WorkSafe New Zealand v Wai Shing Limited

Injured worker recieves $336,300 following workplace accident

WorkSafe New Zealand v Wai Shing Limited

Background
In the health and safety space, WorkSafe NZ v Wai Shing Limited is our first glance at a Court topping up the difference between ACC payments and what the worker could have earned were they not injured.  

When a company is found guilty of breaching of health and safety legislation, the Courts generally order payment of a fine and reparation.  Reparation is a payment a Court can order a defendant to pay to the victim for loss, damage or cost suffered due to the offending.  In this case, a total of $336,300 was ordered to be paid to the victim by Wai Shing Limited.

Until 2014 the case law was fairly settled that ACC entitlements were governed by the ACC scheme and Accident Compensation Act 2001 and that the Courts could not “make up” the difference. In 2014 an amendment to the Sentencing Act 2002 (which contemplates the principles of reparation) allowed the Court to consider these “ACC top ups” when deciding on an amount of reparation.   

Facts
Wai Shing Limited, a horticultural company, was prosecuted after a worker was paralysed in a workplace accident.  He was struck on the back of the neck by a harvester used to collect pumpkin.  The worker was working alone at the time of the event and lay undiscovered for several hours after the accident.  The result of the accident was that the worker was left a tetraplegic, paralysed from the neck down, and now requires around-the-clock care.

The Offending
There were a number of failings by the company including failing to adequately train, provide sufficient PPE including a hardhat, and failure to implement a system to identifiy the vehicle had not returned at the end of the working day.  Wai Shing Limited was found guilty of breaching the Health and Safety in Employment Act 1992 and fined $37,500, with the Director personally fined $12,500. 

Reparations Calculations
The Court looked at both consequential financial loss and emotional harm suffered by the victim when calculating reparation.

Here, in terms of consequential financial loss, the Court looked at the difference between the worker’s ACC payments, and the amount he would have earned had he not been injured, assuming he would have worked until he was 65. The Court also made an assessment that his income would have “increased annually by the labour cost index [but made] no allowance for promotional increase or change of hours.” 20% percent of those earnings (i.e., difference between ACC’s payments and his normal rate) came to $462,400.

The Court subtracted $9,800 already paid by the Company to the worker. The Court further reduced the sum by 50%.  The reduction was to take into account the ACC scheme, its principles, and its benefits.  i.e., if it were not for the ACC scheme, injured persons would have the time, cost and stress of pursuing litigation to seek damages against those responsible for the injury. 

The end result was an order of $226,300 for consequential financial loss.

In terms of emotional harm, the worker suffered severe emotional trauma from the accident and the resulting injuries. Whilst the Court said the worker’s partner couldn’t be assessed it did comment that “it is clear that the impact of the accident on [the worker’s partner] is very much tied into the emotional harm being experienced by [the worker].  It would be artificial to fail to acknowledge the impact on [the worker’s partner] even if [the partner] does not strictly fall within the definition of “victim”.

An emotional harm payment of $110,000 was ordered, making a total reparation order of $336,300.

Comments
This figure is at the top end of reparation sums previously ordered by the Courts. This case was not determined under the new Health and Safety at Work Act 2015 however, we expect to see further increased in these sums given the new legislation which allows for higher maximum penalties.  This also acts as a good reminder to check your statutory liability insurance levels; you cannot insure a company against fines, but you can for reparation.

If you require any further information on Health and Safety law please contact us.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.

August 2017