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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

WorkSafe New Zealand v Nutrimetics International (New Zealand) Ltd (DC, 23/03/18)

OSH Tracker

Defendant:
Nutrimetics International (New Zealand ) Ltd
Nutrimetics International (New Zealand) Ltd was fined $183,750 under the HSW Act after an employee's sleeve became entangled in a rotating stirrer while she reached into the top a hopper to check the quantity of material inside. Her arm was broken in two places. The risk of entanglement had not been identified and guards would have eliminated it. There was also no safe system of work for the machine. The company had already paid reparation of $15,500 to the employee. The court ordered an additional payment of $380 to cover travel and physiotherapy costs (Manukau District Court, 23 March). 
Industry:
Manufacturing
Sub-Industry:
Other Manufacturing
Risk:
Machinery (trapped, crushed, cuts)
Harm:
Injury
Penalty Amount:
$199450.00
Reparation Amount:
$15880.00
Appeared in Safeguard issue 169

Judgment Text

JUDGMENT OF JUDGE R MCILRAITH ON SENTENCING 
Judge R McIlraith
[1]
The defendant has pleaded guilty to a charge under ss 36(1)(a), 48(1) & (2)(c) of the Health and Safety at Work Act 2015 as follows: 
“Being a PCBU, failed to ensure, so far as was reasonably practicable, the health and safety of workers who work for the PCBU, including Malia Pou, while the workers were at work in the business or undertaking, namely operating a tube filler and sealer machine, and that failure exposed the workers to a risk of serious injury arising from exposure to a stirrer in the machine's hopper. 
Particulars: 
(a)
Have a competent person carry out a risk assessment of the machine; 
(b)
Identify the entanglement hazard; 
(c)
Adequately guard the machine; 
(d)
Develop a safe system of work for the operation of the machine. ”
[2]
As the defendant is a body corporate, the maximum penalty is a fine not exceeding $1.5 million. 
[3]
The facts are agreed. 
[4]
The defendant is a company in the business of manufacturing cosmetic products. It operates a manufacturing plant in East Tamaki, Auckland. Ms Malia Pou is employed as a packer and process worker. She has worked for the defendant for 26 years. 
[5]
The defendant operates an Axomatic Tube Filler/Sealer machine. The machine's function is to fill tubes with a cosmetic product such as a cream, gel or shampoo. It was installed in 1999. The machine has a large hopper on top. A long metal stirrer sits inside the hopper. The hopper is automatically filled with a substance by a large stainless steel mobile holding tank with a hose attachment. The hose is attached to the machine near the hopper. The stirrer is removable and is put in place for thicker substances. A ladder with a platform was situated next to the machine, allowing for access to the hopper. The machine is operated by two staff. 
[6]
On 13 April 2016, Ms Pou was working on the machine. She was collecting the finished tubes and performing quality checks while a co-worker was carrying out the task of running the machine. Ms Pou noticed the weight of the tube was feeling light which indicated to her that the product in the hopper was low. She positioned the ladder platform at the operating side of the machine and climbed up to look inside the hopper. With the machine still running, she inserted a spatula into the hopper to scrape the product downward. The right sleeve of her jacket became entangled in the clamp on the stirrer and wound her arm around it. 
[7]
Ms Pou suffered mid-shaft radius and ulna fractures to her right forearm as a result of being drawn in and entangled in the stirrer of the unguarded hopper. She required four surgeries including the insertion of plates and screws. She has scars approximately 20 centimetres long on both the inside and outside of her right lower arm. She has weakness in her arm and pain in her right thumb which travels up her arm when she flexes her thumb. 
Victim Impact 
[8]
I have received a Victim Impact Statement prepared following discussion with Ms Pou and her daughter. It sets out in some detail the physical injuries, financial costs and emotional harm suffered by Ms Pou. Of particular note, in addition to the account of harm suffered, is Ms Pou's statement that she has loved working for the defendant. 
Restorative Justice 
[9]
I have received a report from a Restorative Justice Conference which took place on 27 November 2017. Clearly it was a very positive Conference. An appropriate apology was made and accepted. Confirmation was provided that the defendant has paid $15,500 to Ms Pou as an acknowledgement of the emotional harm caused to her in addition to paying the 20% top up of the lost earnings she has suffered. Of particular note is the confirmation that the defendant has maintained Ms Pou's employment and maintains goodwill toward her. An appropriate assurance was provided that Ms Pou is not held responsible for what occurred and the defendant acknowledged its failings. 
Approach to sentencing 
[10]
There have now been a number of sentencing decisions since the new health and safety legislation has been in force. I have been referred to these cases by counsel. As yet, of course, there is no appellate guidance as to the approach to sentencing under the new Act or, in particular, to culpability bands in the setting of fines. 
[11]
Counsel were agreed that the approach to sentencing is a slight modification to that taken by the High Court in Hanham & Philp. Minor changes are required to reflect specific legislative changes under the Act. The sentencing approach now involves four steps as follows: 
(a)
Step one, assessing the amount of reparation; 
(b)
Step two, fixing the amount of fine; 
(c)
Step three, making any other orders under the Act; and 
(d)
Step four, overall assessment of the proportionality and appropriateness of the total imposition of reparation, other orders and fine. 
Reparation 
[12]
The defendant has paid the sum of $15,500 for emotional harm to Ms Pou. It had earlier topped up her earnings. WorkSafe sought no additional reparation by way of emotional harm. I therefore make no additional order. There is, however, an order for financial loss reparation in the amount of $380 in relation to travel costs and physiotherapy costs. 
Fine 
[13]
WorkSafe submitted, with no disagreement from the defendant, that the following four factors are relevant to the Court's assessment of culpability when sentencing under the Act: 
(a)
The risk of, and the potential for, illness, injury or death which could have occurred; 
(b)
Whether death, serious injury, or serious illness occurred or could reasonably have been expected to have occurred; 
(c)
The degree of departure from prevailing standards in the person's sector or industry as an aggravating factor, including what the person concerned knows or ought reasonably to know about the hazard or risk and the ways of eliminating or minimising the risk and the availability and suitability of ways to eliminate or minimise the risk; and 
(d)
After assessing the extent of the risk and the available ways of eliminating or minimising the risk, the costs associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk. 
[14]
WorkSafe identified a number of operative acts or omissions on the part of the defendant. It submitted that it had been reasonably practicable for the defendant to have had a competent person carry out a risk assessment of the machine, to have identified the entanglement hazard, to have adequately guarded the machine and to have developed a safe system of work for the operation of the machine. It noted that the defendant has accepted through its entry of guilty plea acceptance of these failures contained in the summary of facts. 
[15]
The defendant noted that it had taken steps towards each of these actions. It submitted that this was not a case where had been a complete systematic failure by an employer. It particularly noted that the machine had been risk assessed and it did not accept that the entanglement hazard was obvious. The machine had been operating since 1999 without an incident. Guarding was a feature in the operating environment. Staff had been trained that they were not to touch any moving parts and there was a comprehensive safety training programme in place. 
Risk of and potential for illness, injury or death 
[16]
WorkSafe submitted that the risks involved were serious and well-known. While that was accepted by the defendant to an extent, the defendant did note that it was not possible to fall into the hopper or to be dragged into it. There was no risk to life. 
Whether death, serious injury or serious illness occurred or could reasonably have been expected to have occurred 
[17]
WorkSafe submitted that the injury suffered in this case could easily have been more significant. The defendant, as noted, submitted that there was in fact no such serious risk. 
The degree of departure from prevailing standards in the sector/industry 
[18]
WorkSafe submitted that the defendant's conduct departed from industry standards and guidelines for safe use of machinery, referring to the Safety of Machinery Standard AS/NZS 4024 and the Best Practice Guidelines for Safe Use of Machinery along with the MBIE Position Paper for the Safe Use of Machinery. The defendant noted that the machine complied with European standards when purchased and hazard assessments had been undertaken on it. This had resulted in additional safety steps being put in place. As the defendant noted, the issue in this case is not that it did not have a system or risk assessment process, but that the systems did not identify the stirrer in the hopper as a risk because it was not a part of anyone's job requirement. As a result, the defendant said that its departure from standards was at the low end of cases of such nature. 
The cost associated with available ways of eliminating or minimising the risk, including whether the risk was grossly disproportionate to the risk 
[19]
WorkSafe submitted that the cost of guarding the hopper and implementing a safe system at work could have been insignificant and certainly not disproportionate to the risk of harm to workers. No issue was taken with this proposition by the defendant. 
Setting the starting point 
[20]
I was referred by counsel to a number of cases, both under the new and old legislation. While different positions had been taken in written submissions, both counsel were comfortable in adopting the culpability bands proposed by Judge Gilbert in Rangiora Carpets1
| X |Footnote: 1
WorkSafe NZ v Rangiora Carpets [2017] NZDC 22587Has Cases Citing which are not known to be negative[Green]  
. In that case Judge Gilbert proposed the following bands: 
Culpability Band 
Fine 
Low 
$0 to $150,000 
Low/Medium 
$150,000 - $350,000 
Medium 
$350,000 — $600,000 
Medium/High 
$600,000 - $850,000 
High 
$850,000 — $1,100,000 
Extremely High 
$1,100,000 plus 
[21]
WorkSafe submitted that the appropriate start point for a fine in this case was $600,000. This placed the culpability level at the high Medium or low Medium/High band proposed by Judge Gilbert. For its part, the defendant submitted an appropriate start point of $250,000 placing the culpability in the low-medium band. 
[22]
WorkSafe submitted that the degree of culpability here was no lower than in the Rangiora Carpets case. It submitted that this was daily work undertaken as part of core business, with the hazard being more obvious given the guidance available than had been the circumstance in Rangiora Carpets. WorkSafe also submitted that the culpability ought to be set at a higher level than in another recent case, ITW NZ2
| X |Footnote: 2
WorkSafe NZ v ITW NZ [2017] NZDC 27830 
. In Rangiora Carpets a start point of $300,000 was adopted. In ITW a start point of $450,000 was adopted. 
[23]
For its part, the defendant submitted that culpability was considerably less in this case than in Rangiora Carpets. Counsel stressed that there had been no issue with this machine since the installation in 1999. Unlike many cases where medium culpability was assessed, this defendant had a clear procedure to operate this machine and had not failed to identify this hazard. Counsel also noted that training was in place covering unsafe acts. The defendant submitted an appropriate start point of $250,000. 
[24]
I have reviewed the cases referred to by counsel. A number of the cases where starting points were assessed at the low end of medium culpability, are of very helpful comparison. These include, in particular, JMP Engineering3
| X |Footnote: 3
Department of Labour v JMP Engineering Ltd CRI-2009-004-023434, DC Auckland 
and Stuart Timber Company Ltd4
| X |Footnote: 4
[25]
I place the culpability of the defendant's offending at the bottom of the medium culpability band proposed by Judge Gilbert. Accordingly, I set a start point of $350,000. While I accept WorkSafe's submission that the degree of culpability in this case is greater than that in Rangiora Carpets, I cannot accept that the start point ought to be so significantly above that adopted in that case. That is primarily because there was a safe operating procedure in place for the cleaning of this machine, risk assessments had been conducted and this was not a company taking an irresponsible approach to safety in its work place. 
Aggravating/Mitigating Factors 
[26]
The start point does, of course, have to been adjusted for any aggravating and mitigating factors. There was no suggestion of any aggravating factors present in this case. Accordingly, the issue is simply what mitigation is present and what discount from this start point is appropriate. 
[27]
There was no dispute that the defendant is entitled to discounts to reflect its making of a voluntary payment by way of reparation, its full co-operation with WorkSafe's investigation, its genuine remorse and acceptance of responsibility, the remedial steps taken since the accident and the very good safety record of the company. 
[28]
Again, there was no dispute between counsel that, as provided in Eziform5
| X |Footnote: 5
Department of Labour v Eziform Roofing products Ltd [2013] NZHC 1526Has Cases Citing which are not known to be negative[Green]  
, an overall discount of 30% is appropriate. I accept the breakdown of that discount as submitted by WorkSafe (payment of reparation 15%, remorse and co-operation 5%, remedial action taken 5%, prior good record 5%). 
[29]
That discount takes the amount of fine from $350,000 to $245,000. From that must then be deducted 25% discount for the guilty plea entered at an early stage. That sees the amount of fine reduced to $183,750. 
Other orders under HSWA 
[30]
There was no dispute that the costs sought by WorkSafe, $2,027 (being 50% of WorkSafe's legal costs) was reasonable. The defendant will be required to pay that amount. 
Overall assessment 
[31]
The last step involves consideration of the total imposition on the defendant of reparation, fine and other orders. The total imposed must be proportionate to the circumstances of the offending and the offender. I am satisfied that the total imposition of a fine of $183,750, reparation of $15,880 ($15,500 of which has already been paid) and costs of $2,027 is appropriate. 


WorkSafe NZ v Rangiora Carpets [2017] NZDC 22587Has Cases Citing which are not known to be negative[Green]  
WorkSafe NZ v ITW NZ [2017] NZDC 27830 
Department of Labour v JMP Engineering Ltd CRI-2009-004-023434, DC Auckland 
Department of Labour v Eziform Roofing products Ltd [2013] NZHC 1526Has Cases Citing which are not known to be negative[Green]  

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