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Health and Safety Update – August 2017

Home Insights Health and Safety Update – August 2017

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Published on: August 28, 2017

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In April 2016 the health and safety landscape in New Zealand underwent a significant shift due to the introduction of the Health and Safety at Work Act 2015 (HSW Act).  One major change was the substantial increase in maximum fines. We have now seen the first significant sentencing decision under this Act, which confirms the widespread expectation that fines will substantially increase under the new regime, even for conduct that is not highly culpable.  

WorkSafe New Zealand v Budget Plastics (New Zealand) Ltd [2017] NZDC 17396

Budget Plastics (New Zealand) Limited (Budget) pleaded guilty to failing to ensure, so far as was reasonably practicable, the health and safety of a worker who worked for Budget, while he was at work and that failure exposed the worker to a risk of death or serious injury. This is an offence which is punishable by a fine not exceeding $1.5 million. 

The worker's hand was dragged into a machine while he was pouring recycled plastic into it on 6 April 2016, effectively amputating the worker's hand from his forefingers down to his wrist and leaving the worker with his thumb and half of his forefinger. 

Budget had previously identified issues with the guarding on the machine but had not yet addressed these concerns. 

Fine: starting point

Under the Health and Safety in Employment Act (HSE Act), the maximum penalty for strict liability offences by a body corporate was a fine of $250,000 and Hanham & Philip Contractors set out various bands to determine a starting point under the HSE Act as follows:

  • low culpability – a fine up to $50,000;
  • medium culpability – a fine between $50,000 and $100,000; and
  • high culpability – a fine of between $100,000 and $175,000.

Judge Large noted that it was not for the District Court to make sentencing guidelines and, in the current case, the proper action was to adapt those from Hanham & Philip Contractors.

Hanham & Philip Contractors identified a number of factors that are relevant in determining culpability.  Those factors remain relevant and many of these are now expressly provided for under the HSW Act.

Budget's culpability was found to be moderate. This would have fallen within the second band under the HSE Act and Hanham & Philip Contractors. Under the HSW Act, with the new penalties, the available starting point for this offending was held to be between $400,000 to $600,000. This represents a significant shift in the starting point for moderate offending, being well in excess of the former maximum penalty. 

Fine awarded

After considering the mitigating factors, this being a 30 percent discount for reparation, co-operation, remorse, remedial steps and the defendant's previous good record and a 25 percent discount for the defendant's guilty plea, an end sentence would generally be between $210,000 to $315,000, with an indicative fine of $275,000. However, after considering the company's financial capacity, a fine of $100,000 was ordered. 

Reparations

It was accepted that the introduction of the HSW Act did not affect a sentence of reparation and reparation was fixed at $37,500 through comparison to similar cases.

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