To satisfy the Act, a PCBU must eliminate a risk so far as is reasonably practicable, or where it cant, it must minimise the risk so far as reasonably practicable. The Act does not tell you what you have to do, but it does provide a definition of Reasonably Practicable that gives you a series of tests you can apply.
So lets look at these tests:
- ‘…in relation to the duties of the PCBU…’ – Sect 36 of the Act and tallks about talks about the Primary Duty of Care. This section describes clearly what and who the PCBU is responsible for and provides the base for identifying what you must do. You need to be very clear that you understand what you are required to do and what that means for your business.
- ‘…is or was, at a particular time, reasonably able to be done…’ – This test talks about the controls or mitigation that could reasonably have been or should have been in place. It requires that reasonable controls are implemented and applies the ‘reasonableness test’ established in law to guide what is or is not reasonable. Most people understand ‘reasonable’. The requirement here is that the controls are in place, and where you cant, you have a plan in place to have them in place at some future point.
- ‘…taking into account and weighing up all relevant matters…’ – This is where most businesses start to fall short of meeting their obligations. They do not first identify and second do not weight up the factors that affect, determine, impact or influences the hazard, the likelihood of it occurring, the impact should it occur and ways to control or mitigate the risk. This test requires that you actively consider the factors, the appearance of consideration is not sufficient. If you have not evidenced your consideration then you cant prove it.
- ‘…the likelihood of the hazard or risk occurring…’ – In short you must assess the likelihood of harm occurring considering the factors that determine the likelihood. A matrix can be used for this. Where many business fail is when undertaking a JSA they identify the hazard then the controls, and completely miss this requirement.
- ‘…the degree of harm that might result…’ – as for likelihood, you need to consider the factors. The tendency here is to leap to the worst possible outcome or impact as opposed to the worst feasible. The effect is to inflate the risk assessment,
- ‘…what the person knows or ought to know…’ – You can no longer rely on simply on what you know. You need to keep abreast of changes in your industry to satisfy this requirement, and this must be reflected in your considerations.
- ‘…whether the cost is grossly disproportionate to the risk.’ – Cost is the last consideration and you can only discount a potential control where the cost of the control is grossly disproportionate to the risk being managed. In this regards, cost is not just financial, it includes time, other resources, effort and convenience. Grossly disproportionate is also a very high bar to satisfy. While it is still be to tested in NZ, it is described as the point where there is no further return on the investment.
So to satisfy the legal standard you need to ensure you have the reasopnable controls in place, that you have identifed and actively considered all factors related to the hazrd, risk and ways of controlling the risk including what you know and ought to know, assessed for likelihood and impact, and can show that discounted controls are either not reasonable or are grossly disproportionate.