Few would argue against the principle that businesses should prioritise their most serious risks. If the HSW Amendment Bill had stopped at requiring all PCBUs to identify and focus on critical risks first, it would have been a sensible and largely uncontroversial reform. But the Bill goes considerably further than prioritisation, and in doing so creates problems that may prove more significant than those it is trying to solve.
Let’s start with the definition of a critical risk. I have been in enough H&S working groups to know we are pedantic about words, but nevertheless words matter, in legislation more than anywhere. How critical risk is defined will affect the work we do today, and how we focus and prioritise our work in the future.
The Bill introduces a statutory definition of critical risk with two limbs. The first, a list of specific regulations and hazards in a new Schedule 1A, is straightforward to apply. The second is a catch-all: any hazard likely to result in death, a notifiable injury or illness, or an occupational disease. PCBUs already assess hazards and risks under the current Act, but what is new is the consequence of the assessment.
Small business carve-out
Currently, the duty to manage a risk applies regardless of how it is classified. However, under the Bill, small PCBUs (which represent 97% of New Zealand businesses) will be required to assess their own risks and determine which are critical and which are not. Classifying a risk as non-critical means there is no obligation to manage it.
However, for many hazards that sit in the middle ground – a repetitive lifting task that occasionally causes a serious back injury, a workplace layout that periodically leads to a collision, a fatigue pattern that sometimes results in a serious incident – the classification is not straightforward.
In fact, MBIE’s supporting Regulatory Impact Statement (RIS) suggests that armed robbery in retail is a non-critical risk. This literally stopped me in my tracks. I encourage the author of the RIS to find any retail worker who has had a gun or knife held to them and ask them to determine what the likelihood of being killed was in that situation. The entire retail industry accepts violent and aggressive behaviour as a critical risk, and retailers large and small see this as a high-priority harm requiring effective controls to manage.
Overlapping duties problem
Under the current HSW Act, overlapping duties work because every PCBU at a shared workplace has the same obligations. The large retailer managing the store and the small merchandising company whose workers come on site to stock shelves carry the same duty to manage all risks so far as is reasonably practicable.
The Bill breaks this symmetry. A small merchandising company need only manage critical risks. Things like manual handling, stepladder use and aisle obstructions are non-critical risks, risks the small PCBU is no longer required to manage.
However, those same activities create risks in the large retailer’s workplace that the retailer still has a duty to address. The large retailer must then choose between absorbing the small company’s safety management at its own cost, or imposing contractual requirements that replicate the very obligations the Bill removes, or refusing entry to merchandisers whose employers won’t manage the risks – affecting their commercial relationship and penalising the small business for exercising its reduced obligations.
This pattern applies wherever small and large PCBUs share a workplace: retail, warehousing, construction, logistics. The overlapping duty framework assumes each PCBU is managing its share of the risk. When one is legislatively excused from managing non-critical risks, the framework breaks down.
The compliance burden does not disappear, it transfers from the small PCBU to the large one, with no mechanism to recover those costs and no regulatory oversight of the gap. Risk does not check the size of your business before it causes harm.
Cumulative exposure harm
A big concern for ShopCare is the foreseeable increase in injuries because of reduced legal obligation to manage the risks that cause the most harm. Most workplace injuries are not caused by critical risks. They are caused by manual handling, slips and trips, repetitive strain, fatigue, poor ergonomics, and the cumulative effects of work that is physically demanding.
These are the claims that fill ACC’s books, that keep workers off the job for weeks or months, and that cost the system hundreds of millions of dollars annually. Under the proposed Bill, a small business has no statutory obligation to address any of them.
The principle of prioritising critical risk is sound. But the execution – the definition whose classification now carries fundamentally higher stakes for small businesses, the prioritisation requirement that is not even enforceable, the exemption that removes obligations for the risks that drive the most harm – does not match the ambition.
If this Bill is genuinely about making workplaces safer, the Select Committee should ask why the risks that injure the most workers have been legislated out of scope for the majority of businesses in Aotearoa New Zealand.
Selena Armstrong is CEO of ShopCare.
