21.08.2018

No Longer Stumped: The Health and Safety at Work Act 2015 Sentencing Guidelines

The High Court at Auckland has released its first and much-awaited decision under the Health and Safety at Work Act 2015 (HSWA).

The matter arose from three appeals from District Court sentencing decisions – Tasman Tanning Company, Niagara Sawmilling Company and Stumpmaster had each appealed on the basis that the District Court got it wrong when imposing sentences for their breaches under HSWA. The three appeals were heard together.

Reviewing the existing guidelines

The High Court took the opportunity to review the existing guidelines for sentencing bands for offending under the previous health and safety legislation. These were previously outlined in Department of Labour v Hanham & Philp Contractors Ltd (Hanham & Philp).

It found the approach to sentencing under HSWA requires four steps:

1. Assess the amount of reparation;

2. Fix the amount of the fine by reference first to the guideline bands and then having regard to aggravating and mitigating factors;

3. Determine whether further orders under sections 152 to 158 of HSWA are required [this is a new step, arising out of HSWA’s inclusion of additional sentencing option, such as Training Orders and Adverse Publicity Orders]; and

4. Make an overall assessment of the proportionality and appropriateness of the combined packet of sanctions imposed by the preceding three steps. This includes consideration of ability to pay, and also whether an increase is needed to reflect the financial capacity of the defendant.

When fixing the fine, the following guideline bands should be used:

Low culpability Up to $250,000
Medium culpability $250,000 to $600,000
High culpability $600,000 to $1,000,000
Very high culpability $1,000,000 plus

The High Court stated that the approach set out in Hanham & Philp must be modified to reflect the additional potential orders available to the sentencing court under HSWA, but noted that the Hanham & Philp factors for sentencing remain relevant and do not require rewording.  The High Court was also concerned that overly high routine standard discounts distorted the sentencing process by reducing the starting points to the extent that outcomes become too low.  It emphasised that the statutory response to these low fines had been to greatly increase the maximum.

The High Court’s decisions

 All three companies pleaded guilty in the District Court to breaches of  sections 36 and 48 of HSWA.  Section 48 imposes a maximum possible fine of $1.5 million.  The High Court was asked to consider whether or not the District Court erred in the way it had given effect to the statutory increase for the maximum available fine.  Having established the overall guidelines that the courts should adopt in sentencing matters, the High Court considered each of the three appeals separately:

Tasman Tanning

A forklift driver at Tasman Tanning was exposed to toxic gas at work, which caused him to knock his head, become concussed and experience symptoms for five weeks.  The company admitted breaching several duties, which included: inadequate rules to prevent departures from procedures; inadequate communication protocols; inadequate training and warning about hydrogen sulphide; and failing to provide workers, including the forklift driver, with appropriate protective equipment.  The District Court imposed a fine of $380,000.

The High Court identified the starting point for the fine should have been $550,000 rather than $700,000, as the company was not expected to have protocols in place for what was a one-off, made-up activity by senior employees.  However, it also found the minimum appropriate uplift was 10 per cent, as there had been a previous incident only three years ago, which also involved a lack of suitable equipment, and the 30 per cent discount for mitigating factors applied in the District Court should have been 15 per cent.  The High Court quashed the District Court’s fine of $380,000 and imposed a fine of $363,000.

Niagara Sawmilling

 In Niagara Sawmilling, a worker partially amputated two of his fingers on a grader/trimmer machine.  Despite an external specialist previously recommending changes to the machine, the company’s health and safety adviser disagreed with the expert’s view, and the company did not make the change.  The company also had three previous convictions.  The High Court found that the District Court’s starting point of $500,000 was correct, noting that the company had been fortunate in the sentencing exercise. 

Stumpmaster

Stumpmaster had put out cones to protect the area on the road where a tree might fall, but a pedestrian walked into the area and was hurt by a falling tree, which put her in hospital for six days.  Although the arborist had completed a hazard report when it commenced the work, that manner in which that part of the road was protected was inadequate.  The District Court adopted a starting point of $450,000 to $500,000, which was reduced by 30 per cent and 25 per cent for a guilty plea, then reduced again to take into account what Stumpmaster could actually pay (it was a small, one-person company). The District Court sentenced Stumpmaster to a fine of $90,000, $18,500 in reparation, and costs to WorkSafe of $1,000.

On appeal, Stumpmaster challenged both the level of fine on the basis of inability to pay and the costs order.  However, the High Court dismissed Stumpmaster’s appeal, finding that the starting point for the fine should have been around $550,000, as the District Court judge’s culpability assessment equated towards the top of the medium culpability band.  It also found that the costs challenge was without merit and said that costs were not reserved solely for cases where punishment is merited.

Lessons learned

On the whole, the new sentencing guidelines for HSWA aren’t too different to the old guidelines for the previous legislation – the proportionate levels for the sentencing guideline bands are similar (although there are now four new bands), as well as the aggravating and mitigating factors that the court will consider when deciding to raise or lower the fine.  However, fines are getting steeper and the discounts for mitigating factors are getting smaller.  Parties in situations that may fall under the relevant sections of HSWA should respond to an event as soon as possible and with great care.

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Contact the expert team at Hesketh Henry.
Kerry
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

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