The Health and Safety at Work Act 2015 (H&S Act) introduced substantial increases in the available maximum penalties, and prohibits insurance against fines. The first sentencing decisions under the new regime give businesses a sense of what to expect if they breach the new standards.

Worksafe New Zealand v Budget Plastics (New Zealand) Ltd [2017] NZDC 17935

In this case, various H & S issues contributed to an accident in which an employee lost most of his hand, and was exposed to a risk of death or serious injury. The District Court adapted the new legislation and penalties regime to the approach to sentencing established under the previous legislation. This meant a 3-step test:

  1. assess the amount of reparation. The District Court noted that reparation is governed by the Sentencing Act 2002, and is unaffected by the new H & S Act. Here, reparation of $37,500.00 was awarded;
  2. assess the appropriate fine. Following the previous approach, the District Court looked at three sentencing bands, to make an assessment of culpability as low, moderate or high. Here the level of culpability was moderate, for which the starting point was now a fine of between $400,000.00 and $600,000.00.

In this case, there were notable mitigating factors such as remorse, remedial steps and a guilty plea. Accordingly, the starting point was reduced to a fine between $210,000.00 and $315,000.00; and

3. overall assessment of the proportionality of reparation and fine imposed. Here there was evidence that a fine over $100,000.00 would be beyond Budget Plastics’ means. The District Court held that the case was not so severe as to warrant a fine that would put the defendant out of business. Accordingly, the fine was reduced to $100,000.00.

Worksafe New Zealand v Rangiora Carpets Ltd [2017] NZDC 22587

Here, H & S issues contributed to an accident in which a worker was severely injured after falling through a false ceiling. The District Court continued the approach from Budget Plastics, but with certain refinements:

  • here the District Court favoured a more nuanced approach to culpability, using six sentencing bands: low, low/medium, medium, medium/high, high and extremely high culpability. In this case, culpability was low/medium, engaging a sentencing band of $150,000.00 to $350,000.00.

The starting point was determined to be $300,000.00, but again mitigating factors such as a guilty plea saw this reduced, to $157,500.00.

  • the District Court also introduced a further step in the analysis between steps (2) and (3) above: consideration of whether to make an ancillary order. The H&S Act provides for the courts to make orders such as injunctions, training orders and orders for payment of the regulator’s court costs. Here WorkSafe was awarded 50% of its costs in bringing the prosecution.