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Description of this module

In March the Government introduced the Health and Safety Reform Bill following the Pike River Coal Mine Tragedy. It will become law in April 2015 and place stricter obligations on all in the workplace; it therefore exposes a broader range of individuals to liability.

There are three tiers of liability and associated obligations under the new law – particular onus falls on those in senior management:

1. All workers have a duty to take reasonable care to ensure both their personal health and safety and that of others, irrespective of their skill level. Workers participation in health and safety precautions and programs will be required to an extent determined by the size of the company and level of risk.
    
2. A person conducting a business or undertaking (PCBU) must ensure the health and safety of workers and others affected by the work. PCBU is a broad concept designed to capture all types of working relationships, particularly those persons in the best position to control risks to health and safety. It can include managers, heads of departments and those who control fixtures, fittings or plants at workplaces.
    
3. The law will place an individual duty of due diligence on those in governance roles to proactively manage workplace health and safety and ensure compliance. This will include directors and other officers, an officer defined to include a partner, general partner and any other person who makes decisions that affect the whole, or a substantial part of the business of the PCBU, such as a chief executive. If you set the direction and provide leadership in health and safety, including resource decisions then you will need to observe the duty.

The due diligence duty includes requirements on an officer to take reasonable steps to:

• Acquire up-to-date knowledge of work health and safety matters;
• Gain understanding of the nature of the operations of the PCBU and the hazards and risks with such operations;
• Ensure the PCBU has available resources and implements processes to enable compliance; and
• Ensure there are processes for receiving and considering information on risks and hazards and responding in a timely manner.

What happens if I fail to discharge my duty?
The Bill establishes heavy penalties. If you are a director, officer or PCBU and you fail to comply, you face prosecution and a possible fine of up to $600,000 if proven reckless. A company may face a fine of up to $3,000,000, Workers even face a potential fine of up to $100,000 for simple non-compliance and no resulting injury or illness.

What will the new law mean for my business?
Small and medium enterprises: direct influence on the health and safety or workers and therefore greater exposure.

• Large enterprises: obligations on principals and companies that sub-contract out work are clearer and obligations cannot be contracted out of
• Workers: are covered no matter the working relationship with the company
• Upstream parties: involved in the supply of goods and services will have more obligations relating to their sphere of influence such as designers, manufacturers and suppliers of plant.

What does this mean for me and what next?
Greater exposure to liability calls for greater protection. We have begun setting up asset protection mechanisms for several of our clients, particularly the creation of family and investments trusts. If the new obligations will or may affect you, please call our offices and discuss the best way forward for your circumstances.