Health and safety is still on the agenda, even while the government presses the pause button.
Shelley Major, Managing Director of Major Consulting Group Ltd discusses the benefits of acting, rather than reacting.
Many people seem to be greeting the new health and safety legislation as a temporary aberration. The thought is that the government will wake up and see how much additional cost health and safety compliance is imposing on the economy, and then wind it back. In the meantime and until that happens, businesses could ignore the issue.
Kaching! Did you hear the cash register ring? That was the sound of the fine going into the consolidated fund.
Those who take that approach may well be falling at the first hurdle: failing in their primary duty of care to keep people safe.
If that failure exposes someone to the risk of serious harm – i.e. harm has not yet occurred, only the risk – then under the proposed legislation, the fine can be tripled to $300,000 for an officer and $1,500,000 for the organisation.
Other important points to note are:
- You cannot insure or otherwise indemnify yourself from the fines.
- The draft Health and Safety Reform Bill allows the Court to check your capacity and ability to pay a fine, so they can increase it.
This is not going to go away. While people complain about the cost of compliance, they don’t see the $3.5B that workplace injuries cost the country last year. That’s a lot of money, never mind the personal cost suffered by tens of thousands of people each year.
You may also have noticed that the regulator is more active than ever, holding organisations to account under the current Health and Safety in Employment Act. WorkSafe NZ has its own legislation and a mandate to reduce deaths and serious harms by 25% by 2020. The Crown entity has increased staff numbers to 500, including 300 inspectors, and, with the support of the court, is actively enforcing compliance.
The current health and safety legislation has been around since 1992. I recall the initial reaction at the time – Friday night drinks in the office were cancelled! They have come back, but there is a risk of a similar reaction occurring. All fun events will be cancelled until further notice – or until we forget why we cancelled them.
That isn’t the solution. The obligation is to identify the hazard and understand the risk, then put in place appropriate controls and monitor their effectiveness. While elimination is the first line of defence, that may not be the appropriate control. So you don’t need to over-engineer a control to protect people from paper cuts!
The bigger challenge is ensuring that, as an officer, you understand the risks posed by others in your value chain. For example, are your sub-contractors’ employees appropriately trained and competent? How do you know? Does your building have asbestos? What is your landlord doing about it to keep your people safe?
Non-executive directors are particularly exposed. They need confidence that the systems are in place and are effective. One of their due diligence obligations under the proposed legislation is to ensure resources are not only available, but are being used. As an example, an entity with a contract to project manage an office fit-out must ensure the visiting client has and wears PPE, since the project manager has control over the work site.
Bigger organisations can afford a health and safety manager. The risk is that staff abrogate responsibility for health and safety to that person. The HR function has had a similar problem: managers have pushed HR problems to that department, rather than take responsibility for managing their people.
Health and safety must become everyone’s concern if the intent of the legislation is to be effective. Ticking boxes will not be enough: health and safety must become simply part of the way we do business.
That is a big cultural shift for a country like New Zealand, which prides itself on values such as “she’ll be right” and “number 8 wire”. The shift will need to be led from the top, clearly demonstrating the organisation’s commitment to maintaining a healthy and safe workplace. Of course, that is the situation now. The key difference in the future will be the size of the incentive and the authorities’ determination to make a significant improvement in our Health and Safety record.
Who really wants to be the poster child for a jail sentence?
Major Consulting Group undertakes independent health and safety audits for boards and management. If you are short of capacity or capability, they can also assist to implement the recommendations, tailoring practical solutions to manage your risks according to your risk appetite and budget.