Health and safety reform: Key implications for directors and officers

Following much publicity around its proposed reforms, the Government introduced the Health and Safety at Work Amendment Bill last month, representing the most significant reform to the Health and Safety at Work Act (HSWA) since its introduction in 2015.  

The Government has made clear its objectives in the lead-up to the Bill, with consistent statements of its intention to refocus the legal framework towards preventing serious harm, reducing unnecessary compliance requirements and providing greater certainty for businesses. However, in practice the impact of these reforms, particularly for directors and officers, could be increased compliance activity and uncertainty. 

The key amendments to the HSWA are: 

• • Prioritising ‘critical risks’ 
  • Reducing the duties imposed on ‘small PCBUs’ 
  • Addressing suggested confusion between the HSWA and other legislation 
  • Amending director duties 
  • Strengthening the role of approved codes of practice 
  • Refocusing WorkSafe towards providing guidance, rather than enforcing the law 

Of particular interest, from a governance perspective, are the proposed changes to officers’ duties. This article considers whether these reforms will deliver on the Government’s ambitions to simplify officers’ responsibilities and reduce compliance requirements. 

The scope of the amendments 

The Bill introduces a definition of ‘critical risk’ that captures two alternative categories: specified high-hazard activities listed in a new Schedule 1A (such as asbestos, mining, hazardous substances and adventure activities), and a catch-all test capturing any hazard likely to result in death, a notifiable injury or illness, a notifiable incident, or an occupational disease. 

While failure to prioritise critical risks will not itself constitute a separate offence, PCBUs will need to demonstrate that critical risks have been identified and that greater resources are devoted to their management. However, the Bill also creates a category of ‘small PCBUs’ (those with fewer than 20 workers), who are only required to manage critical risks under their primary duties, and all other PCBUs, who must manage all risks but prioritise critical risks.  

The concept of focusing on critical risk is a good one. However, all businesses will have to undertake new activities to determine what risks they are required to manage. Businesses will also need to work out what risks meet the definition of critical risk. 

For large organisations, this will increase the complexity of their safety management systems and record keeping. For small businesses, it creates additional activities and record-keeping requirements that are not required under existing legislation. It is likely that many small businesses will need to seek specialist advice on navigating the complexity of what is a critical risk. 

For directors and officers, this raises questions about how boards should recalibrate their risk oversight frameworks. The Bill defines ‘prioritise’ to include managing critical risks before other risks, monitoring and reviewing controls for those risks more frequently, and applying a higher proportion of risk management resources to them. 

Boards will need to consider the extent of the effort to maintain broader risk management practices and how to address their responsibilities prudently.  

The Bill also strengthens the role of approved codes of practice (ACOPs). Industry bodies may develop draft ACOPs for regulator review and Ministerial approval. Once approved, ACOPs will receive ‘safe harbour’ status, meaning compliance with the code is deemed to be compliance with the law. 

However, directors should note that only two existing ACOPs – the Approved Code of Practice for Loading and Unloading Cargo at Ports and on Ships (2024), and the Approved Code of Practice: Safe Practice for Forestry and Harvesting Operations (2025) – will receive safe harbour status from commencement. All other existing ACOPs will retain their current evidential status until reviewed and reapproved by the Minister. ACOPs remain non-binding; a person may still demonstrate compliance through other means. 

The Bill also proposes to amend regulator priorities to focus on advisory functions rather than enforcement. This formalises the Government’s stated intention to shift WorkSafe from an enforcement-focused agency to one that ‘engages early’ and ‘supports businesses and individuals to manage their risks’.  

While responsible businesses will likely see some benefits from more advice, ‘cowboy’ operators can continue to undercut pricing in their markets by operating less safely, exposing workers and the public to greater risk, and now with lower chances of being caught. Directors and officers should also be mindful that early engagement with the regulator, while encouraged, may generate records that could later be used in enforcement proceedings. 

Officers’ duties  

The scope of officers’ duties under section 44 of the HSWA has been hotly debated in recent years, following several significant cases on the subject. 

In Sarginson v Civil Aviation Authority [2020] NZHC 3199, Murray Sarginson, a partner of an earthmoving business, was convicted of two charges of engaging in reckless conduct which resulted in the death of his business partner, Liam Edwards. In 2016, Mr Sarginson and Mr Edwards were flying to a worksite in Mr Sarginson’s helicopter, when reduced visibility and compromised balance due to overloading of the helicopter caused them to crash. Mr Edwards died at the scene.  

Critically, Mr Sarginson was acting as the pilot at the time of the incident – an operational role distinct from his responsibilities as an officer. 

Mr Sarginson argued that the duties imposed on officers were limited in scope to governance functions, and accordingly, he could not be found guilty of the charge in his capacity as an officer. The Court rejected this argument, holding that the supervisory nature of officer duties did not detract from the fundamental obligations placed on officers in respect of their other activities within the business. 

The Court observed that while directors of large companies may primarily perform oversight functions, this distinction is particularly significant for small businesses, where officers often operate in a dual capacity, undertaking hands-on roles in addition to their governance responsibilities. 

On a different, but related note, the case of Maritime New Zealand v Gibson [2024] illustrated the potential liability on officers in the wake of tragedy. While the factual circumstances of the two cases differed significantly, both raised fundamental questions about the scope of the officer’s due diligence obligation and the extent to which officers can be held personally accountable for systemic failures in health and safety management. 

In the early morning of 30 August 2020, Mr Pala’amo Kalati, a stevedore at the Port of Auckland, was crushed and killed by a shipping container which fell from a crane when its locking mechanism failed. The former Port of Auckland Chief Executive, Anthony Gibson, was charged and convicted for failing to meet his HSWA duties as an officer. 

These decisions served as a wake-up call for business executives and provide context as to the environment within which the Bill has been introduced. Against this backdrop, an area the Bill seeks to clarify is the scope of due diligence obligations for officers. It also seeks to address perceived confusion regarding the extent of officer accountability under the current framework. 

The Bill provides that an officer’s due diligence obligations under the HSWA will now apply only to their role as an officer, not to activities they perform in another capacity within the PCBU. This effectively overturns the approach followed in the Sarginson case. However, given that the definition of ‘officer’ remains unchanged, encompassing directors, partners and any person exercising significant influence over the management of a business or undertaking, the effect of this amendment may be more limited than many anticipate.  

Senior executives whose roles are inherently supervisory – such as Mr Gibson – will still be required to observe the due diligence duty in full. However, the Bill does make two notable changes to the due diligence framework itself.  

First, the current open-ended (inclusive) list of due diligence steps is replaced with an exhaustive list, which may narrow the scope of what can be expected of officers. Second, the obligation to understand work health and safety matters is now confined to matters ‘as they relate to the business or undertaking’, rather than requiring a broader understanding of health and safety generally. 

Taken together, these changes attempt to restrict the scope of an officer’s duties, confining liability to the due diligence obligation alone and providing a closed set of steps by which that obligation is to be discharged. This is a material change which may provide genuine relief for a specific group: directors and officers of small businesses who also work ‘on the tools’.  

For these individuals, the Sarginson decision created significant uncertainty about whether their operational activities could attract officer liability. The proposed amendments appear designed to address this concern, separating the governance function from hands-on work and limiting officer liability to the former. 

For owner-operators and officers of small businesses who perform dual roles, the distinction between officer and worker capacities may provide meaningful protection, though it may also create difficulties in determining where one role ends and another begins. 

Officers in this position should carefully document the different capacities in which they act, and ensure appropriate systems are in place to manage risks arising from their operational activities, separate from their governance oversight. This introduces another new compliance and record-keeping activity for small businesses.  

It is also worth noting that, for officers of small PCBUs, the scope of the due diligence obligation is further narrowed: because a small PCBU’s duties under sections 36 to 43 apply only in relation to critical risks, the officer’s corresponding due diligence obligation is similarly limited to ensuring compliance with those critical risk duties. 

For directors of large organisations whose functions are primarily supervisory, the amendments offer little change as their due diligence obligations remain substantially the same.  

Perhaps the proposed amendments to officers’ duties may offer less practical change than anticipated, though the shift to an exhaustive list of due diligence steps and the narrowing of the knowledge obligation are developments worth monitoring.  

While the Government has indicated an intention to progress these reforms within the current parliamentary term, the Bill is still in its early stages and will be subject to select committee scrutiny.