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New Health & Safety Regime – from April 2016

by Stephen on September 1st, 2015

Whilst we will all have a view about the political wrangling (and management) surrounding passage of the final stages of the Bill, the Health and Safety at Work Act was passed by Parliament at the end of last week. The catalyst for the changes embodied in the H & S Act were the reports after the Pike River tragedy and an objective of fostering a pro-active (and participative) H & S culture in our workplaces.

The new H & S regime comes into force on 4 April 2016 and has much more teeth than the current regime.

Focus on the PCBU

When the new regime comes into force, it will bring a new label into the H & S lexicon – that of a person conducting a business or undertaking (“PCBU”) – who will be the primary duty-holder.

The definition of a PCBU is very wide – with the aim of capturing not only employer-employee (and principal-contractor) arrangements but all kinds of working arrangements (alone or with others). Importantly, the definition contains a number of exclusions, including:

• people who work in, or are officers of, a PCBU;
• volunteer associations; and
• occupiers of homes who engage people solely to do residential work.

The PCBU has responsibility for the H & S of both:

• those who work for the PCBU; and
• those who could be put at risk by that work.

As a result, it is clear that the H & S Act does not move liability from a business to its officers – and the primary duty of care for H & S matters will remain with the PCBU.

Officers and their due diligence duties

Despite the fact that the business (PCBU) will retain the primary duty of care for H & S matters – the officers of a PCBUs will have a due diligence duty to ensure that the PCBU complies with its obligations.

The definition of an officer includes:

• directors (where the PCBU is a company)
• partners in a partnership
• the general partner of a limited partnership
• any person occupying a role that is comparable to that of a company director; and
• any person occupying a position in relation to the business or undertaking that allows the person to exercise significant influence over the management of the business or undertaking (such as the CEO).

(I suggest that the watering down of the last category during the legislative process – now means that it is likely to be confined to just the CEO in all but large corporates.)

Importantly, the definition of an officer also specifically excludes a person who merely advises or makes recommendations to an officer.

It is suggested that the due diligence duty will require H & S matters to be subject to the sorts of disciplines and internal controls that are relevant to financial reporting and financial risk management. In the case of officers, this includes taking reasonable steps:

• to acquire, and keep up to date, knowledge of work health and safety matters; and
• to gain an understanding of the nature of the operations of the business or undertaking of the PCBU and generally of the hazards and risks associated with those operations; and
• to ensure that the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking; and
• to ensure that the PCBU has appropriate processes for receiving and
• considering information regarding incidents, hazards, and risks and for responding in a timely way to that information; and
• to ensure that the PCBU has, and implements, processes for complying with any duty or obligation of the PCBU under the H & S Act; and
• to verify the provision and use of the resources and processes referred to in the above.

Under the new regime – officers will be subject to the same penalties as the PCBU.

By contrast, under the current regime, a director or officer can be liable for fines of up to $500k or 2 years in jail for (knowing) authorisation / approval / acquiescence / participation in H & S offences – or the failure to take all practicable steps. Prosecutions have been rare – most recently spawning a series of private prosecutions.

High risk industries

In high risk industries, the PCBU will have to establish a formal risk management process.

Much of the political intrigue in recent weeks has been about the issue of the requirement for a PCBU to appoint H&S representatives.

PCBUs with 20 or more employees must do so (if requested by the workforce). This requirement will also apply in high risk industries (which will be finally determined by regulations).

Immediately prior to the legislation being passed, Workplace Relations and Safety Minister, Michael Woodhouse, tabled a paper giving guidance on the topic of high risk industries – with consultation on the definition that would cover the following criteria:

• a risk of a catastrophic event causing multiple fatalities;
• a fatality rate greater than 25 per 100,000 workers; or
• a serious injury rate in excess of 25 per 1,000 workers.

The Minister also signal that he planned to consult on the inclusion of industries with a particular risk of disease from asbestos or silica dust exposure – amongst other things moving from the experience following the Canterbury earthquakes.

New penalty regime

The new H & S regime is designed to have much more teeth than the current one – providing Worksafe with more enforcement options.

Infringement notices (speeding tickets) will be available for:

• minor breaches that do not warrant prosecution – but do require a warning (and corrective action), and
• acts / omissions involving simple issues of fact – and not a detailed investigation into whether the actions taken amounted to taking all reasonable steps / what is reasonably practicable in the circumstances.

Also, a three-tier penalty regime will apply:

Tier 1: Reckless conduct – fines of up to $600,000 for a PCBU / officer and/or 5 years in jail;
Tier 2: Failure to comply exposing a person to the risk serious harm – fines for a PCBU / officer of up to $300,000; and
Tier 3: Failure to comply with a duty – fines for a PCBU / office of up to $100,000.

Other noteworthy points

In the last-minute changes that were made in what was inevitably a political football, in order to secure the approval of Coalition partners, much was made of the apparent fumbling of the efforts not to provide an effective and robust means of identifying high-risk industries (or according to the opposition – exclude many SMEs, particularly farms). However, what was overlooked is the change that requires a PCBU to notify its workers if it seeks to rely on the exclusion relating to businesses or undertakings with fewer than 20 workers that are not “high-risk”.

And from where I sit, noting yet another quad bike death in the last week, I think that (say) a Auckland-based director of a farming syndicate whose farming operations are in Taranaki would take little comfort from the risk weighting of the industry – and instead would be wanting the farm manager to act as H & S representative and being taking an active interest in the farm’s H & S program (and that workers are actively engaged in that program).

As enacted, the H & S Act qualifies a duty-holder’s (whether a PCBU or an officer) obligations to eliminate or minimise H & S risks to the extent that they have the “ability to influence or control” the actions that they would in practice be able to take. I would expect Worksafe guidance on this topic.

Worksafe will be running an education campaign to help prepare for the commencement of the new H & S regime – with new codes of practice and best practice guidelines.

Whilst I think that the Government can fairly say that most, if not all, of the recommendations made after Pike River have been implemented – and the initial alarm about such hot topics such as the position of volunteers (and not-for-profits that are not employers) have been dealt with, the nature of politics and MMP is such that I expect that we will see further alarms.

The recent publicity about the worries of schools principals (that they will be subject to large fines if kids are injured on school trips or on the playground) being one such example. Whilst schools will need to ensure that “so far as is reasonably practicable” the H & S of staff, students and visitors is addressed – for matters within their control (and there will be Worksafe guidance) – those with a political axe to grind may still produce unintended consequences. One such example is the practices (and costs) that have developed around scaffolding. Some schools will see the risk of, ultimately, being proven right after an exhaustive Court process and the attendant bad publicity – as reason alone for seriously clamping down on yet more school activities. Watch this space…


As noted above, the new regime will come into force on 4 April 2016.

Further information

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

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