The Health and Safety at Work Act 2015 in its definition of ‘reasonably practicable’ describes relevant matters that should be considered when identifying available ways of eliminating or minimising the risk, and these include whether the cost is grossly disproportionate to the risk.
The legislators, possibly in their wisdom, did not provide a definition of what ‘grossly disproportionate’ means, instead employers of injured parties must wait and see how this will be judged, when the matter goes to court. These matters then become case law and the guidance for everyone else.
Chief Judge Jan-Marie Doogue, in the case of Worksafe New Zealand (WSNZ) versus Ministry of Social Development (MSD), made her judgement on the 9th of September 2016 and in doing so provided an initial indication of what ‘grossly disproportionate’ will mean for persons conducting a business or undertaking (PCBU’s) in New Zealand. Although the case itself was heard under the 1992 Act, Chief Judge Doogue used the 2015 Act in respect of costs associated with mitigating the risk.
It was deemed that one of the practicable steps that could have been taken to prevent a dissatisfied client of Work and Income New Zealand entering the Ashburton offices and shooting two people dead and injuring a third, was to have some kind of zoning model that would delay the client who was attempting to assault employees. Now, whether this actually is a practicable step that would be effective, versus implementing something that may make people feel safer than they actually are, is a matter of debate and discussion…and for another time.
The interesting element of this judgement was that the costs associated with implementing such a zoning model, throughout every MSD office in the country, were estimated to be between $50,000 to $180,000 per site, and would amount to a total cost of between $13.1 million and $27.3 million nationally. Chief Judge Doogue did not consider these costs to be grossly disproportionate to the risk posed by violent clients and stated ‘The cost must be seen in the context of a $400 million annual operating budget. I am satisfied that the associated costs are within the realms of reasonable practicability’.
So, what does this mean for every other PCBU in New Zealand? Well the message seems to be loud and clear, almost nothing will be too costly when it comes to mitigating the risk of a loss of life. For the MSD the potential cost of $27.3 million is just short of 7% of their annual operating budget, and that’s just one Ministry. What about all other Government departments that may have the potential for ‘dissatisfied clients’ causing harm? Shouldn’t they also now implement such zoning models?
In this case the operating budget may have been considered the most appropriate benchmark for a government department, which doesn’t create revenue as a private company would, but in future cases it be total revenue or profit that is used as the most appropriate criteria. Will organisations do the right thing and take steps now to ensure that workers remain safe, or will they seek to save money hoping not to fall foul of the ‘grossly disproportionate’ test?