Should Employers face Double Jeopardy for Health and Safety Breaches?
22 March 2024Currently, breaches of health and safety are regulated under the Health and Safety at Work Act 2015 (HSWA). The HSWA sets out significant penalties for employers that fail to comply with their health and safety obligations.
In WorkSafe NZ v Salter [2017] NZDC 26277, Salters Cartage Limited (SCL) and SCL’s director, Ron Salter, were ordered to pay a joint total of $300,000 for breaches of several health and safety and hazardous substance regulations. In addition, Salter was sentenced to four and a half months’ home detention. This was a result of a workplace death in 2015, in which a contractor died from an explosion on SCL premises whilst welding near a 96,000-litre tank containing flammable substances.
Nearly six years after the incident, the Commissioner of Police (the Commissioner) is attempting to seize $11 million worth of SCL’s assets under the Criminal Proceeds (Recovery Act) 2009 (CPRA), for failing to comply with health and safety and hazardous substance regulations.
Under the CPRA, the Police may, on application to the Court, seize assets from those that profit from criminal activity. This is also known as a “forfeiture of profits” application. As noted by the Court of Appeal in Commissioner of Police v Salter & Ors [2024] NZCA 6, this would be the first time that health and safety offences are placed within the scope of proceeds of crime legislation.
What is “forfeiture of profits” under the CPRA?
The CPRA is usually used to seize assets from those that have profited from organised or gang-related crime, drug dealing, money laundering, tax evasion and other related criminal activities.
Given that health and safety offences are often a result of unintentional non-compliance, it is difficult to reconcile employers such as SCL being treated in the same way as those who unlawfully benefitted from organised or gang-related crime. Yet, the Commissioner’s forfeiture application suggests otherwise.
What does this mean for breaches of health and safety in the future?
If the Commissioner is successful in issuing forfeiture orders against SCL, this will have a chilling effect on other business owners who may find themselves in breach of health and safety regulations in the future. Not only will future offenders fall subject to penalties under the HSWA, but they will be at risk of seizure of assets under the CPRA.
In addition, this would have a detrimental impact on small business owners (SBO), which make up a significant proportion of businesses within New Zealand. SBO’s in breach of health and safety regulations would be at risk of losing the majority of their assets, putting them out of business. It is also important to recognise the deterrent effect this would likely have on prospective SBO’s, who would become fearful of starting a business because of the high risks associated with health and safety breaches.
One may argue that this will incentivise employers to promote the health and safety of workers, however this can be achieved without subjecting employers to double jeopardy under both the HSWA and the CPRA. It cannot be said that employer’s benefit from health and safety breaches, in the same way as those involved in organised or gang-related crime. Rather, cases such as Police v Salter & Ors [2024] serve as an important reminder to employers to ensure they are well informed of their health and safety duties.
The matter will be determined in October this year when the Commissioner’s forfeiture application is heard in the High Court. Until then, business owners must be aware of the significant impact that the Commissioner’s application may have on them as employers, and the risk of double jeopardy under the HSWA and the CPRA.
For more information you can contact us: Tony Teesdale 021 920 323, Justine O’Connell 021 920 410, Michelle Battersby 021 993 735, or Esther Cohen-Goh 021 178 4111