First Sentencing Decision under HSAW 2015 Reveals Higher Penalties

The first successful prosecution under the Health and Safety at Work Act 2015 has occurred and the sentencing decision has revealed that the Courts will apply much higher penalties than they did under the previous health and safety regime.

WorkSafe New Zealand v Budget Plastics (New Zealand) Limited

An accident involving a plastic extrusion machine occurred at the workplace of Budget Plastics (New Zealand) Limited (‘Budget’) which resulted in the amputation of a worker’s hand, leaving only his thumb and half his forefinger. Budget subsequently pleaded guilty to failing in its duty as a person conducting a business or undertaking (‘PCBU’) to ensure the health and safety of its workers so far as was reasonably practicable.

The District Court found that Budget had not fitted the machine with appropriate guards and emergency stops. Additionally, the machine did not have adequate hazard identification systems, operating procedures or safety processes in place for worker training.

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Culpability Bands

Under the previous Act, the Health and Safety in Employment Act 1992, the Court had provided culpability bands for low, medium, and high culpability; up to 50,000, 50,000 – 100,000 and 100,000 – 175,000. However it was also made clear that the figure of $175,000 at the upper end of the high culpability band was not intended to preclude a greater fine up to the statutory maximum of $250,000. WorkSafe submitted that a departure from these bands was appropriate. It argued for a revised set of bands that were ten times higher and pushed for the “full quantum of fines available”.

WorkSafe assessed Budget’s culpability as moderate and therefore submitted that a starting point of $900,000 was appropriate. Budget argued the appropriate starting point was $200,000 and submitted that the sentencing under the new regime should produce results that are consistent with the experience and guidance provided by the Australian courts. It was accepted that the starting point under the old regime would have been only $90,000.

Decision

In assessing Budget’s culpability the Court found that there was an obvious risk of amputation to those using the machine. The incident was foreseeable and there was potential for a much more severe injury to have occurred. Weighing up all factors, the Court determined that Budget’s culpability was moderate. This would have fallen within the middle band of $50,000 – 100,000 under the old Act, however under the new regime it determined the available starting point could range between $400,000 and $600,000.

The Court then decided that the end sentence would sit between $215,000 and $315,000 depending upon the starting point adopted. This was due to reductions made to give credit for mitigating factors.

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Ability to Pay

The Sentencing Act requires the Court to consider the financial capacity of an offender when determining a fine. The Court accepted and considered submissions that a fine in excess of $100,000 would cause significant difficulties for Budget as a business. The Court found clear evidence that “a fine above $100,000 will be outside of the defendant’s means” and accordingly, the fine was reduced to the amount that Budget could realistically pay, namely the sum of $100,000.

Although the Court specifically declined to provide any sentencing guidelines, this decision certainly indicates that higher penalties will be imposed under the new regime.

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