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Workplace responsibilities of small-scale forest owners under the Health and Safety Reform Bill

Julian Bateson, New Zealand Tree Grower May 2015.

The aim of this article is to help give you a bit more of an idea about some of the changes to the health and safety law which will be coming into force around the end of this year. The article was compiled from information available on the MBIE website.

A member of the team in Worksafe, who is working on the new legislation, reviewed a draft of the article and confirmed that at the time it was written, it was all factually correct. However, the Health and Safety Reform Bill is subject to change as it goes through the usual consultation process and some of the information will almost certainly be modified before it becomes law. If you need more definitive and up-to-date information you should talk directly to someone from Worksafe or to a lawyer familiar with the current Act and the proposed changes.

Changes to the Health and Safety Reform Bill will affect small-scale foresters who use contractors to work on their property. There will be a new category of ‘person conducting a business or undertaking’, with the acronym PCBU. This replaces the category of principal in the current Health and Safety in Employment Act. Having contractors working on your land means your property becomes a workplace.

This article looks at who will be responsible for health and safety in the workplace under the new law, which is due to come into force around the end of 2015. The boxed text contain extracts from the Ministry of Business, Innovation and Employment submission to the Independent Forestry Safety Review about how the Bill and phase one regulations will apply to forestry.

The Ministry of Business, Innovation and Employment is mainly responsible for work health and safety strategy and policy development, legislation and regulations.They work closely with WorkSafe which is responsible for developing guidance and approved codes of practice as well as providing education to those in the workplace participants and for enforcement of the law.

The purpose of the new Bill

The Health and Safety Reform Bill reforms New Zealand’s workplace health and safety system, following the work of the Independent Taskforce on Workplace Health and Safety and the Royal Commission on the Pike River Coal Mine Tragedy. The Bill is part of a major package of changes to the health and safety system which has resulted in the establishment of WorkSafe. It will create the Health and Safety at Work Act to replace the Health and Safety in Employment Act 1992.

The Bill imposes a primary duty on a person conducting a business or undertaking, to ensure as far as is reasonably practicable, the health and safety of their workers and other people associated with the work carried out. It imposes a positive due diligence duty on officers of PCBUs, which means those in governance roles, to ensure they comply with health and safety requirements. The Bill also outlines graduated offence categories and penalties for breaches of the duties.

The duties of a PCBU are all associated with carrying out work. The definition of a ‘workplace’ is a place where work is carried out for a business or undertaking and includes anywhere a worker goes, or is likely to be, while at work. The definition of a worker is a person who carries out work in any capacity for a PCBU. This framework effectively creates a web of responsibility, and will lead to direct incentives to include and implement good health and safety practices, starting with the forest owner right through the contracting chain.

Responsibility under the proposed new law

Moving to the PCBU concept ensures that the duties lie with people who are in the best position to control risks to health and safety at work and that those duties are appropriate to their role at work. This means that −

  • For small to medium-sized enterprises there is very little change because of the more direct influence they already have on health and safety of their workers in a business of that size
  • For larger businesses which have the obligations of principals and companies that sub-contract out work, it is clearer and obligations cannot be contracted away
  • Workers are covered no matter the working relationship as it is broader than employer-employee
  • Upstream involvement in the supply of goods and services will mean more explicit obligations relating to matters which are within their sphere of influence, and examples include designers, manufacturers, importers and suppliers of plant.

Duties of PCBUs will sometimes overlap

In practice, this means that the PCBUs in a forestry operation will all owe duties to the workers they each employ or otherwise engage or contract to do work for them. Some PCBUs, such as forest owners, are unlikely to have the same direct duty to workers on the site, because they do not cause the workers to be engaged, and the workers do not work in the owner’s business or undertaking. The manager would have more direct control of these workers than the owners in these situations.

However, the forestry owner would have a duty to the workers whose work they do in fact influence or direct. In practice, this is likely to be limited to the requirements that the owner includes in its contractual arrangement with the manager. The existing principal’s guide to contracting to meet the Health and Safety in Employment Act 1992 includes what is expected of both parties in terms of monitoring and information provision during a contract, and we consider that this guidance will continue to be applicable under the duties in the new Act.

How the system will work

PCBUs will have the duty become involved with workers and to have participation practices for health and safety matters. There is also a duty owed to other people affected by the work being carried out. Specific duties extend to upstream participants in the supply chain. There may be multiple businesses or undertakings and therefore multiple PCBUs involved in work at the same location.

The following are examples of PCBUs in different worksites or working arrangements.

  • The forest manager, the principal logging contractor on a forestry site, sub-contractors engaged by the principal contractor such as logging crew operators, logging transporters, sub-contractors engaged by those sub-contractors including self-employed contractors in the logging crews, as well as the forest owner or the wood buyer engaging any of the above.
  • A service station owner, the service station operator if different from the owner, the mechanic if running a separate business, the PCBU carrying out the supply of gas cylinders to the public at the service station, and the operator of an attached fast-food outlet.

Duties of directors under the new law

The proposed law will create a due diligence duty so that those in governance roles must actively manage workplace health and safety. Directors and other officers of a PCBU will be required to operate due diligence to ensure that the PCBU complies with its duties. Due diligence will be individual to the officer who, if they carry out due diligence, are not liable regardless of the conduct of the PCBU or other officers.

Due diligence will be defined to match the governance role of the officers. It will include, for example, a requirement that the officer take reasonable steps to gain an understanding of the nature of the operations of the PCBU and the hazards and risks associated with those operations and ensure the PCBU has, and implements, processes for complying with its duties.

Regulations will have implications for forestry sector

The provisions of the proposed general risk and workplace management regulations apply across all workplaces, including forestry. The discussion and proposals relating to the following topics in the discussion paper are likely to be of particular interest to the sector and are likely to address some of the problems identified by the panel –

  • A prescribed risk management process
  • Information, training, supervision and instruction
  • Provision of facilities
  • First aid
  • Emergency plans
  • Personal protective equipment
  • Falling objects
  • Managing health and safety risks to young people.

Similarly, the proposed worker participation regulations would apply in forestry where either health and safety representatives or committees were chosen as the way to involve workers in matters of health and safety.

Penalties under the new regime

Failure to comply with due diligence could result in prosecution and a fine, the maximum level of which would be determined by whether or not the failure exposed a person to a risk of death or serious injury or illness. An officer would only face a term of imprisonment if they were also proved to have been reckless with regard to the risk. This means that there must be proof that the officer had foreseen dangerous consequences that could well happen, together with an intention to continue the course of conduct.

There will be a new tiered liability regime and a significant increase in the maximum penalty levels over the current law to sanction and deter duty holders from breaching their health and safety duties. The use of graduated categories of offences and penalties will provide better guidance to the courts about appropriate fine levels. The Australian tiered model will be used as a basis of the new offences and the penalty regime and this is outlined below.

Category 1 – Reckless conduct This applies to a person who has a health and safety duty and without reasonable excuse, engages in conduct which exposes an individual to a risk of death or serious injury or illness, and is reckless with regard to the risk. The maximum penalty for an individual PCBU or officer is $600,000 or $300,000 for an individual who is a worker or other person, or five years’ imprisonment, or both. For a body corporate the maximum penalty is $3 million.

Category 2 – Failure exposing to serious risk This applies to a person who fails to comply with their health and safety duty, and the failure exposes an individual to a risk of death or serious injury or illness. The maximum fine for an individual PCBU or officer is $300,000 or $150,000 for an individual who is a worker or other person. For a body corporate it is $1.5 million.

Category 3 – Failure This applies to a person who fails to comply with their health and safety duty. The maximum fine for an individual PCBU or officer is $100,000 or $50,000 for an individual who is a worker or other person. For a body corporate it is $500,000.

This compares to current New Zealand law, where the offence broadly equivalent to category one carries a maximum fine of $500,000 and two years of imprisonment, or both. Conduct that would contravene the other two categories would carry a maximum fine of $250,000.

How enforcement will be carried out

Under the proposed new law the regulator’s powers include to −

  • Issue guidance, warnings and make information available
  • Enter workplaces for the purpose of informing and securing compliance and gathering information, supplemented by powers to obtain search warrants
  • Issue improvement notices, prohibition notices, non-disturbance notices, and to take remedial action and seek injunctions where they are not complied with
  • Accept enforceable undertakings from duty holders given in connection with a contravention or alleged contravention
  • Issue infringement notices without prior warning
  • Bring prosecutions.

The enforceable undertaking is new although the other methods are broadly the same as those available now. Currently, infringement notices can only be issued after a formal warning has been given, which has resulted in few being issued. This warning requirement will be removed.

As mentioned at the beginning, this article was compiled from publicly available information. It is only a guide to changes, many of which can be open to interpretation.

Julian Bateson is the NZFFA health and safety representative.


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