Improving health and safety at work: An effective regulatory framework

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In Confidence31 Under the Model Law only professional directors and officers are subject to the duty. Itexcludes anyone acting on a voluntary basis who receives only out-of-pocketexpenses. This would, for example, exclude members of a school board of trustees orofficers of a sports club from the due diligence duty even if the organisation itself is aPCBU.32 Workers and others in the workplace will also be required to take a reasonable degreeof responsibility for their own health and safety and for the health and safety of thosearound them.Discussion33 This duties framework seeks to improve health and safety outcomes by:a. allocating duties to those participants who are in the best position to control risksb. ensuring the duties are appropriate to the participant’s rolec. making the duties clear and achievable.34 The first question a business will need to ask itself is what it can reasonably do toensure the health and safety of workers and others affected by its business.35 While the advantages are substantial, adoption of the Model Law will require NewZealand businesses and workers to engage with some new concepts, includingPCBUs, and the concept of identifying risks and hazards and taking steps to removethese ‘so far as is reasonably practicable’, as well as a modified compliance regime.36 Adoption of the Model Law it is not a radical departure from the HSE Act. It is simply abetter, more modern version of the Robens approach. The Model Law is, however,sufficiently different that it will be clear to New Zealand duty holders and regulators thatnew behaviours are required. It is predicted that increasing the profile of health andsafety issues and creating a shared responsibility amongst participants in the system,together with the other aspects of the proposals such as leadership and incentives, willlead to better health and safety outcomes.37 The likely effects on business of the package of changes are discussed in the overviewpaper and the regulatory impact statement. Overall, understanding the changes willmean some initial costs to businesses – as with any regulatory change businessesneed to understand the changes and if necessary adapt their systems. This canparticularly affect small businesses. Over time, however, the regulatory and systemchanges should create greater certainty and reduce on-going compliance costs forsmall and large low-risk businesses, and even make it easier to comply for high riskbusinesses.38 I agree with the Taskforce that the Model Law should be used as the basis for a newHealth and Safety at Work Act.39 If Cabinet agrees to the proposal to use the Model Law as a basis for the drafting ofnew health and safety legislation, a number of other core Taskforce recommendationswill be dealt with as a matter of course. Some of the key matters that were of interest tothe Taskforce are discussed within this context below.MBIE-MAKO-146085576
In ConfidenceCoverage of the NZ Defence Force (NZDF)40 The State Services Commission undertook a review in 2012 of the HSE Act and itscoverage of the military. It recommended that legislation be clarified to make clear thatNZDF personnel are covered by the legislation and that Navy vessels are also covered.I propose that the new Health and Safety at Work Bill should explicitly cover the NZDF,including naval ships, while excluding NZDF personnel on operational service. Officialswill provide further advice to me and the Minister of Defence on the implications ofexcluding operational service.Compliance and Liability Framework41 Improved health and safety duties are necessary but not sufficient to improve thehealth and safety system. There is also a need for appropriate consequences to followfrom breach of those duties. Health and safety enforcement acts as a deterrent, bothdirectly (an individual firm’s experience) and from the knowledge of others’ experience.Deterrence theory suggests that penalties need to be certain and proportionate to thebenefits of non-compliance in order to be effective. There also needs to be a range oftools available to promote compliance without solely relying on prosecution.Taskforce recommendation 11: that the government implement measures that increase the costs ofpoor health and safety performance, including:a. extending the existing manslaughter offence to corporations and revising the corporate liabilityframework that applies to all offences (including manslaughter)b. stronger penalties and cost recoveryc. visible and effective compliance activity42 The Minister of Justice is considering the recommendation to extend the existingmanslaughter offence and will seek Cabinet decisions on any proposed changes in duecourse (likely by the end of July). The Minister of Justice has also proposed that areview of the general corporate liability framework be referred to the Law Commission.43 Beyond the high-level recommendation outlined above, the Taskforce also made anumber of recommendations about various ways to strengthen penalties and otherwiseimprove compliance in the body of their report. These are discussed below.Stronger penalties44 Adoption of the Model Law and Taskforce recommendations would result in a newtiered penalty regime and, overall, a significant increase in the maximum levels overthe current law. These increases include a maximum penalty of $600,000 or 5 yearsimprisonment for a PCBU that commits the most serious offences involving recklessconduct that exposes people to serious risks. In my view, the penalty levels in theModel Law will be appropriate in a New Zealand context.45 Under the current law, penalties issued by the Courts continue to be low. Fifty-five percent of all fines imposed are less than $30,000 (12% of the maximum) and 92% areless than $50,000 (20% of the maximum). Low fine levels undermine the generaldeterrent effect and send signals that offending of this type is less serious and thatworkplace health and safety is not important.46 The proposal will see the level of maximum fines increased to sanction and deter dutyholders from breaching their workplace health and safety duties. The use of graduatedcategories of offences and penalties provides better guidance to the Courts aboutappropriate fine levels.MBIE-MAKO-146085577
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