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Safeguard OSH Solutions - Thomson Reuters

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OSH Tracker

Proform Plastics Ltd v Department of Labour (HC, 26/03/13)

Sentencing Tracker

Principal Offences:
Failing to take all practicable steps to ensure safety of an employee (ss 6 & 50(1)(a) Health and Safety in Employment Act 1992)
Plea:
Guilty
Non-Custodial Sentences:
$35,500 fine (reduced from $42,000 on appeal)
Mitigating Factors:
Early guilty plea

OSH Tracker

Defendant:
Proform Plastics Ltd
Industry:
Manufacturing
Sub-Industry:
Other Manufacturing
Risk:
Machinery (trapped, crushed, cuts)
Harm:
Injury
Penalty Amount:
$35500.00
Reparation Amount:
$0.00

Judgment Text

JUDGMENT OF PETERS J 
M Peters J
Introduction 
[1]
This is an appeal against sentence imposed under s 50(1)(a) Health and Safety in Employment Act 1992 (“Act”). The appeal is brought under s 116 Summary Proceedings Act 1957. 
[2]
On 26 June 2012 the Appellant, Proform Plastics Limited (“Proform”), pleaded guilty to an offence pursuant to s 50(1)(a) of the Act, the offence being that it failed to take all practicable steps to ensure the safety of employees while at work.1
| X |Footnote: 1
Health and Safety in Employment Act 1992, s 6. 
 
[3]
Sitting in the District Court at Hamilton, Judge Burnett convicted Proform and imposed a fine of $42,000. The Judge arrived at this fine by adopting a starting point of $80,000 and then reducing it to reflect mitigating factors. 
[4]
Proform's appeal is brought on the ground that the fine imposed was manifestly excessive, in particular because the Judge adopted a starting point that was too high. The Respondent (“Department”) opposes the appeal. First, it submits that the starting point was within the range available to the Judge and secondly that, in any event, the issue on appeal against sentence is whether the end sentence is manifestly excessive, and in this case it is not. 
[5]
I have concluded that the sentence was manifestly excessive, for the reasons which follow. 
Background 
[6]
Proform is a manufacturer of plastic products. On 7 October 2011, its employee, Mr Tengu, was operating what is referred to as a CNC router machine when the blade on the machine stopped. Mr Tengu believed that the blade had stopped because it had returned to the “home” position at the end of a cycle. He attempted to cut away a scrap of product from the blade. In fact, the machine had not finished its cycle and the blade had jammed. The blade “un-jammed”, causing an injury that required three stitches to Mr Tengu's wrist, an injury from which he quickly recovered. Mr Tengu had been trained to press an emergency stop button if the machine jammed. He did not do so because he did not think the blade had jammed. 
[7]
The Department took the view that Proform should have: 
(a)
installed a guard to prevent an employee reaching into the path of the blade; and 
(b)
installed an “interlock” device, so that power to the machine would disconnect automatically if the guard were open. 
[8]
The Department charged Proform pursuant to s 50(1)(a) of the Act on the basis that it had failed to take all practicable steps to ensure the safety of its employee and in particular that it failed to take all practicable steps to ensure its employee was not exposed to the risk of injury from the machine. 
[9]
Section 50(1)(a) of the Act reads as follows: 
“50 Other offences 
(1)
Every person commits an offence, and is liable on summary conviction to a fine not exceeding $250,000, who fails to comply with the requirements of— 
(a)
a provision of Part 2 other than section 16(3); or 
 ”
[10]
Section 6 was the provision of Part 2 of the Act relied upon, and that provision reads as follows: 
“6
Employers to ensure safety of employees 
Every employer shall take all practicable steps to ensure the safety of employees while at work; and in particular shall take all practicable steps to— 
(a)
Provide and maintain for employees a safe working environment; and 
(b)
Provide and maintain for employees while they are at work facilities for their safety and health; and 
(c)
Ensure that plant used by any employee at work is so arranged, designed, made, and maintained that it is safe for the employee to use; and 
(d)
Ensure that while at work employees are not exposed to hazards arising out of the arrangement, disposal, manipulation, organisation, processing, storage, transport, working, or use of things— 
(i)
In their place of work; or 
(ii)
Near their place of work and under the employer's control; and 
(e)
Develop procedures for dealing with emergencies that may arise while employees are at work. ”
[11]
On conviction, Proform was liable to a fine not exceeding $250,000. 
Principles 
[12]
It is common ground that the leading case on sentencing for offences under the Act is Department of Labour v Hanham and Philp Contractors Ltd.2
| X |Footnote: 2
Department of Labour v Hanham and Philp Contractors Ltd (2009) 9 NZELC 93,095 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] 
The relevant aspects of Hanham for the purposes of this case are as follows. 
[13]
First, the following three step process is to be undertaken on sentencing for offences under the Act: 
(a)
assess the amount of reparation; 
(b)
fix the amount of the fine to be imposed; and 
(c)
make an overall assessment of the proportionality and appropriateness of the total imposition of reparation and fine. 
[14]
In the present case no reparation was sought and there was and is no issue as to proportionality. The issue is the amount of the fine. 
[15]
As to that matter, in Hanham the Court said:3
| X |Footnote: 3
Ibid, at [80]. 
 
“Summary of sentencing approach 
 
(5)
The second main step is to fix the amount of the fine. This should follow the methodology established by the Court of Appeal in Taueki, namely fixing a starting point on the basis of the culpability for the offending and then adjusting the starting point upwards or downwards for aggravating or mitigating circumstances relating to the offender (see [47] — [50] above) 
(6)
The assessment of a starting point for the fine involves an assessment of the culpability for the offending (see [54] and [55] above). Starting points should generally be fixed according to the following scale: 
‘Low culpability: a fine of up to $50,000 
Medium culpability: a fine of between $50,000 and $100,000 
High culpability: a fine of between $100,000 and $175,000. ’”
(7)
The starting point for the fine is then to be adjusted for any relevant aggravating and mitigating factors relating to the offender (see [61] — [63] above). 
 ”
[16]
The Court listed seven (non exhaustive) factors to be taken into account in assessing culpability.4
| X |Footnote: 4
Ibid, at [54]. 
The second factor forms the basis of this appeal, namely the nature and seriousness of the risk of harm occurring “as well as the realised risk”. The list of factors is as follows: 
“•
The identification of the operative acts or omissions at issue. …  
An assessment of the nature and seriousness of the risk of harm occurring as well as the realised risk. 
The degree of departure from standards prevailing in the relevant industry. 
The obviousness of the hazard. 
The availability, cost and effectiveness of the means necessary to avoid the hazard. 
The current state of knowledge of the risks and of the nature and severity of the harm which could result. 
The current state of knowledge of the means available to avoid the hazard or mitigate the risk of its occurrence. ”
District Court approach 
[17]
The Judge considered each of the matters in [16] above. She referred to the failure to install guards on some machines and to install interlock devices on any machines; the fact that guards and devices had now been installed; the clear risk of harm and obvious hazard caused by Proform's omissions; and the departure from prevailing standards, it being well known (and recognised by Proform) that guards and interlock devices should be installed. 
[18]
The Judge adopted a starting point of $ 80,000. She paid particular regard to Department of Labour v Fonterra Co-operative Group Ltd,5
| X |Footnote: 5
Department of Labour v Fonterra Co-operative Group Ltd DC Hawera, CRI-2011-021-1101, 7 March 2012
because it was similar to the present case. In that case, an employee had the tip of their finger amputated in an accident involving an unguarded blade and the Court adopted a starting point of $90,000. 
[19]
Given that starting point, it is clear the Judge considered this to be a case of “medium” culpability. I agree. Many of the factors the Court identified in Hanham were present in this case. The question is whether $80,000, being in the upper half of the “medium” band, was within the range available to the Judge in the particular circumstances of this case. 
Appeal 
[20]
Arriving at the appropriate starting point requires the Court to take an overall view of culpability. That said, in Hanham the Court made it clear that the Sentencing Act 2002 and s 51A of the Act require the Court to take into account the degree of harm resulting to the employee, despite the fact that often a benign outcome will be a matter of good luck rather than good management.6
| X |Footnote: 6
Department of Labour v Hanham and Philp Contractors Ltd, above n 2, at [52]; Health and Safety in Employment Act 1992, s 51A; and Sentencing Act 2002, s 7. 
 
[21]
I accept Proform's submission that, at least on the face of her notes, the Judge did not give the degree of realised risk sufficient weight, focusing more on the risk of harm. 
[22]
I have been referred to several cases addressing circumstances in which employees have been injured as a result of unguarded parts or blades.7
| X |Footnote: 7
Department of Labour v Mount Pokaka Timber Products Ltd DC Kaikohe, CRN 12027500288, 3 August 2012; Department of Labour v Tegal Foods Ltd DC Christchurch, CRI-2011-009-4955, 27 September 2011; Department of Labour v Ancient Kauri Wood Products Ltd DC Kaitaia, CRI-2011-029-171, 11 August 2011; Department of Labour v Griffins Food Ltd DC Papakura, CRI-2009-055-2437, 29 June 2010; and Department of Labour v Smith Crane & Construction Ltd, DC Christchurch CRI-2009-009-5169, 2 October 2009
The starting points in these cases range from $45,000 in Department of Labour v Griffins Foods Ltd to $100,000 in Hanham and Department of Labour v Mount Pokaka Timber Products Ltd
[23]
Many of the circumstances in these cases were comparable to the present but in each the employee concerned suffered a more severe injury. For instance, in Mount Pokaka the employee received an injury to his foot leading to hospitalisation for 17 days, and he required ongoing treatment and skin grafts. In Tegal Foods, the employee lost part of her finger. In fact the entire use of her left hand was compromised and she suffered ongoing pain. The starting point in Tegal Foods was $75,000. In Ancient Kauri Wood Products Ltd, the employee lost much of his left hand, underwent surgery for 20 hours to have the hand reattached, was hospitalised for three weeks, had lost the feeling in his hand and required ongoing treatment and physiotherapy in an effort to regain the use of the hand. The starting point in that case was $80,000. 
[24]
In those cases, not only were the injuries more serious but plainly they were going to give rise to long lasting and/or permanent adverse consequences for the employees' careers and their enjoyment of life. 
[25]
One case to which counsel for Proform referred me is Griffins Food Ltd where the Court adopted a starting point of $45,000. The employee had lost the end of a finger, and had to contend with ongoing pain and surgery. In that case, however, the employee had undone the bolts on protective housing. But for his doing so the injury would not have occurred. 
[26]
Taking these cases into account, I am satisfied that the Judge adopted a starting point that was too high. Counsel for Proform submitted that a starting point of no more than $60,000 should have been adopted. In my view, a starting point of $65,000 to $70,000 was warranted. I propose to take the mid-point of that range, that is $67,500, as the starting point. 
[27]
The Judge gave Proform discounts of 30 per cent on account of various mitigating features and 25 per cent for its early guilty plea. I accept the Department's submissions that these levels of discount were generous but not so much that I would interfere with them. 
Result 
[28]
Taking a starting point of $67,500, being the mid-point of the range identified, and giving Proform the benefit of the same percentage discounts arrived at by the Judge, I impose a fine of $35,500 in substitution for that imposed by the Judge. 


Health and Safety in Employment Act 1992, s 6. 
Department of Labour v Hanham and Philp Contractors Ltd (2009) 9 NZELC 93,095 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] 
Ibid, at [80]. 
Ibid, at [54]. 
Department of Labour v Fonterra Co-operative Group Ltd DC Hawera, CRI-2011-021-1101, 7 March 2012
Department of Labour v Hanham and Philp Contractors Ltd, above n 2, at [52]; Health and Safety in Employment Act 1992, s 51A; and Sentencing Act 2002, s 7. 
Department of Labour v Mount Pokaka Timber Products Ltd DC Kaikohe, CRN 12027500288, 3 August 2012; Department of Labour v Tegal Foods Ltd DC Christchurch, CRI-2011-009-4955, 27 September 2011; Department of Labour v Ancient Kauri Wood Products Ltd DC Kaitaia, CRI-2011-029-171, 11 August 2011; Department of Labour v Griffins Food Ltd DC Papakura, CRI-2009-055-2437, 29 June 2010; and Department of Labour v Smith Crane & Construction Ltd, DC Christchurch CRI-2009-009-5169, 2 October 2009

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