Skip to Content, Skip to Navigation
Advertisement

Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

WorkSafe New Zealand Ltd v Steelcap Holdings Ltd (DC, 18/08/15)

OSH Tracker

Defendant:
Steelcap Holdings Ltd t/a Sanders Premier
Steelcap Holdings Ltd t/a Sanders Premier was fined $25,000 and ordered to pay $8000 in reparation after an employee’s finger was amputated while cutting timber on a table saw bench. The machine had no hood guard or riving knife, and the push stick provided was not used (North Shore DC, 18 August 2015). 
Industry:
Manufacturing
Sub-Industry:
Wood and Paper Product Manufacturing
Risk:
Machinery (trapped, crushed, cuts)
Harm:
Injury
Penalty Amount:
$33000.00
Reparation Amount:
$8000.00
Appeared in Safeguard issue 155

Judgment Text

NOTES OF JUDGE J C DOWN ON SENTENCING 
Judge J C Down
[1]
Steelcap Holdings Limited is charged by WorkSafe New Zealand with being an employer failed to take all practical steps to ensure the safety of an employee, Jacob Hula, in that it failed to ensure that he was not exposed to hazards arising out of the use of a table saw bench. This provision is found within the Health and Safety in Employment Act 1992, s 6 and 50, and carries a maximum penalty of a fine not exceeding $250,000. 
[2]
The circumstances of this offence were as follows. The defendant, Steelcap Holdings was trading as Sanders Premier, building fences, decks, pergolas, gazebos, trellises, gates and sheds. Jacob Hula, the victim in this case, was employed by the defendant and is still today employed by him as a factory labourer, responsible for milling timber, manufacturing gates and other products. He is a qualified cabinetmaker, has worked for the defendant for about 12 months at the time of this incident. He is not the only person who uses that saw. 
[3]
On 20 November 2014 Mr Hula was at work. He was apparently not rushing. He was cutting timber on a job that did not have a tight deadline. He appears to have guided a plank of timber through the saw with his left hand, and in doing so suffered the amputation of his left middle finger, near amputation of his index finger, which has now been reattached, and lacerations to thumb and ring finger. He did not use the push stick that was provided to push the plank of timber through the saw, but the machine was found to be lacking in its safety requirements. It had no hood guard or riving knife. He was treated at hospital on 20 November and discharged on 25 November. 
[4]
There are a number of fact sheets and guidelines produced by the Ministry of Business Innovation and Employment relating to circular saws, requiring that both push sticks must be provided but also adjusted hood guards and riving knife. Only the first of those was made available to Mr Hula and other employees using that circular saw at the defendant's premises. There were a number of other publications, a WorkSafe publication in April 2014, a fact sheet which stated that employers should fix attachable hood guards to all benches large enough to cover the blades, to prevent contact with the blade, push sticks by each machine and fit a steel riving knife to every circular saw. There are also best practice guidelines issued in May 2014 to reinforce the need for employers to make an assessment by identifying, assessing and controlling hazards, carrying out a risk assessment particularly in relation to machinery hazards. 
[5]
This equipment was inherited by the defendant from the previous company which he brought and no instruction manual was left with it. A replacement manual has been now located and push sticks are said to serve as an extension of the hand, and protect against accidental contact with the saw blade. It also goes into the purpose of blade guards, which guard against unintentional contact with the saw blade from chips flying about, and the riving knife which prevents the work piece from being caught by the rising teeth of the saw blade, and being thrown against the operator. I am told by the prosecution today that the requirements for all three safety measures have been clear in the legislation and guidelines since the 1970s, so these requirements are not in any way new. 
[6]
What the prosecution say is that the defendant could have taken practicable steps of ensuring an adjustment hood guard was fitted, ensuring a riving knife was fitted to the saw, and an adequate system in place to identify hazards in the workplace. I am told that the defendant, following the incident, has fitted the guard and the riving knife to the saw in question, and has worked to improve a health and safety system in the workplace. The defendant has no previous convictions and was fully co-operative with WorkSafe, and all of those matters are to be taken into consideration when assessing mitigating features to reduce the appropriate fine. 
[7]
The prosecutor seeks reparation for Mr Hula. It is said to be nominal reparation in the range of $3000 to $6000, because he has not provided to the Court a victim impact statement and does not apparently wish to co-operate in that sense, nor did he wish to be engaged in a restorative justice process which the defendant was happy to participate in. Because there is no clear indication of the impact that this has had upon the complainant it is not possible for the Court to make a proper assessment as to the injury and impact, so as to assess an appropriate level of compensation. I am, therefore, in a difficult position but will make an order of compensation or reparation based upon the known facts. 
[8]
The prosecution urge a starting point, based on the authorities that they have placed before the Court, of $90,000. That places the offending within the middle band of seriousness, a reduction for mitigation features and 25 percent for guilty pleas at an early stage. I am reminded that the purposes in the Sentencing Act 2002 of denunciation, deterrence and accountability will have significant weight in health and safety cases, and I take those matters into consideration. The lead case, I am told, is Labour v Hamman and Phelpt Contractors Limited & Others HC Christchurch, CRI-2008-409-000002, 18 December 2008, where three main steps are proposed, assessing the amount of reparation, fixing the amount of the fine and making an overall assessment of proportionality and appropriateness of the total figure imposed. I note, however, that in terms of reparation that the defendant is insured and that that in fact will not have a direct impact on the company if I order a reasonable amount of reparation for emotional harm. 
[9]
As I say there are within the leading case bands of low, medium and high culpability. For medium culpability, which is urged in this case, a fine of $50,000 and $100,000 is proposed as appropriate, bearing in mind the fact that the maximum penalty is $250,000. In fact, both counsel for prosecution and for the defendant company agree that this is a medium culpable offence, and agree that the figure should be a start point between $50,000 and $100,000. The prosecution urge me to conclude $90,000, the defence $60,000, and that submission of $60,000 is based upon an assessment of the causation of the accident, which appears to have been as a result of the victim not using a push stick but using his hands. 
[10]
I am urged to conclude that there are two areas in which the machine was lacking, and therefore the failure by the defendants may not have prevented this accident. That maybe the case but in assessing the gravity of the offending, and the appropriate start point it seems to me that I must also have significant regard to the fact that guidelines, which have been in place for decades, are simply not even considered by the defendant in this case, and it would seem to me that the provision of at least a guard, let alone the rive knife would be a matter of common sense, let alone what might have quite easily have been assessed by him with a little research as to the duties that he had in relation to the safety of his employees in using such a machine. 
[11]
Taking into account the knowledge that the victim in this case failed to use the rod that was provided, and making an assessment as to the significant, in my view, failure of the defendant to provide appropriate safety measures for the use of that machine, I have come to the conclusion based upon the authorities that I have read that the appropriate start point in this case is $80,000. 
[12]
I make that assessment based upon the following factors. The operative acts or omissions at issue, the omissions at the time were the lack of the knife and the guard, whether they were operative or not is a matter of conjecture, although I note the summary of facts for the prosecution is clear that this happened as a result of the victim not using the push stick and instead using his hand. Thirdly the degree of departure from standards prevailing in the industry. This was a significant departure. Obviousness of the hazard I have already indicated, in my view, it was very obvious. The availability, costs and effectiveness of the means to avoid the hazard, these I am told by the Department are adjustments that can be made to existing machinery. It does not need a whole new machine. The current state of knowledge and risks and nature and severity of harm which could result. The current state of knowledge over decades, as I have found, is that such guards need to be in place, and the current state of knowledge as to the means available to avoid the hazard. Again those means were easily accessible and available. As I have concluded the appropriate start point, in my view, in this case is a fine of $80,000. 
[13]
The thrust of the submissions made on behalf of the defendant focus not only upon the reduced starting point that is proposed of $60,000, but on the ability of the defendant to pay. I have already described the reasons why I reject the submission from the defence that the appropriate start point is only $60,000. I am going to focus my attention on the defence case in terms of the ability to pay and the appropriate reductions for mitigation and guilty pleas. 
[14]
It seems to be accepted by both sides that significant mitigation is appropriate in this case, because of the steps that have been taken subsequent to this accident, and the way that they have looked after the victim. Those steps are very significant and taken together with the fact that the defendant is of prior good character in relation to this type of offending, it is easy for me to come to the conclusion that a discount of 30 percent is appropriate for all of that mitigation. Further, and following the well trodden line of authority in the criminal jurisdiction for discount for guilty pleas, a further 25 percent should be applied for those guilty pleas. That brings me, therefore, to the following figures. From a start point of $80,000, 30 percent would mean a reduction of $24,000 and a resulting fine of $56,000. A reduction of a further 25 percent for guilty plea would result in a final fine of $42,000 before I consider matters of ability to pay, and the effect that such a fine would have upon the defendant company. I will come to that in a moment. 
[15]
I am told that Steelcap has insured against reparation and therefore despite the lack of information I am going to order that the company pay reparation to the complainant, Jacob Hula, the sum of $8000. 
[16]
The prosecution, WorkSafe, suggest that an appropriate period over which the company could pay a fine could extend out to five years. The defence urges the Court to conclude that in its financial circumstances, which are tight, there is no doubt about that, a fine that can be paid over a period of three years is more realistic. Although I would normally take into account the amount of reparation also before reaching the final point, the reality is that due to prudence of course that amount of money is covered by the defendant's insurers, so it has only a small effect on the totality of the final fine that I impose in this case. 
[17]
I have read a number of documents and the submissions in relation to the defendant company's ability to pay. It is clear that over the last two years there have been losses rather than profits in the business. That does not mean that there have not been profits sufficient to pay a modest sum to the defendant as sole director of the company, or his employees, but it does mean that overall there has been a shortfall. I have read an assessment by an accountant by the name of Steven Derix, certified practicing accountant, who sets out the current state of the defendant company in financial terms. He says this at paragraph 7: 
“Any fine imposed upon Sanders Premier requiring an immediate lump sum will cause severe stress on the cash flow of the business. The business has for the last two years ran at a loss and its cash flow forecast for the next 12 months have overstated expected sales and understated expenses such as raw materials and labour costs. ”
However he concludes that Sanders Premier should have sufficient cash flow, this is in paragraph 10, to pay a fine over a period of time of $500 per month. 
[18]
One thing I do not want to do is impose a penalty which would cause so much financial hardship to the company that it becomes unviable, and that in fact indirectly the victim in this case and other employees are punished and end up losing their job as a result of this action. I very much have that in mind and I am therefore prepared to order the fine to be paid at the rate of $500 per month. It appears that this business is still in its development stage, so it is not anticipated that there will be significant profits in the next few years, but in time hopefully that can be achieved to secure not only the defendant's future but the future of his employees. 
[19]
I am, therefore, minded to order the payment of the fine at the rate of $500 per month. Over what period is the only question in my mind. From a final fine figure of $42,000 I am prepared to allow a significant reduction I think in the region of 40 percent to a final figure for fine of $25,000. It seems to me that that representing just 10 percent of the maximum penalty for this type of offence represents a modest but appropriate level of fine for the defendant company. It will take longer than the three years to pay but it will not take as long as five years, perhaps in the region of four years for the company to pay. I note that there are some properties that maybe sold in the course of the business, and of course if the company is in a position to pay that fine off quicker then it should do so. 
[20]
For now the sentence that I impose is, entering a conviction, one of $25,000 fine, and an order for reparation of $8000. That sum must be paid within 28 days and the fine of $25,000 is to be paid at the rate of $500 per month. 

From OSH Tracker

Table of Contents