28.08.2019

Could a Health and Safety Breach Mean Jail Time?

In August 2019, a United Kingdom judgment imposed a custodial sentence on a site supervisor who was involved in breaches of the Health and Safety at Work Act 1974 (UK Act) that caused the death of a worker in 2014.  This article considers the potential for a similar outcome in New Zealand.

The Health and Safety Executive (the UK equivalent of WorkSafe) brought charges claiming that Clancy Docwra Ltd, a UK based construction company, failed to ensure, so far as was reasonably practicable, the safety of its employees and of others who were not their employees working onsite.  The company was prosecuted for breaching their duties under the UK Act, and upon conviction this resulted in a significant fine of £1,000,000 (approximately NZ$1.9m) and an order to pay costs of £108,502.30.

Daniel Walsh, a Clancy Docwra site supervisor, received a custodial sentence for 6 months (suspended for 12 months) and was ordered to pay costs of £15,000 as a result of his failure to observe his duty.  Mr Walsh was not a Chief Executive or a director, but was another worker in a supervisory capacity.

Could a similar outcome occur in New Zealand?

The general health and safety duties imposed on employers and workers in New Zealand and the UK are aligned.

The UK Act requires an employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all their employees and those exposed to risk by their activities.  Employees must take reasonable care for the health and safety of others who may be affected by their acts or omissions at work.

This is very similar to the Health and Safety at Work Act 2015 (HSWA), which requires employers to ensure, so far as is reasonably practicable, the health and safety of their workers and those influenced or directed by them.  Workers also have a duty to take reasonable care that their acts or omissions do not adversely affect the health and safety of other persons.

When HSWA was being debated in Parliament in 2015, it caused some excitement about custodial sentences that could be imposed in respect of breaches of “officer” duties which could affect directors and senior executives, such as CEOs.  A high-profile director of a NZ company suggested that he would resign to avoid the possibility of jail time.  There were stories of principals clear felling schools to try and avoid liability for a tree-related accident.

An analysis of the UK Act and HSWA makes it clear however, that the standard in New Zealand under HSWA for custodial sentences is considerably higher.

  • In the UK, the prosecution need only prove there has been an exposure to a material risk. Where there is a conviction, the courts then determine the appropriate sanction through to custodial sentences.
  • Under HSWA, the highest possible penalty is reserved for engaging in reckless conduct that exposes others to a risk of death, serious injury or illness. For individuals, maximum penalties include custodial sentences of up to five years and/or a $600,000 fine, whereas Persons Conducting a Business or Undertaking (PCBU) can be liable for fines up to $3 million.

In other words, under the NZ Act, reckless conduct is required for a custodial sentence; under the UK Act, a mere breach will qualify.  Reckless conduct will require the prosecution to show that an individual knew or ought to have known that its action or omission would cause harm.

Custodial sentences, particularly of other employees, are far less likely to occur in New Zealand.

For example, in August 2019, a Hawke’s Bay fruit juice company whose employee was killed after being dragged into machinery was fined $367,500 and ordered to pay reparation of $141,000 to the employee’s widow.  The machinery causing the death had been imported from China and had not been fitted with a New Zealand Standards compliant interlock that would have prevented the machine from operating when the machine’s guarding was open.

Arguably, the risk of death or serious injury could considered to be “foreseeable” where such an obvious and rudimentary deficiency existed, however WorkSafe did not prosecute on the basis that the PCBU’s omission was reckless.  We are aware of cases taken by the Department of Labour (WorkSafe’s predecessor) for ‘reckless’ breaches, and so there is precedent for the regulator looking to bring such charges where the facts demonstrate knowledge of the risk.  However, none of these were brought against other employees.

As a general proposition though, unless the company or individual have engaged in reckless conduct exposing others to a risk of death or serious injury, the penalty will be limited to financial consequences.  The sentencing judgments have routinely demonstrated the fines that are being imposed are substantial, and so the message remains that an investment in prevention of harm is the prudent course of action.

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