What are director and executive health and safety obligations?

Executive employee and director health and safety duties have been in the spotlight recently, as we wait for the judgment in Maritime NZ v Gibson; New Zealand’s first prosecution of a CEO as an “officer” under the Health and Safety at Work Act. This article considers the duties of officers under the Act, the extent to which officers need to be in the detail of health and safety matters, and the extent to which officers can rely on advisors in order to exercise due diligence. 

New Zealand’s Health and Safety system 

The Health and Safety at Work Act 2015 extended proactive duties from those in governance to a broad range of individuals defined as “officers”; which includes directors, partners and anyone with a significant influence over the management of the business. Advisors are not included as officers. 

This change, following the Pike River Coal Mine tragedy, reflects the position of Australian law, which requires officers to exercise due diligence. 

What is good governance in health and safety? 

It is reasonable expect those exercising their duties as officers to be proactive, inquisitive and knowledgeable.   

Last month, the Institute of Directors released “Health and Safety Governance: A Good Practical Guide”[1]. It provides clear guidance, meaning there’s no excuses for those in the “C suite” to lack a general understanding about what their obligations require. 

Good health and safety governance necessitates that officers take proactive take steps including: 

• Learning and developing knowledge about health and safety, the business obligations and officer obligations. It is essential this knowledge is kept up to date, such as through training and industry engagement.  
• Understanding the business and anticipating change. Officers need to know about the nature of the business operations, its core activities, and how any changes to the environment within which it operates may impact the business and its risks. 
• Planning and resourcing the business including ensuring that there are resources and sound processes to support risk management including people and equipment. This requires planning for and financing health and safety.  
• Ensuring there is opportunity for feedback about risk, that it is heard and acted on through systems which enable the prompt implementation of any necessary changes.  
• Reviewing and verifying that controls and critical systems to manage risk are working and effective as intended.   

These steps may appear straightforward, in that they require an officer to have a deep understanding of the business, be curious to health and safety and be committed to developing and enhancing systems that address business risk. However, New Zealand continues to have high numbers of workplace fatalities and serious harm incidents, which suggests something isn’t right in how we’re addressing health and safety at work. 

Ports of Auckland Chief Executive prosecution 

In 2022, New Zealand’s health and safety regulator for activities on ships and in the port environment (Maritime New Zealand), brought charges against the former Chief Executive Officer of Port of Auckland. It was alleged that he breached his due diligence duty.   

This is the first prosecution under New Zealand’s Health and Safety at Work Act of a non-director. Previous prosecutions were predominantly against smaller businesses where the director has been heavily integrated into operational aspects of a business, thereby minimising layers that may have separated the business from the director. The charges were defended, and the case heard in April – May this year.   

Once a judgment is released, this case should provide guidance about the nature and scope of officer’s due diligence obligations. It is hoped the judgment will extend to commentary regarding how director due diligence obligations may change depending on the size of a business, and the impact of a large operation with multiple layers of management.  

Guidance offered by Australian law 

A recent Australian case by its health and safety regulator SafeWork provides some guidance for New Zealand.[2] It was recognised that it is reasonable for a director to have a level of delegation, including the appointment of capable people, as they cannot know everything happening in the business at any given moment. However, officers are required to be proactive, not reactive. This includes verifying whether agreed health and safety control measures have been implemented or attending worksites to ensure that they understand daily operations of the business. 

Guidance for employers regarding health and safety  

Health and safety must be a critical focus for all businesses. This includes taking all reasonably practicable steps to manage hazards and risk. It is insufficient for those in directorship or senior executive roles to be reactive to health and safety within an organisation. They need to be proactive and demonstrate knowledge, curiosity, engagement and a commitment to resource the business appropriately to mitigate risk.   

Alongside directors understanding what systems are in place and why, key questions should include what can be done better and how does the organisation review whether its health and safety controls are effective. Proactive commitment of leadership to a healthy and safe workplace culture moves organisations from minimum compliance and lip service to a genuinely safer and healthy workplace environment. 

DTI Lawyers specialist employment law team are experienced in guiding organisations regarding their health and safety obligations. You can contact us at on 07 282 0174 or at [email protected]