Sentencing under the Health and Safety at Work Act 2015
WorkSafe New Zealand has reported the first sentencing decision under the Health and Safety at Work Act 2015 this week. The decision is the first guidance available about the interpretation of the Act and the quantum of fines and reparations likely to be imposed going forward.
Budget Plastics Limited was sentenced in relation to an incident in April 2016, when an employee's hand was dragged into a machine while he was pouring recycled plastic into it. The employee's hand was severed, leaving only a thumb and half a forefinger. WorkSafe reports that Budget Plastics had identified guarding issues with the machine in question six weeks before the incident but had not taken any steps to address it in the interim period, and notes that the incident could have been avoided if the known issue had been immediately addressed by improving the machine guards or isolating the machine.
Taking into account the seriousness of the incident, the employee's lifelong injury, and Budget Plastics' failure to manage and control the risks, the Court considered the appropriate starting point for the fine was in the range of $400,000 to $600,000. The fine was then reduced to $275,000 to take into account mitigating factors, which may have included the business' previous health and safety record, cooperation with WorkSafe during the accident investigation process and steps taken to address the hazard after the fact.
However, after considering Budget Plastics' financial position and ability to pay the Court imposed an actual fine of $100,000 and ordered reparation of $37,000 to be paid to the worker.
The decision emphasises the importance of not only identifying risks and hazards within your business operations, but taking immediate steps to manage and control them once they are identified. It also highlights the significant increase in penalties under the Act. Similar incidents under the previous legislation resulted in fines in the range of $30,000 to $40,000, so this decision represents a huge increase in the quantum of fines.
Our dedicated Health and Safety team are closely monitoring the way the Act is being interpreted and applied, by WorkSafe and now by the Courts, and will send regular updates to keep our clients and contacts up to date.