The Health and Safety Reform Bill is now working its way through Parliament. Prompted by the Pike River Coal Mine disaster, it represents the largest change to workplace health and safety since the Health and Safety in Employment Act was passed in 1992.
One of the themes that came out of the Pike River Royal Commission Report was a recommendation for increased statutory responsibilities on directors. The proposed health and safety changes have reflected this, signalling increased responsibilities and penalties for company officers.
Firstly, the proposed law looks to capture any person who makes "decisions that affect the whole or part of a business". This includes directors, and could extend to senior managers, and trustees of trading trusts. Previously these parties may have delegated responsibility for workplace health and safety to other managers.
Secondly, under the proposed law, directors and managers have a duty to exercise due diligence and to take "reasonable steps" to ensure compliance. These reasonable steps are a step up from the current duties. Directors and managers will be expected to know and understand health and safety matters. They will need industry-specific understanding of risks and hazards. They will have to ensure the business uses appropriate resources and processes to prevent health and safety risks.
Directors and managers will also have more administrative duties, to ensure the business has the resources and processes to respond to incidents, hazards and risks, and to ensure it has the correct processes for complying with duties under the legislation.
No longer will a director or senior executive be able to pass on health and safety issues to operational managers. Directors and managers will be personally responsible for understanding the health and safety aspects of the businesses they manage, while making sure their businesses have adequate health and safety resources and processes in place.
Many directors and senior managers will have to learn the operational details of their businesses, and how health and safety laws apply to them. It will no longer be good enough for a director or manager of a coal company or a forestry company to know nothing about the safety issues of mining or tree felling.
The proposed penalties back up this tough stance. Reckless offending attracts fines up to $3 million and/or five years' imprisonment. Merely failing to comply with the above duties could attract a $500,000 fine. There will be no grace period once the law is changed sometime after April 2015. Directors and managers don't have a lot of time to bring themselves, and their businesses, up to speed.
» Mary-Jane Thomas is a partner at Preston Russell Law. E-mail questions to email@example.com.
- The Southland Times