Restructuring in New Zealand: Health and Safety Obligations in Workplace Change

Engaging with workers is an important element of health and safety management.  The Health and Safety at Work Act 2015 (the H&S Act) recognises this by requiring PCBUs (Persons Conducting a Business or Undertaking) to engage with workers on health and safety matters.  If a matter might affect a businesses workers’ health and safety, then the officers of the business need to engage with the workers about it.

Engagement means giving workers information about the decision the business is thinking about making or the issue that it is trying to resolve, and a real chance to provide input into its decision-making. This includes giving workers the opportunity to raise health and safety concerns about that issue.  Workers’ views need to be considered and then workers need to be advised of the outcome in a timely manner.  How do health and safety requirements affect a business’s obligations in situations of workplace change including redundancy.  

The Act imposes obligations on the officers of a PCBU to exercise due diligence to ensure that the PCUB complies with its duties under the H&S Act.  The duty to exercise due diligence requires an officer to take reasonable steps to know about work health and safety matters and keep that knowledge up-to-date, gain an understanding of the nature of the operation of the organisation and the hazards and risks associated with those operations, ensure the PCUB has appropriate resources and processes to eliminate or minimise those risks and uses them.

In a recent development in Australia – its safety regulator SafeWork issued a prohibition notice to stop the University of Technology Sydney’s proposed redundancy process on the grounds that the way the process was being managed risked staff members’ mental health. SafeWork said that the proposed job cuts were exposing workers to “serious and imminent risk of psychological harm” and ordered an immediate pause to the employer’s process.  

Traditionally, New Zealand’s Employment Relations Authority and Employment Court have shown a willingness to scrutinise a restructure process to determine whether the employer has complied with its obligations to properly consult with affected employees and in a number of cases have issued compliance orders requiring the employer to meet their contractual obligations.  Where the employer’s course of action was found to be insufficient redundancies were paused.  

Although the H&S Act provides little detail on mental health (including psychological distress) this is becoming a focus area for WorkSafe under the heading of “mentally healthy work”.  Mentally healthy work is described as a broader concept than the safety-based approach to mental health which has a focus on preventing bullying and harassment.  Within the mentally healthy work framework, WorkSafe has identified a number of “psychosocial factors” which can impact workers’ mental health, including job security.  Whether WorkSafe will follow the Australian regulator in issuing prohibition orders in restructuring or job change situations is yet to be seen.  Importantly, employers need to be mindful of their health and safety obligations and that restructuring is inherently stressful.