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How safe do you feel?
Proposed amendment to health and safety legislation may have a significant impact upon employers.
Readers of publications such as this may have noted that over recent weeks employment law commentators have been given to writing commemorative pieces in honour of the first anniversary of the Employment Relations Act. Given this tendency to reflection, one might be forgiven for concluding that the employment law environment in New Zealand is now quite settled, and that we may all take solace in "business as usual". That conclusion is, however, far from the actual fact.
Upon taking office, the Labour Government promised a comprehensive review of all of New Zealand's employment legislation. Significantly, that process involves a review of the Health and Safety in Employment Act. From a practical perspective it could be argued that this legislation has been something of a failure: New Zealand loses approximately 1.2 million work days annually to workplace accidents. In the face of this staggering number, many may be surprised to learn that, on average, the Department of Labour only brings about 260 prosecutions under the Act each year - 80% of which are only brought following an accident (rather than being focused on the prevention of accidents).
Most significantly, however, the average fine imposed for a transgression of this legislation is less than $6,000 (despite available fines being up to $100,000). Further, the practical experience of the Act is that in imposing fines, a District Court Judge is likely to order that between 50% and 100% of any fine be paid directly to a person injured in a workplace accident - arguably meaning that the real relevance of the Act is its ability to allow the prospect of a substitute for the perceived failings of accident compensation.
To address the numerous concerns held about this legislation the Government has proposed significant reform in a number of different areas. Reforms were outlined in a discussion paper which was circulated earlier this year. Having received responses to that paper, we must now await the production of a draft amending bill indicating the nature of future change.
Of all of the amendments suggested, one about which many employers may not be aware is the prospect of introducing private prosecutions into health and safety law. Rather than leave it to health and safety inspectors to bring actions against employers for breaches of the legislation, this change would allow injured employees (or, more likely, their unions) to prosecute their own employer.
While the concept of private prosecution is not foreign to the law, it might be argued that, in this particular case, a change of this nature would represent a significant amendment. The response to the proposed change has been divided - perhaps predictably with unions strongly supporting the initiative.
Employers may, however, like to give thought to a number of the potential consequences of such an amendment:
- Rather than achieving the environment of co-operation sought (consistent with the general principles of the employment legislation), it is arguable that this amendment will lead to an adversarial employment environment, with employees seeking to punish their employers where accidents occur at work.
- Because of the attitude taken by the Courts to date, employees may be given a powerful incentive to pursue a private prosecution in view of the fact that it is likely that they will receive a substantial portion of any fine themselves. Further, it is likely that any amendment will increase the level of available fines (possibly up to $500,000) - thereby encouraging a significant increase in the amounts awarded under the Act.
- From a commercial perspective, it may be easier for an employee to bring a health and safety prosecution than an employment problem: arguably, there is certainly more incentive for an employer to settle an action which might potentially cost business a six figure fine.
- It is possible that the advent of private prosecution might give rise to the creation of "professional prosecutors" (who will probably be union officials). It is at least conceivable that such individuals would practise on a contingency basis - taking fees from successful prosecutions of employers.
The introduction of private prosecutions to health and safety legislation would mark a significant amendment to our current law. Employers may care to take careful note of the draft bill when it is issued - and if private prosecutions are suggested, may like to participate in any select committee process. Watch this space?
