The Health and Safety at Work Act has now been passed by Parliament and will come into effect on 4 April next year – five and a half years since the Pike River Mine disaster which precipitated the reform.
The aim is to encourage a pro-active and participative health and safety culture in our workforce, in line with the recommendations of the Health and Safety Taskforce and the Royal Commission report into Pike River.
Some changes were made to the initial Bill as it progressed through the House, which the Opposition parties consider will weaken it. But the new regime will still be a significant improvement on what we have now.
We outline the new structure.
The new Act has much bigger teeth than the existing legislation – providing more enforcement options and tougher penalties.
Infringement notices with 'on the spot' fines will be available for:
- minor breaches that warrant more than a warning but less than a prosecution, and
- actions or omissions that involve straightforward issues of fact, and do not include qualifying phrases (such as "so far as is easily practicable" or "reasonable steps").
The Act establishes a three tier approach for offences:
Category 1 - reckless conduct; fines up to $600,000 for a director and/or five years in jail
Category 2 - exposing a person to serious harm; up to $300,000
Category 3 – breach of duty; up to $100,000.
The definition of officer has been fine-tuned through the legislative process and is now designed to capture directors and very senior managers – which, in all but the largest firms, is likely to be just the Chief Executive.
Officers have a positive duty of due diligence which requires them to "take all reasonable steps" to ensure that the PCBU (Person Conducting a Business or Undertaking – this will generally be the company or the employing organisation), is fulfilling the organisation's obligations under the law.
For directors, the duties will be similar to the discipline they have traditionally applied to managing financial risk and will include:
- maintaining an up-to-date knowledge of workplace health and safety matters
- understanding the nature of the operations of the business and any associated risks and hazards, and
- ensuring and verifying that the PCBU has access to, and uses, the resources, information and processes needed to eliminate or – if elimination is not possible – to minimise safety risks.
The Act does not move liability from the company to its officers as the main duty of care will sit with the PCBU.
Currently a director or officer can be held liable for a fine of up to $500,000 and imprisonment for up to two years if they knowingly "directed, authorised, assented to, acquiesced in, or participated in, the failure" to take all practicable steps.
Less serious offences, where the director does not intend to create the offence and had no knowledge of it, are presently limited to penalties of $250,000.
It has been rare for a director to be charged under the current Act, and those that have been were directors of very small businesses.
Officers will be subject to the same penalties as PCBUs under the new Act.
Responsibilities of the PCBU
The PCBU is required to ensure the health and safety of those who work for the PCBU and those who could be put at risk by that work. Where there are multiple PCBUs on a site and an overlap of duties, PCBUs must discharge their overlapping responsibilities to the extent they have the ability to control the matter. They must also consult, cooperate and coordinate their activities with the other PCBUs.
In high risk industries, the PCBU will have to establish a formal risk management process. This will require:
- identifying all reasonably foreseeable hazards
- involving workers and their representatives in developing the risk mitigation strategy
- eliminating or minimising the risk so far as is reasonably practicable by:
- substituting the hazard with something less hazardous and/or
- isolating the hazard from any person who could be exposed to it and/or
- implementing engineering controls, and if a risk still remains
- putting in place administrative controls (work methods or procedures) or providing personal protective equipment, and
- regularly reviewing the control measures to ensure they remain effective over time.
All PCBUs have the right to appoint H&S representatives and/or H&S committees should they wish. PCBUs employing more than 20 people, and all businesses in sectors with moderate to high risk of injury, are obliged to provide this representation if requested to do so by the workforce.
Regulations will specify, among other things:
- the criteria for electing an H&S representative, the training to be provided, the term of office (three years) and procedures to terminate an appointment
- the process for determining the configuration of work groups (these must be negotiated between the PCBU and workers, and must be designed to ensure that workers' H&S interests are represented effectively and efficiently, and that H&S representatives are readily accessible to each worker in the group), and
- the composition and meeting requirements of H&S committees (they must be at least half composed of workers not nominated by the PCBU, and the committees must meet at least every three months, or at any reasonable time requested by least half of the committee members).
Smaller businesses (20 or fewer workers) in low risk industries do not have to appoint an H&S representative. PCBUs which meet the size test will be excluded from the exemption where there is:
- a risk of a catastrophic event causing multiple deaths
- a fatality rate greater than 25 per 100,000 workers
- a serious injury rate in excess of 25 per 1000 workers, or
- a likelihood of exposure to asbestos or silica.
Commencement of 4 April 2016
The new regime will come into force from 4 April 2016. From that date, duty holders will be expected to be compliant. There is no transition period. Accordingly, businesses and individual officers should be taking the time now to review their health and safety regimes to ensure that they will be best placed to meet the new regime.
The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.