This Article was written by Tom Castle of Burley Attwood Law. This firm provides the full range of legal services from property contracts, to company and commercial business transactions, dispute resolution and litigation.

On 4 April 2016, the Health and Safety in Employment Act 1992 (“the 1992 Act”) was repealed and replaced with the Health and Safety at Work Act 2015 (“the HSWA”).

The HSWA is modeled upon the Australian Health and Safety legislation. In view of New Zealand and Australia having broadly similar political and legal settings, a foundation on Australian law gave New Zealand policy makers a considerable “head wind” in creating a modern act, in that various concepts had been tested in Courts of a similar jurisdiction and mode of procedure.

That said, the not insignificant differences between the two countries’ legal systems and prosecutorial regime, together with the material changes between the 1992 Act and the HSWA, means that employers and the legal profession alike will be paying close attention to how New Zealand Courts will shape the practical application of the new legislation.

The first (sentencing) decision from the Court under the HSWA has recently been released.

Budget Plastics (NZ) Limited (“BPL”)

Arising out of a workplace accident in April 2016, the first prosecution under the HSWA concluded in the Palmerston North District Court on 23 May 2017. Judgment was given on 22 August 2017.

This case involved an accident whereby a portion of an employee’s hand was partially amputated after it became caught in the auger of a plastic extrusion machine. The machine was being operated within BPL’s facility and as part of BPL’s normal business operations (plastic waste processing into a reusable form).

BPL pleaded guilty to being a ‘person conducting a business or an undertaking’ (or “PCBU”, as defined in section 17 of the HSWA) that failed to ensure so far as was reasonably practicable, the health and safety of a worker while he was at work. This is an offence pursuant to section 36(2)(a) and 48(1) and (2)(c) of the HSWA and is punishable by a maximum penalty of a fine not exceeding $1,500,000.00.

An investigation by the prosecutor (Worksafe) revealed a number of issues with the systems that BPL had in place for identifying hazards in the workplace.

Significantly, Worksafe’s investigation found that insufficient consideration had been given to the risks associated with the extrusion machine, albeit a preliminarily assessment of the work place had been carried out by a health and safety company engaged by BPL some 6 weeks before the accident. That assessment had identified the extrusion machine as an area “requiring steps to bring it into compliance”.

In particular, Worksafe’s investigation revealed the following failures.

  1. Inadequate safe operating procedure for use of the machines;
  2. Inadequate policies for training workers in the safe use of the machines;
  3. Insufficient machine guarding;
  4. Lack of appropriately fitted and located emergency stop controls;
  5. Inadequate systems in place for identifying hazards in the workplace.

By pleading guilty, BPL acknowledged that it had failed to ensure the health and safety of its worker in a number of ways and that those failures resulted in serious harm. It was BPL’s first appearance before the Court.

Being the first prosecution under the HSWA, the level of the fine (and reparation for the employee) was a key take out from this case, particularly given the considerable increase in maximum penalties available to the Court under the HSWA.

Under the now repealed 1992 Act, offending of this kind usually attracted a fine of between $30,000.00 and $40,000.00.

In this case, the Judge set a start point “range” of between $400,000.00 and $600,000.00, given the level of culpability from the BPL – including the fact the injury was serious and the accident was “foreseeable”.

This was reduced to a “range” between $210,000.00 and $315,000.00 based on mitigating factors such as BPL’s engagement with a health and safety specialist, co-operation with the investigation, no prior convictions and its early guilty plea.

The Court decided that, ordinarily, the end fine would be in the “range” of $275,000.00. However, this was reduced to $100,000.00 based on BPL’s inability to pay (which was supported by accounting evidence and not strongly opposed by Worksafe).

In addition to the fine of $100,000.00, BPL was ordered to pay the employee victim $37,500.00 in emotional harm reparations.

Although this case was awaited with some interest and certainly marks a clear increase in the level fines that the Court will be prepared to impose (as was one of the intentions of the HSWA), it is noteworthy that the Judge stipulated a “range” in respect of the fine – rather than a definitive starting and end point. Although Worksafe submitted that a modified sentencing band methodology could be derived from the Court’s approach under the 1992 Act, the Judge noted that it “was not for the District Court to make sentencing guidelines”.

This aspect is bound to move considerably as more cases are heard and appellant decisions from higher Courts serve to create a more certain framework within which sentencing will proceed.

This article does not constitute legal advice.  You should obtain specific advice before you make any decisions or take any action based upon information contained therein.