The changes are intended to create a clear, balanced framework that reduces regulatory burden for small businesses, prioritises critical risks and focuses on preventing serious harm.
WorkSafe is in the process of developing new guidance, training and support materials that focus on critical risks and providing practical support to persons conducting a business or undertaking (PCBUs).
A stronger focus on critical risks
At the heart of the reform is a move towards prioritising critical risks. These are the hazards with the greatest potential to cause significant harm.
A critical risk is a risk associated with a hazard:
- Likely to result in death, a notifiable injury or illness, a notifiable incident, or an occupational disease listed in Schedule 2 of the Accident Compensation Act 2001; or
- Described in Schedule 1A, which include those governed by high-risk regulatory regimes (think asbestos, mining or isolated work).
Critical risks need to be managed before other risks. PCBUs need to identify hazards that pose a critical risk based on:
- What they know, or ought to reasonably know about the business or undertaking.
- The associated hazard.
- Whether the risk is likely to result in death, a notifiable injury or illness, a notifiable incident or specific occupational diseases.
A more proportionate approach for small businesses
The changes are intended to give small businesses clarity about what they need to focus on without unnecessary compliance costs.
The legislation introduces two distinct PCBU groups, which have different obligations.
- Small PCBU duties are generally limited to managing critical risks.
- Small PCBUs are businesses with fewer than 20 workers. If the number of workers fluctuate throughout the year due to the nature of the business, the business will still be considered a small PCBU if it reasonably expects the number of workers to be fewer than 20 for at least 9 months of the year.
- The vast majority of New Zealand businesses will meet the definition of a small PCBU.
- Large PCBUs, those with 20 or more workers, will need to manage all risks.
The Ministry of Business Innovation and Employment (MBIE) has provided the following example in its Regulatory Impact Statement.
| Small PCBU Orchard with less than 20 workers | Large PCBU Orchard with more than 20 workers |
| Duty to manage critical risks, for example: Machinery and vehicle use Working at heights Chemical use Electrical hazards Heat stress and sun exposure Noise exposure |
Has a duty to manage critical risks and non-critical risks. Examples of non-critical risks include for example: Manual handling Repetitive tasks Slips, trips, falls Fatigue and mental health |
Clearer duties for directors
The Amendment Act does not remove officers’ duties. It clarifies that governance duties should be considered distinctly from operational responsibilities.
Officers remain responsible for ensuring the business has effective systems, oversight and resources in place.
Greater reliance on industry codes
Approved Codes of Practice (ACOPs) are another feature of the legislation. From 1 April 2027, compliance with relevant ACOPs will provide a guaranteed path to compliance with duties.
What businesses need to do to get ready for the changes
To prepare for the upcoming changes, you should:
- Identify critical risks in your business.
- Prioritise the monitoring and management of critical risks.
- Familiarise yourself with any relevant ACOPs or guidance.
- Remember that just because some risks are not critical does not mean they do not exist. These risks should still be managed appropriately.
Need support? If you have any questions about what the changes mean for your business, please get in touch with our team. Email admin@cmalaw.co.nz or phone 03 211 0153.
Disclaimer: This update provides commentary on employment law, health and safety and immigration 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.