9.05.2018

Leading from the front on Health and Safety – what all directors need to know

The government is committed to holding directors to account for their company’s performance in health and safety, and assisting them to understand and manage their responsibilities.

When it comes to matters of governance, the buck stops with the directors of a company. In matters of health and safety, this concept has perhaps become a little forgotten. The government is committed to holding directors to account for their company’s performance in health and safety, and assisting them to understand and manage their responsibilities. One of the recommendations to come out of both the Royal Commission into the Pike River tragedy, and the Independent Taskforce on Health and Safety, was the need to ensure directors are taking overall responsibility for managing health and safety within their workplaces.

To this end, the Ministry of Business, Innovation, and Employment (MBIE), together with the Institute of Directors, has introduced a guideline document: Good Governance Practices Guideline for Managing Health and Safety Risks.

This Guideline does not have the force of Legislation or a Code of Practice, but is certainly something that the Court “may” (and in fact, is likely to) take into account in deciding whether a director has met his or her statutory obligations. Under the present Act (the Health and Safety in Employment Act 1992), a director can be liable where the company has committed a breach of the Act. A director can be charged where it is clear that he or she directed, authorised, assented to, acquiesced or participated in the company’s failure to comply with a provision of the Act.

There are certainly cases when this has occurred – the fatal explosion and fire at a coolstore at Tamahere near Hamilton in 2008 being one example. Following this tragedy, a director of Icepak Coolstores was convicted and fined $30,000 for acquiescing in the company’s failure to take all practicable steps to ensure the safety of employees. There are also a number of other, often smaller, companies where both company and directors (or other officers) have been prosecuted for health and safety failures. Following Pike River, Peter Whittall was charged with a number of counts of acquiescing in the company’s breaches of the Act. Those charges have yet to be heard.

The Independent Taskforce’s review of Health and Safety has recommended that the current Act be repealed, and replaced with something more akin to the Australian Model Work Heath and Safety Act. Under this legislation, officers of a company are required to take reasonable steps to:

  • a. Acquire and update knowledge on health and safety matters
  • b. Understand the operations being carried out , and the hazards and risks associated with them
  • c. Ensure that the person(s) operating the business has and uses appropriate resources and processes to manage health and safety risks
  • d. Ensure that the person(s) operating the business has appropriate processes in place to receive and respond to information regarding incidents, hazards and risks, and
  • e. Ensure the person(s) operating the business has and uses processes for complying with duties or obligations under the Act.

It is likely that the proposed new legislation for New Zealand will contain provisions very similar to these. We understand that the government is aiming to have the new legislation in place, and coming into force by October this year.

In the meantime, the Guidelines are certainly something with which all directors should familiarise themselves. It is clear that the courts will take a dim view of those directors who fail to take health and safety seriously, or who plead ignorance as to their obligations.

The Guidelines set out four key element for directors. These are:

  • Policy and Planning (setting a Health and Safety Policy, targets, and managing the managers’ performance in health and safety)
  • Deliver (exercising due diligence to ensure that health and safety system is fit for purpose, keeping informed about industry best practice, and how the company is measuring up, ensuring that sufficient resources are available)
  • Monitor (outline expectations on health and safety reporting, review reports, failiarise themselves with risk audits, assessments and incident investigation, and seek expert advice if needed)
  • Review (ensure there are formal reviews to assess the effectiveness of health and safety management, if necessary, by an independent advisor)

The document goes on to outline the respective responsibilities for directors and managers under each element, and includes ‘diagnostic’ questions to assess the current state of compliance, and guide directors’ future actions.

Directors ignore the Health and Safety Guidelines at their own peril. It is incumbent upon all directors to familiarise themselves with their obligations, ensure that their managers are doing what they should, and that the company is doing what it ought with regard to keeping workers safe. As the Guidelines state; “Directors should never turn a blind eye to health and safety information. If they become aware everything is not as it should be they need to take decisive action”.

As always, if you need assistance with understanding and meeting your obligations under the Health and Safety in Employment Act, please contact us to set up a discussion.

 

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
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Media contact - Kerry Browne
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