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First OSH Prosecution Under New Act - $137,500

Published 04 Sep 2017

From a workplace accident in April 2016, the first prosecution under the new Health & Safety at Work 2015 Act (HSWA) went through Palmerston North District Court last week, costing the firm $137,500.

Budget Plastics (NZ) Ltd have to pay $37,500 in emotional harm reparations and a $100,000 fine after an employee had a portion of their hand amputated while operating a plastic extrusion machine.

The Company who had in the weeks prior to the accident engaged a consultant to do a Health & Safety audit but failed to address the issues found, including the lack of guarding for this particular machine.

Following a WorkSafe investigation several points of failure were outlined:

  • inadequate safe operating procedure for use of the machine
  • inadequate policies for training workers in the safe use of the machine
  • insufficient machine guarding
  • lack of appropriately fitted and located emergency stop controls
  • inadequate systems in place for identifying hazards in the workplace

Being the first prosecution under the new Act, the level of the fines are the biggest takeout from this case.

Under the previous Health and Safety in Employment Act (1992) fines from machine guarding cases usually ranged between $30,000 to $40,000 on average. In this case WorkSafe suggested that a starting point of $900,000 was appropriate.

The Judge however, recommended a fine start point of between $400,000 and $600,000 given the level of culpability from the Company. This was then reduced to between $210,000 and $315,000 based on mitigating factors such as the Company's engagement with a Health & Safety consultant and guilty plea. The fine was then set in the range of $275,000 but finally reduced to $100,000 based on the company’s ability to pay, backed by the Company's accounting evidence.