On 22 August 2017, the first sentencing decision under the Health and Safety at Work Act 2015 (the “Act”) was released. As expected, the penalties under this Act are larger than what could have been expected under its predecessor the Health and Safety in Employment Act 1992 (the “HSEA”).
Under the Act, a person conducting a business or undertaking (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. Furthermore, Section 48 of the Act provides that it is an offence to fail to comply with certain duties under the Act (including the duty referred to above) that exposes individual to risk of death or serious injury or serious illness. The penalty levels under the Act are significantly higher than under the HSEA. If convicted of a Section 48 offence, an organisation that is a PCBU and not an individual is liable to a fine of up to $1.5 million.
In this case, the employer, Budget Plastics (New Zealand) limited pleaded guilty of the duty of failing to ensure the health and safety of a worker. The guilty plea is not surprising given the evidence against Budget Plastics. The worker had lost a significant part of his hand using a plastic extrusion machine. Worksafe’s investigation concluded that:
- The extrusion machine was insufficiently guarded and was not fitted with appropriately located emergency stops;
- Budget did not have adequate systems in place for identifying hazards in the workplace;
- Budget did not have an adequate safe operating procedure for the extrusion machine; and
- Budget did not have adequate polices in place for training workers in the use of the machine.
In addition, Budget was found to not have implemented the recommended changes by an external health and safety adviser in respect of the extrusion machine.
The District Court awarded reparation to the victim of $37,500. It determined that Budget was moderately culpable for the offence and that the starting point for the fine at $400,000 to $6000,000. Having considered mitigating factors and Budget’s limited ability to pay, the fine was set at $100,000 with an award for costs of $1,000.00.
The size of the penalty (reduced because of Budget’s limited ability to pay) will be a warning to PCBUs that health and safety is to be taken seriously.
Disclaimer: The above information is for information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on the information given.