Important Changes in Health and Safety Law

Reform Initiatives Plan for improved service delivery by MBIE Plan for improved service delivery by MBIE

Legislative Reform Health and Safety at Work Bill Based on the Australian Model Work Health and Safety Act. Based on the Australian Model Work Health and Safety Act. Object is to ensure workers’ health and safety Object is to ensure workers’ health and safety New offences and increased penalties New offences and increased penalties New duty to take “reasonably practicable steps” New duty to take “reasonably practicable steps”

Health and Safety at Work Bill Features A broader duty on “persons conducting a business or undertaking” A broader duty on “persons conducting a business or undertaking” A presumption in favour of the highest level of protecting workers from harm A presumption in favour of the highest level of protecting workers from harm Comprehensive regulation of major hazard facilities Comprehensive regulation of major hazard facilities Increased interaction between new regulator, other government agencies, and work places. Increased interaction between new regulator, other government agencies, and work places.

Health and Safety at Work Bill Features Increased worker consultation and involvement in health and safety Increased worker consultation and involvement in health and safety The new regulation will be underpinned by regulations, approved codes of practice, and guidance materials The new regulation will be underpinned by regulations, approved codes of practice, and guidance materials New due diligence duty on directors and officers New due diligence duty on directors and officers

Health and Safety at Work Bill Timeframe WorkSafe currently being established and will be operational in December 2013 WorkSafe currently being established and will be operational in December 2013 The Bill will be introduced to Parliament in December 2013 and enacted by the end of 2014 The Bill will be introduced to Parliament in December 2013 and enacted by the end of 2014 A funding review of WorkSafe will be conducted in December 2015 A funding review of WorkSafe will be conducted in December 2015

Implications of change What will be required? HSEA requires all practicable steps to be taken to safeguard health and safety HSEA requires all practicable steps to be taken to safeguard health and safety All steps that it is reasonably practicable to take in the circumstances having regard to prescribed matters All steps that it is reasonably practicable to take in the circumstances having regard to prescribed matters MHSL imposes a test of reasonably practicable steps MHSL imposes a test of reasonably practicable steps A step which is, or was at a particular time, reasonably able to be done taking into account prescribed matters A step which is, or was at a particular time, reasonably able to be done taking into account prescribed matters

Implications of change Who will be affected? HSEA contains separate but parallel obligations for different duty holders HSEA contains separate but parallel obligations for different duty holders Australian MHSL imposes a single obligation on all “persons in control of a business undertaking” Australian MHSL imposes a single obligation on all “persons in control of a business undertaking” Increased emphasis on upstream suppliers, e.g. designers, manufacturers, and suppliers of plant, substances, and structures Increased emphasis on upstream suppliers, e.g. designers, manufacturers, and suppliers of plant, substances, and structures Additional due diligence obligation on those in governance roles Additional due diligence obligation on those in governance roles

Implications of change Due diligence role for those in governance Individual liability for directors and officers under the HSEA Individual liability for directors and officers under the HSEA As an officer, director, or agent who authorised, assented to, acquiesced in, or participated in a corporate failure As an officer, director, or agent who authorised, assented to, acquiesced in, or participated in a corporate failure More direct liability under the MHSL More direct liability under the MHSL Officers must exercise due diligence to ensure the PCBU complies with its obligations Officers must exercise due diligence to ensure the PCBU complies with its obligations Due diligence requirements prescribed by statute Due diligence requirements prescribed by statute

Implications of change Due diligence role for those in governance Institute of Directors Guideline Institute of Directors Guideline

Implications of change Enforcement : Penalties New ZealandAustralia Offences and Penalties Action/inaction knowing that it is reasonably likely to cause death or serious injury – fine of up to NZ$500k and/or two years’ imprisonment Failure to comply with duties – fine of up to NZ$250k Offences and Penalties Category 1 (reckless conduct)  $A3million : corporate  $A300k/600k : individual/officer and/or five years’ imprisonment Category 2 (conduct causing / exposing person : serious harm)  $A1.5 million : corporate  $A150k/300k : individual/officer Category 3 (breach of duty)  $A500k : corporate  $A50k/100k : individual/officer

Implications of change Enforcement : Penalties Changes will drive the new regime to be similar to Australia Changes will drive the new regime to be similar to Australia Introduction of the three-tier system Introduction of the three-tier system  Reckless conduct  Exposure to risk of death or serious harm  Other failures Individual fines proposed to range from $50k to $600k, with increase in maximum prison term to 5 years Individual fines proposed to range from $50k to $600k, with increase in maximum prison term to 5 years Fines will also dramatically increase for corporates (up to $3m) Fines will also dramatically increase for corporates (up to $3m)