Trusts and Health & Safety - A Governance Wake-Up Call

By Rob Thomson, Managing Director - Safe Business Solutions

A recent Court of Appeal decision has confirmed that trusts can be prosecuted under the Health and Safety at Work Act 2015. While that may not come as a complete surprise, it does sharpen the focus on how health and safety responsibilities sit within trust structures.

This isn’t a brand-new law change. The HSWA was already drafted broadly enough that a trust could fall within the definition of a PCBU - any uncertainty sat more in ‘how’ that would be interpreted and applied in practice. What the Court of Appeal has now done is remove that ambiguity via case precedent.

In practical terms, the position is now clear. A trust can meet the definition of a PCBU, the Act can be enforced against it and prosecution in that context is legally valid.

In New Zealand, trusts are commonly used to hold business assets or operate trading entities. There can sometimes be an assumption that the structure itself creates a degree of separation from operational risk. The recent decision makes it clear that where a trust is effectively conducting a business or undertaking, it can be held to account in the same way as any other PCBU.

For those involved at a governance level, particularly trustees, the implications are practical rather than theoretical. Health and safety is not something that can be delegated and forgotten. There is an expectation of active oversight, a clear understanding of risk and confidence that appropriate systems are in place and working.

What we often see in practice is that health and safety reporting to trustees is either too high-level to be meaningful or too operational to provide real assurance. Striking the right balance is critical. Trustees should be in a position where they can ask questions and receive answers that give them confidence, not just comfort.

This decision is a useful prompt to revisit how governance is being managed in relation to health and safety. That includes looking at how risks are identified, how performance is reported and whether there is a clear line of sight between what is happening on the ground and what is being discussed at the governance table.

For a detailed legal analysis of the case, the original article from Russell McVeagh is worth reading:
https://www.russellmcveagh.com/insights-news/court-of-appeal-rules-trusts-can-be-prosecuted-under-the-health-and-safety-at-work-act-2015/

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