PCBU duties - The three Cs

Employment Update

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In April 2016, New Zealand's Health and Safety in Employment Act 1992 was replaced by the Health and Safety at Work Act 2015 (Act). Our July 2015 and September 2015 updates provide a thorough explanation of the changes. One of the key changes introduced by the Act is the duty of a person conducting a business or undertaking (PCBU) to consult, co-operate and co-ordinate its activities with other PCBUs.

Section 34 of the Act states:

If more than 1 PCBU has a duty in relation to the same matter imposed by or under this Act, each PCBU with the duty must, so far as is reasonably practicable, consult, co-operate with, and co-ordinate activities with all other PCBUs who have a duty in relation to the same matter. 

Non-compliance with section 34 carries with it a fine not exceeding $20,000 for an individual or $100,000 for any other person. 

The Act essentially mirrors the Australian Model Work Health and Safety Act 2011 (Model Act) and, therefore, we have been waiting to see how the Australian courts would interpret this duty as, up until recently, there was no case law on this point. 

However, in late May 2016, the Australian Industrial Relations Court (Court) in Boland v Trainee and Apprentice Placement Service Inc. ([2016] SAIRC 14) convicted and imposed a fine on a company for failing to, so far as reasonably practicable, consult, co-operate and co-ordinate with another business/duty holder in relation to the same matter. 

Background 

Trainee and Apprentice Placement Services Inc (TAPS) is a not-for-profit business that places apprentices with contractors to gain work experience. TAPS had placed a roofing apprentice in a role with a roofing contractor. The apprentice was working on a roof under the guidance of the contractor and suffered multiple injuries when the gutter he was working on came into contact with high voltage wires. 

TAPS was prosecuted for failing to consult with the roofing company about their health and safety policies, to ensure the safety of its workers. TAPS had undertaken an audit of their operations prior to placing the apprentice with the roofing contractor; however, the Court held that the audit was inadequate as there were no safety measures on site. The presence of the high voltage wires was an obvious hazard that should have been identified. 

Decision 

Both the Australian Model Act and New Zealand Act allow a fine to be imposed, not exceeding $100,000, where a company contravenes the duty to consult, co-operate and co-ordinate. The starting point for a penalty in this case was $20,000, which was reduced by 40% to $12,000 in recognition of TAPS early guilty plea, quick efforts to improve safety systems, and continued support of the worker and his injuries. The Court also commented that TAPS had a previously exemplary record as an employer and that they were generally very aware of their health and safety obligations. Similar mitigating factors would likely be applied in an analogous New Zealand case. 

It is unclear from the judgment whether the roofing company has been prosecuted; however, the company in control of the site, Inspire Construction Services Pty Ltd, had gone into liquidation. It is likely that they too would have been prosecuted, had they been solvent at the time of prosecution. 

Conclusion 

The case shows that the duty to consult, co-operate and co-ordinate is real, and fines will be imposed for non-compliance. It is likely that this decision will influence the New Zealand courts and we will watch with interest to see how the duty is interpreted here. 

We are currently working with a number of organisations to amend their relevant contractual documentation to reflect this new duty. Franchise arrangements and landlord/tenant relationships can be particularly vulnerable in light of this duty. Furthermore, those organisations that host contractors on their workplace (whether or not they are directly contracted) will also need to bear this duty in mind when considering the relevant health and safety duties. 

If you have any questions, or require assistance with amending your contractual documentation to reflect this new duty, please contact us.