RATHER SAFE THAN SORRY!
11 November 2015
Last week on Wednesday & Thursday we presented a couple of update sessions in NZ on the new Health & Safety at Work Act 2015 (the new NZ Act), which commences on 4 April 2016. Attendance was reasonable however we were somewhat surprised by the lack interest from some of the more established organisations, given that the new NZ Act will substantially change how H&S must be managed in New Zealand.
Some leading companies we spoke with were of the view “not much is going to change” or “we are ok in this space as we have H&S in-house expertise” or “we are onto it and have run our own workshops”.
We sourced two Australian experts to present. Why Australians? Well the New NZ Act is almost the same as Australia’s Work Health and Safety Act 2012 (Australian Act) and the Australians have been working with the Australian Act for nearly three years. There is nothing like learning from others’ mistakes and there have been many made across the ditch. The New NZ Act has been drafted to correct ambiguities in the Australian Act and to omit provisions that are unnecessarily complex. However, whilst ambiguities in the Australian Act were problematic, the key challenge for the Australians was to get senior business leaders to accept that they are accountable for safety under the Australian Act. We suspect the same will apply in NZ. The message from Australia is that H&S in NZ needs a complete reboot in regard to systems, culture and accountability.
If you believe this is going to be easy think again. The Kiwi mind-set of “no worries she’ll be right” is not going to cut it. Having listened to Siobhan and Stephen, we learned that organisations in Australia are still struggling to adjust to certain aspects of the Australian Act, 3 years after it commenced.
The key messages I took away from the sessions were:
- the complexities associated with the new primary duty holder – the PCBU, and the challenges of managing those duties when they are shared by multiple duty holders
- the wide range of persons to whom the PCBU’s duty is owed
- current NZ H&S experts generally have limited and superficial understanding of how the NZ Act affects CEO’s, Board members and other senior corporate executives – as do those people themselves!
- H&S is no longer a function that can be limited to an in-house H&S expert; this person will now be considered an expert adviser – it’s the most senior company execs who will be held accountable. Breaches of the key duties under the New NZ Act are criminal offences and they attract significant penalties for breach – for example, a corporate PCBU faces a maximum penalty of $3 million dollars, whilst an officer (director or very senior executive) faces a maximum penalty of $600,000 and/or go to jail for up to 5yrs.
- Lost Time Injuries (LTIs) alone are not an accurate measure of the success of an H&S system. A more detailed analysis of the organisation’s safety culture and performance will provide a better measure. .
- NZ companies and their Boards CEO’s and Senior Execs as well as current NZ H&S managers appear to have underestimated the scope of change that will be imposed by the New NZ Act and in particular, the vastly increased compliance risks and challenges introduced by it.
- Safety culture and therefore safety performance is driven from the top and needs to be given equal or greater priority to other business priorities.
The Australian experience has made me realize that NZ has a long way to go. Current NZ H&S experts are way off the mark.
03 November 2015
‘Health and safety awareness’ has become a bit of a catchphrase among business owners, HR managers and employees alike, so much so that it has almost lost its meaning along the way.
The new Health & Safety at Work Act, due to come into effect on 4 April 2016, is set to remind businesses that the safety of their staff is something to be taken seriously. Under the current Health & Safety Act, the wider company is liable for any injuries received by a person while they’re at work. Under the new legislation, an individual from the company, probably the CEO, would be liable and would face a hefty fine (far more than the current $52,500 penalty) along with possible jail time.
Recently the pyrotechnics company in charge of a high-profile fireworks display gone wrong was fined more than $100,000 in penalties and damages after they were found liable for injuries received by two members of the public at Eden Park last year. Hired to conduct a series of fireworks displays at a Bledisloe Cup match in August 2014, Waikato-based business Van Tiel Pyrotechnics pleaded guilty to seven charges laid by WorkSafe, most seriously failing to take all possible steps to ensure no action or inaction of any employee harmed any person.
What would that penalty have looked like under the new Health & Safety at Work Act? Put simply, an individual from the company, probably owner, would have been to blame. As a result, they would have been sentenced to footing the $100,000 bill himself, potentially facing jail time as well.
So what do business owners need to know before the new legislation kicks into gear in April? Firstly, what you see is what you get. The Act has already been passed and is fixed, which means it can only be amended by Parliament. Secondly, regardless of whether you’re a large, small, high- or low-risk business, the Act requires all New Zealand businesses to implement stricter worker engagement and participation processes. Thirdly, failure to comply with the new Act can now result in business owners, directors, executives and managers landing criminal prosecution, hefty fines and jail time, rather than lumping it all onto the business. Finally, companies will no longer be able to insure for claims or damages as a result of health and safety-related prosecution and fines.
While company owners and managers initially might be frightened of the new legislation, there’s no need to be. The updated New Zealand Act is similar to the Australian counterpart which has been in effect since 2012 and has seen great success in health and safety relations. The similarities reflect our government’s desires to replicate the same success on this side of the ditch, and regulators will seek guidance from Australia while the new Act is still in its infancy.
Company owners, directors and managers who aren’t sure what the new health and safety legislation means for their business should do their research well before the Act kicks in early next year. Enrolling in a workshop that outlines all the changes in layman’s terms is also a great idea; Adelhelm & Associates is hosting a Health & Safety at Work Act workshopin Wellington on 4 November and Auckland on 5 November 2015.
But more than anything else, businesses should take a close look at their current health and safety practices and make sure they’re up to scratch – because not only could a future health and safety issue affect the reputation of their business, it could also take a much more personal toll.
Adelhelm & Associates
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