Australia's “eye-watering” H&S fines an omen for NZ

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While the dust may have settled, significant uncertainty still surrounds New Zealand’s Health and Safety at Work Act but – according to one industry lawyer – employers don’t have to wait for the first cases to find some clarity.

“Given the fact that the new regime is closely modelled on the Safe Work Australia (Model Act), the cases out of NSW, Queensland and South Australia provide useful guidance for New Zealand businesses,” says Laura Scampion, a partner at top law firm DLA Piper.

As with Australia, New Zealand employers are now at risk of much more significant consequences, including fines of up to $3 million or five years in prison. However, the majority of Aussie cases are yet to stray into this higher territory.

“In Australia, despite the huge increase in maximum penalties, this has not been reflected in the doubling or tripling of fines in District Court cases generally,” revealed Scampion. “However, there are some notable exceptions.”

Romanous

Following an offence that fell “slightly above the middle range of objective seriousness”, construction company Romanous Contractors was fined an incredible $500,000 before discounts.

“The case arose out of the death of a contractor at a construction site who fell through unsecured planks that covered a 5.1 metre penetration to the level below,” explained Scampion. “The fine was reduced from $500,000 to $425,000 after a 15 per cent discount for the company's late guilty plea.”

John Ramanous – the company’s sole director and site manager – was fined $90,000 after adjudicators found the system he had adopted was “ad hoc, unplanned and wholly inadequate.” This fine was later reduced to $85,500.

Visy Paper

Paper, packaging and recycling giant Visy Paper was fined $550,000 before discounts after a veteran employee was killed in the workplace. The forklift operator and traffic controller was struck by a reversing front end loader whilst helping to unload a semitrailer.

While the fine is notably high, Auckland-based Scampion says the company could actually have been facing a far steeper charge if it didn’t have an exemplary reputation.

“The defendant's fine could have been higher but for Visy Paper's prompt remedial steps, its 'significant commitment to workplace safety' before the incident and the fact that it accepted responsibility for its failings and expressed an apology, remorse and contrition,” she explained.

Ultimately, the fine was reduced to $412,500 due to the judge applying the full discount of 25 per cent for the defendant entering an early plea of guilty. 

“These cases demonstrate the potential exposure of large companies, small companies and directors,” stressed Scampion. “While all of these defendants had a care and concern for safety, this was not enough to prevent a significant fine before discounts of half a million dollars or more, or $90,000 for a director.”

Scampion also stresses a further point of note – that it is unlawful under the HSWA for a duty holder to insure themselves, or agree to be insured, for liability to pay a fine.

“This was also the case under the old Act,” she told HRM. “However, now contravention of this provision carries with it a fine for a PCBU not exceeding $250,000.  

“We are currently advising a number of clients on the re-drafting of some general indemnities in their contractual documentation together with those indemnities that more specifically relate to health and safety,” she revealed.

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