Below are six recent cases of fines imposed under legislation. All of them are relevant to construction businesses and highlight the high cost of unforeseen breaches of legislation.

Bully Boss Fined $40,000

This one happened in Australia, but they have very similar workplace safety laws, in fact ours were modelled on theirs. So, what happens in Australia is a good indication of what could be coming here. In this case the company was convicted and fined AUD20,000 for failing to provide and maintain a safe system of work. The director was also individually fined AUD20,000 for failing to take reasonable care as an officer of the company.

Essentially, the director was found to have verbally abused, intimidated and threatened a sub-contractor over a period of four years. The bullying came to a head during the 2019 Covid lockdown. The court found that the company and the director should have provided a safe system for identifying, reporting, investigating and stopping inappropriate workplace behaviour, including bullying.

Worksafe had a guide to assist businesses with preventing and responding to bullying at work: https://www.worksafe.govt.nz/search/SearchForm/?Search=bullying&action_results=Go

Developer Fined $96,000 for Altering Protected Tree in Auckland

A property developer was found guilty under the Resource Management Act of deliberately altering a protected tree. The offence was committed after a tornado in June 2021 and the judge noted that it was a reckless and opportunistic act. The developer was fined $96,000.

Contractor Fined $40,500 for Illegal Earthworks

In this case the contractor was convicted for unlawfully carrying out earthworks without best practice erosion and sediment control measures in place, in breach of the Resource Management Act. The judge found the company was “highly culpable” and had “deliberate disregard for the rules and the environment”.

Unlawful Dumping of Material Results in $20,000 Fine

An individual was found guilty of breaching the RMA by failing to comply with an enforcement order issued by the Environment Court. This related to the dumping of tonnes of waste material that posted a serious and ongoing risk to the environment from asbestos exposure, as well as lead and zinc leaching into groundwater. A fine of $20,000 was imposed along with an order to complete 200 hours of community service.

Runaway Trailer Costs Firm $400,000

Two related South Island companies were fined $270,l000 and ordered to pay reparations of $130,000 following the death of a man after his vehicle was struck by a runaway trailer.

WorkSafe found that the companies did not have the systems to ensure vehicles were kept in good working order, or systems to ensure drivers visually checked their vehicles before use. In addition, staff had inadequate training, instruction, supervision and experience to safely use company vehicles and trailers.

This conviction follows another case from 2022 for inadequate management of trailer safety. In that case a nine-year-old girl was killed when a trailer’s safety chain failed, disconnecting it from the truck towing it and sending it into the path of an oncoming vehicle. An investigation found the tow ball and coupling were badly worn down.

Enforceable Undertaking Agreed After Worker Sustains Serious Hand Injuries

A worker at a timber processing company sustained serious injuries when his hand struck the blade of a docking saw he was operating. The company was charged with failing to ensure there was effective guarding or controls for the safe operation of the saw. They agreed to an Enforceable Undertaking that involved a total spend over over $110,000. This included making financial amends to the victim totalling $46,977 and donating $10,000 to the local fire brigade.

What Does Statutory Liability Insurance Cover?

Statutory liability insurance ensures that if a contractor breaches legislation, such as the Resource Management Act, Building Act, Fair Trading Act or Health & Safety at Work Act, they won’t be financially burdened by the resulting costs, which can be significant. Additionally, if the contractor is prosecuted under that legislation they won’t need to bear the significant legal defence costs.

From a WorkSafe perspective, contractors as PCBUs are responsible for health & safety on their worksite. Any accident could result in a WorkSafe investigation, prosecution and potential reparations being awarded to the injured person. While statutory liability insurance can’t legally insure Health & Safety fines, it will cover legal costs and reparations.

The cover is for unintentional breaches, if the offense committed is deliberate or with knowledge that it would breach the law then it will likely be excluded from coverage.

Premiums are relatively inexpensive, increasing according to the risk. For example, property developers and civil contractors may attract higher premiums due to their greater exposure RMA obligations.

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