(Please note that since this blog was written, the Health and Safety Reform Bill has been introduced to the House and some detail has changed. A more recent look at Directors and Officers liabilities is now available).
Well, we all knew the Health and Safety Reform Bill was to be based on the Australian Model Act. So, having analysed the draft in detail, here’s the result. Apart from some minor tweaks, the Health and Safety Reform Bill is essentially identical to the Aussie Model Safety Reform Bill.
Anyway, as far as points of interest, let’s take a look. The following summary makes the assumption that you already know the current HSE Act’s main features. So the comments only focus on noteworthy changes. In some cases, noteworthy non-changes. Some changes, e.g. the detail on the hierarchy of controls that will replace “eliminate, isolate, minimise” will be in Regulations. These haven’t been drafted yet.
Person Conducting a Business or Undertaking (PCBU) under the Safety Reform Bill
This definition allows separation of specific duties within a business or undertaking. There are now specific duties listed (e.g.) people who manage fixtures, fittings or plant. So, due to your job description, you may find yourself with specific duties under the legislation. That might focus the mind a little – see “Offences” below. Of great significance is the inclusion in the Health and Safety Reform Bill of duties for “Officers”. Officers are directors, partners, body corporates. But also, they can be any other person “who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business”.If you direct a business in any substantial way, you could be liable for prosecution if something goes wrong. But wait, there’s more, as they say. You must make yourself familiar with the business. You need to ensure the PCBU has (and uses) resources and processes to eliminate or minimise risks. You must ensure the PCBU has information on risks, hazards and incidents. Additionally, that you respond to these risks and that you have compliance processes in place. If you fail to ensure the above, it will be an offence in itself.
So you could be prosecuted even if no incident occurs. It raises the question as to whether the new inspectorate will “look under the hood” a bit more. Why? To audit directors and see if they are doing anything.
You are probably aware that some Guidelines have been published jointly by MBIE and the Institute of Directors. They are called Good Governance Guidelines for Managing Health and Safety Risks. This is an excellent document which gives very practical advice. It tells you what questions and information you should be asking for, as a director or senior manager.
Penalties will increase significantly and there are 3 levels or categories of offence in the Health and Safety Reform Bill.
- “Reckless Conduct” This roughly equates to our current Section 49 “Offences likely to cause serious harm”. Offences with high culpability. This “Reckless” category of offence applies to anyone with a duty. Someone who, without reasonable excuse, recklessly allows or causes risk of death or serious injury/illness. Maximum penalties: Individuals who are not PCBUs or an officer of a PCBU: 5 years imprisonment or $300,000 fine, or both. For a PCBU or officer: 5 years imprisonment or $600,000 fine, or both. For a Body Corporate: $3,000,000 fine. Compare that with a $500,000 fine, as it is currently.
- “Failing to Comply” (death or serious injury) This category of offence applies to anyone with a duty who simply fails to comply with a requirement. It’s for situations where this exposes a person to risk of death or serious illness or injury. (In other words, the duty holder did not behave knowingly and recklessly). Maximum penalties: Individuals who are not PCBUs or an officer of a PCBU: $150,000 fine. For a PCBU or officer: $300,000 fine. For a Body Corporate: $1,000,000. Compare that with $250,000 fine, as it is currently.
- “Failing to Comply” (simple failure of a duty) This category of offence applies to anyone with a health and safety duty who simply fails to comply with a requirement. Maximum penalties: Individuals who are not PCBUs or an officer of a PCBU: $50,000 fine. For a PCBU or officer: $100,000 fine. For a Body Corporate: $500,000. Some sections of the Health and Safety Reform Bill are attributed their own maximum fines. For example, failure to notify a Notifiable Event has maximum penalties of $10,000 (any individual) and $50,000 (Body Corporate).
Meaning of “Reasonably Practicable” under the Safety Reform BillThis replaces the definition of “all practicable steps”. It’s how we currently decide if we have done enough to comply with a requirement. For those who are familiar with the current “all practicable steps”, the proposed definition in the Health and Safety Reform Bill hardly differs at all from the current one. It’s essentially a risk based decision. In short, we must consider how likely something is, how serious it could be, what we already know about it and any means to prevent it. The heavier the weight of all those factors, then the more we have to do. Including the spending of money, where the risk justifies it. No real change then, although some commentators make a lot of the stated “Purposes” of the Health and Safety Reform Bill. It states that people should be given “the highest level of protection” as is “reasonably practicable”. I have tried to see the difference but have failed so far. Either you apply “highest level” or “reasonably practicable”, but you can’t have both. Maybe someone knows what the Aussies intended here, but to me, the two terms must be read together, and “reasonably practicable” overrides everything.
The concept of Serious Harm is gone, as we know it. In its place are Notifiable Events (related to a workplace).
- Death (of a person). Self explanatory.
- Notifiable Injuries/Illnesses.These include illnesses where work is a significant contributory factor, injuries requiring immediate treatment as an in-patient. There is a list of serious injuries not too different from the current Serious Harm list.
- Notifiable Incident. These include events where there is an exposure to serious risk. Some examples are: Uncontrolled escape of a substance, uncontrolled fire, explosion, escape of gas, steam or pressure. There is also electric shock, fall or release of something from height, collapse, overturning, inrush of water, mud and similar events.
Consultation, representation, participation (with workers).The Health and Safety Reform Bill introduces 33 pages on this subject, as opposed to 6 now. For that, you might expect there to be some fundamental changes, but mostly, what’s added is detail. We still, at the core level, have safety committees and safety representatives who can get training and then exercise certain functions and powers (provided they act in good faith). That general model was introduced in 2002 in the HSE Amendment Act.
Here is my selection of the main points:
- Focus on “Work Group” Work groups are to be identified for the purposes of consultation. Generally speaking, functions and powers of safety representatives are limited to that work group.
- Term of Office. A safety representative has a term of office of 3 years unless they resign. Their term expires if they cease to be a worker in the group, are removed by the Regulator or by a majority of members in that group.
- Powers of a Health and Safety Representative A Health and Safety Rep may request the formation of a Safety Committee, which the PCBU is required to facilitate. Safety Committees must consist of at least 50% of workers not nominated by the PCBU. The Rep may attend meetings about health and safety between groups of employees or individuals, involving the PCBU and inspectors. They will also have the power to enter and inspect the workplace. They may request, (and must be given), any reasonable information about hazards and the health and safety of workers. They may accompany an Inspector during a visit and consult with the Regulator or Inspector.They may choose to be accompanied by another person.
- PCBU’s obligations to Health and Safety Reps There are requirements to consult, confer, provide information and allow the Health and Safety Rep to go about their duties. They must also be allowed as much time as is reasonably necessary, and be paid at the rate they would normally have earned. There are qualifying exceptions, such as gaining consent for release of personal information.
- Training for Health and Safety Reps A PCBU must allow Health and Safety Reps to attend approved health and safety training and pay them their normal rate. Currently, there is no mention of how much training is reasonable over a given period, although this may be detailed in applicable Codes of Practice.
- Liability of H&S Reps There is no specific duty that H&S Reps are bound to, and they are protected from civil and criminal liability, provided they act in good faith. Presumably, while not acting in the capacity of a H&S rep, they are still liable under Section 30, Duties of Workers.
- Provisional Improvement Notices (PIN) These may be issued by a H&S rep who has the appropriate training. A PIN will state requirements for remedying H&S contraventions and by what date. As with our current Hazard Notices, the H&S rep must first have consulted with the PCBU. Unlike Hazard Notices, however, the PIN must be complied with unless the PCBU applies to the Regulator for an inspector’s review (within 7 days). This has essentially turned the process for Hazard Notices on its head, because Hazard Notices can only be enforced if an inspector becomes involved.
Adverse, coercive or misleading conduct
Adverse behaviour is a range of actions, taken for “Prohibited H&S Reasons”, They include dismissal, termination of contract, refusal to employ a person and anything that causes detriment to the worker. It includes threats and organising to take detrimental actions. “Prohibited H&S Reasons” include: The person is, or has been a H&S Rep, has exercised powers and functions of a H&S Rep or has advocated for workers. To be an offence, the H&S Reason has to have been the dominant reason for the adverse behaviour.
The above analysis represents my best attempt at picking out the key changes proposed in the draft Health and Safety Reform Bill. It was introduced to the House in December 2013. This is not an entire summary of the Health and Safety Reform Bill, and there will be Regulations introduced to support it, which will provide more detail in due course.
What should you do? The good news is that if you have a working health and safety management system based on the current HSE Act, very little of any great substance will be changing (see list below). If, on the other hand, you have no safety management system, or you know your system isn’t really functioning, you could do a lot worse than start work on a new one or resurrect the existing patient. Although not much in the way of fundamentals is going to change, the rules and penalties are sure as heck getting tighter.
List to be going on with right now
- Officers (Directors) Get yourself a copy of the Guidelines issued by MBIE and Institute of Directors. Get to know your business hazards if you don’t already fully understand where the pressure points are. Make sure people are resourced to manage risks and that safety is being actively monitored and managed. Don’t rely on bits of paper and statistics. Get out and ask the hard questions. Insist on H&S issues being fixed and demonstrate a personal interest.
- Notifiable Events Start thinking about events as indicators and opportunities. Take notice of them and keep a list. Encourage reporting and investigation.
- Consultation Start thinking about how you can expand the role of your H&S Rep and Safety Committee. Give the Rep training and involve him/her in any meetings in which health and safety is discussed. Ask them what they would like you to do in regard to H&S issues. It’s better to start doing these things constructively now, than to wait until you have to.
Call Simon Lawrence on (09) 535 4355 or 0800 000 267 if you wish to find out more, or if you need some professional advice.