Skip to main content
Logo: Te Ara - The Online Encyclopedia of New Zealand. Print all pages now.

Workplace safety and accident compensation

by Hazel Armstrong

Men took their lives in their hands when they went logging or coal mining in the 19th century. If a worker was injured or died, families were left to fend for themselves. But since the 1970s New Zealand has compensated people who are injured through a world-leading government-owned scheme.


Working in the 19th century

The largest early New Zealand industry was whaling, which began in 1791. Whalers faced dangers catching whales and rendering down blubber in large cauldrons.

Other early industries were based on felling timber and extracting natural resources such as gold and coal. Logging was dangerous work and accidents were common. Dozens of men were crushed by falling trees every year in the late 19th century. Branches flying off a falling tree were so deadly they were known as widow-makers. A timber worker clearing a logjam in a river had to be ‘almost as limber as a cat, it being near certain death to fall’.1

Dangerous fruit

 

Māori climbed towering kahikatea trees for delicious seasonal berries, koroī, which ripen high in the canopy and were eaten by the basket load. The harvesters – who fell to their deaths if they slipped – were recalled in the proverb ‘He toa piki rākau kahikatea, he kai nā te pakiaka’ (the bold kahikatea climber is food for the roots).

 

In mines and quarries, and on road and railway works, deaths by crushing were common. Miners were smothered underground, or died from drowning, sickness, or poisoning from handling dangerous chemicals. 

‘Blood on the coal’

Fatal and serious accidents were so common in coal mines that the miners had a saying, ‘There’s always blood on the coal’. They were paid by how much coal they produced, and this led to unsafe working practices. In 1879, 34 miners lost their lives after an explosion in the Kaitangata coal mine in South Otago. Those not killed in the explosion died of suffocation.

Sharp bend

 

Jack Wood, a pioneer resident of the remote bush community of Mangapūrua on the Whanganui River, remembered the dangers of shifting large logs with a draught horse. ‘It was necessary to unhook the horse and take the timber around an extra-sharp bend on rollers … We were just on completing the job when George had a very nasty accident for the block … ran up on his left hand, severing his small finger.’’2

 

A lack of safety lamps in the mine meant that miners sometimes used ordinary candles underground and one of these caused the firedamp (methane gas from coal) to ignite.

Shipping

Early colonial New Zealand was a maritime country dependent on coastal transport and overseas trade. Working conditions on its ships caused accidents. There was a constant risk of shipwreck, and many sailors worked high above deck on foot ropes, often in strong winds and rain.

Manufacturing

As manufacturing industries developed, new kinds of industrial accidents became common. Many woollen mill workers were girls as young as 14, and some had to work 18 hours a day. Tiredness led to frequent injuries from the machinery. By 1891 the death rate from workplace accidents was higher than in Britain and much of Australia.

Footnotes
    • Quoted in Dick Scott, Inheritors of a dream. Wellington: A. H. & A. W. Reed, 1969, p. 81. Back
    • Arthur P. Bates, The bridge to nowhere: the ill-fated Mangapurua settlement. Whanganui: Wanganui Newspapers, 2003, p. 65. Back

Workplace compensation, 19th and 20th centuries

The Regulation of Mines Act 1874 (which came into force in 1879) provided compensation for workplace injury and death. This had to be sought from the owner and was contingent upon proof of negligence.

The Employers’ Liability Act 1882 gave workers in a wider range of industries the right to claim compensation from employers whose negligence had contributed to an injury. Workers still had no automatic right to compensation for injury, and sometimes had to sue their employers to prove negligence. These cases were expensive and often unsuccessful.

The Factories Act 1891 set up the first system for inspecting factories and enforcing safety regulations.

Mining accident levy

In the notoriously hazardous mining industry, the government charged employers a levy from 1891 to fund the compensation of injured miners. Workers also set up their own life insurance schemes through trade unions. These funds were not large enough to provide adequate compensation because of the large number of accidents and occasional disasters. An explosion in the Brunner mine in 1896 killed 65 miners, leaving more than 200 women and children without an income. The families sued the mine owners, but after a long legal battle they received only a small payout. The community was left impoverished and divided.

Workers’ compensation, 20th century

In 1900 the Workers’ Compensation for Accidents Act introduced a ‘no-fault’ principle. Compensation for industrial accidents no longer depended on proving an employer had been negligent. The act provided injured workers with weekly benefits, and compensated the families of those killed at work. Employers were encouraged to take out insurance to cover themselves against payouts under the act. However the benefits paid were small and lasted for a maximum of six years.

During the first half of the 20th century workers and their dependants continued to struggle to receive adequate compensation for injury or death at work. The watersiders’ union president, ‘Big Jim’ Roberts, told his members that if they lost thier lives, the stevedoring contractors and shipowners would go to court to try to deprive their dependants of compensation.

The welfare state

Following the creation of the welfare state in the 1930s, the state came to be seen as the logical provider for compensation and rehabilitation. From 1947 it was compulsory for employers to take out insurance against workplace injuries. Three years later a Workers’ Compensation Board was set up to insure workers whose employers failed to provide sufficient coverage, and to promote accident prevention. This board was funded by levies collected from accident insurers and some employers.


Accident compensation

The system set up by the Workers’ Compensation for Accidents Act 1900 did not cover non-work accidents or motor vehicle injuries, which became increasingly common. It was also often difficult for injured workers to claim compensation if employers and insurers used legal arguments to dispute their obligation to pay. These issues were examined in 1966 by a Royal Commission on Compensation for Injury in New Zealand, headed by Chief Justice Owen Woodhouse. The commission’s report recommended that the state provide 24-hour, no-fault insurance for all personal injury. In return, New Zealanders would give up the right to sue for damages arising from personal injury.

Life experience

 

During the Second World War, Owen Woodhouse commanded torpedo boats and worked with Yugoslav partisans. These experiences gave him first-hand knowledge of the trauma caused by injury and death. Made a Supreme Court judge in 1961, in 1966 he was asked to chair the Royal Commission on Compensation for Injury.

 

These recommendations were supported by both main political parties and given effect by the Accident Compensation Act 1972. This required all taxpayers, employers, self-employed people and motor vehicle owners to pay a levy to a new state agency, the Accident Compensation Commission (later renamed the Accident Compensation Corporation). The amount of the levy on earners was set by the government each year on the basis of the risk of accidents in each industry – a coal miner paid a higher levy than an office worker.

Assistance and levies

In the 2010s anyone who was injured could apply for ACC assistance, regardless of whether they were working at the time of their injury or were to blame for it. If their application was approved and they were working before the accident, they received compensation of 80% of their weekly income – subject to upper and lower limits – while they were unable to earn due to the injury. Treatment and rehabilitation costs were also covered. In 2012/13, 1.7 million people had accident claims accepted by ACC and 76,000 received weekly compensation.

In 2012/13 ACC collected $4.7 billion from all levies. ACC invested this money locally and internationally, and used it to fund accident prevention, accident compensation and accident rehabilitation.

ACC spent part of its income from levies on campaigns to reduce the number of injuries, their severity and cost. Campaigns to reduce workplace injuries have focused on issues such as work-related driving while tired, occupational over-use syndrome (OOS), and hearing loss from loud noise.

Change and criticism

In the 2010s the ACC system continued the basic principles outlined when it was set up, but it has been altered over time. The Accident Rehabilitation and Compensation Insurance Act 1992 introduced experience rating, which based employers’ levies on the amount of previous claims they had made. It also reduced the level of payments for rehabilitation and compensation.

Since its introduction in 1974, the ACC scheme has been criticised at various times by trade unions, politicians and employers. A few ACC claimants have taken advantage of the scheme by continuing to claim compensation when they were capable of resuming paid work. Critics argue that because New Zealanders cannot sue for compensation, there is less incentive to prevent workplace accidents.

ACC’s monopoly on accident compensation has been claimed to be financially inefficient, and critics have questioned whether the government should own an insurance scheme. In 1998 the Accident Insurance Act opened part of the scheme to commercial competition, but this was repealed following a change of government the following year.

An independent evaluation by PriceWaterhouseCoopers in 2007 found that the ACC scheme achieved a level of benefits and performance comparable with Australia and other countries, at a lower cost. Nevertheless, political parties continued to campaign to reform ACC and reintroduce private sector participation in accident compensation insurance.


Workplace health and safety, 1990s and early 2000s

By the 1980s, workplace health and safety was covered by a large number of very prescriptive industry-specific acts and regulations overseen by various government agencies. The Health and Safety in Employment Act 1992 brought all workplaces and workers under one act that was primarily administered by the Department of Labour’s Occupational Safety and Health unit. Employers had to take all practicable steps to safeguard workers under a regime that allowed for a high degree of self-management. The Department of Labour could take employers to court for breaches of the act.

The Hazardous Substances and New Organisms Act 1996 set special requirements for handling explosive, toxic or other dangerous materials at work.

Pike River

In 2010 a methane gas explosion killed 29 workers in the Pike River coal mine on the West Coast. The tragedy exposed major shortcomings in the country’s health and safety regime. The Department of Labour had only two mining inspectors, so mines could not be rigorously checked – Pike River’s health and safety systems were wrongly assumed to be legally compliant. The Pike River Royal Commission (2012) and the Independent Taskforce on Workplace Health and Safety (2013) both recommended a major overhaul of the law and regulatory agencies.

New developments

A stand-alone regulator, WorkSafe New Zealand, was created in 2013. This organisation assumed the health and safety responsibilities of the Department of Labour and its successor, the Ministry of Business, Innovation and Employment. The Health and Safety at Work Act 2015 replaced the 1992 act. Businesses in high-risk sectors and those in low-risk sectors with more than 20 workers now had to have health and safety representatives and committees if workers requested them. Penalties for non-compliance were increased.

Travelling for work

 

In 2015, WorkSafe New Zealand was the main workplace health and safety regulator, but transport agencies also had responsibilities in this area. Maritime New Zealand regulated work on ships while the Civil Aviation Authority was responsible for aviation. The New Zealand Transport Agency and the Police had roles in land transport workplaces.

 

Working conditions

One cause of work-related illness and death identified in the late 20th century was asbestos poisoning. Asbestos was widely used in New Zealand as a building and insulation material until its use was banned in 1991. People exposed to asbestos do not usually suffer ill effects for at least 20 years, and this time lag helped to conceal the risks of using the material.

In the 2010s office workers greatly outnumbered people in tough, dangerous physical work – but they were afflicted by injuries such as occupational over-use syndrome (OOS). Some occupations, such as farmers, fishers and truck drivers, were likely to work long hours and outside normal working hours, increasing their risk of workplace accidents. Workplaces were far safer than they had been, but workers continued to be killed, injured and infected with disease while doing their jobs. In 2013 the Independent Taskforce on Workplace Health and Safety found that New Zealand had a high rate of workplace deaths compared to other OECD countries


Hononga, rauemi nō waho

More suggestions and sources

More links and websites


How to cite this page: Hazel Armstrong, 'Workplace safety and accident compensation', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/workplace-safety-and-accident-compensation/print (accessed 20 August 2019)

Story by Hazel Armstrong, published 11 Mar 2010, reviewed & revised 18 Apr 2016