Employers in New Zealand need to provide a "safe" workplace for their employees and visitors as legislated in the Health and Safety at Work Act (2015) (HSWA). The word "safe" is in inverted commas because there are regulations that define the level of safeness based on the risk posed by the hazard. In this article, Krish Shekaran - Global Structures WorkShare Manager, explores how employers could approach, respond and proactively manage the health and safety risks posed by hazards, particularly from seismic events.
"Safe" workplaces depend on the risk posed by hazards. For example, if the hazard is from a fire event, the Building Act cites regulations that specify the alarm systems required and the number of "safe" routes out of the building for employees and visitors. Normally a commercial building will have a building warrant of fitness (BWOF) that certifies that the fire alarm systems comply to the standards the building was designed to.
Whether the building is owned or leased by the employer, asking for a current BWOF is a good way to manage health and safety obligations towards employees and visitors. The older the building, the older the systems so it’s important to also understand what the systems would be if the building was designed today. This can help with an educated decision on whether an upgrade is needed.
Similarly, the HSWA (Asbestos) Regulations control the use – and removal – of asbestos in the workplace. These regulations affect all commercial buildings (excluding private residential houses) built before 2000, and require that asbestos materials be identified on-site. The Regulations require that an employer or person conducting a business undertaking (PCBU) must have an asbestos management plan in place for a structure where asbestos is found or is likely to be found.
Industrial site hazards and safety
Industrial sites usually have more hazards, including moving parts in machinery, forklifts, conveyors, steam, chemicals etc. All these hazards pose risks to employees and visitors. A raft of regulations provide guidance on the level of safety for industrial sites, such as the HSWA (Hazardous Substances) Regulations 2017 (HSR) and HSAW (Major Hazard Facilities) Regulations 2016 (MHFR). The employer needs to assess these risks and provide mitigation measures to make the site a "safe" place to work.
These sites are also usually subject to constant change due to process improvements. Risk assessment and mitigation is a regular part of operating an industrial site. In 2016 the Major Hazard Facilities (MHF) Act further complicated the responsibilities of an employer of an industrial site. There are seismic implications of the MHF Act and a range of practical measures to help an operating business – see this paper that highlights the impact of managing seismic risk on manufacturing facilities.
Managing and mitigating seismic risk
Like asbestos or fire risks or risks on industrial sites, risk of potential harm to an employee or visitor from a seismic event needs to be known by an employer and mitigation measures implemented to make the workplace "safe". Whether the landlord or the employer does the seismic assessment is a contractual matter, but the responsibility of making the workplace "safe" lies with the employer.
From a regulatory context, the relevant New Zealand legislation that provides some guidance on the level of seismic safety for building occupancy are the Building (Earthquake-prone Buildings) Amendment Act 2016 and the HSWA. Worksafe New Zealand (which enforces HSWA) has recognised that this is an important and often confusing matter for building owners and PCBUs to navigate. That’s why it’s put together some information on how to deal with earthquake-related health and safety risks.
According to Worksafe New Zealand: "If you're a PCBU who owns or occupies a building, and you're meeting the requirements of the Building Act, we are not going to enforce to a higher standard under HSWA." This sets the minimum bar for PCBUs to identify and manage seismic risk of their buildings. More guidance on this can be found on the Worksafe New Zealand website.
A case study in managing and mitigating seismic risk
Consider that a landlord leases a tenancy in a multi-tenancy building to an employer. Part of the lease agreement requires that the landlord provide a seismic assessment for the tenancy. However, the landlord is not fulfilling their contractual obligations. Can the employer keep waiting for the seismic assessment from the landlord? Or does the employer commission their own seismic assessment? We recommend the latter as this puts the employer in a more defendable position should any employee be harmed in a seismic event. Pursuing legal action against the landlord for not fulfilling their contractual obligations is also an option for the employer in this case.
In the case above, if the seismic assessment commissioned by the employer finds the structure to be less than 34%NBS (new building standard - note a new building is expected to be >100%NBS), the employer must consider strengthening the structure as per requirements of the Earthquake Prone Building Act.
This is a complex issue. Although the responsibility of making the workplace "safe" lies with the employer, only the landlord can strengthen the structure as they own the building. Working through this can be time consuming, distracting, costly, and it's unlikely to reach a satisfactory outcome. It's common for an employer's seismic policy to mandate that they vacate the tenancy within days after receiving a rating of less than 20%NBS and within weeks after a rating of less than 34%NBS if strengthening works can't be urgently carried out within that timeframe.
The above two situations can be avoided if the lease agreement requires a seismic assessment to the "current" guidelines to be provided as part of the prelease negotiations. The "current" guidelines are important. In the past few years there have been quite a few learnings that the guidelines have adopted (see table below) and that means older seismic assessments need to be updated.
|2006||Original NZSEE guidelines released|
|2017||Geotech is compulsory, issues related to reinforced precast walls, seismic restraints and diaphragms.|
|2018||Hollowcore / precast floors|
Some employers have seismic policies that require higher than 34%NBS (i.e 67%NBS or 80%NBS), making updating assessments to the current guidelines even more relevant.
The role of high level reviews
There’s an option for tenants / employers to undertake high level reviews (HLRs) of seismic assessments provided by landlords before leasing tenancies as part of their due diligence, and only lease them when the review provides a desired outcome. Usually, a HLR can be accommodated in the typical prelease negotiation periods. But if the HLR reveals further work to be done from an assessment perspective or possible structural strengthening then this can complicate the negotiation and the timeframes. HLRs will not necessarily identify all aspects that could affect the rating so should therefore be considered with care.
Say the structure was assessed by the landlord’s engineer and is confirmed by a HLR by the tenant / employer’s engineer. The tenant / employer then moves into the tenancy as the building meets their seismic policy. But a few years later the guidelines change, the rating reduces, and the building no longer meets the tenant’s seismic policy. What are the options for the landlord and the tenant?
Unless there was an agreement for such an eventuality in the lease agreement, the landlord has the option of following the timelines of the Earthquake Prone Building Act. Depending on the latest rating this could mean that employer now no longer has a workplace that meets their requirements for a "safe" place for their employees and may want the landlord to strengthen and / or vacate the premises. This again puts the tenant / employer in a complicated position. Every case is different and so a mutually agreeable position must be reached by landlords, tenants, engineers and lawyers working together.
The future of seismic strengthening buildings
In today's world where most tenants / employers are aware of their health and safety obligations it makes sense for landlords to commission a seismic assessment and strengthen to at least 34%NBS, if not 67%NBS. This makes their assets more likely to be leased. It pays to future proof the asset by strengthening to a higher than target %NBS if possible. Going higher than 34% is purely a commercial decision.
In case of owner operators (OOs) the challenge is more practical. OOs are often more interested in mitigating the risk than spending valuable resource on completing detailed seismic assessments. High-level seismic triaging allows OOs to understand which of their assets need Initial Seismic Assessments or Detailed Seismic Assessments (DSA). When we have sufficient confidence around the expected seismic behaviour of the structure, we stop the DSA and discuss appropriate next steps. This is a cost-effective methodology for OO’s. If their assets aren’t expected to exceed the target %NBS, strengthening schemes can be designed, alongside advice about how this will impact operations during implementation.
For example, OOs can increase production on site by adding a late shift for a period before carrying out strengthening works so there’s no impact on production. Speed of erection of steelwork takes precedence over trying to rationalise the size of the steel sections as faster installation is vital.
There are multiple pathways for employers to understand seismic risk exposure to their employees and visitors and actively manage it. Seismic activity is another risk for employers / PCBU to deal with. With good advice and an evidence-based approach, dealing with this risk can be simplified, a defendable position reached, and employers can go back to focusing on their core business.