Health and Safety Amendment Bill: Alignment, ambition and what’s missing

Not addressed as the IoD sought, except for:

• Smaller organisations where directors or managers hold multiple roles, with the focus on their responsibilities as officers or owners
• Providing an exhaustive list of duties for officers (i.e. directors and executive management)

Move to a more educative function for WorkSafe and other Health and Safety regulators.

Limited, if any, focus on governance understanding and enforcement capability.

Include a new provision for organisations with more than 20 employees and a board, committee or similar governing body where governance is separate from executive management. The provision would define the specific responsibilities of the board and executive management in relation to “officer duties”, including a collective duty for boards.

Add a new clause, in addition to clause 21 of the Amendment Bill, along the following lines to sit within Section 44 (Duty of Officers):

“(X) This subsection applies to a PCBU that –
(a) is not a small PCBU; and
(b) has a board, council, committee, or other governing body whose role is separate from the day-to-day management of the business or undertaking.

(Y) For the purposes of this [section] –
(a) the governing body, acting collectively, is responsible for the exercise of due diligence in its governance capacity, including –
(i) setting clear expectations, policies, and strategic priorities for the management of work health and safety, including the management and prioritisation of critical risks;
(ii) ensuring that the PCBU has in place appropriate systems for oversight, assurance, and reporting to enable the governing body to verify that the requirements of subsection (5) are being met; and
(iii) monitoring, through appropriate assurance processes, the effectiveness of those systems and the PCBU’s performance in meeting its duties under this Act;

(b) executive management is responsible for –
(i) implementing the policies, priorities, and expectations set by the governing body;
(ii) establishing, operating, and maintaining the resources and processes necessary to manage risks to health and safety in accordance with this Act; and
(iii) providing timely, accurate, and sufficient information to the governing body to enable it to meet its duties under this section.

(Z) The duty under this [section] is owed –
(a) by each member of the governing body individually; and
(b) by the governing body collectively, and the collective duty is not discharged solely by the actions or omissions of one or more individual members.”

Where an organisation has a governance board and separate executive management (most often in organisations with more than 20 employees), the responsibilities of “officers” for health and safety are different (i.e. boards are responsible for strategy, policy and oversight, and executive management is responsible for day-to-day operations).

In smaller organisations, as the Bill highlights, these roles are not separate and the Bill clarifies this. However, the Bill does not address the current lack of attention to the difference between governance and management for organisations with boards. The resulting lack of clarity continues to create confusion and compliance costs.

Reduce to more reasonable levels, or remove, the stringent uninsurable personal penalties on individual directors in the current law, and make clearer that this is for negligence and not acting in good faith.

This follows direction of amendments the Minister of Commerce and Consumer Affairs is making to the Credit Contracts and Consumer Finance (CCCFA), which remove the liability for the due diligence obligation (s 29). These reforms highlighted perverse outcomes for lending practices and seek to address them.

The same is true with this penalty regime, which results in a focus on compliance with the letter of the law, rather than the spirit of governance that the IoD advocates (see Pillar 4 – Compliance of the Four Pillars of Governance Best Practice).

Create an effective co-ordination mechanism across government to ensure a systemic approach to health and safety matters, rather than the current piecemeal approach.

This might include amending section 195 – Health and Safety at Work Strategy to require the Minister to publish the strategy in this section at least every three years.

One of the biggest issues in the health and safety at work regulatory and wider system is the inconsistency and lack of connection within government for policy development, legislative design, implementation and monitoring.

A legislative requirement would provide a foundation and platform for addressing this issue.

Requiring the Minister to publish a Health and Safety at Work Strategy every three years would support a systemic approach, as section 195 requires cross-agency input and analysis.

Include a provision in the Bill that makes it easier to publicise lessons from poor health and safety governance practice, and to highlight sound health and safety governance practice arising from settlements with organisations following regulator enforcement action.

This could be done by adding relevant provisions to Part 4, Subpart 4 (Enforceable undertakings) of the Health and Safety at Work Act 2015 – for example, a new section 124A authorising the regulator to publish lessons and governance practices arising from settlements and enforceable undertakings. Such a provision would need to include appropriate safeguards relating to personal safety, personal information, legally privileged information and commercially sensitive information, among other matters.

Adopting this proposal would extend provisions in the Amendment Bill that provide greater guidance from regulators on approved codes and standards.

It would also build on the Health and Safety governance good practice guide by providing illustrations of governance practice that supports improved health and safety outcomes – and those that do not.