Prosecution puts health and safety failure cost in figures

David Smillie

September 2017 . . . Health and safety was back in the spotlight again last week with the first sentencing decision under the Health and Safety at Work Act 2015, followed just days later by an incident in which a worker at Micky Finns Irish Bar, in Arrowtown, got their fingers stuck in a pizza rolling machine and had to be freed by firefighters.

New Zealand's health and safety landscape has undergone significant changes since the introduction of the Health and Safety at Work Act 2015 which came into effect on April 4, 2015.

The new Act calls for greater participation, leadership, and accountability in health and safety.

The Act was introduced in response to the Independent Taskforce on Workplace Health and Safety review conducted in 2013 following the Pike River Coal mine disaster.

The taskforce found that New Zealand's health and safety system was not fit for purpose, and had a number of significant weaknesses that needed to be addressed.

With 50 to 60 New Zealanders killed in workplace accidents every year, and thousands more injured, this was an essential piece of legislation.

Last week, the first significant sentencing decision under the new Act was issued: WorkSafe New Zealand v Budget Plastics (New Zealand) Ltd. A Budget Plastics employee's hand was caught in a piece of machinery resulting in part of it having to be amputated.

Budget had been told about compliance concerns by a health and safety consultant, and was in the process of addressing these. Issues with the machine had been identified, but had not yet been addressed.

Budget pleaded guilty to failing to ensure, so far as was reasonably practicable, the health and safety of a worker.

Judge Large, in the Dunedin District Court, indicated that the starting point for this level of offending would have been a fine between $400,000 and $600,000, but due to Budget's remorseful and remedial steps since the incident and its early guilty plea,

His Honour imposed an indicative fine of $275,000, which was subsequently reduced to $100,000 due to the company's limited financial capacity.

The case highlights the substantial increase in fines under the new Act. Under the old regime, a maximum fine of $250,000 could be imposed.

Under the new Act, the maximum fine is $3,000,000 for companies, and $600,000 plus potential liability for imprisonment for individuals. Budget's level of offending would have incurred a fine of between $50,000 and $100,000 under the old system.

Under the new regime, the starting point for this level of offending now appears to be between $400,000 and $600,000 ($300,000 for an individual who is a PCBU or officer at a PCBU): a more than 500% increase.

All people conducting businesses or undertakings (PCBUs) must comply with the Health and Safety at Work Act 2015. Notably, PCBUs must ensure, so far as is reasonably practicable, the health and safety of workers, and that other people are not put at risk by its work.

PCBUs must also ensure worker engagement and participation, manage risks, and consult other PCBUs that have overlapping duties. Detailed information about these duties can be found on the WorkSafe website or by referring to the Act. PCBUs should also consider seeking expert advice to assist with compliance.

It is paramount all PCBUs regularly review their health and safety processes, procedures and policy. This is particularly important for those businesses yet to review their organisation's health and safety following the enactment of the 2015 legislation.