The Christchurch rebuild is the biggest urban reconstruction undertaking in New Zealand's history. And it's triggering a growing focus on health and safety in worksites - not just for large construction companies, but also for subcontracting sole traders.
At the same time the Government is planning to overhaul health and safety legislation, once it has digested and reviewed the recommendations of the independent taskforce on health and safety, delivered in April.
Some commentators believe the reform may extend duties to company directors by imposing a health and safety regime of due diligence.
In post-earthquake Christchurch, some companies have been prosecuted, following accidents in the workplace. Recently the High Court fined an employer $60,000 after an employee was seriously injured falling from a roof. It appears OSH and the judiciary are taking a strict line with companies that have failed to take the necessary practical steps to ensure the safety of their workers on worksites.
There is now a general expectation in Christchurch that companies involved in dangerous activities, including construction, must have a comprehensive drug and alcohol policy. In fact, some major construction companies now require that not only all subcontractors establish a drug and alcohol policy but also that all staff and subcontractors pass a drug detection test before being allowed on a worksite.
This raises several questions. First, can a subcontractor legally impose a drug and alcohol policy on existing employees, when none was previously in place? The answer may well depend on what is in the employment agreement. A properly drafted employment agreement would contain clauses allowing for a drug and alcohol policy to be introduced. However, if there isn't such an allowance, then the employer may need to undertake a formal consultation process with its workforce about the proposed introduction.
Secondly, can a subcontractor claim a breach of contract against its principal contractor, if the principal contractor decides mid-contract that all the subcontractor's employees must now be screened for drug use? Again, the answer may well lie in the terms of the contract.
Some contracts will stipulate quite clearly that the subcontractor, its employees and own subcontractors must abide by all the rules of access to the worksite and any later changes. They may also refer to health and safety rules. In such a clear situation, the subcontractor would have to abide by that requirement. However, the situation isn't so clear if the subcontract was oral.
So for example, you may well have a situation where a major national construction company will subcontract to a regional company which in turn will subcontract to sole traders. Most contracts between the major national companies and regional subcontractors contain the necessary clauses requiring the subcontractors to abide by worksite rules and any later changes.
However, more often than not, the subcontract to the sole trader will be oral and/or just a plain scope of works. In this situation, introducing a drug pre-screening obligation could well place the regional company in breach of contract with the sole trader, as it would in effect be unilaterally varying the contract.
We are seeing in Christchurch a shift where even sole traders are introducing alcohol and drug policies, in order to tender for some of the rebuild work.
In view of the likely significant shift in health and safety policy making, all New Zealand employers are well advised to review their health and safety policies, and in particular how they manage drug and/or alcohol abuse in the workplace.
John Shingleton is general manager of Malley & Co and the partner responsible for employment law.