Health and Safety Update: Sentencing Trends and Enforceable Undertakings
Health and Safety / 21 March 2019
The Health and Safety at Work Act 2015 (HSWA) came into force on 4 April 2016, and since then, the Courts have been grappling with the new complexities of sentencing under HSWA including how to apply the large increase in potential penalties. WorkSafe has also been regularly exploring enforceable undertakings as an alternative to prosecution, provided offending is not classified as reckless, and on application.
Penalty ranges apply depending on the severity (how bad is the breach of duty) and degree of harm (how bad is the impact for the victim of the breach). The need to tailor the sentence to the harm led the Courts to create sentencing bands, to assist them in enforcing the HSWA, as discussed in this article. The Courts consolidated the approach to sentencing in a recent case, Stumpmaster Ltd, The Tasman Tanning Co Ltd and Niagara Sawmilling Co Ltd v WorkSafe New Zealand  NZHC 2020 (Stumpmaster).
The decisions relating to the HSWA are varied given the incidents leading to prosecution involve specific facts, but in summary, since Stumpmaster, the Courts have:
- consistently ordered fines over $200,000, but in many cases has also taken into account the financial abilities of the offending company to pay, reducing the level of penalty accordingly, as scaled to the means of the offender. Ability to pay is therefore a factor many defendants are now arguing;
- considered awards to “top up” lost income (ie the difference in the victim’s income compared with ACC payments they’ve received);
- in setting reparation awards, reviewed reparations made by the defendant to the victim already, and their behaviour post incident, as well as the impact to the victim; and
- ordered that prosecution costs be paid on a calculated basis, usually at a relatively low level in the low thousands.
Enforceable undertakings are voluntary agreements, the aim of which is to improve conditions, make amends to victims and benefit the wider industry and community usually by some kind of education or training programme funded and delivered by the offender. Enforceable undertakings are also published on the WorkSafe website, and fines apply where they are breached.
The costs relating to enforceable undertakings are significant, meaning they are not necessarily a more cost effective option than defending prosecution, but worth exploring in certain circumstances particularly while there is still significant benefit in educating industries about particular risks, aligning with WorkSafe’s overall strategy to lift the bar on health and safety.
What does this mean for you?
Health and safety sentencing takes into account a wide range of factors, and the conduct of the defendant entity in response to the incident is highly relevant, so that developing a strategy in this respect early on is necessary. Enforceable undertakings do offer an alternative to prosecution but they are expensive and public when finalised.
Should an incident occur, seeking legal advice early and cooperating with investigations is critical. If you or your business need advice on health and safety risks, our team is here to help.
Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.