As discussed in our previous articles Impact of Health and Safety Reforms at Governance Level and Government Announces Law Reform Package for Workplace Safety, the Government's "Working Safer" package aims to significantly reform New Zealand's Health and Safety law.
One of the most fundamental components of this change will be the introduction of entirely new legislation. This will replace the Health and Safety in Employment Act 1992 (HSE).
The introduction of this new Bill is the first step towards achieving the new Act. As we set out below the Bill introduces a range of new concepts not previously seen before in the HSE. This is still proposed law at this stage, but employers, directors and others will need to appreciate the ramifications for them if the Bill becomes law.
This is a new concept introduced by the Bill. A "Person Conducting a Business or Undertaking" will be the primary duty holder under the Act. That is, the Act will firstly be aimed at them in terms of duties and consequent liability.
The concept of a "PCBU" will assist in identifying who is responsible and who is consequently liable. With that in mind, it is cast intentionally wide.
A PCBU is defined broadly to include all persons conducting a business or undertaking alone or with others regardless of whether it is for profit or gain. Essentially, a PCBU will cover pretty much any type of organisation (with some limited exceptions). It is safe to assume that if you are reading this, your organisation will be a PCBU!.
A PCBU will have a duty to:
- Eliminate risks to health and safety, so far as is reasonably practicable; and
- If it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks as far as is reasonably practicable.
The term "reasonably practicable" is defined in the Bill as follows:
"Reasonably practicable, in relation to a duty to ensure health and safety, means that which is, or was, at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters, including:
- The likelihood of the hazard or the risk concerned occurring; and
- The degree of harm that might result from the hazard or risk; and
- What the person concerned knows, or ought reasonably to know, about –
- The hazard or risk; and
- Ways of eliminating or minimising the risk.
- The availability and suitability of ways to eliminate or minimise the risks; and
- After assessing the extent of the risk and the available ways of eliminating or minimising the risk, the costs associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk."
Due Diligence Duty imposed on PCBU
The second key component of the new Bill is a new personal obligation of due diligence on the officers of an organisation (i.e. a PCBU) to ensure that the PCBU complies with its duties and obligations.
An officer is defined, in the Bill, to include not only directors, but people who are in comparable position to directors, partners, and more generally people that make decisions that affect the whole or a substantial part of the business of the PCBU. The aim is to capture the senior management and decision makers of a PCBU and not be limited by strict titles.
The "due diligence" duty that the Bill imposes requires PCBU officers to take reasonable steps to:
- Acquire and keep up to date knowledge of work health and safety matters;
- Gain an undertaking of the nature of the operations of the business and generally of the hazards and risks associated with those operations;
- 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;
- 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;
- Ensure that the PCBU has, and implements, processes for complying with any duty or obligation under the Act; and
- Verify the provision and use of the resources referred to above.
This is a personal obligation on the PCBU officers. A breach of it may result in a criminal prosecution and conviction as a standalone offence in addition to any other offences under the Act that the PCBU may have committed.
The Bill also proposes to continue with the provision from the HSEA whereby it is unlawful to have insurance against infringement fees or fines (which we note are set to rise).
It may be possible, however, for a duty holder under the new Bill to insure themselves against reparation orders or the legal costs of any prosecutions.
The Government aims to pass the bill into law by the end of 2014 and hopes for it to come into force in April 2015. Obviously, this year's General Election may impact on that, however, the Bill has so far progressed at a rapid pace from its inception last year.
We will update you on the Bill's progress. In the meantime, if you want to understand the impact of these proposed changes on your business or you, please contact a member of our Employment Team.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.