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The NZ Initiative's Jason Krupp says Worksafe’s new health and safety regime is likely to impose a significant cost on the economy

The NZ Initiative's Jason Krupp says Worksafe’s new health and safety regime is likely to impose a significant cost on the economy

By Jason Krupp*

Imagine for a second that you are a small business owner, and one day while trawling through your emails, a bolt of lightning sizzles through the office window and strikes your assistant, killing him instantly.

Then to compound the situation, the telephone rings, and it is the police. They inform you that another employee is dead after her car struck a lamp post while on the way to work.

The two tragic events, which have a likelihood of 0.0004% and 0.01% chance, respectively, of occurring in a year, can only be regarded as the worst of all possible luck, right?

Wrong.

They are a result of your negligent behaviour as an employer, and you are liable for both deaths. So you better lawyer up quickly, start preparing shareholders for a hefty fine, and you might potentially have to tell the family that you’re going away for a few years.

At least that is what can be extrapolated from the recent announcement that Worksafe NZ, the workplace health and safety watchdog, has laid charges against the Ministry of Social Development (MSD) for a shooting at an Ashburton Work and Income office last year.

Worksafe was established in the wake of the Pike River Mine disaster as means of improving health and safety practices in New Zealand. The shift has also introduced radical new measures such as holding management and directors directly accountable for any breaches of the health and safety law within their organisations.

Two people were murdered and one seriously wounded in the Ashburton incident when a balaclava clad man wordlessly walked into the office with a shotgun and started firing. John Tully, a homeless 48 year old man, was later arrested and charged with the crimes. He was previously evicted from the office, and appears to have had a long running dispute with Housing New Zealand over his inability to secure state sponsored accommodation.

The deaths are undoubtedly tragic, but are they the fault of MSD? The family of one of the victims doesn’t think so, and has gone on record to say that “nobody could foresee what was going to happen that day”. However, Worksafe believes that MSD failed to take all practical steps to ensure the safety of their employees while at work.

But what exactly is “all practical steps” in the case of a person who walks into an office and shoots someone?

Since there was already a security guard on site, and an entry barrier can be circumvented by concealing the weapon under a coat, you can only assume that Worksafe are talking about a bulletproof screen of some kind. Perhaps even metal detectors.

Should the regulator successfully prosecute MSD it would imply that every Work and Income office in the country would have to instal these measures, at the cost of millions to the taxpayer.

But while costs would be astronomical, the upside is that it might reduce your chances of being murdered in New Zealand, which stood at 0.001% in 2012. Well, in a WINZ office at least.

Extrapolating the logic further, other government departments and private businesses that have a history of disgruntled employees and customers will have to take similar steps to ensure “all practical steps” have been taken to eliminate workplace risk, no matter how unlikely.

Banks will look like prison visiting rooms, bus drivers will have to be armed, and the iconic fish and chips experience will be akin to a visit from the bomb squad.

If this scenario sounds like an absurdity, it is because it is. It is a sign that the “elf and safety” madness that has gripped places like the United Kingdom is about to start squeezing here. Soon we’ll be banning candyfloss on sticks for fear of impaling people, forcing children to wear goggles for marble games, and banishing kettles from hotel rooms so guests don’t burn themselves when making a cup of tea. These are all actual examples from the UK.

Just switching to Worksafe’s new health and safety regime is likely to impose a significant cost on the economy. There is no exact figure available as yet, but in New South Wales it was estimated that a similar regulatory change would cost A$3.4 billion over five years. The bulk of this would fall on small firms that employ less than 20 people because they will have to hire external consultants to advise them on how to be compliant.

New Zealand could face comparable regulatory costs from the change, and this is before the unintended costs of decisions like the one outlined above are taken into account.

If decisions like this are allowed to fly unchallenged by clear thinking, we might as well shut up shop and mothball the economy right now in the face of a regulator that has zero tolerance for risk in the workplace, no matter how unlikely.

That health and safety practices in New Zealand could be improved is certainly open to rational discussion and analysis, particularly where fatalities are concerned. But the costs imposed by the regulator’s actions also need to be considered, and a balance struck.

I suspect we are going to see a strong pushback from MSD on this issue. And while my better nature would like to think it will be motivated by the absurdity of the situation, my more pragmatic side suspects it will be because Minister for Social Development Anne Tolley is personally liable for health and safety breaches under the new Worksafe rules.

Were I not an atheist, I might thank god that Worksafe has used this terrible case to pick a fight with the government.

-------------------------------

*Jason Krupp is a research fellow at the New Zealand Initiative. This is this week's NZ Initiative weekly column for interest.co.nz.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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27 Comments

There does need to be a rational approach, at the same time the old attitude of 'just use your commonsense' is a bit dated.  I don't know enough about the WINZ case, but if the WINZ office had assesed the risks of a disgruntled 'customer' walking in to cause harm, and had a chain of records to back that and show how they had taken all practical steps, practical being the key word, then they will be fine.  Did the staff even know what to do in that situation?  Who's responsible for the education of the staff?
 
Of course it's best to get a professional consultant to advise in these types of situations, you don't need to know everything when you are in business, you just need to know who to call.  It's no different to paying an accountant or a lawyer. 
 
You'll need to clarify what you call costs, obviously if you restrict your boundaries to business expenses you will have a different cost then if you included costs to employees, ACC payers, tax payers and communities.  Who is currently winning when the community pays the costs of workplace accidents?

I agree - we need to understand why they have decided to prosecute. The offender had been trespassed from WINZ - so obviously the branch of MSD had identified him as a threat to their staff. And he had known mental health issues - so it would be careless to think that such a person would willingly/rationally respect a trespass order.  The agency itself needed additional strategies to my mind to protect its staff from a potential breach of such an order. Given the individual was homeless, desperate and mentally ill with already identified violent tendancies - perhaps the Ministry should have undertaken legal proceedings to have the individual committted under the mental health act.
 
But its not just MSD who fails the mentally ill in this country - the whole system of governance around our treatment of mental health issues is desperately wanting.
 
 

Of course it's best to get a professional consultant to advise in these types of situations.  Not always.  These days farmers are expected to send staff on atv handling courses - or they can train their staff but only if they are accredited as a trainer.  Given that these atv courses are funded similarly to a 'bums on seats' basis, the robustness of some of the 'professionals' can be called in to question.  In our area (but not our farm) after attending one of these approved courses farm staff have still driven in to ditches, fences etc.  Whereas where the farmer, who isn't an approved trainer, hasn't sent their staff to an approved course but has rules and policies in place for the riding of atvs, there have been no incidents.  Farm hazard professionals will give you a template and then say - now you go and identify all the hazards on the farm.  They are not interested in helping you to actually identify any hazards, so the money is not well spent in my opinion.  Unless of course saying that you have a H & S policy means you have ticked a box.  The fact that it is more a less a one size fits all template and may not actually be that great, is irrelevant - you have ticked the box.  So the list goes on........

The farmsafe/ACC course I went on a couple of years ago (for a discount in ACC fees) was a complete waste of time.

Their biggest push was to keep a journal.  this was supposed to solve everything.  
I ppointed out to them that for small farms it wasn't relevant and for workplaces with over 3 people it was a legal requirement anyway (OSH).  They disagreed.  I pointed out that in a workplace with 1 or 2 people communication of immediate or historical hazards wasn't a journalling problem because everyone involved was already fully notified. They disagreed, keeping a journal was going to fix the accident issue.

They made more suggestions, again many of which were actually more dangerous than our normal practices.

Sending staff to ATV skool, or giving the motorbike drivers helmets is actually more risky.
the biggest problem is it creates a false feeling of security and _Risk_Compensation_ means they actually act more dangerous, more frequently.  The expert said not this wasn't correct, as people had completed the courses and a journal identified problems.  The annoying thing is you skool or certify these people then they won't listen, as they've got all the answers.   

And as farm employer I've got ACC, OSH, government, media, and court system all salivating for examples to make regardless of circumstances.  None of whom have any interest in holding an employee responsibile for their own choices or actions.  fk that.  That was the last straw for me, and why I sold up.
 

Excellent article.
 
The hideous conjunction of Elfin Safety and in the construction trade, Sitesafe, is a classic case of good intentions run riot.
 
The ol' C S Lewis quote springs to mind:
"Of all tyrannies, a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience."
 
Even a cursory look at cost imposts which did not exist two decades ago, in a residential build context, will reveal:

  • site fencing
  • scaff for roof and in general above the top plate of the walls
  • fall protection across top plates while erecting roof trusses
  • every electrical cord, tool certified annually by a certified certifier (ever wonder why the rise and rise of battery tools, which need no such palaver?)
  • notifications of all potential hazards on site (when, as Jason notes, a lighning strike incinerates some hapless roofie, the dangers posed by meteorological phemonena will have to be added - they'll need much bigger boards...and to issue well-earthed tinfoil hard-hats)
  • site meetings to discuss Today's Dangers - direct loss of tradie productivity

My own SWAG of these costs is around $20-40K per house.....

Waymad it is 3 months on those small electrical items.......and some are charging $8 a pop......annual certification is on permanent fixed electrical items......
 
Given the State is in charge of education.....and education includes common sense then....I'm thinking that all acccidents should be the Ministry of Educations fault ;-)))

Its utter madness. Even when you buy the leads brand new, they are not tagged!!
Straight out picking on Business and Managers. 
Government, Councils, Tax, Spending, Compliance, Regulations, Laws, its all out of control.
Do we really vote for all of this??? 
Are we not smart enough to not need Nanny State??
We are being brought down to the lowest common denominator. It's against evolution and it will not end well, for the next generation..  ;)
 
 
 

Nanny State has never been a democratic process.....private citizens are nothing more than State slaves who's sole role is to serve their masters in the bureaucracy.
 

it also stopped places like the salvation army re-using old appliances. destroyed that whole market.

no we didn't vote for it.  the politicians did.
that's why the existing system is so completely stupid.  all the dumb things both parties put through anyway.  the only think your vote can do is try and hold one dumb group out of power for a while (until the others start doing something really stupid - like clark government backing a nation wide push for PV vehicles nearly 10 years ago

Worksafe is run by a bunch of Pommies , who have come over here and are wreaking havoc on small businesses .
They have really gone overboard bringing with them all the over-regualtion that even the UK Government would not implement .
Relatively , NZ is quite a safe place to work and has been over the past 2 decades , with forestry and mining accidents takinf the limelight ofr accidents , although small construction site accidents predominate
These worksafe NZ  folk are frankly clueless about how over-regulation stifles business , they even check there is sunscreen SPF20 + on the building site .
They fail to recognsie that workers have some responsiblity for their own safety , and that this should be part of their training .
To hold shareholders and directors resopnsible when young employees hoon around while using dangerous equipment of fail to carry out basic safety procedusres  is BS ........
 

Its the new religion.

I have to chuckle that as an artificial breeding technician no bugger gives a damn about our safety. Getting a straw into a cow can put one in some tenuous situations. The answer is generally knowing when to say no. Never seen or heard from work and safety personnel. I bet the large animal vets dont get much coverage either. Why? Cos some jobs you cant do much about. You acknowledge there is risk and suck it up. And work and safety go pick on stupid stuff like not wearing helmets simply to make it look like they are doing something worthwhile.

P { margin-bottom: 0.21cm; }

In the case of the WINZ they have little defence.  I know the person who warned them of this sort of outcome in a general sense.  The advisor is not a some wolly headed head office wally, but he was flatly ignored.  The risk is obvious, they deal with people who are in stressed situations.  Very disturbed people are far from uncommon, it was only a matter of time, so WINZ deserve everything that Worksafe throw at them.
In a general sense I have a lot of sympathy for this article.  When we first became involved in safety management we adopted the approach of measuring and reporting it, with team investigations into all incidents and accidents. The approach of these was to understand the event and as with the airline industry, it was a no blame exercise in which everybody was motivated to improve long term safety management. Safety management was part of every bodies responsibility. Unfortunately that has all changed and it is now the realm of “professional” safety managers and in large part has degenerated into a but covering, box ticking exercise. To an extent this is inevitable because the authorities have become very prosecution focused. But then again you cannot blame them when you consider Pike River. I had some peripheral involvement with Pike River and it was clear to me that the safety culture was under severe pressure from the commercial imperatives. It is no surprise to hear rumours (from several sources) that staff had blocked out the gas detection sensors which were supposed to shut down the machinery when gas was present. It really comes down to senior management standing strong on safety, but exercising a lot of wisdom at deciding where to draw the line where people have to take responsibility for them selves and not putting so much pressure on staff that they are motivated to cut corners.

WINZ policy also creates major difficulties (not so much the fronts people, but the mechanics of the system).

_Desperate_ citizens who are in serious crisis go to that place only to be told to fk off (which is still fk off, no matter how nicely it is said), or go eat cake, or its your fault.  

Is it there any reason that those who take the thirty pieces of silver to do those fronting jobs shouldn't bear the brunt of the organisation they choose to cover for .. the desperate people haven't chosen to be desperate and in dire need of help.

The current hirage and renumeration sytsem has no fat for most of the small organisations, so people have to be very capable. have much in the way of disorder and there's no way to make a living (unless the government has bought some votes/media in that sector and pays bribes for employers to take people).   With a way to make a living where are the less than perfect people going to end up - and you know some of the types that end up making it through the hiring systems, they the idiots in your own offices and workplaces - what happens to the rest?  They are forced to the cunts at WINZ to be treated like scum - one time I went in a suit after a legal meeting, now I know how the Negroes were treated in the segrated US.  I was the wrong class, wrong colour, wrong part of town, how dare I be in their area.  They've improved past the outright abuse since then but that's one of the only things that changed (that and now one can actually make appointments rather than sit in the foyer all day while "higher priority" cases are called.  ACC are the only government agency that are worse to deal with.

A good friend was working on a transpower site fencing in summer. Temperatures were way over the 30° mark. Yet he had to wear fireproof overalls and helmet. The overalls had to cover the wrists. Ie no rolling yer sleeves up. So at 60 years of age he was digging holes in ridiculous heat in ridiculous clothing. He was at more danger from heat stroke or heart failure and pointed this out in a health and safety meeting. To be shut down and told to tow the line. Needless to say he found work elsewhere. Common sense needs to prevail or we will price ourselves out of the market. My friend was a contractor on this site. He regularly viewed employees of transpower in gangs of 3 or more doing the job of one due to these crazy rules. Why use fireproof clothing before the power lines go up???

its the rules, arse covering must be preserved.
thats why price-settor businesses are a problem

When the NZ fire service first brought in the new level 2 clothing it was found that many people suffered from heat exhaustion.....this ended up requiring a compulsory strip down and hydration protocol.......In the case of your friend I guess some people get so overzealous in following safety protocols that they look right past all immediate threats....
 
 

So if stress is a Health and Safetly issue, and one of the biggest stresses people have is housing affordability....... The question has to be 'have the Govt. taken all practicial measures to mitigate housing stress?'

Or has the Auckland and Christchurch Councils done enough to isolate, eliminate or mitigate land supply constraints they imposed???

banks did put dropping glass, and fast raising barriers in response to armed robbery.
they caused more injury than they could have ever prevented and nothing to protect customers or staff, as armed robbers could always prepare.

smarter heads prevailed eventually and the "safety measures" were removed.  Now the cash is harder for staff to get to which is far more effective, and areas more open, making robbery more difficult

MSD is likely to comply if no career or personal blame is laid, as they can showcase new compliance, and thus be seen to be doing something.

shame the "first best response" isn't an option...eliminate the hazard (by fixing the problem)

I spent 3.5 years building a simple to use online Health and Safety system with multiple staff members. This was to make management of H&S simple and generally more "fun"... Seriously!
 
The system had the capability to support the decision making progress in that the system would help you deal with your incident and hazards based on over 700 knowledge items (wisdom) gleaned from best practice. It supported Contractor Onbaording, Skills etc...
 
I have mothballed the project and the staff had to be let go :( ... they will come back when I have finance... and constanly ask me when its coming as they believe in the product!
 
BUT as I could not raise finance, or much goverment support, to fund the project and that told me a lot... Project too big for NZ and well the government .. is the government... they just have to be seen to be doing things.
 
I actually had large multi billion dollar compaines (in Oz!) keen to use the final product!
 
All is not bad news as we soon release a project for Commerical Bee Keepers... so still doing something ethical.

Dude.  the problems we really face on farm are more basic than that.

town based mechanic who don't remember to tighten nuts on brake systems, or don't bother to tap out a new thread on a stripped nut holding up a step on a tractor and just leave the bolt out.  Vehicles adapted from other uses that aren't designed for Nz conditions (eg the tractors designed for plowing, not for repeated climbing on and off as happens with Nz farming...)

Or to quote one real example:
Problem with a junior staff member giving a ride to his girlfriend on the quad bike down the race going as fast as the machine will go.  Despite repeatedly being told "no passengers", "don't go over 30km on races, 20 in paddock"
 How aware is this guy?  He actually had previously killed someone with a quad (not that it was mentioned at interview or by ex-employers as the matter was still before the courts _apparently_).

Can't fire the guy. Can't replace him. Spring is almost here.  And government insists it's the farmers responsibility....  (farmer was supposed to be on leave that weekend, but put off leaving until saturday lunchtime to finish a few jobs)

comment below.. I thought I hit reply!

Disclaimer:
I am NOT a H&S Advisor, I just was creating a recording system to support YOUR H&S processes, but I will try to answer your coment.
 
Re: Sub Optimal Mechanic
Re: Vehicle Adaptations
Our system would support your regular audits, which would be set up to automtaiclly repeat, and this hazard would be found during the audit.
Or someone reported this as a Hazard (under the new law changes, which may be law by now, H&S is everyones responsability and every person can be prosecuted for NOT reporting a known hazard - BIG CHANGE!).
Either way these problems would be recognised and added to our H&S Systems.
If the problem could not be eliminated then the problme would end up in the Hazard Register and due to the severity they would have caused Corrective Actions to be initated and tracked by your H&S system...
These would leave a paper trail back to the business servicing your vehicles which would stand up in court as you have reported possibly negligent practices.
NOW...
IF someone had a near miss or even an accident then these would result in a review (with access to ovver 750 possible suggestions to help you "solve" the problem", again supported buy our H&S system.... Corrective Actions woudl result...then " as above"..
 
 
Re: Problem with a junior staff member giving a ride to his girlfriend on the quad bike down the race going as fast as the machine will go.  Despite repeatedly being told "no passengers", "don't go over 30km on races, 20 in paddock"
>>> Despite repeatedly being told
Basically.. 
Prove it? ... or ill see you in court!
If this was recorded in our H&S system, through recording meetings or being observed as a hazard, then you have grounds for dismissal and you have some evidence that the person was NOT supposed to be doing what they did when the Dept. Of Labour turn up to fine you.
Did you give the person the skills he needed?
Did you record this in the H&S System as a skill and provide evidence of his training?
Was the person told what PPE to use?
Prove it?
 
H&S is not about doing a stiupid 1 hour couse on "Site Safe" .. It's about a REAL useful system that records things and supports your H&S processes.
Thats why our system was 3.5+ years in the making (and some time was spent doing work on other clients projects to fund it)...
Me and the team were creating a great system...  just trying to save lives... and stop good bosses getting sued for trying to run a business and provide jobs for people!
Sad.. very sad...  wanted to take it global too..
Had mines in Oz wanting it, Multi Billion car dealer chain in Oz wanting it... etc.
NZ is bad for small business...

"It is actually a great time to launch this product this year. The proposed changes to the Employment Law w.r.t Health and Safety are a game changer and will cause a LOT of changes in the industry. No longer can Directors/Manager and even employees avoid the fines. They will be responsible. I have not seen, still, a system that holds a candle to what you were building and I would still be willing to endorse your system to all my clients".  - Leigh Tobeck
 
...
 
A taskforce report released last Sunday revealed it is four times more dangerous to work in New Zealand than in the UK.
 
...
 
"Good safety is good business," Ling (Outgoing CEO Fletcher Building) said. "I would argue that reducing our accident rate by 90 per cent has saved us a fortune. The annual report makes no bones about this.”
 

Tony I would suppose Pike River and the forestry industry would have bumped our figures into the multiples of the UK. Both of which were the result of Work and Safety ignoring these industries. Clearly we need employers to take responsibility. But I have sympathy for Cowboy, where is the personal responsibility,and is there legislation to cover this. We all do dumb shit. Sometimes this kills or hurts us. It is called an accident. Sometimes it cannot be foreseen and you just cant blame anybody. Does legislation cover this? Speaking to a farm overseer a while ago he felt a workers life would cost his business $100k plus whatever the circumstance. That is crazy. Shocking to have a team member die. Shocking to be blamed for this loss of life no matter the reason.

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