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Brief Counsel

Double jeopardy for workplace accident?

29 July 2015

A Christchurch manufacturer has incurred penalties from two different authorities under two different laws for the same workplace accident.

Background

VIP Frames and Trusses Ltd (VIP) produces prefabricated steel and wooden building frames and trusses for the construction industry.  One of its employees, Lyndon Fredericks, was seriously injured at work when an inexperienced worker, only five days on the job, was using a nail gun directly opposite him and misfired, puncturing his lung and pericardium and narrowly missing his heart.
The company:
  • was taken to the Employment Relations Authority (ERA) by Mr Fredericks earlier this year where he was awarded $6,000 in compensation for humiliation, loss of dignity and injury to his feelings on a claim for unjustified disadvantage in VIP’s failure to provide a safe workplace, and
  • later pleaded guilty to Worksafe New Zealand’s prosecution under the Health and Safety in Employment Act 1992 (HSEA) for failing to take all practicable steps to ensure the safety of employees while at work, on which the District Court required the company to pay Mr Fredericks reparation.

The District Court decision

The Court could not find any cases where the ERA had ordered compensation prior to an HSEA sentencing but rejected an argument from the defence that it should not make any order of reparation for emotional harm given that the ERA had already dealt with this issue. 
The Judge said that he must be guided by the statute he was working under and in accordance with the principle of consistency in the Sentencing Act, by the decisions of higher Courts.  The ERA had not been required to follow the same legislation or the same case law in making its decision.
However, having assessed the amount of reparation due to Mr Fredericks at $15,000, he ordered VIP to pay only $9,000, taking into account the $6,000 that had already been awarded by the ERA.

Other penalties

The Court found that the accident was the product of:
  • an unsafe work practice - the two men had been “cross-nailing” (working with nail guns concurrently on opposing sides of the same frame).  Although there was some ambiguity in the material available to employers on this practice and around how common or accepted it was, it clearly contravened the Worksafe guidelines so was not a “minor” deviation, and
  • the inadequate training and supervision of the new employee.
It assessed the starting point for the fine at $85,000, reduced to $46,962.50 with discounts for reparation (15%), for VIP’s cooperation, remorse, previous good record, and steps taken since the accident (20%), and for VIP’s late guilty plea (15%).

Chapman Tripp comments

This case should not incentivise increased cases against employers in the ERA for unjustified disadvantage where injuries are sustained in workplace accidents.
Based on the decision in the VIP case, it appears that where the employer also faces charges under the Health and Safety in Employment Act, and reparation is awarded to the victim, a deduction will be made in the reparation payable based on the amount paid for unjustified disadvantage.
If the HSEA prosecution was known about at the time of the ERA case, the company may well have been able to stay the disadvantage claim (although there was more in issue before the ERA) until determination of the HSEA prosecution.

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