The Government introduced the Health and Safety Reform Bill 2014 ("Bill") to the house on 10 March 2014.
As foreshadowed in the Working Safer reform package, the Bill will replace the existing occupational health and safety legislation, including the Health and Safety in Employment Act 1992 ("HSEA"), and is based on the Australian Model Health and Safety Law.
The main purpose of the Bill is to provide a balanced framework to secure the health and safety of workers and workplaces, and it lists the various ways in which it seeks to achieve this. Key changes that the Bill introduces to achieve this purpose include:
- new definition of duty holder - PCBU (Person conducting a business or undertaking), to replace existing definitions, including "employer" and "principal";
- new qualifier definition of "so far as is reasonably practicable" to replace "all practicable steps";
- new general duty for PCBUs to ensure, so far as is reasonably practicable, the safety of:
- workers they have engaged; or
- workers whose activities are influenced or directed by the PCBU; or
- other persons;
- introducing due diligence obligations for directors and senior managers;
- new duty where more than one person has a duty in relation to the same matter: each duty holder has an obligation to consult and coordinate activities with all other persons who have a duty in relation to the same matter;
- increased worker participation requirements;
- increased enforcement tools, including the power to issue improvement notices, prohibition notices, non-disturbance notices, suspension notices, and to accept enforceable undertakings;
- significantly increased penalties for corporate entities and individuals; and
- amendments to related legalisation, including the ACC Act 2001, and the Employment Relations Act 2000.
Changes in Bill from Exposure Draft
The content of the Bill is largely as expected, following the publication of the Health and Safety Reform Bill - Draft for Consultation ("Exposure Draft") in November 2013. However, there have been a number of changes and clarifications to the Bill's definitions and technical terms since the publication of the Exposure Draft. The notable changes are:
- application of the Act to the Crown, armed forces, aircraft, ships, Exclusive Economic Zone, and high risk plant;
- introduction of a number of new definitions in the Interpretation section, including "hazard", "high risk plant", and "risk";
- inclusion of a "ship" in the definition of a "workplace";
- that a person or court may have regard to requirements under other enactments when determining whether a health and safety duty has been complied with;
- certain office holders (elected members of: community boards, local authorities, local government boards, and school boards of trustees) do not commit an offence for a failure to comply with the due diligence obligation for officers;
- amendment to the definition of categories of persons in the offence clauses. What was "Body Corporates" is now "Any other person";
- removal of the procedure for determining work groups;
- removal of provisions related to the election of health and safety representatives; and
- new provisions relating to appeal processes for health and safety representatives that have been removed from office, obligations of PCBUs in relation to health and safety committees, and information to be used by health and safety committees for health and safety purposes only.
Process and timeframes
The Bill is expected to pass its first reading on 13 March 2014. It will then be referred to the Transport and Industrial Relations Select Committee, which will scrutinise the Bill in more detail. As usual, the Select Committee will invite interested parties to make submissions on the Bill. Following this, the Bill, and any recommendations made by the Select Committee, will be referred back to the House for its second reading.
The Government has indicated it expects the Bill to pass into law by the end of this year, and come into force in April 2015. The Bill is expected to be supported by two phases of regulations. Proposals for the first phase of regulations are expected to be released for consultation in early April 2014.
Summary of the Bill
We have summarised the key sections in each Part of the Bill. Due to the significant size of the Bill we have not gone into specific detail. Please feel free to contact the team if you wish to discuss a specific section or part of the Bill.
Part 1 - Health and safety at work
Part 1 sets out the preliminary provisions, application, definitions and key principles relating to health and safety duties relevant to the balance of the Bill.
The Government's aim is to remove the confusion associated with definitions under the current legislation. The new definitions are intended to provide much needed clarity as to who has duties in the workplace and how the duties are to be met.
The key aspect of Part 1 is the new definitions. As foreshadowed, the Bill introduces new duty holder categories to remove existing confusion around "employer", "principal" and "person who controls a place of work" under the HSEA. The duty holder categories include:
PCBU (person conducting a business or undertaking)
A PCBU means, a person conducting a business or undertaking -
- whether the person conducts a business or undertaking alone or with others; and
- whether the business or undertaking is conducted for profit or gain.
A PCBU does not include employees or directors of a PCBU, volunteer association and occupiers of a home who employ or engage another person solely to do residential work.
In relation to a PCBU, "Officer" means -
- any person occupying the position of a director of a company;
- any partner in a partnership;
- any general partner in a limited partnership;
- any person occupying a position in a body corporate that is comparable with that of a director of a company; and
- any other person who makes decisions that affect the whole, or a substantial part, of the business of the PCBU (for example, the chief executive).
The definition of "worker" is intended to be broad and to address previous confusion under the HSEA with respect to a principal or employer's obligations to persons on a worksite, such as contractors, employees of contractors, and volunteers.
"Worker" means a person who carries out work in any capacity for a PCBU, including work as an employee, contractor or subcontractor, an employee of a contractor or subcontractor, an employee of a labour hire company who has been assigned to work in the business or undertaking, an outworker (including a homeworker), an apprentice or a trainee, a person gaining work experience or undertaking a work trial, or a volunteer.
A definition of "reasonably practicable" will replace the current standard of "all practicable steps". The definition includes, as a last step, an assessment of whether the cost to address the risk is grossly disproportionate.
In relation to the duties to ensure health and safety, "reasonably practicable" means that which is, or was, at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters, including—
- the likelihood of the hazard or the risk concerned occurring;
- the degree of harm that might result from the hazard or risk;
- what the person concerned knows, or ought reasonably to know, about—
- the hazard or risk; and
- ways of eliminating or minimising the risk;
- the availability and suitability of ways to eliminate or minimise the risk; and
- after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk.
Part 2 - Health and safety duties
Part 2 imposes duties on PCBUs, officers, workers and other persons (such as visitors).
Part 2 introduces the general duty for all PCBUs to ensure, so far as is reasonably practicable, the health and safety of—
- workers employed or engaged, or caused to be employed or engaged, by the PCBU while the workers are at work in the business or undertaking; and
- workers whose activities in carrying out work are influenced or directed by the PCBU, while the workers are carrying out the work.
In addition, a PCBU must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.
PCBUs that are involved in management or are in control of worksites have additional duties, as do PCBUs involved in the design, manufacture, import, supply, installation, construction, or commission of plant.
Duty to consult concurrent duty holders in relation to the same matter
In addition to the primary duty, the Bill introduces a new obligation for concurrent duty holders. Under s 27, all duty holders who have a health and safety duty in relation to the same matter are required to consult, cooperate and coordinate activities with all other persons who have a duty in relation to the same matter. Going forward, all parties with duties in relation to the same matter will have to consult with each other, irrespective of whether they directly have health and safety duties to each other.
An individual who contravenes s 27 is deemed to have committed an offence and is liable for a fine not exceeding $20,000. Any other person (for example, a PCBU) is liable for a fine not exceeding $100,000.
Duty of officers
The Bill introduces a duty on "Officers" to exercise due diligence to ensure that the PCBU complies with its duties. The due diligence obligation includes taking reasonable steps to:
- acquire, and keep up-to-date, knowledge of work health and safety matters;
- gain an understanding of the nature of the operations of the business or undertaking of the PCBU and generally of the hazards and risks associated with those operations;
- ensure that the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking;
- ensure that the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards, and risks and for responding in a timely way to that information;
- ensure that the PCBU has, and implements, processes for complying with any duty or obligation of the PCBU; and
- verify the provision and use of the resources and processes.
The due diligence requirements are consistent with the recommended steps in the Institute of Directors' Good Governance Practices Guideline for Managing Health and Safety Risks, published in early 2013.
Officers should review these Guidelines to consider whether they can do more to understand their business and take steps to ensure their business has the necessary health and safety processes in place.
Duty of workers
Similar to the employee duty under the HSEA, workers have a duty to:
- take reasonable care for his or her own health and safety;
- take reasonable care that his or her acts or omissions do not adversely affect the health and safety of others;
- comply, as far as reasonably able, with any reasonable instruction that is given by the PCBU to allow the PCBU to comply; and
- co-operate with any reasonable policy or procedure of the PCBU relating to health or safety at the workplace that has been notified to workers.
Offences relating to Health and Safety duties
Subpart 3 of Part 2 sets out the offences relating to a breach of the health and safety duties in the Bill. For simplicity, we have summarised the offences as follows:
Click here to view the table
Part 3 -Engagement, worker participation, and representation
Part 3 gives workers and their representatives an increased role in workplace health and safety. The Bill carries over much of the content in the Exposure Draft, particularly the requirement for all PCBUs to implement a worker participation system. However, there are notable additions and omissions.
Parties to an issue about work health and safety must make reasonable efforts to achieve a timely, final and effective solution. A party may seek the assistance of WorkSafe to resolve the issue. An inspector may then be appointed to assist and may, if the issue is of a type specified by the regulations, decide the matter conclusively.
The Bill omits the provisions of the Exposure Draft that related to the election of health and safety representatives. Under the Bill, it is no longer an offence for a PCBU to fail to supply resources, facilities or assistance reasonably necessary to allow elections to be conducted. These provisions may later find their way into the accompanying regulations.
Part 4 - Enforcement and other matters
Part 4 sets out a number of enforcement mechanisms that can be exercised by WorkSafe or other parties. These sit alongside the possibility of infringement proceedings that may be filed in the District Court. They are summarised as follows:
Click here to view table.
If issued with one of the above notices, a party may apply to WorkSafe for an internal review of the decision. It is possible to apply to have the effect of this notice stayed pending the decision of this review. A limited right of appeal to the District Court is granted that allows a party to challenge an internal review on the basis it is unreasonable.
WorkSafe can accept enforceable undertakings from a person for a breach, or alleged breach, of the Act or regulations. WorkSafe must give reasons for accepting or rejecting the undertaking. If the undertaking is not complied with, WorkSafe can apply to the District Court to enforce the terms of the agreement, along with costs of the enforcement proceedings and ongoing monitoring costs in the future. The person who has breached the undertaking may also face a maximum fine of $50,000 for an individual or $250,000 for all others.
Other powers include the ability for a court to:
- issue injunctions following a conviction requiring the offender to cease particular conduct;
- order an offender to undertake a specified course of training; or
- make an adverse publicity order.
The Bill provides that an insurance policy that indemnifies a person against a fine or infringement fee under the Act will be of no effect.
Part 5 - Miscellaneous Provisions
Part 5 outlines the role of WorkSafe as the primary health and safety regulator, as well as the functions and powers, such as monitoring and enforcing compliance, of other regulators under the Bill.
Under Part 5, the Minister responsible for the regime must publish a "Health and Safety at Work Strategy" which identifies the Government's strategic direction for improving health and safety. This forms part of the wider co-operation between Crown agencies which allows for information sharing and joint initiatives (such as the injury prevention action to be undertaken by ACC and WorkSafe as part of the Bill).
This also includes an assortment of mechanical provisions, including those that enable regulations relating to health and safety to be made under the Bill, and similarly, for codes of practice and safe work instruments to be approved.
Part 6 - Amendments to other Acts
Part 6 amends other legislation to give effect to the policies to be implemented by the Bill, and to ensure consistency in the wider health and safety regulatory regime.
The key Acts to be amended are:
- Hazardous Substances and New Organisms Act 1996 - to integrate the regulation of workplace use of hazardous substances into the workplace health and safety system in order to consolidate and simplify health and safety legislative requirements;
- Accident Compensation Act 2001 - to enable WorkSafe and ACC to work together to improve injury prevention;
- Employment Relations Act 2000 - to integrate expanded health and safety rights and obligations with existing employee protection mechanisms, so that employees who are subjected to adverse conduct may take a personal grievance; and
- WorkSafe New Zealand Act 2013 - to ensure the statutory role, functions and powers of WorkSafe are consistent and appropriate for it to carry out its role under the Bill as the primary regulator of health and safety.
Notably, the Bill provides for the development of improved incentive schemes by ACC and WorkSafe that were proposed as part of the Working Safer reforms. The schemes will include the Star Safety Rating Scheme ("SSRS") that was announced by ACC Minister Judith Collins in December 2013. The voluntary scheme will rate businesses’ workplace safety history and those with a good safety star rating will be rewarded with ACC levy discounts. The initial concept documents for the SSRS are scheduled to be published in mid 2014 and indications are that SSRS will be initially rolled out within the construction, forestry and high hazard sectors, with other industries to follow.
Schedule 2 establishes a mining sector-specific worker participation in health and safety regime, which grants powers to industry health and safety representatives in addition to those contained in Part 3, including the power to:
- suspend mining operations;
- require mining operations to stop in case of serious risk to health and safety; and
- cancel or suspend a mining operation.
Schedule 2 contains provisions requiring WorkSafe to establish a new entity, the New Zealand Mining Board of Examiners, the functions of which include advising WorkSafe on the competency requirements for mine workers and certifying mine worker competency via a certification regime.
Health and safety reform is now well underway. In addition to the Bill, the Government has indicated it will commence consultation in respect of the first tranche of new regulations in April 2014.