Additional Liability Options

Under the Health and Safety at Work Act 2015 directors and other officers will now be directly liable if they fail to exercise due diligence to ensure their organisation complies with the Act.

An officer is a director, partner or person occupying a position in an organisation that is comparable to that of a director. An officer also includes a person who holds a position that allows them to exercise significant influence and control over the management of a PCBU.

A breach of the duty to exercise due diligence is a criminal offence attracting a maximum penalty of $600,000 and up to five years imprisonment for serious offences. These penalties are imposed on officers personally and are over and above any penalty that is imposed on the PCBU.

The owner and director of a building company died and left his shareholding to his widow. However, the company was unable to survive and became insolvent, leaving a number of customers' projects unfinished and suppliers owed money.

Creditors put the company into liquidation and an action was brought against the widow as sole director of the company for the money owed to creditors.

The court found in favour of the claimant as it was no defence that the widow was not well versed in the company's business.

The D&O policy covered the legal defence costs and damages awarded.

An Auckland-based commercial building contractor got into trouble and was put into liquidation.

The liquidators pursued the director personally under the Companies Act, as the business had been trading while insolvent for many months.

The liquidators sought to recover losses by taking the director's house and other property that was jointly owned by his wife.

The D&O cover responded under the "Spousal Liability" extension to protect the partner's interest also.

The Employment Relations Authority (ERA) ruling said Steve was paid $25 an hour under the table. He was never provided with a letter of appointment or an employment agreement. Tax was not being paid to Inland Revenue, so he had no tax records regarding the identity of the employer, the ruling said. After he was fired over the phone in early 2017 Steve took the matter to the ERA.

In mid-January 2017 a new foreman entered the fold and told Steve not to come in to work the next day The ERA said Steve was unjustifiably dismissed because the dismissal process was minimal and unfair and he was not consulted about a possible redundancy.

A Christchurch man was awarded nearly $30,000 for unjustified dismissal after he was sacked for sharing details of his salary with a co-worker. James was hired in June 2017 as a salesman for Whitehouse Builders, a Christchurch building firm, along two other sales staff. After his base salary was reduced he discussed this with another staff member, who confronted the employer and subsequently resigned.

Whitehouse claimed he had not dismissed James, but had told him to go so that there was some space for them both to cool off. However, the ERA found James was unjustifiably dismissed and suffered an unjustifiable disadvantage in his employment by having had his pay reduced unilaterally, and was entitled to a payout. He was awarded $28,630, after a 30 per cent discount was applied due to breaching good faith by revealing his salary.

A builder doing renovation work had a falling out with their client and was accused of theft of jewellery. The homeowner laid a complaint with Police who investigated and this led to charges being laid. These were eventually dropped, but there were many hours of lawyer’s fees to pay.