The Health & Safety Reform Bill 2014 (“the Bill”) was introduced to Parliament on 10 March 2014.  It was, in part, a response to the Royal Commission into the Pike River Mine tragedy.  It was also thought that the current Health & Safety in Employment Act 1992 (“the Act”) has struggled to keep up with the modern work environment.

It is inevitable that the Bill will, in some form, be enacted in the near future.  The changes will be significant and businesses and company directors do need to prepare for this and keep themselves abreast of developments.  Although the Bill will be amended as it progresses through Parliament, it is expected that the key provisions will, for the most part, remain the same.

The purpose of the Bill is to provide a balanced framework to secure the health and safety of workers and workplaces.  The Bill proposes several key changes, some of which have already come into place.  These include:

(a)           A new health and safety regulator, Worksafe New Zealand, which replaces the Department of Labour.  This change has already come into effect.

(b)          A new Health & Safety Reform Act, to replace the Health & Safety in Employment Act 1992.

(c)           New terminology including person conducting business or undertaking (“PCBU”), officer, worker and a new definition of workplace.

(d)          A new standard being “insure as far as is reasonably practicable”.

The Bill was supposed to come into force by April 2015 but has been delayed.  The latest report from the Transport & Industrial Relations Select Committee was published on 24 July 2015.  That report has proposed several changes to the Bill from its original form.  It is anticipated that the Bill will be enacted later this year, though it is unclear exactly when it will come into force.  The Bill allows different timeframes for the various obligations, with the last date any part could come into force being 31 October 2017.  General duties will come into force sooner than that, perhaps as early as the first quarter of 2016.

Person Conducting a Business or Undertaking

Under the Bill, PCBU replaces the term “employer”, as used in the current Act.  PCBU is a broader concept in line with the modern working environment.  A business is not just responsible for its employees but also others that its work or business may affect.  The Bill recognises that a PCBU may have responsibilities to workers with whom they do not have a direct contractual relationship.  A PCBU will have the primary duty of care to ensure the health and safety of those who “work for” the PCBU.

A PCBU can be a business, partnership, company or sole trader.  The Select Committee wants the Bill to be clear that a self employed person will be a PCBU with a primary duty of care, including ensuring their own health and safety at work.

Officers

“Officer” is a new concept under the Bill.  An officer will be a director of a company, a partner in a partnership, and includes a person in a body corporate occupying a position in that body comparable with a company director.  Under the original Bill, it was unclear how far down the management structure the term would reach.  This has now been clarified and is likely to be limited under the final Bill to “people in very senior governance roles, such as directors and chief executives”.

The Select Committee has also suggested that the test change from “those who make decisions affecting the whole or a substantial part of a PCBU’s business” to those in positions that allow them to “exercise significant influence over the management of the business or undertaking.”   

An officer does not have to ensure the health and safety of a PCBU’s workers, but needs to exercise due diligence in ensuring that the PCBU is able to comply and does comply with its duties.  The Bill introduces a positive duty on those at the governance level of an organisation to actively engage in health and safety matters.  These obligations will be ongoing.

The introduction of the concept of “officer”, and the duties that come with being an officer, is arguably the most significant change for many organisations and their senior management.  The duties impose considerably more liability on those who are defined as officers under the Bill.  Officers should ensure that they are well aware of their duties before the new legislation takes effect.

Workers

The Bill introduces the concept of a “worker”, rather than an employee.  The definition under the Bill has been drafted to address a PCBU’s duties to persons on a worksite not caught under the current Act’s definition of an “employee”, such as contractors, employees of contractors and others who might undertake work for the PCBU. 

The Select Committee has recommended a slight change in wording from the original Bill in order to make it clear that a worker will always be an individual and not a corporation or group.

Workers will have their own duties under the Bill to take reasonable care for their own health and safety; and to comply and cooperate with reasonable instructions from a PCBU.

Duty of Care

“All practicable steps” is to be replaced with the new “as far as is reasonably practicable”.  That is, a PCBU will owe a primary duty of care for the health and safety of those workers who are carrying out work for or at the direction of a PCBU. There will be a need to balance the likelihood of a risk occurring with cost. The presumption will be in favour of taking steps to avoid the risk unless the cost of doing so would be “grossly disproportionate”. There is a positive duty on a PCBU to think laterally about who its work may affect.  The practical distinction between the old and the new standard is something that will likely be hashed out before the Courts in the coming years.

Overlapping Duties

There are overlapping duties on employers under the current Act.  However, the Bill clarifies, even further with select committee input, the duties of PCBUs in situations where there is more than one duty holder.  This is of particular importance in situations where there are shared workplaces, or a worker is carrying out work for more than one PCBU.

The Select Committee has recommended that in situations where there is more than one duty holder, a PCBU is required to discharge its duty to the extent that it has the “ability to influence and control the matter”.  This is a change from the original wording of “capacity to influence and control”.  This change in wording is designed to address in a practical sense what a PCBU will be able to do in order to discharge its duty.

The Select Committee has also recommended clarifying that the “three C’s” – Consult, Cooperate and Coordinate, in respect of overlapping duties, only apply to a PCBU and not to officers and workers.

Small Business Exemption

Small businesses are not exempt from complying with the general duties imposed under the Bill.  Small PCBUs will still be expected to engage with their workers on matters of health and safety.

However, PCBUs with fewer than 20 workers will now be exempt from the requirement to have health and safety representatives or committees.  This exemption will only apply in industries which are low risk.  It is still unclear exactly which industries are considered high risk.  There could be some overlap with what are considered “safety sensitive” areas where employers are entitled to require random drug testing.  We know it will include forestry, but its expansion beyond that is not yet known.  Of course, those with fewer than 20 workers who wish to can still have health and safety representatives or committees.

PCBUs with more than 20 workers, and those in high risk industries, will have to hold elections for health and safety representatives or establish health and safety committees when requested by their workers.  Health and safety representatives, particularly those who have been through training, will have certain powers granted to them under the Bill.

Conclusion

The Bill will affect all New Zealand workplaces.  It is important that businesses keep up to date on the Bill and the impact it will have on their workplace.  If you have any questions about how the Bill will affect you or your workplace, or what your workplace needs to do to meet its requirements under the Bill, please contact us for further information.