NZ boards the criminal justice bandwagon

An unsettling trend is emerging in the modern workplace. While great strides have been made to manage occupational hazards through workers’ compensation, a new and potentially more sinister risk now looms over both employers and employees …

The general purpose of this series is to discuss workers’ compensation, with the more recent articles having dealt with the criminal justice system. It is rational to ask how we get from one to the other, and relatively easy to understand.

The average person goes to work to earn a living. That person does not expect to go to jail while simply working, but individuals are exposed to very serious risks, the nature of which is changing.

Peter L. Bernstein’s excellent book, Against the Gods – the remarkable story of risk, argues that one of the greatest achievements of modern society is that it has largely managed to conquer risk. This is something that we would have thought to be impossible in the mid-20^th century. Since the book’s publication in 1996, however, society seems to have lost the plot, and the conquered risks are surfacing once again.

To determine how this has come to be, let’s start by looking at the origins of managing workers’ compensation. Working persons face the risk of being injured while working. The existence of this risk was clearly understood by 1831, when the UK courts dealt with the case of Priestley v Fowler. It did not take too long to realise that this risk could and should be managed. 

In South Africa there are nearly 200,000 occupational accidents every year. What steps can be taken to reduce this risk of injury to zero? The answer is that we can never totally eradicate risk. Hence, the question moves to how to compensate injured persons.

Questions such as who was at fault or who caused the accident become irrelevant, and thus workers’ compensation was created: compensation without fault or causation. The risk was now managed.

The same can be said about motor vehicle accidents (MVAs). Each year about 14,000 people die in MVAs and again, it can be accepted that the accident figure will never be reduced to zero. Many of those who die or are injured are also employees. So, most countries in the world (including South Africa) have introduced MVA funds. While these funds are also supposed to be on a no-fault basis, some countries (again, including South Africa) have not completed the process.

What about the risk created by driving? Take the example of a worker employed to drive a heavy-duty truck. Given that every year 14,000 people die in MVAs, it can be accepted that a company employee bears a high risk of being involved in a very expensive and dangerous MVA. Seen from a risk perspective, it should be accepted that the risk of transporting goods across the county should reside with the employer; logically, it cannot reside with the driver-employee. This is common sense.

Thus, a century or so ago, the common law developed the doctrine of vicarious liability, under which the employer bears the risk if the employee is acting in and through the course and scope of their employment; if the employee-driver causes an accident, the employer becomes liable for the cost of the damages. Because this risk is also insurable, the cost of damages is, in practice, covered. 

Where does this leave the driver? The question of a driver’s civil or criminal liability originally received little attention. In practice, drivers usually did not face civil or criminal charges. Interestingly, the common law includes no crime of negligent injury to property. Criminal liability was possible where persons died, but prosecutions were actually very rare.

Interestingly, the question of whether an employee could be criminally liable for doing his job was raised for the first time in the US and, bizarrely, that employee was the country’s president. In constitutional law we have conventions: rules that are not articulated as rules of law, but are accepted as such. Some questions are never supposed to be asked, and certainly not tested in the courts. These are rules of good conduct, existing within all three state powers: parliament, executive, and courts. In the US, the Supreme Court was asked to rule on the criminal liability of the president. One could argue that a constitutional convention excludes the president from any criminal liability while acting in and through the scope and office of the position. The president should not be charged and, if not charged, then there is no need to ask the court to express an opinion on the convention. 

For 250 years the question was not asked. Nixon got close to being charged but resigned before it could happen and then, to settle the matter, he was pardoned by his successor. President Trump was actually charged, forcing the Supreme Court to express a view on the matter. This broke the convention: do not charge a president and do not ask the court to rule on it. 

This has, in fact, been the de facto position of all employees: going to work and doing your job to earn a living should not result in civil or criminal liability. The common law and day-to-day practice evolved to achieve this end. In Peter Bernstein’s world, the risk had been managed.

Things have changed, however. That employees are not liable while simply doing their job seems to have been forgotten in the UK. We have already discussed the UK Horizon British Post Office scandal. Over a 20-year period, hundreds of sub-postmasters were accused of stealing money from the post office and over 700 were prosecuted. Many were convicted and sent to jail. Many lives were ruined; some committed suicide … and it turns out that the money was probably never stolen. The computerised accounting system, Horizon, was faulty. A situation should not exist where normal employees go to work, do their everyday job, and end up with their lives being ruined under these circumstances. 

This brings us to New Zealand (NZ). The employer in question was a transport company, Salter’s Cartage, owned by Ron Salter. In 2015 a work-related accident occurred in which a contractor died while welding on top of a tank, which exploded because of the welding. The incident was investigated and Slater decided to plead guilty to a range of charges and pay reparations and a fine. In this case the regulator imposed a fine of R4.432 million and sentenced him to four-and-a-half months of home detention.

Two years later the police brought fresh proceedings, arguing his violation of the health and safety regulations meant he was operating a criminal enterprise. The police consequently seized his assets, which would then be declared forfeit to the state. These assets included his residential home and the home of his daughter and her husband. The police argued that the assets he had built up during his lifetime were the “proceeds of crime”. 

The seizure of assets legislation, a US innovation, had been passed by the NZ parliament to fight organised crime. Of course, if the police succeeded, the same situation would be faced by other businesses – violation of health and safety regulations would result in the seizure of a firm’s assets or the private assets of the firm’s owners. The matter went before the NZ courts during this year, nearly a decade after the accident, which is a further point of concern; the owner of the firm has had to deal with this matter for nearly ten years. 

It should be clear that increasingly the criminal justice system is posing a risk to normal employers and employees. Unlike the original occupational injury risk, which was managed via workers compensation, this new risk appears to be unmanageable. We are no longer in the Berstein world where risks have been conquered. Things have changed …