For generations, New Zealanders have thrived on innovation, entrepreneurship and a can-do attitude. Our economy is characterised by small businesses doing great things with very little.

Around 97 per cent of New Zealand businesses have fewer than 20 employees and small enterprises contribute one third of New Zealand's gross domestic product.

From these statistics, it is evident that many Kiwis are entrepreneurial risk-takers, willing to put their economic livelihood on the line.

Yet these very characteristics may have contributed to New Zealand's "she'll be right" health and safety culture, and our legacy of workplace harm. On average, 73 people die on the job each year in New Zealand and one in 10 is harmed.


On a per capita basis, these figures are much higher than other comparable OECD countries. As noted by the Royal Commission into the Pike River Coal Mine Tragedy, "Kiwi stoicism, deference to authority, laid-back complacency and suspicion of red tape all affect behaviour from the boardroom to the shop floor".

The Health and Safety Reform Bill, reported back from select committee last week, aims to rectify this. It forms a key part of the wider Government strategy to reduce workplace death and injury by 25 per cent by 2020.

The linchpin of the Government's strategy is the concept of tripartite responsibility: a primary duty on the person conducting the business or undertaking (known as a PCBU), supplemented by a duty of due diligence on officers and a culture of worker participation and engagement.

Essentially, the legislation proposes a three-way dialogue between a business, its governance function and its operational coalface, where each party's perspective is accorded equal value and each party is committed to building a safety-first culture.

This is borne out by the primary duty under the Bill, requiring a PCBU to ensure, so far as reasonably practicable, the health and safety of those who work for it and others whose working activities are influenced or directed by the PCBU.

As part of this duty, businesses will be required to look at the hazards and risks faced by the business, the likelihood of those risks eventuating, the degree of harm that may result and the steps that can be taken to eliminate or minimise the hazard.

Cost becomes a poor second cousin, to be considered only after the other matters, with a high threshold requiring consideration as to whether the cost is "grossly disproportionate" to the risk.

"Officers" are required to exercise "due diligence" to ensure the business complies with its health and safety duties. This will require officers to have a heightened understanding of health and safety matters and to be satisfied about the policies and processes put in place by the business and the relevant resource allocation.

The select committee has confirmed that it intends the duty of due diligence to apply only to those exercising a senior governance role. In most small businesses, this is likely to be limited to the directors and the chief executive or general manager.

With penalties of up to five years' imprisonment and/or a $600,000 fine, neither of which can be insured against, the due diligence duty is an about-turn from the current legislation, which discourages involvement of the governance function in health and safety decision making.

The third component is perhaps the most contentious for small businesses. All businesses will have a duty to engage with workers and put in place practices that provide reasonable opportunities for workers to participate effectively in improving workplace health and safety.

The "worker" definition is broad, including employees, contractors, sub-contractors, labour hire workers, apprentices and volunteer workers.

The engagement obligations are detailed and require the sharing of relevant information, a reasonable opportunity to express views, and that any views expressed be taken into account.

Larger businesses with 20 or more workers, and smaller "high risk" businesses, are required to initiate elections for health and safety representatives or establish a health and safety committee.

Opposition parties have criticised this small business carve-out as "watering down" the bill's fundamentals. However, the core worker engagement provisions remain robust and many smaller businesses may decide a committee-type arrangement is the best worker engagement tool for them, and will put one in place voluntarily.

All facets of business need to be part of the health and safety conversation. The key is establishing an environment where each part of the business recognises that their experience and views are valued, and can contribute to building a stronger health and safety culture.

All parts of the business also need to be involved in incorporating a health and safety culture into business practice. Policy manuals collecting dust do nothing but provide evidence of business non-compliance.

Businesses need to engage with workers in a way that resonates with them. Everyday processes must be cemented into a worker's work habits through practical training, testing, supervision and role modelling from more senior staff.

Less used processes and emergency management training should be frequently repeated so, if an emergency arises, workers will instinctively follow the processes they have been trained to use. The most effective training is likely to be delivered through a mixture of written documents, online tools, practical discussions and supervised activity.

Smaller, entrepreneurial businesses are at an advantage here. They can use a flatter structure, a "thinking outside the square" ethos and their more flexible size to build a workplace culture where health and safety simply becomes part of "the way we do things around here".

Building and prioritising this culture from the start will stand a business in good stead as it grows and matures.

Now that businesses have more clarity around the likely scope and timing of the legislation, it is an opportune time to contemplate the move from "she'll be right" to "everyone home safe, everyday". The time to start the conversation is now.

Christie Hall is Employment Law Leader at EY Law and Zena Razoki is a law clerk at EY Law.