An alternative to prosecution under health and safety legislation
Enforceable undertakings were introduced in the Health and Safety at Work Act 2015 (HSWA) as an alternative to prosecution. An organisation that has breached its health and safety obligations, and is under investigation by WorkSafe, can enter into a binding agreement with WorkSafe to remedy their breaches, rather than going through prosecution and sentencing. In this article we discuss the features of this alternative and the potential benefits of taking this path.
Enforceable undertakings are not an easier or lower cost alternative to prosecution, but there are other benefits to a business.
Firstly, by entering into an enforceable undertaking your organisation can avoid the cost, time and negative publicity associated with prosecution and sentencing, and avoid a significant fine.
Secondly, enforceable undertakings are required to address the breach, provide compensation for the victim and their family, and to also have a wider industry or community benefit. Organisations can ensure that even where a tragic accident has taken place, there can be positive outcomes.
Since the HSWA came into force in April 2016, WorkSafe has entered into 21 enforceable undertakings. Common features are for an organisation to:
• Commit to address health and safety issues identified as a result of the breach or subsequent investigation, and to provide health and safety training to its workers to ensure the breach does not recur
• Provide compensation to the victim or their family (usually topping up the victim's ACC to 100% of their lost earnings and paying additional reparations) and, where possible, it commits to future assistance for the victim
• Agree to develop, fund and implement industry-wide initiatives to improve health and safety more generally across their industry. For example, Fletcher Construction was required to establish a health and safety forum with local hire companies, and
• Commit to a community-focused contribution or initiative. Examples include establishing tertiary health and safety scholarships, significant donations to charitable organisations, and public advertising campaigns on health and safety.
WorkSafe will not accept an enforceable undertaking where it does not provide benefits for the organisation, the victim, and the wider industry and community.
Significant cost to undertake
Given the high costs of enforceable undertakings, an average of $178,402, enforceable undertakings have proved popular with larger organisations that have the resources to negotiate and implement them (for example, Zespri, Downer and Fletcher Construction). It remains to be seen whether smaller organisations will also embrace enforceable undertakings, and how WorkSafe will take into account the financial and resourcing constraints those smaller organisations will face.
Prosecutions under the HSWA can have very serious consequences for your business, both financially and reputationally. If you are being investigated by WorkSafe, we highly recommend that you talk with us and consider whether an enforceable undertaking is the right path for you.