The case involved an employer who carried out an apparently controlled explosion in a West Coast mine in 2007. The explosion led to the mine being flooded, which trapped two employees working nearby. One was lucky to escape alive, the other drowned.
The Department of Labour prosecuted the employer, Black Reef Mine Ltd, for failing to take all practicable steps to ensure the safety of the employees. The employer was initially fined $10,000 and also ordered to pay reparation of $20,000 to the deceased’s widow.
The Department of Labour appealed those fines, saying they were inadequate. The High Court dealt with this case as well as two other appeals involving workplace injuries in the same hearing. In all three cases, the Department argued that the sentences imposed were inadequate in light of changes made to the Health & Safety in Employment Act 1992 in 2003, which resulted in a substantial increase in maximum penalties.
The High Court decided that a “substantial uplift” in existing levels of fines was needed to reflect the seriousness of workplace accidents, the ongoing costs of accidents to society, and the general increase in the maximum fines introduced in 2003.
The High Court said the starting points for fines under the H&S Act should be fixed at:
• 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.
Applying these fines to the facts before it, the High Court increased the fine on Black Reef to $20,000 and ordered reparation of $75,000. In the other two cases, it imposed:
- A fine on a commercial construction company of $50,000 following an accident in which a contractor was injured by falling off wooden scaffolding (the District Court had originally set a fine of $5,000);
- A fine of $40,000 on a food manufacturer whose employee’s arm became caught in a conveyor belt ($15,000 had been imposed by the District Court).
Employers need to take note of the significant increase in these fines. It reflects a tougher attitude from the Department and the Courts.