Articles

Health & Safety Reform Bill

July 13th, 2015

Health & Safety is now recognised as a vital business activity, both at an operational & board level.

On average 75 people per year die on the job, 1 in 10 is harmed & 600-900 die from work related diseases, all coming to a cost of $3.5 billion per year. The new Health & Safety Reform Bill that is currently before parliament is here to change that. The new reform Bill was to come into force in the second half of 2015 (but there may be some delays).

The changes to the new Bill are significant & there are heavy penalties when breaches occur. These penalties now have a direct consequence to directors’, & chief executives who fail to exercise a duty of care. Penalties for these individuals may be up to $650,000 fine or 5 years imprisonment or both.

The new legislation is now taking a board, risk based approach. This sees a shift from just monitoring & recording incidents as often seen under the current legislation to a proactive focus of identifying & managing risks both at a director & operational level.

The proposed legislation breaks health & safety into a numbers of sectors that directors & chief executives must be aware of.

PCBU

PCBU refers to the Person Conducting a Business or Undertaking. It allocates duties to the person or entity in the best position to control risks to health & safety, as appropriate to their role.

An Officer

Includes director(s) & chief executive(s), who have the ability to make the decisions that impact on the operation of the business.

Primary Duty of Care

The primary duty of care requires all PCBUs to ensure, so far as is reasonably practical:
1. The health & safety of workers employed or engaged by the PCBU
2. That the health & safety of other people is not put at risk from work carried out as part of the business or undertaking (for example customers)

Worker Engagement

The proposed legislation strengthens the relationship between both directors’ & workers. The PCBU must:
1. Engage with workers
2. Have effective practices to allow workers to participate in improving health & safety on an ongoing basis. These are known as worker participation practices.

Confused yet?

If you’ve got this far well done – even if you’re finding it all a bit confusing. At the end of the day the aim is to make sure that the workplace is safe. My main suggestion is not to put your head in the sand but get proactive. There is plenty of advice & information out there (that may be part of the challenge trying to work out what is relevant to your industry).
The New Zealand Institute of Directors has some very practical & easy to read information & this link is a summary of good governance guidelines.

Penalties

If you’re still wondering do you need to really do anything then have a look at the proposed penalties:

Reckless conduct (clause 42)
• Individual, 5 years & or $300,000
• Officer of PCBU, 5 years & or $600,000
• Company, $3million

Exposing an individual to risk of death or serious injury (clause 43)
• Individual, $150,000
• Officer of PCBU, $300,000
• Company, $1.5 million

Failing to comply with health & safety duty (clause 44)
• Individual, $50,000
• Officer, $100,000
• Company $500,000

Here are some recent cases & penalties

$70,000
Fall of 3.5m

$60,000 / 4 months home detention
Vehicle hit & knocked down power lines

$30,000
Vehicle rolled

$40,000
Fall of 2.5m

$15,000
Inadequate scaffolding

$10,000
Risk assessment not current

$4,000
Gas fitting without license

$30,000
Fall. Broken wrist

$57,000
Lost finger

$15,000
Quad. No helmet

$103,000
Worker killed in accident

$40,000
Quad. No helmet

So there we have it – just a teaser for what is to come – remembering of course that we still operate under current legislation. In my view this should be taken as an opportunity for you to complete a health check on the safety in your business.

I’m sure the last thing any business owner wants is to have a death or serious harm incident involving anyone connected to their business. But to make sure it is safe will require an effort through all levels of the organisation.
Don’t leave your health & safety review until it’s too late.