Business, Property & Finance

Your Guide to The Duty of Due Diligence under the Health and Safety at Work Act 2015

on Wednesday, 08 June 2016. Posted in Business, Property & Finance, Litigation, Disputes and Employment

Your Guide to The Duty of Due Diligence under the Health and Safety at Work Act 2015

The HSWA imposes an ongoing duty of due diligence on an Officers of a PCBU to make sure that the PCBU is complying with its duties under the Act. Directors can be held liable even if their PCBU is not prosecuted and face potential fines of up to $600,000 and imprisonment for up to 5 years.

Officers of a PCBU now need to be more focused on health and safety matters than ever before.

Who is an officer?

Under the HSWA an "Officer" is defined to include:

  • a director of a company;
  • a partner in a partnership;
  • any general partner in relation to a limited partnership;
  • any person occupying a position equivalent to that of a director in respect of any body corporate or unincorporated body (for example; members of school boards of trustees, body corporate members and committee members of not for profit organisations);
  • anyone occupying a position which allows them to exercise significant influence over the management of the PCBU (e.g. a chief executive).

However, volunteer officers, elected members of local authorities, members of school boards of trustee, are exempt and cannot be held liable if they fail in their due diligence duty. A volunteer is defined in HSWA as meaning a person who is acting on a voluntary basis (whether or not that person receives out-of-pocket expenses).

What does the duty of due diligence involve?

Officers are required to exercise due diligence to ensure that their PCBU complies its duties and obligations under the HSWA.  The aim is to ensure that the people in charge do whatever is necessary to achieve compliance by the PCBU.

Under the Act  "due diligence" includes taking reasonable steps to:

  • acquire and keep up to date knowledge of work health and safety
  • gain an understanding of the nature of the operations or undertaking of the PCBU and its associated hazards and risks
  • ensure and verify that the PCBU has appropriate resources and processes to eliminate or minimise health and safety risks
  • ensure and verify that the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards and risks and for responding in a timely way
  • ensure and verify that the PCBU has and implements processes for complying with its duties under the Act

An Officer's duty of due diligence involves the taking of "reasonable steps" and what is reasonable will depend on the particular role the Officer plays in the PCBU and what influence he/she is able to exercise.  In some situations it may be acceptable to rely on information provided by others and in other situations the Officer may be required to have a direct role in the management of health and safety.

If an Officer does seek to rely on information provided by others then he or she must be able to establish that it was reasonable for them to do so.

Officers must exercise the care, diligence and skill a reasonable Officer would exercise in the same circumstances, taking into account matters including the nature of the business or undertaking, and the officer’s position and nature of their responsibilities.

What practical steps can I take to make sure I am complying with my duty of due diligence?

  1. Understand what your duty of due diligence under the HSWA involves.
  2. Know what duties your PCBU has under the Act and what it needs to do comply. See our Guide Duties of a PCBU under the Health and Safety At Work Act 2015
  3. Officers should consider whether or not they should obtain expert advice from health and safety experts. But remember that overall responsibility for health and safety cannot be delegated.
  4. Think about how your PCBU will ensure that it has the right people with the right skills and motivation to manage health and safety. Allocate health and safety tasks throughout the entire organisation. Job descriptions of managers should include health and safety responsibilities and accountabilities.
  5. Ensure that your organisation has a health and safety system which is fit for purpose and which:
    • identifies and assesses work related health and safety risks
    • has processes to eliminate or minimise those risks
    • reporting and investigating incidents in a manner which identifies root causes and responds to them in a timely way
    • managing potential emergencies that may arise in the workplace.
    • ensuring that injured people are property cared for
    • engaging with workers on health and safety matters
    • worker participation – to allow workers to raise health and safety concerns, improve health and safety and contribute to health and safety decisions
    • consulting and coordinating with other organisations where they have the same duties under the HSWA
    • continually improving the system including audit and review processes
  6. At board level consider having a charter statement which evidences the board's role in health and safety matters. Consider also having a policy statement for the whole organisation which demonstrates commitment to health and safety.
  7. Obtain information from senior managers and other people involved in the operations of the business. Ensure that you have a detailed knowledge of your organisation's risks and control systems. Regularly engage with workers and managers to ascertain this.
  8. Establish who has a role to play in health and safety matters in the PCBU. Know who is doing what. Ensure that there are effective processes in place for the recruitment and training of managers to reinforce a positive health and safety culture. Make sure you get the information and advice you need from these people.
  9. Consider how your organisation is engaging with its workers on health and safety matters. What is being done to ensure that workers' views are listened to and that they are involved in the decision making processes. What processes are in place to ensure that workers have real opportunities for participation?
  10. Think about what your PCBU is doing to ensure that other PCBUs that it works with have adequate health and safety systems.  How will you work with those other PCBUs to manage health and safety matters where your PCBU has the same or overlapping duties?
  11. Make sure you know what is being done to monitor health and safety performance of your PCBU. Make sure you get reports on health and safety matters on a regular basis to ensure that information regarding health and safety flows back to you. Make sure the reports provide you with the information you need to ensure that your PCBU is meeting its health and safety obligations.  Ask questions and get more information if needed.
  12. Ensure that records are kept in relation to decisions made in relation to health and safety matters. These records should record the decision, the reason for the decision, who made the decision and why, what information was provided to make the decision.
  13. Reporting to the board should include information such as:
    • data on all accidents including ACC claims, near misses and work related ill health
    • data on absences due to sickness (can be an indicator of stress and fatigue)
    • data on issues such as high noise levels, toxic chemicals and bullying
    • progress of implementation of improvement plans and meeting policy goals
    • details of hazards which have been identified and steps taken to eliminate or minimise
    • reports on reviews and audits of the organisation's health and safety system
  14. Ensure that your PCBU has an adequate budget for ensuring health and safety compliance and meeting its obligations under the HSWA.
  15. With respect to incidents you should ensure that there are processes in place for notification of Notifiable Incidents. You should also understand the cause of any incident and ensure that steps are taken to prevent the incident recurring. There should also be follow up to ensure that any action steps identified following the incident are implemented. See our Guide – Notifiable Events under the Health and Safety at Work Act 2015.
  16. Ensure that there are periodic external audits and reviews of the health and safety system.

Officers of large PCBUs cannot rely on the fact that their PCBU has a health and safety management system in place. They should understand how it works, and take steps to make sure it is working. In smaller PCBUs, officers are more likely to have a hands-on role in health and safety. They should talk directly with workers, supervise health and safety practices and investigate incidents.

Make sure you know enough about health and safety matters in your PCBU to be able to ask the right questions and get the information you need to ensure that your PCBU is complying with its duties under the Act.

We recommend that any Officer wanting a good understanding of his or her duties under the HSWA should read the Health and Safety Guide: Good Governance for Directors developed by the Institute of Directors and WorkSafe.

For more information or assistance please contact:

Stephen Corlett

Lizandra Bailey


This information is intended to be general in nature.  You are strongly recommended to seek your own legal advice in relation to the matters dealt with here.

©    Brookfields Lawyers 2016 – All Rights Reserved


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