Conviction overturned in Whakaari White Island proceedings

The High Court did not agree and held that WML did not:

• Owe a duty under s 37 of the HSWA because it did not ‘actively manage and control’ the workplace in a practical sense; or
• Breach any duty under s 37 of the HSWA that it might have had. 

The key findings are:

• “Management and control” of a workplace will fall on a continuum, from mere ownership of the workplace at one end to control over the work carried out at the workplace at the other. 
• Whether a PCBU “manages or controls” a workplace under s 37 of the HSWA is a factual question that depends on the nature of the workplace, and the PCBU’s actual power to control the workplace as part of its business or undertaking in practice. PCBUs cannot avoid liability by not exercising powers of control that they possess.
• In assessing what constitutes a “reasonably practicable step” by a PCBU who controls a workplace, the courts will consider whether the underlying access agreements impose robust health and safety obligations on the PCBU(s) actually carrying out the work. While PCBUs cannot contract out of or disclaim their duties under the HSWA, contractual mechanisms can be a reasonably practicable step to eliminate or minimise risks in certain circumstances.

The decision creates a test that in some respects is more onerous than the approach taken by the District Court.

The District Court had found that, because the intention was to capture those who actively manage or control workplaces, “[m]erely being able to manage or control a workplace, but not doing so, is not enough”. The High Court decision emphasises that this would allow a PCBU to escape a duty under s 37 by neglecting to exercise powers of management or control that were available and finds that “the inquiry...must be one of whether the PCBU has the power or capacity to actively control or manage the particular workplace in a practical sense”.

It is clear from the Court's decision that whether a PCBU has the power or capacity to actively control or manage a workplace in a practical sense will be a fact-specific enquiry (and the judgment notes the need for the law to remain flexible to circumstances that neither legislatures nor the courts can foresee at the time). Accordingly, while the High Court’s decision provides some indication of the circumstances in which the courts will not consider the duty in s 37 applies, there remains some uncertainty about how much management or control of a workplace a PCBU must exercise before the courts will consider the duty in s 37 is engaged. Despite this position, the approach taken in the judgment will obviously guide the courts in their consideration of the application of the s 37 duty in other cases.  

MinterEllisonRuddWatts recommends that PCBUs consider the judgment and its application to their business or undertaking to identify the circumstances in which they may owe a duty under s 37 and, if so, whether they are taking sufficient steps to discharge that duty. Pending further decisions from the Courts regarding the application of this duty, we consider there is a role for WorkSafe to publish further guidance regarding the s 37 duty so that PCBUs have some certainty about the circumstances in which the regulator will expect PCBUs to discharge this duty.

For more detailed analysis of the High Court’s judgment click here or to discuss the case with one of our health and safety experts, click here.

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