Recently the Government announced its intention to overhaul the current employment health and safety laws, through the release of the Reform Package Working Safer – A blueprint for Health and Safety at Work. The Reform Package represents the most significant reform of New Zealand's workplace health and safety regime in 20 years.
Of most significance to employers is that the Reform Package will see the likely repeal and replacement of the Health and Safety in Employment Act 1992 with new legislation, likely to be named the Health and Safety at Work Act. The Government intends to have this in force by December 2014.
Whether you are an employee, manager, employer, or director, the Reform Package contains a number of important initiatives that affect your role. Some of the main changes that are contained within the Reform Package are summarised below.
The Reform Package is largely modelled on the Australian Model Workplace Health and Safety Law. There are two primary focuses; revising the definition of who is responsible for workplace health and safety, and imposing new due diligence duties on directors.
Responsibility for Workplace Health and Safety
It is intended that the proposed legislation will change the definition of who is responsible for workplace health and safety, allocating duties to those people who are in the best position to control risks to health and safety, as appropriate to their role in the workplace. This will mean that more people within an organisation may become responsible for health and safety under the proposed legislation.
The primary duty holder under the proposed legislation will be described by the legislation as the "Person conducting a business or undertaking" ("PCBU"). The legislation will provide that a PCBU will need to ensure, so far as reasonably practicable, the health and safety of workers and others affected by their work.
Whether a person who conducts a business or undertaking is a PCBU will be a question of fact to be determined in the circumstances of each case, considering all relevant matters.
In some employment situations, there may be multiple businesses or undertakings, and therefore multiple PCBUs, involved in work at the same location or on the same project. Once passed into law, the new legislation will provide that the multiple PCBUs must work together to meet their respective workplace health and safety obligations.
The Reasonably Practicable Test
Notably, the use of the phrase "reasonably practicable" in the Reform Package signals a change from the "all practicable steps" test that is currently used under the Health and Safety in Employment Act. The Australian Act provides some guidance as to what may be reasonable, and we will likely see a similar provision contained in our new law.
Under the Australian Law, the phrase "reasonably practicable" means that which is or was at a particular time, reasonably able to be done, taking into account and weighing up all relevant matters, including specific matters contained within that Australian law.
Due Diligence, Governance And Director's Duty
Under the Health and Safety in Employment Act, individuals who are officers, directors or agents of a company are liable for the company's health and safety failures if they directed, authorised, assented to, acquiesced in, or participated in the failure.
It is proposed that the new legislation will extend this duty and create a due diligence duty for "officers" to proactively manage health and safety in the workplace. An officer will be defined as directors, chief executives, and others in governance roles (including senior managers) but will exclude anyone acting on a voluntary basis who only receives 'out of pocket' expenses.
It is likely that the duty will be personal. Therefore, if an officer has acted with due diligence, he or she will not be held to be liable for the conduct of other officers or the PCBUs.
To demonstrate that the duty has been discharged, the officers will need to show that they have taken "all reasonably practicable steps" to understand the PCBUs operations and the associated hazards. Therefore, officers will need to ensure that compliant health and safety processes are put in place (complying with relevant standards and regulations and so forth), are sufficiently resourced and provided for, and are properly implemented. A failure to comply with the duty could, depending on the case, result in the officer facing prosecution, and exposure to large penalties including a fine and/or imprisonment upon conviction.
What Happens Next
The Reform Package signals a strong intention to improve the implementation of New Zealand's approach to health and safety in the workplace. In particular, there is a clear emphasis on improving leadership and collaboration between Government, senior managers, employers, and company directors.
It is anticipated that the Government will introduce the Health and Safety at Work Bill before Parliament in late 2013. We will update you with details of the Bill and its implications once it is placed before Parliament.
In the meantime, we recommend that you keep these proposed changes in mind when running your business, so that you are able to transition smoothly into the new requirements, if and when they become law.