Focus on health and safety sharpens

Workplace health and safety is back in the media spotlight after a recent appeal of a major retailer's sentence and the progress through Parliament of new legislation set to line up our regime with that of Australia.

Briscoes was recently left feeling much like an uninitiated customer who buys an item full price from one of their stores, after receiving a $75,000 fine from the Manukau District Court.

Briscoes pleaded guilty to failing to take all practicable steps to ensure the health and safety of Ajay Chadha, who tripped over display boxes piled in an aisle and broke his femur in the maelstrom of pre-Christmas shopping. However, Briscoes appealed against the sentence it received, claiming that the starting point for the fine was manifestly excessive and failed to take into account proper sentencing principles.

The High Court disagreed with Briscoes and found the mid-range level of fine to be appropriate in the context of the serious effect on the victim and the foreseeability of danger when goods are stacked on the floor. The court commented that the risk was obvious and the stacking of boxes was a clear departure from industry standards.

It applied an uplift in the sentence to reflect general deterrence and Briscoes' retail profile and earnings - the NZX listed group is valued at $520 million. In the end, the sentence was reduced to $42,000 after the court agreed that discounts for mitigating factors such as Briscoes' co-operation and safety record and an early guilty plea had been overlooked.

In fact, Briscoes should count itself lucky.

The sentences available to the courts for health and safety prosecutions are about to be marked up - significantly. Under the proposed Health and Safety Reform Bill, likely to become law early next year, prosecutions for health and safety will look more like they do in Australia - and that means that business will need to sit up and take notice.

The bill extends health and safety duties to all people in the workplace, though the focus is on people conducting a business or undertaking (PCBUs). PCBUs will include company directors, managers and department heads.

PCBUs will have a specific duty of care to ensure the health and safety of workers employed or engaged by the PCBU and workers whose activities are influenced or directed by the PCBU.

Relevant to Briscoes' case, PCBUs must additionally ensure that the health and safety of other people is not put at risk as part of their business or undertaking. This includes customers.

Several new offences and penalties will be introduced for people who breach their duties. The most serious offence is to recklessly engage in conduct that exposes a person to whom a duty is owed to a risk of death, serious injury, or illness.

If convicted, a new graduated scale of maximum penalties will make eye-watering reading and the Briscoes fine look like small change: a fine of up to $300,000 and/or five years in prison for individuals; up to a fine of $600,000 and/or the same jail time for a PCBU or an officer of a PCBU.

For companies, a fine of up to $3 million could be ordered.

While obviously reserved for the worst cases, that sort of penalty could sink all but the biggest businesses, and that is exactly the deterrent that the new regime desires. The goal is to avoid fines being viewed by large corporates as simply licence fees. Combined with this, it is unlawful to insure against such fines.

Briscoes' case is somewhat unfortunate as the accident seemed minor and rare. A misplaced stack of four cardboard boxes does not warrant the same level of criminal consequences for a business as a forestry death.

It is fair to say that even in the face of the more powerful enforcement regime, the reality is that there will still be a low risk of retailers being forced to pony up for large fines and compensation for accidents that happen in stores. It seems unlikely that WorkSafe New Zealand (the health and safety watchdog) will take a criminal prosecution unless a business has been clearly reckless. The injured victim is also likely to be covered by ACC and therefore barred from suing the company.

However, while WorkSafe has, and will continue to have, the exclusive first bite at the cherry in taking a prosecution within the first six months, private prosecutions are still available. For example, the Council of Trade Unions has recently decided to take a private prosecution against M&A Cross, employer of Charles Finlay, a Tokoroa man killed in a forestry accident last year.

In another example, the New Zealand Defence Force recently pleaded guilty in a private prosecution brought by the sole survivor of the 2010 Anzac Day helicopter crash, for failing to ensure employees were not exposed to hazards from the operation of helicopters while at work. While Crown agencies are not liable to fines and penalties, NZDF was ordered to pay compensation of $20,000 to each of the victims' families.

These cases demonstrate that even the current health and safety regime can bite when it needs to, and that things are only going to get tougher for those who fail to take adequate steps to safeguard their employees and customers.

Susan Hornsby-Geluk is a partner at Dundas Street Employment Lawyers.

The Dominion Post