New Zealand: Commercial landlords beware – know your obligations under the Health and Safety at Work Act!

Last Updated: 4 June 2017
Article by Mike Parker

Property

The Health and Safety at Work Act 2015 (the Act) came into full force on 4 April this year. The Act creates new classes of duty holder, new duties and increased penalties for non-compliance. Commercial property landlords will now, in most cases, be duty holders, with obligations under the Act. So too directors and officers of the landlord (where the landlord is not an individual). In this article we'll consider those obligations and how they may be satisfied.

PCBUs and Landlords duties under the Act
The Act introduces the concept of a person conducting a business or undertaking, or "PCBU". It imposes duties on all PCBUs to ensure the health and safety of workers and other people who have contact with their business or undertaking. Under the Act, commercial property landlords will be regarded as PCBUs, subject to some exceptions. Essentially, this means that landlords now have a primary duty to ensure, so far as reasonably practicable, the health and safety of workers and other people affected by work on their property.

Further duties may apply to landlords, including when they manage or control a workplace, manage or control fixtures, fittings and plant, or supply plant or structures. For instance, while tenants control their workspaces, landlords may control common areas such as carparks, stairwells, entrances and exits, plant rooms, etc. Landlords will have to ensure, so far as reasonably practicable, that entries and exits, common areas, landlords fixtures, fittings, plant and structures do not pose health and safety risks. The duty extends to tenants, tenant's workers, contractors engaged by the landlord to do work at the property, and other persons working at the property.

What is reasonably practicable?
What is considered "reasonably practicable" will depend on the circumstances. Factors to be taken into account include:

  • The likelihood of the risk or hazard occurring;
  • The degree of harm that might result from the risk or hazard;
  • What is known, or would be reasonably expected to be known, about a risk or hazard;
  • How to eliminate or minimise the risk, and the costs of doing so.

Duty to consult, cooperate and coordinate with other PCBUs
More than one PCBU may be carrying out work at the same workplace. In such cases the Act requires all the duty holders to consult, cooperate and coordinate activities with each other. Accordingly, landlords will need to work together with tenants and other duty holders to ensure that they are meeting their duties under the Act. For example, if a landlord wishes to carry out work to a building, the landlord, tenant and the contractor will have duties to the tenant's workers. All three PCBUs will need to consult to ensure they meet their individual duties.

Duties cannot be transferred to other PCBUs
Duties are not transferable. Consequently, duty holders cannot avoid responsibility by saying that they expected someone else to carry out the duty. For example, where a landlord's property manager arranges for a plumber to carry out work to shared toilet facilities that are used by a number of tenants, the plumber, landlord, property manager and the tenants are all likely to be PCBUs with overlapping duties.

Directors and Officers of Landlord PCBUs are caught too
The Act also imposes a duty of care on officers of PCBUs. "Officers" include:

  • directors, where the PCBU is a company;
  • partners, where the PCBU is a partnership, other than a limited partnership;
  • general partners, where the PCBU is a limited partnership;
  • persons occupying a position that is comparable to that of a director in any body corporate other those listed above;
  • persons occupying a position that allows them to exercise significant influence over the management of the business or undertaking (for example, a chief executive).

The duty requires officers to exercise due diligence to ensure that the PCBU complies with any duty under the Act. "Due diligence" requires an officer to:

  • Acquire and keep up to date knowledge of health and safety matters;
  • Gain an understanding of the risks and hazards associated with the conduct of the business;
  • Ensure the PCBU has, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety;
  • Ensure the PCBU has appropriate resources and processes for responding to information regarding incidents, hazards and risks in a timely way; and
  • Ensuring the PCBU has, and implements, processes for complying with the duties under the legislation.
  • The duty imposes a positive obligation on officers to be proactive, and to exercise the care, diligence and skill that a reasonable officer would exercise.

In practice this could include obtaining reports from the PCBU landlord on health and safety risks, covering how known risks are being eliminated or minimised and monitored, and ensuring that sufficient resource is available to do so.

How can landlords ensure they are complying with the Act?
The Act is still relatively new. Many commercial landlords will not have turned their mind to how to address their duties under it. The Property Council of New Zealand is working with Work Safe New Zealand to develop a model health and safety policy for commercial property owners to provide some guidance. However, it is unclear when this will be available. In the meantime, landlords and officers should consider:

  • Checking whether tenants have a comprehensive health and safety policy in place, and getting a copy of it;
  • Finding out who the tenants health and safety representative is, and have them report to you on health and safety matters;
  • Engaging a specialist health and safety agency to do a practical assessment of the risks and help prepare a health and safety policy;
  • If hazards or risks exist that are not covered by the tenant's health and safety policy, ensure these are dealt with either by way of addition to the tenant's health and safety policy, or in your own health and safety document which is then displayed at the property;
  • Having the property, including the building infrastructure, fixtures and fittings, plant and other structures regularly monitored for the existence of health and safety risks;
  • Consulting with tenants to ensure risks or hazards in common areas such as shared toilet and kitchens, carparks, foyers, lifts and stairwells are identified and eliminated, or minimised if they cannot be eliminated;
  • Providing information and training to protect people from specific risks, if appropriate;
  • Including clauses in leases that specifically acknowledge and address the parties' health and safety obligations;
  • In the case of officers, obtaining reports from the PCBU on how health and safety risks are being managed and monitored, and ensure that sufficient resource is available to the PCBU landlord to do so.

Avoid the penalties
The penalties for not complying with the Act are significant - up to $600,000 and/or up to 5 years imprisonment for an individual, and up to $3,000,000 for a body corporate! In the wake of workplace disasters such as the Pike River mine disaster and the deaths and injuries that occurred as a result of building failures in the Christchurch earthquakes, there is an increased focus on the health and safety of people coming into contact with commercial buildings. It is important that you consider if the duties under the Act apply to you, and address them.

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.

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