largely timely service, my regular ferry commute has, in recent weeks, been characterised by almost always running behind schedule. So much has this lack of punctuality become the new normal that a handful of the usual suspects (me included) now arrives late safe in the knowledge that we have time for one last email or telephone call, etc. When asked, the crew suggest that the problem lies with a new edict from the harbour master limiting the speed of ferries in the inner harbour to a modest 12 knots – because of the health and safety changes next month.

Upon investigation, I have learned that the 12 knot speed limit was actually implemented in 2007, after a process of consultation, to reduce the risk of collision because of the high number of collisions in the inner harbour due to congestion and speed. So, if there has been a recent change, I think it likely that the harbour master has indicated that enforcement steps may be taken.

Similarly, the berthing routine has recently changed, with no passengers allowed on the foredeck while the ferry is docking, again for health and safety reasons. For ferry regulars, this is unsurprising as the ferry company has recently pleaded guilty to health and safety breaches under the old law as a result of a ferry running into the Devonport wharf early last year injuring a dozen passengers. The accident was caused by a control systems failure (and, allegedly, a failure on the part of the operator to ensure that its risk mitigation procedures were adequate) but many of the injuries were said to have been cause by insecure passenger seating.

Health and safety changes – impact on directors

Recently, media reports have indicated that the changes heralded by the Health and Safety at Work Act 2015 coming into force next month have triggered the resignation of Peter Jackson from his role as a director of Weta Workshop. Those reports continued by saying that the changes will make directors personally liable for the health and safety of the business (sic).

A media spokesperson for Weta Workshop was quoted as saying that:

• Peter Jackson, along with Jamie Selkirk, resigned from the Weta board, because the new law would necessitate directors to have day-to-day involvement in Weta’s business; and
• as a manufacturing business, it’s important that the directors are involved – and Peter felt he was not and decided to step down.

The law changes that come into effect next month are also cited as a reason why some custodians of managed forestry schemes do not wish to hold forestry land on behalf of investors.

It is reasonably well known that the Health and Safety at Work Act will impose personal liability on directors and officers of PCBUs (persons conducting a business or undertaking) in the event of a breach of their obligations to exercise reasonable due diligence to ensure that the PCBU complies with its health and safety obligations. The spectre of personal liability for directors has been greeted with alarm in some quarters.

However, whilst there will (no doubt) be some organisations and some industries that will need to lift their game, it seems difficult to accept that directors who take their role and its responsibilities seriously should not feel the need, en masse, to follow the example of Peter Jackson. (But many of us will understand that some directors will recognise that their personal strengths lie more in the realm of creative direction – not governance. However, the directors of most SMEs have long had to do both).

The approach of MBIE and Worksafe is also interesting. For example, Worksafe’s much-publicised policy decision to use a carrot and stick approach in the forestry industry, combining education programs with prosecutions, to drive change – whilst declaring that education not prosecution will continue to be its priority in the farming sector.

Whilst the new Act will mean that directors will not be able to shuffle their health and safety responsibilities exclusively down to management – it is equally clear that:

• a breach of the new health and safety regime by a PCBU will not automatically lead to directors facing fines and the prospect of a jail term; and
• whilst the practical reality of the new regime is that it will require directors to have an understanding of their business and its health and safety risks, and be able to show a reasonable basis for believing that those risks are being adequately managed by appropriate systems and processes (and people), those management steps will both manage the risk of incidents and the risk to directors and officers.

It seems to be a truism that attention to detail is just as vital in the workplace health and safety arena as all other aspects of a well-managed business. As a result, there seems to be a high correlation between the ranks of the well-managed, high performing businesses, which already have good governance systems in place across a range of business risks – and those for which the new Act should hold few fears. Many of those businesses have long taken workplace health and safety issues very seriously and have demonstrated the sort of thought leadership that has seen them seek to partner with customers and suppliers to achieve common goals (using such labelling as Zero Harm).

Whilst there must always be some uncertainty with new legal tests that have yet to have been the subject of judicial scrutiny, the benchmark standards prescribed by the Health and Safety at Work Act of exercising the care, diligence and skill that a reasonable person would in the relevant officer’s position (with the test for reasonableness being determined against the particular circumstances) should do little more than enshrine concepts of best practice within the relevant industry or type of activity.

As with so many other business risks, the positon of figurehead or “sleeping” directors, who retain a board seat despite little knowledge of, or involvement in, the operations of the business must be seen as one which will go the way of the Aardvark, Equally, the puppet master syndrome, where someone who exercise direct influence (despite not being a director in name) is also made precarious by virtue of the purposive definition of an ‘officer’ (of a PCBU) under the Health and Safety at Work Act.

And, as I have previously noted, the role of officers of voluntary organisations and of organisations towards their volunteers was clarified before the Health and Safety at Work Act became law.

Further information

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