Clean, Green, Equitable New Zealand has a dirty little secret. Compared with similar countries, our workplace health and safety record is grim. Not only are workplace deaths tragically frequent, but occupational injuries and illnesses are rife.

In a bid to address this, changes to New Zealand’s workplace health and safety legislation have been in the works since the Pike River Mine disaster in 2010. But only recently has the updated legislation, in the form of the Health and Safety at Work Act 2015 (HSWA), come into force.

While this might not seem relevant to investors, the new Act applies to those in the business of residential property. This means that whether you are a landlord operating rental properties or an investor carrying out a development or extensive renovation on their property, it is essential to know how the HSWA applies to you.

In this article, we find out what the new health and safety legislation is all about and what it means for investors.

Making Work Safer

According to WorkSafe New Zealand, every year 52 people die on the job, while hundreds of people are injured and 600-900 die from work-related diseases. It has long been accepted that these figures are far too high. The HSWA is intended to improve the situation.

Workplace Relations and Safety Minister Michael Woodhouse says it heralds the start of the journey towards better health and safety practices in the workplace. “The new law makes it clear that everyone has a role to play in health and safety, Woodhouse says. “It modernises our approach to health and safety and recognises the complexity of 21st century workplaces by encouraging more communication and co-operation, both within and between businesses.”

In his view, the HSWA strikes the necessary balance between ensuring workplaces are safe without imposing unnecessary red tape on business. “It does not require business to eliminate all risks in the workplace at any cost – that’s not realistic. But it does require that risks are dealt with in a sensible and proportionate way by those who are best placed to influence or control work.”

Who’s A PCBU?

Under the new Act, there is a new legal concept known as a Person Conducting a Business or Undertaking (PCBU). While a PCBU will usually be a business entity, like a company, a PCBU can also be an individual. A PCBU has a duty to ensure the health and safety of workers and others affected by any work they carry out. A Worksafe spokesperson says the landlord of a property is considered a PCBU. As such, they have a duty of care to ensure the health and safety of everybody involved with, (or affected by) work on site, "so far as reasonably practicable".

The people who could be affected include the tenants, contractors engaged by the landlord, or members of the public. Duncan Cotterill associate Jessie Lapthorne says the new law places responsibility on landlords, as PCBUs, for the health and safety of any contractors engaged by them to carry out work on their property.

For example, when employing an electrician to do work on a rental property, a landlord has to ensure the person hired is competent, suitably qualified and has appropriate health and safety controls in place. “If a landlord engages a contractor without carrying out appropriate checks and a worker, tenant or someone at the property is injured in connection with that work, they could be liable under the HSWA,” Lapthorne says.

Landlord Obligations

As a PCBU, a landlord has a duty to ensure health and safety “so far as is reasonably practicable”. This means it’s about what they can reasonably do to manage health and safety, the Worksafe spokesperson says. “If more than one PCBU is involved in the situation, the PCBUs must work together to ensure health and safety, but they are only responsible for what they can influence and control.”

For example, if a landlord engages a plumber for repairs on a rental property, the landlord has control over engaging that company. “They can meet this duty by assuring themselves they are contracting a bona fide reputable company. But, once the plumbing company is on site, the landlord will have little influence or control over their day-to-day work.

“The risks created by the plumbing company on the job are up to them to manage. But if the landlord knows about a risk on the property (eg: difficult access or a dangerous dog), it should let the plumber know. It should also let the tenants know that work is being done.”

She adds, however, that the extent of responsibility will usually be less for residential property owners than for commercial property owners. This is because the duties only apply when work is being carried out at or on a property.

Further, it is worth noting that landlords are not liable for the actions of the tenants while they are living in the property, Lapthorne says. “Therefore, if a tenant takes it upon themselves to carry out repairs on the property the land owner will not be held responsible if any injury results.”

Responsibility Exemption

For property owners, there is to a degree an exemption from responsibility in the new Act.

The definition of a PCBU does not include the occupier of a property, even if they employ or engage another person for residential work, Lapthorne says. “This means that a home-owner or a tenant won’t be classified as a PCBU, even if they have a cleaner, gardener or nanny, or if they engage a builder, plumber or electrician to do work on the house.”

Somebody running a business from their home, however, will be a PCBU in respect of any work connected to the business. “In some cases there may be a grey area as to whether something is residential work or not, for example where a cleaner cleans both the home and office areas of a house.”

Shared Responsibilities

Under the new Act, landlords will have to work with their contractors when it comes to health and safety. This could get complicated if there are multiple PCBUs involved – as there would be on an extensive renovation, for example.

Lapthorne says that, in such situations, the landlord will be one PCBU, while each contractor undertaking work will be another.

“But a landlord cannot just rely on the contractor to manage the health and safety risks. Nor can a landlord specify in the contract that the worker will take care of all health and safety matters as contracting out of the duties in the HSWA is prohibited.”

To this end, a landlord needs to ensure that a tradesperson is competent and appropriately qualified and have appropriate health and safety management systems in place. Lapthorne recommends that landlords prequalify contractors before engaging them to carry out works on their property.

Development Concerns

Investors embarking on small or large developments need to be fully aware of their responsibilities under the new Act, too. As with extensive renovation jobs, new build projects are complex as they involve multiple PCBUs and workers.

WorkSafe New Zealand construction programme manager Marcus Nalter says every party involved – including the developer – will have duties to ensure the health and safety of the workers on site that they influence or have control over. “Where they have overlapping responsibilities for the same workers they have a duty to consult, co-ordinate and cooperate with each other to ensure that duty is met,” Nalter says.

Volunteer officers Have a duty of due Diligence but can’t be Held liable for a failure To meet that duty – Carly Edward

This is known as “overlapping duties”, he says. “In practice, what it means is the person or business that is best placed to manage a risk that affects more than just their own workers has primary responsibility to do so but everyone has to play their part.”

Ultimately, the new law is designed to encourage co-operation on site. For example, many building sites already start the day with a toolbox talk. “Having open lines of communication between workers, supervisors and managers has always been a good idea.

The new Act specifically encourages that sort of approach by introducing a duty to engage with workers that applies to all workplaces. Health and safety doesn’t have to be difficult and doesn’t have to mean a lot of paperwork, Nalter says. “It starts with identifying risks, talking about them with anyone on site that might be affected, and finding appropriate ways to manage them.”

While it is not possible to eliminate all risks, the key is doing what is “reasonably practicable” to control and minimise risks. “So identify onsite risks, the likelihood of an incident and the consequences of them. Your control measures should reflect the seriousness of the risk.”

Body Corporates

For apartment investors, the new Act has an added complication. Body corporates qualify as PCBUs – and have to ensure the health and safety of those involved with, or affected by, work on the common areas of the property for which the body corporate is responsible.

Crockers body corporate team manager Carly Edward says if an investor is a body corporate committee member they have a duty to ensure the body corporate is doing what it needs to do under the new Act.

“Officers themselves don’t have the duty to keep people safe – that is the duty of the PCBU (the body corporate), but as leaders of the body corporate you should make sure the body corporate is doing the right things to manage risks (so far as is reasonably practicable),” Edward says. “Volunteer officers have a duty of due diligence but can’t be held liable for a failure to meet that duty.”

The body corporate, the body corporate manager, the building manager and anyone carrying out work for the body corporate can have overlapping duties, she says. “Everyone has a role to play in keeping people safe and healthy, but with responsibilities that match what they can reasonably influence and manage.”

Meth Contamination

Meth contamination of rental properties is currently a hot topic. Perhaps accordingly, concern has been widespread that the HSWA means landlords will need to do meth tests between tenants – or they could be accused of renting an unsafe property.

But the WorkSafe spokesperson says under the HSWA, a landlord would not be expected to test for meth presence in a rental property as a matter of course.

She said if a landlord believes tenants are using or manufacturing meth in a rental property it has nothing to do with the new Act, but they should inform the police. “If a landlord believes an untenanted property has been used for meth usage or manufacturing, they should arrange for it to be tested and cleaned up to ensure it is fit for residence before it is re-let.”

In either situation, a landlord should not allow anyone working for them to enter a property if they believe it has been used for meth manufacturing, rather experts should be employed to deal with the property.

Breaching The Hswa

Failure to comply with the new Act could incur heavy penalties. A range of penalties, from the issuing of improvement notices to criminal proceedings, may result from non-compliance.

Jessie Lapthorne says that if an HSWA breach was identified, WorkSafe would be notified and they may then investigate. “If WorkSafe then decided to prosecute one or more of the PCBUs for a breach of their obligations under the Act, charges would be laid and the matter would proceed through the court system.”

WorkSafe won’t investigate all incidents they are notified of, nor will all incidents warrant criminal proceedings. It is likely WorkSafe will focus their attention on the more serious incidents, like fatalities and incidents that require hospitalisation, she says.

However, this is new territory for all involved. It was very uncommon for a landlord to be prosecuted under the old health and safety regime, Lapthorne says. “There was the odd example, such as where a landlord engaged an unqualified person to install a gas appliance. But the obligations under the new Act are broader and more clear, so it may well be easier for a landlord to be prosecuted now.”