By Grant Nicholson
Partner, Kensington Swan Lawyers
Almost all directors and senior managers understand that health and safety is a risk management issue in their businesses. This year is a time for a renewed focus on this, as law changes and international best practice improvements raise the bar for local companies.
The National led Government has adopted a bill initially introduced by Labour in 2008, and within the next few months it is inevitable that the Health and Safety in Employment Act is going to change. Technical changes to the definition of serious harm will mean that employers have to report more injury incidents to the Department of Labour.
This is a risk issue, as more reporting will mean more chance of investigation by the Department of Labour’s inspectors. A new law will also be introduced, requiring businesses to collaborate on health and safety management when employees from multiple companies are required to work together.
In March 2010 a senior British politician, the Conservative’s Lord Young of Graffham, spoke at an international health and safety conference in Scotland about the need for health and safety laws to be simplified and to reflect common sense. This call was widely rejected by industry experts. Common sense is not sufficient when running a complicated business. Many work place injuries occur when employees cut corners and ignore common sense. The Department of Labour and the courts are clear that businesses must take steps to protect employees from themselves, even if this means protecting against things that should be common sense.
In process terms, New Zealand directors and managers usually seek to manage risk and ensure legal compliance by doing what the Health and Safety in Employment Act requires – identifying all risks and taking steps to eliminate, isolate or minimise those risks. This often involves a combination of equipment, processes, training and supervision.
The British Institute of Directors has introduced a guide for directors to help them address their health and safety responsibilities. This guide includes questions directors should ask and processes businesses should implement to ensure they are managing risks appropriately. The New Zealand Institute of Directors has not published a similar guide, but could be expected to do so in the future. Even if it doesn’t, local company directors may well take guidance from the British publication.
The guide has been important in the United Kingdom as the introduction of corporate murder and manslaughter laws in 2006 has meant that after workplace fatalities, the police are now routinely leading the investigation rather than health and safety regulators. There is nothing like being compelled to attend interviews at a police station to focus the mind of a senior manager or director!
New Zealand does not currently have corporate murder laws, so you may ask ‘why do I care?’ The reality is that New Zealand’s health and safety landscape is shifting, and directors and senior managers are now in the frame in a way they weren’t even five years ago. Just ask Wayne Grattan, the managing director of Icepak Coolstores. Everyone will remember the tragic cool store fire at Tamihere in Hamilton in April 2008 because of the death of a fire fighter and the serious burns suffered by several others. Wayne Grattan was prosecuted personally for acquiescing in the failure by his company to comply with its health and safety obligation. He was ultimately fined $30,000.
The Minister of Labour, Kate Wilkinson, has recently challenged all businesses to improve health and safety performance in New Zealand, and the Department of Labour is looking for cases where it can pursue enforcement action against directors and senior managers, in the hope it will promote personal responsibility and motivate them to ensure their businesses do better.
So, what should directors and senior managers do? The clear message from the Scotland conference was that the most important thing is building a positive health and safety culture. This requires accountability, and visible support from senior management. Management must both talk the talk and walk the walk. Good systems are a must, but managers must also demonstrate their personal commitment to safety by asking good questions and acting safely themselves.
The challenge for 2010 and beyond is to ensure that your business takes sufficient steps to manage risks and, equally importantly, that you can demonstrate compliance. After all, do you want to be the next manager or director facing personal prosecution?
Contractor Vol.34 No.7 August 2010
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