On 7 August the Government announced a reform package that will overhaul the
current workplace health and safety legislative framework. It has been described
by the Government as "the most significant reform of New Zealand's workplace
health and safety system in 20 years". Significantly, the "Working Safer"
package will involve repealing the Health and Safety in Employment Act
(HSE Act). It is intended that the HSE Act will be
replaced by a new Health and Safety at Work Act, which the Government intends to
introduce into the House by December 2013, and come into force by December
The "Working Safer" package is part of the Government's response to the
recommendations made by the Independent Taskforce on Workplace Health and
Safety. It is also intended to deliver on the Government goal of reducing New
Zealand's workplace injury and death toll by 25% by 2020.
The proposed Act will be based on the recently developed Australian Model
Work Health and Safety Law (Model Law). Some of the major
changes that the proposed law will introduce are summarised below.
The proposed legislation is intended to allocate duties to those people in
the best position to control risks to health and safety, as appropriate to their
role in the workplace.
As with the Model Law, the primary duty holder under the intended Act will be
a "person conducting a business or undertaking" (PCBU). Whether
a person conducts a business or undertaking is a question of fact to be
determined in the circumstances of each case.
The term PCBU is a broad concept that is intended to capture all types of
modern working arrangements, covering all relationships between those in control
and those who are affected by that control. For example, duties will extend to
contractors, subcontractors, employees and volunteers. Each PCBU will be
required to supervise and monitor the health and safety performance of the
parties beneath them in the chain. Under the proposed Act, the PCBU also owes a
duty to other people affected by the work being done.
There may be multiple businesses or undertakings, and therefore multiple
PCBUs, involved in work at the same location or on the same project. In
addition, the proposed Act will extend duties to upstream participants in the
supply chain, such as PCBUs that are designers, manufacturers, importers and
"Reasonably practicable" test
The "all practicable steps" test in the current HSE Act will be replaced by
the Model Law's "reasonably practicable" test.
In the Model Law, the term "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 the matters specified in the Model
Directors' due diligence duty
The proposed Act will introduce a new due diligence duty, which means that
those persons in governance roles must proactively manage workplace health and
safety. The due diligence duty will be owed by directors, chief executives and
others in governance roles, but will exclude anyone acting on a voluntary
The due diligence duty will be defined to match the governance role of
officers. For example, it will include a requirement that the officer takes
reasonable steps to:
gain an understanding of the nature of the operations of the PCBU and the
hazards and risks associated with those operations; and
ensure the PCBU has, and implements, processes for complying with its
Under the current HSE Act, directors, officers and agents are only exposed to
potential secondary liability if they have participated in, contributed to, or
acquiesced in any failure of the company to comply with the HSE Act. In
contrast, under the proposed Act the due diligence duty will be individual to
the officer. If an officer exercises due diligence, he or she cannot be held
personally liable regardless of the conduct of the PCBU or other officers.
Failure to comply with a due diligence duty could result in the duty-holder
facing prosecution, and exposure to a fine and imprisonment upon conviction. The
maximum level of the penalty would be determined by whether or not the officer's
failure or recklessness exposed a person to risk of death or serious injury.
Modified penalties structure
As in the Model Law, there will be a new tiered liability regime under the
proposed Act. There will also be an overall significant increase in the maximum
penalty levels. The Minister of Labour has stated that he considers the penalty
levels that apply in the Model Law would also be appropriate in the New Zealand
In order to illustrate the potential penalties that might apply in the
proposed law, we set out below the Model Law's penalty regime:
for category 1 offences (reckless conduct), the maximum penalty for an
individual is $600,000 or five years' imprisonment, or both. For a body
corporate, it is $3 million;
for category 2 offences (failure to comply with health and safety duties
exposing an individual to serious risk), the maximum fine for an individual is
$300,000 and for a body corporate is $1.5 million; and
for category 3 offences (general failure to comply with health and safety
duties), the maximum fine for an individual is $100,000 and for a body corporate
In contrast, under the current HSE Act, an offence broadly equivalent to
category 1 carries a maximum fine of $500,000 and 2 years' imprisonment or both,
while conduct that contravenes categories 2 or 3 carries a maximum fine of
$250,000. These fines apply to both individuals and bodies corporate.
The Minister of Justice is considering the Independent Taskforce's
recommendation to extend the corporate manslaughter offence and the general
corporate liability framework.
In addition to the above, the proposed Act will confer on courts new powers,
such as an ability to make adverse publicity orders, and will increase the range
of compliance and regulatory tools available to regulators.
Regulations, ACOPs, standards and guidance
The overhaul of the HSE Act will mean that new regulations, guidance and
Approved Codes of Practice (ACOPs) will need to be developed to assist PCBUs and
workers to understand how the law and regulations will apply to them. The
Government has indicated that the creation of regulations, ACOPs, standards and
guidance will be a phased process, based on priority.
The Government has also said that risk areas will be the target of the
regulator body, WorkSafe New Zealand, which is expected to be operational from
Government to issue guidance on H&S for EPBs
On 7 August the Government announced its earthquake-prone buildings policy.
In particular, earthquake-prone buildings will be identified through assessments
within five years of Building Act Amendments taking effect later this year and
building owners will have 15 years to carry out strengthening work or have
buildings demolished. Buildings must be strengthened to 34% of the new building
As part of its announcement, the Government advised that MBIE is preparing
some guidance for building owners and employers on their responsibilities where
the requirements of the Building Act and the HSE Act overlap. This guidance is
due to be made available in October.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.