"Sounds good for victims, but employers now have to pass on ACC levies plus reparation insurance premiums. Guess who to?"Featured comment
Research under way on the fines for workplace injuries or fatalities could see the financial punishment for employers increase, a Queen’s counsel warns.
Nigel Hampton says findings of a University of Canterbury study on penalties imposed on employers of injured or killed workers may lead to hikes in the maximum level – currently at $500,000.
Christchurch-based Mr Hampton recently represented miners' union the EPMU during Royal Commission hearings into the Pike River Coal mine disaster, in which 29 men died in a series of explosions in November 2010.
"This research may well result in the Ministry of Business, Innovation and Employment (MOBIE) calling for an upping of the sentencing tariff generally, again, and seeking amendments to the sentencing limits within health and safety in employment laws, by further raising the maximum financial penalties able to be imposed," he says.
"It's a very useful piece of work. It will be helpful for lawyers and judges as a sentencing tool.
"I can see it being cited, by prosecuting and defence lawyers, during argument or submissions as to size of fine and of reparations in health and safety employment prosecutions.”
University of Canterbury is researching the size of sentencing fines in the 2438 successful prosecutions of employers in cases of injured or killed workers over the last 18 years.
Data indicates that in the last four years the average fine of an employer in a successful prosecution has risen from $13,000 to $33,000, and a medium to high culpability finding increased fines by more than $30,000.
The maximum penalty of $500,000, for a section 49 offence under the Health and Safety in Employment Act, has never been imposed. Most offences under the act carry a maximum of $250,000 for a section 50 offence.
Penalties were hiked substantially after the Department of Labour, now the MOBIE, made a successful appeal to the High Court in 2008.
It argued that the fines imposed by the District Court were inadequate and did not reflect the five-fold increase in the maximum fine that Parliament had written into the Health and Safety in Employment Act.
University of Canterbury economics and finance researcher Dr Andrea Menclova says the level of fines increased substantially after that.
"Our research indicates that the cases used in the appeal were largely representative of District Court health and safety in employment sentencing of that time and that the then Department of Labour had been trying to create a precedent for large increases in fines in health and safety in employment sentencing in general," she says.
"The degree of harm suffered by the employee is not nearly as significant when determining the level of fines, but continues to be very important when determining reparations.
“For example, an employee’s death does not seem to affect the level of fines but it increases reparations by about $20,000.”
Although fines had increased since the appeal, the mean level of reparations has not increased as much.
Even the penalty for fatal harm has remained relatively constant, or possibly decreased slightly, mitigating the impact of the legislation on total employer financial liability – fines and reparations combined, Dr Menclova says.
And employers are now awarded bigger discounts for financial limitations than they once did.
Before the appeal, an employer’s financial limitations reduced total financial liability by around $12,000 and this has now risen to $19,000.
“It will be interesting to see whether the Department of Labour considers the new sentencing practice adequate or whether further increases in health and safety in employment fines will be called for,’’ Dr Menclova says.
The university research team is looking at the following factors in its research: Degree of employer's culpability, degree of harm resulting, employer’s safety record, the presence of employer's financial limitations, remorse, co-operation with the authorities, remedial action, guilty plea, the need for general and particular deterrence (as viewed by the judge), employer size, the presence of voluntary payment by the employer, attendance at a restorative justice conference, employee culpability and the number of victims and related defendants.