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July 2005
First Employer prosecuted for stress
Employers were delivered a wake up call in April when a Nelson engineering firm became the first New Zealand company to be successfully prosecuted for failing to prevent illness caused by workplace stress. The Department of Labour’s occupational safety and health service prosecuted the company, Nalder and Biddle Ltd, after one of its employees became ill from stress last year.
Nalder and Biddle was fined $8000 on 13 April this year and ordered to pay reparation of $1300 for failing to effectively manage work-related stress. This was the first prosecution of its type under the Health and Safety in Employment Act. The Act requires that employers take all practicable steps to identify and manage hazards in the workplace and ensure employees aren’t harmed. It was amended in 2002 so that the definition of harm now includes any mental or physical harm caused by work-related stress.
The Department of Labour’s National Operations Manager, Mike Cosman, said the mental and physical harm the employee suffered was the direct result of work pressures and poor work organisation, which the company failed to deal with despite numerous complaints. Cosman said it was a clear-cut case of an employer failing to address an employee’s health and safety concerns.
‘She was working in an environment where poor communication was the norm, and the work culture was non-supportive. Even after complaining many times over several months, the company did nothing substantive to address her concerns.’
Being busy or challenged, or working long hours, were not bad things, Cosman said. ‘But when it starts to cause mental or physical harm, an employer is obliged to act. This company failed to act to protect a worker, whose workload was making her ill, and this was a clear breach of the Act.
The charge of failing to effectively manage workplace stress carries a maximum fine of $250,000. Nalder and Biddle’s fine was a small one, but sends a signal to employers that workplace stress is a real hazard that needs to be addressed.
