Immigration guide for employers JULY 2011

Transcription

1 DEPARTMENT OF LABOUR IMMIGRATION Immigration guide for employers JULY

2 IMMIGRATION GUIDE FOR EMPLOYERS This guide will help you decide the right category for workers you may need to support through the immigration process. It explains the application process and provides some advice on recruiting offshore and settling new migrants and their families into their new life in New Zealand. More detailed explanation of the instructions is available at or you can phone to request copies of guides and application forms. ISBN

3 CONTENTS INTRODUCTION 3 ANSWERS TO COMMON IMMIGRATION QUESTIONS 3 Can I hire a worker from another country who is already in New Zealand? 3 Can I hire a worker from another country who does not have a work or residence class visa? 4 Which immigration category is appropriate to my potential employee/s? 5 Is there a special category if I frequently need to hire skilled people from offshore? 7 What is a visa? 7 What is the difference between a residence class visa holder and a citizen? 7 Does someone with New Zealand residence need a work visa? 8 How does a person get permanent residence in New Zealand? 8 How do I support someone to work in New Zealand and are there any conditions? 9 What does a job offer need to include if it is part of an immigration application? 9 How is skilled work defined? 9 How can I get a job onto the Long Term or Immediate Skill Shortage lists? 9 Can a foreign-born worker bring their family with them? 10 Does someone working for food and board need a work visa? 10 What is the New Zealand Residence Programme? 10 Can someone with a criminal conviction work in New Zealand? 11 Is there any type of work not allowed on a temporary visa? 11 RESIDENCE AND WORK VISA INSTRUCTIONS 11 The Skilled Migrant Category 12 Talent categories 14 Residence from Work Instructions 17 Essential Skills work visas 17 Specific purpose visas 18 Students 19 Working holidays 19 1

4 Family Category for residence 19 General information on applications 20 Interim visas 20 Quick guide to residence and work visa instructions 21 HOW DO I FIND STAFF OVERSEAS? 22 Planning for the recruitment process 22 Describing the job 24 Finding and interviewing candidates 26 Making an offer 27 WELCOMING AND SETTLING MIGRANTS 29 Setting expectations 29 Preparing the workplace 30 On arrival 31 Cultural differences 32 Review 32 Encouraging residence 32 WHO CAN HELP? 33 The Department of Labour 33 Support from your industry or region 34 Settlement Support New Zealand 34 New Zealand Qualifications Authority 34 CONTACT THE DEPARTMENT OF LABOUR 34 WORK ENTITLEMENT CHECKLIST 35 Employer obligations under the Immigration Act Is the person you are checking a New Zealand citizen? 35 Checking a New Zealand citizen s work entitlement 35 Checking a non-new Zealand citizen s work entitlement 35 Did VisaView confirm that this person is entitled to work for you? 35 2

5 INTRODUCTION A skilled workforce is essential to New Zealand s economic growth. Immigration is one of the levers Government has to help business gain and retain the skills it needs. The Department of Labour is actively promoting our country as a great place to live and work to both migrants and expat Kiwis. Businesses hire people from overseas for a variety of reasons, mainly when they cannot find suitable staff in New Zealand. Employers tell us that hiring a migrant benefits their business in a variety of ways, many which were unexpected. Some employers find the international connections of a migrant employee help their business expand. Others say the introduction of new ways of doing things can provide efficiency gains and stimulate innovation in their businesses. The New Zealand Residence Programme aims to match people coming to New Zealand with the skills required by our workplaces. We also want to ensure that migrants and their families settle well and stay in New Zealand. There are multiple work and residence instructions that allow foreign passport holders to live and work in New Zealand. ANSWERS TO COMMON IMMIGRATION QUESTIONS Can I hire a worker from another country who is already in New Zealand? If you want to offer a job to a foreign national in New Zealand you must check that they are legally able to work here. Citizens of New Zealand (including the Cook Islands, Niue and Tokelau) and Australia do not need a work visa to legally work here. Residents of New Zealand and Australia do not need a work visa to legally work here. A New Zealand passport; birth certificate or citizenship certificate with photograph identification; residence class visa, or endorsement in a foreign passport indicating New Zealand citizenship show that a person is able to work here. An Australian passport, Australian Permanent Residence Visa or Australian Resident Return Visa is also proof that they are able to work here. Most foreign passport holders eligible to work in New Zealand will have a New Zealand residence class visa or New Zealand work visa label or stamp in their passport. Some people may have electronic visas and they will be able to show you a print out of the letter received from the Department. Some foreign passport holders may have an endorsement in their foreign passport stating that they are a New Zealand citizen. Holders of student visas, who are able to work in New Zealand, will have their work conditions noted in their visa or may have a letter from Immigration New Zealand called a Variation of Conditions attesting to their entitlement to work. 3

6 You can check visa details and whether a foreign national can legally work for you using Immigration New Zealand's online VisaView system. VisaView allows registered New Zealand employers to access records held by Immigration New Zealand and to check whether a person who is not a New Zealand citizen is entitled to work in New Zealand. It also allows registered employers to confirm New Zealand passport information provided by job seekers. The sharing of information through VisaView is authorised by legislation. If you don t use VisaView you must check the expiry date of the visa and the conditions listed on that visa. Many visas that are granted only allow a person to work for a specific employer in a specific location, or for a limited number of hours. If the person changes employer or location they must go through another immigration visa process to change their visa conditions. If a person you want to hire does not have a visa valid for the job you are offering they may be able to get one with your support. If someone who is not legally entitled to work in New Zealand works for you, you are committing a criminal offence. For more information see A Guide to Help Employers Check Work Entitlement, available from the Department of Labour. DID YOU KNOW? If you use VisaView to check a foreign national s work entitlement, a positive response will include the visa expiry date and any work-related conditions of that visa. Can I hire a worker from another country who does not have a work or residence class visa? You can make a job offer to someone who does not have a work or residence class visa but this should be conditional on them getting a work or residence class visa. They may not start working for you until they have the relevant visa, as described above. Most work and residence class visa categories require a person to have a job offer before they can get a New Zealand visa. To support someone in their application, you need to establish that they are eligible and there are no New Zealanders available to do the work. This largely depends on the type of job they are being offered, and their skills and experience in doing that job. They must also meet the Government s health and character requirements, and their qualifications and work experience must be verified. DID YOU KNOW? All work visas are issued on a fixed-term, temporary basis. The only permanent way to live and work in New Zealand is if you are a New Zealand citizen or residence class visa holder. 4

7 DID YOU KNOW? An Inland Revenue (IR) number alone is not proof of a person s legal ability to work in New Zealand. They must have New Zealand citizenship, a work or residence class visa, or a temporary visa that specifically allows them to work. Which immigration category is appropriate to my potential employee/s? There are various immigration categories designed to ensure that people migrating to New Zealand have the skills that are really needed here. They also ensure that no New Zealanders are disadvantaged by foreign workers entering the labour market. To work out if the position you need to fill meets immigration requirements you need to answer these questions: 1. Is the job considered skilled according to immigration instructions? Does it require experience and qualifications? 2. Does it appear on the Long Term Skill Shortage List? 3. Does it appear on the Immediate Skill Shortage List? 4. Are there no New Zealanders available to do the job? 5. Is it a short- or long-term role? If it is a skilled, permanent position a potential employee should check their eligibility for residence under the Skilled Migrant Category. This works on a points system with the majority of points being earned for a job offer in a skilled occupation. People who are accepted under the Skilled Migrant Category will usually be granted residence and can stay and work in New Zealand permanently. See the detailed Skilled Migrant Category information on page 12. If the role is on the Long Term Skill Shortage List ( and the candidate has the work experience and qualifications listed specifically for that position, they may get a work visa through the Talent Work Category. A work visa will be granted for the length of the employment contract, up to a maximum of three years. Although the visa is a temporary option, people who come to New Zealand on this type of visa can apply for residence through the Residence from Work programme after working here for two years. Once here they cannot work for another employer or in another location without applying for a variation to their visa conditions, in essence going through another application process. Once they have been granted residence, they may work for any employer. A person who has skills listed on the Immediate Skill Shortage List ( is able to apply for a temporary work visa if they have a relevant job offer and the work experience and qualifications listed for that position. 5

8 If the role you are seeking to fill is not on one of the skill shortage lists or is not considered skilled according to immigration instructions, you need to be able to demonstrate that you cannot find suitably skilled or qualified New Zealand workers or New Zealand workers who could be trained to do the work. The Department of Labour will undertake a labour market test to confirm this. The process is detailed on page 14. To go through the labour market test before you have found a candidate you should apply for Approval in Principle. This means that you are pre-approved to hire people in the positions specified within the time specified, typically six to twelve months. You can apply for Approval in Principle to hire many people and this is valid until you have filled the number of positions specified in your application, or until the expiry date. If you have already found someone you wish to employ, and you can meet the labour market test, you can assist the candidate to apply for an Essential Skills work visa. You will have to supply information for the labour market test in support of their application. It is better to apply for and be granted an Approval in Principle in advance as this provides more certainty for employer and employee. If you need to employ someone for a specific purpose or event (such as intra-corporate secondment, senior level transfer, sports referee or judge, performing artist, specialist machinery installer) you may be able to support that person s work visa application through a Specific Purpose category. People with exceptional talent in the fields of art, culture or sport may, with the support of a recognised New Zealand organisation in that field, be eligible for a Talent work visa. Several industries have been recognised by the Department of Labour as experiencing shortages of labour. Seasonal labour schemes are being tested and developed to help in these areas. Talk to business organisations in your industry to find out what is going on in your area or visit to see the latest information. People holding work visas that have been granted due to a job offer, can only work for that employer, in that location, and only for the term specified on their visa. Before their visa expires they must go through the work visa process again and must meet the immigration requirements that are current at that time. They may qualify for another category by that time. For example, many people with New Zealand work visas may later be eligible for residence under the Skilled Migrant Category. People who hold a current Australian Permanent Resident visa or a current Australian Resident Return visa can get New Zealand residence at the border provided they meet our standard immigration character and health requirements. These can be found at 6

9 DID YOU KNOW? Holders of an open work visa can work for anyone in New Zealand. Open work visas are often issued to the partners of people on more restrictive visas or young people on a working holiday. Is there a special category if I frequently need to hire skilled people from offshore? By becoming an accredited employer you can channel prospective employees through the Talent work visa category. This is a good option when you d like to be able to hire several staff over a period of time. This category allows people to gain a resident visa after working here for two years under the Residence from Work Category. The Talent (Accredited Employer) work instructions require that prospective employees meet any occupational registration requirements in their industry, are aged 55 years or under, will be paid a salary of at least NZ$55,000, have a job offer of at least 30 hours a week for two years or more, and meet our standard immigration health and character requirements. To become an accredited employer you need to apply to the Department of Labour and show that your business is in a sound financial position, has a high standard of human resources policies and processes, is committed to employing and training New Zealanders, that you comply with immigration and employment law and are a good employer. Employers are accredited for twelve months at a time. Once accredited and when you have found staff, you need to make them a job offer that complies with the conditions as above to support their application. To find out more about employer accreditation visit What is a visa? A visa allows a person to travel to the New Zealand border and, provided they meet entry requirements, to stay in New Zealand in accordance with the conditions of their visa. Visas expire when a person leaves the country unless they have travel conditions allowing multiple entry to New Zealand. A person who is in New Zealand may apply for a further visa if they wish to stay past their visa expiry date. They may also apply to vary the conditions of their visa. What is the difference between a residence class visa holder and a citizen? A residence class visa holder is legally and permanently allowed to live in New Zealand although they do not have all of the rights and privileges of a New Zealand citizen. These include being able to hold a New Zealand passport, receive some educational 7

10 scholarships, or represent New Zealand in some international sports. Owning rural land is also difficult for those people who are not New Zealand citizens. People who have been resident in New Zealand for five years, and meet conditions set by the Department of Internal Affairs, are able to apply for New Zealand citizenship. For more information visit Does someone with New Zealand residence need a work visa? No. All New Zealand residence class visa holders are entitled to work in New Zealand for any employer. How does a person get permanent residence in New Zealand? There are two options for skilled workers to apply for New Zealand residence: the Skilled Migrant Category and the Residence from Work Category. For workers, the Skilled Migrant Category is the most direct pathway to residence in New Zealand. It is designed to make sure that those migrating to New Zealand have the skills that the country needs. This category works on a points system. Points are earned on the basis of an applicant s qualifications, work experience, age, and job or job offer in New Zealand. Bonus points can be earned if their job, job offer, or experience is in an industry which has been identified as having a skills shortage or growth potential. The Skilled Migrant Category is explained in more detail on page 12. People who have held a work visa under the Talent work instructions may apply for New Zealand residence under the Residence from Work Category after they have been working here for two years. Some people who hold a Talent work visa may also earn enough points to apply for residence under the Skilled Migrant Category. They could apply under the Skilled Migrant Category if they didn t want to wait the two-year period to qualify for residence under the Residence from Work Category. People who wish to invest in New Zealand or establish a business here can apply for work visas under the Long-Term Business Category and residence under the Entrepreneur and Investor categories. People who have close family in New Zealand may be able to get residence through one of the Family categories. New Zealand also grants residence to a limited number of refugees and people from certain Pacific island nations each year. See our website for more information on each of these residence categories. 8

11 How do I support someone to work in New Zealand and are there any conditions? Immigration instructions allow for an employer to support a potential employee s application for a work or residence visa by providing a job offer. However, this is only applicable if the employee and/or employer meet the criteria of one of the current immigration instructions. The word support is used, rather than sponsor in such applications. Employers may act as sponsors under the Talent (Arts/Culture/Sports) work instructions for both Work to Residence and Residence from Work categories. More information on what is required of an employer to support a work or residence application can be found on page 21. What does a job offer need to include if it is part of an immigration application? An offer of employment should include full contact details for the employer and prospective employee, and an employment agreement including a job description and person specification. These documents should specify the type of work offered, qualifications and experience required plus details of pay and working conditions. You may also be asked to provide evidence that you are offering the appropriate market rate to the person you wish to employ. For more detailed information on making a job offer see page 27. How is skilled work defined? Skilled employment is work that uses specialist, technical or management expertise. This expertise may have been gained through recognised relevant qualifications or previous work experience. Skill level is primarily determined by the occupation s placement on the Australian and New Zealand Standard Classification of Occupations (ANZSCO), an independent list of occupations compiled by Statistics New Zealand and the Australian Bureau of Statistics. Skill level one occupations are the highest skilled and skill level five occupations are the lowest skilled. To access the ANZSCO, see our website How can I get a job onto the Long Term or Immediate Skill Shortage lists? The Immediate Skill Shortage List (ISSL) and the Long Term Skill Shortage List (LTSSL) are instructions instruments through which Government seeks to utilise immigration as part of the solution to meet skill shortages and skill gaps. The ISSL and LTTSL are reviewed twice a year with submissions considered from industry representatives and employers. The review process includes checking research on international skill shortages, New Zealand labour market reports, consultation with 9

12 industry organisations, unions, other government departments and, in the case of additions to the LTSSL, Ministerial approval. More information on making a submission can be found at Can a foreign-born worker bring their family with them? Yes, they can bring their partner and dependent children if they meet health, character and, in some cases, English language requirements. Where a prospective employee is applying for a work visa, their partner may be eligible for an open work visa and their school-age children eligible for student visas. Where the prospective employee is applying for New Zealand residence the partner and children would ordinarily be part of that application and may also be granted residence if the application is successful. The partner of an applicant must be legally married to, or in a civil union or de facto relationship with, the applicant. They must be able to show that their relationship is genuine and stable. A partner will only be granted residence if both people in the partnership have been living together for at least 12 months. Dependent children can be aged up to 19 years in the case of people applying for work visas and 24 years for residence class visas. To be considered dependent, children need not live with an applicant but must be able to prove that the dependant relies mainly on the applicant or their partner for financial support. They must not have children of their own. Does someone working for food and board need a work visa? Yes. Any activity undertaken for gain or reward is regarded as employment. This includes any work done in return for money, goods or services such as board, transport, food or clothing. People undertaking employment in New Zealand must be legally allowed to work here in that role, which means having the correct work or residence class visa or citizenship. What is the New Zealand Residence Programme? The New Zealand Residence Programme (NZRP) contains residence goals set by Government to meet New Zealand s ongoing skills requirements and humanitarian commitments. The number of places available to migrants under the NZRP is reviewed by Cabinet periodically. Currently the overall NZRP is set at 135,000 to 150,000 approved places between July 2011 and June This includes: 10

13 The Skilled/Business stream (approximately 80,700 to 89,925 places), The Uncapped Family Sponsored stream, including Partner and Dependent Child categories (approximately 29,700 to 32,100 places, for the planning purposes of Immigration New Zealand), The Capped Family Sponsored stream, including Parent, Siblings and Adult Child categories (approximately 14,850 to 16,500 places), and The International/Humanitarian stream (approximately 9,750 to 11,475 places). Can someone with a criminal conviction work in New Zealand? All people entering New Zealand must meet our character requirements. People who have serious criminal convictions will not be allowed into the country. For more specific information go to our website and see the information on character requirements. Is there any type of work not allowed on a temporary visa? A person with a temporary visa cannot provide commercial sexual services, or operate or invest in a business of prostitution in New Zealand. People with open work visas can work in any other job. It is up to the employer to check the work visas of employees and make sure their work meets any restrictions that are noted in the visa. DID YOU KNOW? New Zealand employers may offer employment to any foreign national but the prospective employee cannot start work until they have the appropriate work or residence class visa. RESIDENCE AND WORK VISA INSTRUCTIONS New Zealand residence instructions are geared towards attracting those migrants who have the skills that are in demand in New Zealand. This not only contributes to the growth and prosperity of New Zealand businesses, but ensures that migrants can find decent work and a place to fit into. The instructions which define to whom work visas can be granted, aim to address specific, more immediate, skill shortages and employer needs. While an industry's or employer s needs are important in work visa decisions, these must be balanced with the security needs of our country and the need to ensure that the entry of workers from offshore does not undermine the wages and conditions of New Zealand workers. 11

14 Work visas are granted on a temporary basis. However, people who have worked legally in New Zealand may be able to apply for New Zealand residence if they subsequently meet the criteria in our residence instructions. The Skilled Migrant Category The Skilled Migrant Category is designed to make sure that those migrating to New Zealand have the skills that the country needs and is the main pathway to residence in New Zealand. The application and selection process for the Skilled Migrant Category works on a points system. Points are earned on the basis of a migrant s qualifications, work experience, age, close family in New Zealand, and job (or job offer) in New Zealand. For example, an offer of skilled employment in New Zealand is worth 50 points. Six years relevant work experience earns 20 points, a recognised tertiary or trade qualification 50 points. Bonus points can be earned if the applicant s offer of employment, work experience or qualification is in an area or industry which has been identified, by the Department of Labour, as having a skills shortage or growth potential. A score of 100 points or more is required to begin the four-stage Skilled Migrant Category application process. 12

15 Step 1 The applicant fills in and submits an Expression of Interest (EOI) form, either online or on paper. This includes information on things such as their skills, work experience, job offer and family circumstances. If the applicant has a partner and dependent children they should be included in the EOI. Step 2 Submitted EOIs go into a pool where they are ranked according to the number of points claimed. Every fortnight EOIs are selected from the pool using criteria set by the Minister of Immigration. This criteria is reviewed every six months. Current selection criteria means: selected in sufficient numbers to meet New Zealand Residence Programme numbers for skilled migrants. additional specific criteria which the Minister of Immigration sets every six months. Step 3 When an EOI is selected, the information it contains will be verified and the applicant may be invited to apply for residence. The applicant then has four months in which to collect all their required documentation (including job offer documentation) together and submit their residence application. If an EOI is not immediately selected, it remains in the pool for six months and may be selected within that time depending on the number of places available under the New Zealand Residence Programme. If an applicant s situation changes and they are able to earn more points, for example if they get a job offer, they are able to amend their EOI while it is in the pool. Step 4 Once a residence application has been received the applicant s supporting documentation is checked and their application assessed. They may be asked to attend an interview at this stage. If successful in their residence application, the applicant, and all eligible family members included in their application, will be issued with a New Zealand residence class visa. In some instances the applicant may be issued with a work visa and be able to apply for residence at a later date. 13

16 To work out how many points a potential employee would score go to or see the Self-Assessment Guide for Residence in New Zealand (INZ 1003) available on our website or from branch offices. Steps in the Skilled Migrant Category application process Worker calculates their points using the Self-Assessment Guide for Residence in New Zealand (INZ 1003) or online points indicator Worker completes and submits their Expression of Interest (EOI) into the pool EOIs in the pool are ranked and selected according to current immigration selection criteria EOI information is verified by an immigration officer Worker is invited to apply for residence Migrant completes and submits the residence application (including job offer documentation) Residence application information is checked and the application assessed by an immigration officer Successful applicant is issued with a residence class visa 14 Talent categories A Talent work visa is appropriate for people who either have a job offer from an accredited employer, a job offer in an occupation on the Long Term Skill Shortage

17 List (LTSSL), or an exceptional talent in the arts, culture or sports. A Talent work visa can be issued for 30 months and after two years working in New Zealand the holder is eligible to apply for New Zealand residence under the Residence from Work instructions. A Talent (Accredited Employer) work visa requires the candidate to have a job offer from an employer accredited with the Department of Labour. The job must be for at least two years, full time, and paying a salary of at least NZ$55,000 (based on a 40- hour week). The applicant must be aged 55 years or under. For occupations where professional registration is a requirement to practise, the applicant must meet those registration requirements. A Talent (LTSSL) work visa requires the candidate to have a job offer in an occupation on the Long Term Skill Shortage List for which they are suitably skilled and qualified. The job must be for at least two years, full time and paying a salary of at least NZ$45,000 (based on a 40-hour week). For those occupations where professional registration is a requirement to practise, the applicant must meet those requirements. A Talent (Arts, Culture, Sports) work visa requires the candidate to have an exceptional talent in the arts, culture or sports and a job offer requiring that expertise. They should be prominent in their field and must be supported by a New Zealand organisation nationally recognised in that field. The applicant must be aged 55 years or under. The applicant must also have a sponsor. The organisation may choose to act as sponsor, or the applicant may be sponsored by an individual. See an example of the application process for a Talent (LTSSL) work visa on page 16. Notes 15

18 Steps in the Talent (Long Term Skill Shortage List) work visa application process Employer checks if job vacancy is on the Long Term Skill Shortage List Employer ensures job meets appropriate criteria (24 months, minimum 30 hours per week, etc) If so, employer locates an appropriately skilled overseas worker Worker fills out Work Visa Application (INZ 1015) Employer supplies a job offer to the overseas worker that meets the criteria Employer fills out designated sections of the Employer Supplementary Form Work Visa Application (INZ 1113) and provides this to the worker to send in Worker submits application to nearest Immigration New Zealand branch Successful worker granted visa by Immigration New Zealand Worker to notify employer of success of application Employer to check work visa before overseas worker starts work 16 Worker can apply for residence under the Residence from Work Category after two years

19 Residence from Work Category People who receive a New Zealand Work to Residence visa under a Talent category may apply for residence after working for two years in New Zealand. People applying for Residence from Work, who have held a Talent (Arts, Culture, Sports) work visa, must have been actively involved in their specialist field during their last two years in New Zealand and still be prominent in that field. The applicant must be supported by a nationally recognised organisation in their field, sponsored by that organisation or an individual, and must not have sought welfare aid during their time in New Zealand. People applying for Residence from Work, who have held a Talent (LTSSL) work visa, must: still be working in an occupation on the LTSSL or that was on the LTSSL at the time they obtained their work visa be receiving a salary of at least NZ$45,000 be aged 55 years or under meet the professional registration requirements of their occupation. People applying for Residence from Work who have held a Talent (Accredited Employer) work visa must have worked for an accredited employer for two years and have current full-time employment. They should be receiving a salary of at least NZ$55,000. The salary requirements above are based on a 40-hour week. Applicants must also meet the professional registration requirements of their occupation. Essential Skills work visas Employers who are unable to find suitable workers in New Zealand and have roles that do not meet Skilled Migrant or Talent work visa criteria may be able to assist an employee to get an Essential Skills work visa. An employer must be able to demonstrate that they cannot find suitably skilled or qualified New Zealand workers, or New Zealand workers who could be readily trained to do the work. The Department of Labour will undertake a labour market test to confirm this. An employer meets the labour market test by proving that there are no suitable employees in New Zealand and that they have made genuine attempts to attract and recruit New Zealand workers for the positions at the current market salary. This could include evidence of advertisements placed, responses received, industry statistics on vacancies, or training in place to address shortages. The Department may also consult with Work and Income or industry organisations to ensure that the labour market test is met. The Department will always seek advice from Work and Income when conducting 17

20 a labour market test for workers in lower-skilled occupations (those at skill level four or five on the ANZSCO see page 9 for more information on the ANZSCO). If you are employing overseas workers to work in lower-skilled work the processing time may be longer, as the Department will be seeking advice from Work and Income in every case. To speed this process up, we recommend that employers approach Work and Income themselves to try to fill the lower-skilled vacancies before offering employment to overseas workers. If Work and Income already knows these positions cannot be filled, it will be able to provide this advice to the Department sooner, reducing the processing time of the application. To go through the labour market test before you have found a candidate, you should apply for Approval in Principle. This means that you are pre-approved to hire people in the positions specified within the time specified, typically six to twelve months. You can apply for Approval in Principle to hire many people and this is valid until you have filled the number of positions specified in your application, or until the expiry date. If you have already found someone you wish to employ, and you can meet the labour market test (by proving that there are no suitable employees in New Zealand and that you have made genuine attempts to attract and recruit New Zealand workers) you can assist the candidate to apply for an Essential Skills work visa. You will have to supply information to meet the labour market test, as described above, to support their application. If you have a vacancy in an occupation listed on the Immediate Skill Shortage List (ISSL) in your region, or the Long Term Skill Shortage List (LTSSL), you will need to make a job offer to the person who you wish to employ so that they can satisfy the work visa requirements. The prospective employee must be able to demonstrate their skills and experience relevant to the job as described on the skill shortage lists and meet immigration health and character requirements. Specific purpose visas A special category exists for people who need to employ someone for a specific purpose or event. Applicants under this category might include corporate secondments, senior-level transfers, sports players and professional sports coaches, performing artists, specialist machinery installers, film crews, and others. In this category there must be proof of the special need for such an employee and proof of the employee s ability and experience in doing that job. The Department of Labour must be satisfied that no New Zealand workers will be disadvantaged by the specialist being employed. Most visas under this category are issued for three to twelve months. 18

21 Students Some students are able to work for up to 20 hours a week during the academic year and some may work full-time over the summer holidays. Students studying in some fields are eligible for work visas to enable them to fulfil practical course requirements. All students who are legally allowed to work in New Zealand will have an endorsement in their passports, or a letter from us (variation of conditions) stating their entitlement to work and the limitations on such work. After a student has completed their studies they may be able to get a work visa under the Study to Work instructions. They must be either fulfilling practical training requirements that are part of their course requirements, have passed and completed a qualification in New Zealand which took three years or more to complete, or gained a qualification which would earn them points under Skilled Migrant Category criteria. For specific criteria for students and graduates go to Working holidays New Zealand has reciprocal agreements with more than 20 countries allowing people aged 18 to 30 years to work temporarily while on holiday in New Zealand. The conditions of work visas for working holidaymakers vary according to the country they come from. Working holidaymakers from most participating countries can stay in New Zealand for up to a year. Citizens of the United Kingdom can stay for 23 months. Working holidaymakers can t take a permanent job but they can have several jobs with different employers. Some are only allowed to work for each employer for three months, and some are able to work for up to a year. Conditions are noted on the work visa granted. Young citizens of most qualifying countries can apply from anywhere in the world. Some working holidaymakers must apply from their home country. Online applications are generally processed in a couple of days and an electronic visa will be issued. For more detailed information on working holiday schemes offered by New Zealand go to Family Category for residence People may apply to live in New Zealand if they are supported or sponsored by a family member who is already a New Zealand citizen or residence class visa holder. People applying through the Family Residence Category must be the partner, dependent child, parent, brother, sister or adult child of a New Zealand citizen or residence class visa holder. For more detailed information on go to 19

22 General information on applications All people applying for New Zealand residence and work visas must meet our standard immigration health, character and, in most cases, English language requirements. These are explained in detail on the immigration website. Each application must be submitted on the appropriate application form, and be accompanied by the relevant fee, applicant s passport, passport-sized photographs and additional information as specified on each form. Information on current fees, branch locations and processing times can be found at For more detailed information on the immigration instructions above, and to download forms and guides, go to or call free (within New Zealand) Interim visas If you have an employee who is applying for a further work visa then they may be granted an interim visa that allows them to stay in New Zealand lawfully while their application is processed. They may be eligible to continue working on an interim visa if the job is in the same position, for the same employer and in the same location as their current visa. Immigration New Zealand will make a decision on whether to grant a person an interim visa close to the day their current visa expires and will inform them by or letter. A person cannot apply for an interim visa and there is no guarantee that one will be granted. There are also no fees or forms. Interim visas are valid for a maximum of six months or until a decision is made on the person s temporary visa application whichever is earlier. 20

23 Quick guide to residence and work visa instructions Your employment need Your best option What you need to do I need skilled, permanent workers from overseas. I have a long-term need to regularly employ skilled workers from overseas. I need to employ an artist, performer, sports person, sports coach or someone with an exceptional talent. I m seeking to fill a long-term vacancy in an occupation on the Long Term Shortage Skill List. I have a temporary skill shortage in an occupation on the Immediate Skill Shortage List. I need to fill a temporary position or positions for which I m unable to find suitable workers in New Zealand. I need to employ someone from overseas for a specific purpose or event, eg for a tournament, show, or specialist installer. I want to employ a student or a trainee to provide them with work experience. I want to employ a young person from overseas who s here on a working holiday. Employ people under the Skilled Migrant Category (SMC). Employ people under the Talent (Accredited Employer) Work Category. They can then Work to Residence. Employ people under the Talent (arts, culture, sports) Work Category. They can then Work to Residence. Employ someone under Talent (LTSSL) Work Category. They can then Work to Residence. Employ people under the Essential Skills work instructions (temporary). Employ people with a work visa under the Essential Skills work instructions (temporary). Employ someone with a work visa under the Specific Purpose or Event instructions (temporary). Employ someone with a work visa under the Study to Work instructions (temporary). Employ someone on a working holiday scheme. Check that the job meets immigration skill level requirements. Provide a job offer to assist the SMC application. Apply to become an accredited employer. Once accredited provide job offer to facilitate applicant s Talent work visa application. Assist the applicant to prove their talent is exceptional and provide a job offer. Provide a job offer to assist candidate s application. Provide a job offer to assist candidate s application. Apply for Approval in Principle and prove that you have been unable to find staff in New Zealand. Prove the employee is suitably qualified, their skills will benefit New Zealand and they are needed for the period of time requested. Provide a job offer. Provide a job offer to assist candidate s application. Use VisaView to check they have a valid visa. 21

24 HOW DO I FIND STAFF OVERSEAS? Hiring staff from overseas can be more complex, costly, and time-consuming than hiring a New Zealander from within the country. This section will help you think through the issues particular to offshore recruitment and will draw your attention to considerations that may not be part of your everyday recruitment activities. It is not intended as a general recruitment guide. The Department of Labour publishes a How to Hire Guide for Employers which guides employers through the general recruitment process and relevant employment laws. It does not cover immigration issues but complements the information contained in this guide. The How to Hire Guide for Employers can be downloaded from or ordered by calling Planning for the recruitment process In deciding to recruit offshore you need to check that people you may want to hire will be able to get New Zealand work or residence class visas. This largely depends on the role you have to offer them. The first section of this booklet along with information on the immigration website will direct you to the immigration category most appropriate to your situation. When planning offshore recruitment you should consider which country or countries you are likely to find suitable candidates in. Which countries have skilled workers in the field you need? Which countries are known as leaders in your industry? Are the standards for workers similar, are the jobs similar? Are the projects smaller scale or larger scale? Are the qualifications for workers similar? Check the List of Recognised Qualifications on the immigration website or contact the New Zealand Qualifications Authority (NZQA) to see which countries qualifications they consider comparable. How long will it take to get someone started? How long will it take to advertise, receive CVs, shortlist, interview, check references and make the job offer? Do you know how long it will take for an applicant to get police and medical checks, lodge their application and receive a visa? 22 How long will it take them to pack their old life and plan their new one?

25 Do they have a family to move? Will they wait until the end of year or term to move their children to new schools? Who within your staff will manage the process? Who will interview? How will you interview? Can you travel to interview people? Will you use a recruitment agent who specialises in offshore recruitment? What will you do if you get a huge response? Do you have more than one vacancy? Could you refer a good candidate to another company? Can you partner with anyone else to minimise costs? Does your local Economic Development Agency promote lifestyle opportunities in your region overseas? Can the Chamber of Commerce, Employers Association or your industry association put you in touch with others who recruit overseas? Does your industry have a cluster of employers with similar skill needs who may wish to partner? Does your industry have offshore forums, conferences, etc? NOTES 23

26 Describing the job When writing the job description you need to be honest in describing the role and the work. Check that terminology used in the job description is used in the country you are looking in. For example a roading engineer in New Zealand would be known as a highway engineer in the United States. Check such details with a resident of the country you are recruiting in or visit job websites in that country. Does the job description reflect reality? If the job description isn t realistic the applicant will be disappointed and may be less likely to stay. Provide details of leave and other benefits as the basics may be different to what is standard in other countries. How specialised is the role? New Zealand roles are usually broader, more generalist roles than offshore positions in larger companies where people are in more specialised roles. Be specific, especially in describing niche roles compared to generalist roles. Consider the relevance of the job title. Look on overseas job websites and see what similar occupations are described as in other countries. How is the industry structured in the country you are hiring in does this differ from New Zealand? Qualifications Check with NZQA or industry bodies as to what the equivalent qualification is in the country from which you are hiring. Check that the qualification names are the same in that market. Different qualifications have different titles depending on the country in which they are awarded. Check any professional or occupational registration requirements with your industry organisations to make sure candidates can meet these. Do they have to sit exams, work supervised for a period, etc? Make sure the candidate knows these conditions, can meet them, and is willing to do so. Pay packages 24 Are you paying a fair market rate for the position? Can you demonstrate the market rates in New Zealand to someone offshore so they have context for the market rates here?

27 What is the same job paying in the country you are targeting? What other benefits might someone from overseas expect? Health insurance, retirement savings, childcare, 35-hour working week? What do you offer? Do you offer bonuses, stock options or similar that people may expect overseas? What ongoing training do you provide? What opportunities for advancement are there? Will you pay relocation costs? Can you offer financial assistance with airfares, freight for household goods, etc? NOTES 25

28 Finding and interviewing candidates Advertising Where will you advertise your position websites, trade publications, migration or recruitment expos? When will you advertise and interview? Check this is not before our summer holidays when New Zealand closes down, or during overseas holidays when you may not get a good response. Are there events within your industry where you can meet people or migration shows in the country you are recruiting from? Check the immigration website for upcoming events. Your website Does it have a section for international applicants? Can you post the job description in its international format? If there are online application forms, are these suitable for offshore applications? For example is there space for a foreign address with country and zip code fields? Check site content does not exclude those people who do not have a work visa from applying. Interviews How will you conduct interviews in person, phone, teleconference, video conference, webcam? Where and when will you interview? Will you travel to meet them or invite them over to meet you? Will you pay for them to come to New Zealand for an interview? Do you have an agent, adviser, or representative overseas who can interview for you? Can you interview several candidates for several positions in one trip if you are travelling? Can you involve applicants partners in discussions where appropriate? Often the decision to migrate will rest on the partner s expectations and support so talking with them can be worthwhile. How will you check references? Telephone calls (check time-zone differences), or fax? 26

29 Expectations Be realistic and make sure the migrant s expectations are as close to reality as possible. If they get here and things are not as they expected, or the job isn t what you told them, they may leave. Working practices differ in many countries, though the fundamentals may be the same. Be aware of the differences. Ask what the working day is like in their current job. Can you provide local information so they get a flavour for your town or city? Making an offer You can make a job offer to someone who does not have a work visa but that offer should be conditional on the applicant getting the appropriate work or residence class visa. This is similar to making the offer conditional on reference checks or medical tests. They must not start working for you until they have a work or residence class visa. To support a migrant s immigration application you need to provide a job offer, supporting documentation and an Employer Supplementary Form Work Visa Application (INZ 1113). Job offer documentation should include: the employer s name, address and contact details the prospective employee s name and address an employment agreement including a job description and person specification, detailing: the job title or designation the address of the place of employment the type of work, duties and responsibilities of the job the pay and employment conditions such as holidays and sick leave qualifications and experience required confirmation of whether or not registration in New Zealand is required the duration of the job, and how long the job offer is open for. The offer must meet the requirements of New Zealand employment laws and pay an appropriate market rate. The job offer must be current when we assess the migrant s application. 27

30 Occupational or professional registration If the occupation requires the worker to be registered in New Zealand, we need to see evidence they have occupational registration here or can obtain it easily before they commence employment. This can be full or provisional registration, depending on the occupation. Notes 28

31 WELCOMING AND SETTLING MIGRANTS Moving to a new country requires considerable adjustment, even for migrants from countries with whom we share a language and ancestry, such as the United Kingdom. Many of the issues faced by skilled migrants that determine whether they settle happily into New Zealand life relate to their expectations and the way their families settle into their new location. Employers can play a big part in smoothing the way for long-term, successful migration. Providing help and time to encourage migrants families to put down roots in New Zealand can help you to retain migrant staff. After all, employing anyone requires time and financial investment on the part of an employer, and it should be in your best interest to ensure that the migrant stays with your company and in New Zealand for the long term. Setting expectations Doing as much as you can to manage an employee s expectations of life in New Zealand by providing them with helpful and honest information can help them avoid surprises and settle successfully. The key to helping people have realistic expectations is to be honest with them from the interview stage. It may also help to include their partner in discussions early on. People like to know what their standard of living will be like when they move to a new country. The Department of Labour provides settlement packs to people whose residence application is accepted. This contains information on topics such as buying a house, the health and education systems, tax and driving in New Zealand. This information is also published on the settlement part of our website. Some useful information you could provide to people before they leave their home country A contact in New Zealand for the employee s partner. Can you provide someone who can help answer some of their questions? This is particularly helpful with family issues when the migrant does not have friends or family in New Zealand. A contact or buddy in your workplace to answer any questions the new employee may have which will help them to feel welcome when they arrive. A local real estate magazine or website to give them an idea of local housing options. Our housing can be very different to what people expect. Things like central heating and double-glazing are not as common here as they are in cooler climates overseas and, as a result, our houses can require lots more heating. 29

32 Information on the local area, climate, maps and guides to help them get familiar with their new home. See your local information centre, Settlement Support New Zealand coordinator or Economic Development Agency. Contact details for schools and universities if they have children. Can you advise them how to set up a bank account? Many overseas banks have contacts in New Zealand who can help. Further information about many aspects of the New Zealand lifestyle including housing, education, work and culture can be found at Preparing the workplace People from countries with the same language and similar culture to New Zealand can have noticeable differences in the way they do things. This can cause conflict when manners and customs are misunderstood. Kiwis may find some European cultures rude if they speak bluntly, when in fact there is no offence intended. People from some Asian cultures will say yes when they mean no because they do not wish to offend. Do some research and educate your employees to expect some differences. Are your staff aware and accepting of different ways of doing things, different ways of saying things? Are they prepared to welcome and support foreign workers? Perhaps you could organise a work barbeque to introduce them and their family to other employees. Migrants bring different skills and new ways of doing things. Be open to new ideas and ensure your staff are too. NOTES 30

33 On arrival There are a few simple actions you can take outside of the workplace which make a big difference to someone who may feel far from home when they first arrive. Here are some suggestions to help employees settle in. Meet them at the airport. Provide help with finding a house or some accommodation for when they first arrive. Identify schools in the area for their children. Can you help with finding work for their partner? Can you help with finding contacts for their partner such as interest groups, classes, etc? Give new arrivals some time off to house hunt, settle the kids, etc. Provide information on the local area, maps and guides to help them get familiar with their new home town. Take them for a drive around the area to help them get orientated. Can you show them how to get a bank account and Inland Revenue (IR) number? NOTES 31

34 Cultural differences In the workplace you may notice some obvious or subtle cultural differences. While you might expect people from a culture with a different language to have more noticeable differences, English-speaking countries can have different attitudes and ways of doing things too. New Zealanders tend to be less formal than other cultures and this often takes new migrants by surprise. We also work hard and can have different expectations about the length of the working day and overtime. We tend to expect all employees to show initiative whereas in some cultures this is frowned upon, so this needs to be clearly explained. How do you refer to each other? Is the boss Mr Forbes or Jim? Are workplace policies that you may take for granted clearly explained to the new employee? E.g. break times, clothing, smoking, etc. Settlement courses covering things like how Kiwis think, attitudes, acceptable behaviours in New Zealand and so on contribute to helping people fit in to their working and social environments. Language courses are valuable for speakers of English as a second language and their partners. You can pay for these courses or help an employee locate them in your area. Review Once your new employee has been in their job in New Zealand for a few weeks it is advisable to discuss how they are settling in. Make some time to sit down and review how the work is going and identify any issues to resolve. Is the job meeting their expectations? Is their work meeting your expectations? How is their life outside of work? Have they developed social networks? Joined a club? Explored the area? Check how the family is getting on. Can you help? Remember that people who have moved across the world away from their friends and family may take some time to feel welcome and at home here. The more you can do to help them and their families adjust and feel welcome, the greater likelihood that they will stay and contribute to your business. Encouraging residence 32 If the person you employ has a work visa rather than New Zealand residence it is good to track their immigration status and encourage them to apply for residence. Many employers keep track of the visa expiry dates of all staff work visas to ensure renewals

35 are applied for ahead of time. This will give individuals and families added security and encourage them to stay in New Zealand. NOTES WHO CAN HELP? The Department of Labour The Department of Labour has 15 offshore branches and many receiving posts offshore. Staff in the branches have local knowledge and may be able to assist and provide information if you are travelling offshore. For example staff in the London branch frequently support New Zealand employers at migration expos in the United Kingdom. To find out about upcoming offshore events that the Department of Labour is participating in and locate offshore branches go to our website Immigration New Zealand is a service of the Department of Labour and is what we are known as overseas. In New Zealand our team of relationship managers work with employers to make the most of offshore recruitment activities undertaken by New Zealanders. If you are thinking of heading offshore to recruit, or just want advice on the opportunities, talk to the 33

36 relationship manager in your industry or area. They can also put you in touch with offshore branch staff. To contact a relationship manager call the Immigration Contact Centre on freephone ; they will direct you to the relevant relationship manager. Support from your industry or region Do you know any other employers in a similar line of work who have recruited from overseas? They may be able to offer advice or support. Some industry organisations band together companies in their industries to recruit offshore. This presents cost savings and increases the reach of employers through increased profiling of New Zealand in offshore markets. Settlement Support New Zealand Settlement Support New Zealand has coordinators in many New Zealand cities who help new migrants to find their way about and make social connections. They can provide valuable contacts for a migrant s partner who may be feeling homesick and lonely in their new country. They can also assist by providing local information packs for employers to give to new staff. See our website for contact details or check with your local city council or Economic Development Agency to locate a Settlement Support coordinator in your area. New Zealand Qualifications Authority The New Zealand Qualifications Authority (NZQA) can provide advice on the relevance of overseas qualifications. Visit CONTACT THE DEPARTMENT OF LABOUR For employment, work and labour market information For immigration information or freephone (within New Zealand) For work and work-related subjects in New Zealand 34

37 The Department of Labour recommends it is good practice to confirm all prospective employees are entitled to work in New Zealand and in the jobs offered, and to keep good records of this. The easiest way to check is to use VisaView our online tool at WORK ENTITLEMENT CHECKLIST Employer obligations under the Immigration Act 2009 It is an offence under the Immigration Act 2009 to allow, or continue to allow, someone to work for you who is not entitled to do so. This checklist is designed to help you meet your obligations under the Act. A more comprehensive work entitlement guide is available at Is the person you are checking a New Zealand citizen? Yes. Go to Checking New Zealand citizens. No. Go to Checking non-new Zealand citizens. Checking a New Zealand citizen s work entitlement Sight a New Zealand passport, OR Confirm New Zealand passport information at AND sight the passport or other photo identification, OR Sight a New Zealand birth certificate AND photo identification, OR Sight a New Zealand citizenship certificate AND photo identification. Retain copies. A New Zealand birth certificate can be ordered online at by anyone who has an igovt ID. Processing time is up to eight days plus delivery. Payment is by credit card. Birth certificates may also be ordered by phone, post or in person. Checking a non-new Zealand citizen s work entitlement Check work entitlement at OR Sight a passport with a New Zealand residence class visa, OR Sight a passport with a valid New Zealand visa with conditions that allow the person to work for you, OR Sight an Australian passport, OR Sight a passport with an Australian permanent residence visa or a current returning resident s visa. Retain copies. A tax code declaration IR330 form is not a reasonable excuse for employing someone who is not entitled to work for you. Did VisaView confirm that this person is entitled to work for you? No. You may not be able to employ this person. New Zealand citizens will need to provide evidence of their citizenship. Non-New Zealand citizens should contact the nearest Immigration New Zealand office to apply for a visa to work in New Zealand. Yes. You can employ this person until the date specified and in accordance with any conditions stated. Refer to Immigration Contact Centre call the Immigration Contact Centre on (0508 WORKNZ). Note that this contact number is for employer enquiries only. General visa enquiries should be directed to When checking documents for proof of work entitlement and identity, the Department of Labour recommends sighting original copies and retaining a photocopy or scan for your records.

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47 OCCUPATIONAL SAFETY & H E A LT H S E R V I C E D E P A R T M E N T O F LABOUR T E T A R I M A H I INFORMATION ISSUED: December 1996 A brief guide to TRAINING EMPLOYEES As an employer, you have duties under the Health and Safety in Employment Act 1992 to train and supervise employees to ensure that they do not cause harm to themselves or other people. This leaflet has some practical hints to help you with the task of training employees. Your Responsibilities As an employer you must ensure that employees do not undertake any work of any kind, use plant of any kind, or deal with a substance of any kind unless: They have the necessary knowledge and experience to ensure they do not cause harm to themselves or other people; or They are supervised by a person with the necessary knowledge and experience. You also must ensure that employees are adequately trained in the safe use of all plant, objects, substances and protective clothing and equipment they are required to use. Preparing Yourself to Train Before you start training someone, make sure you have the necessary training resources, both to familiarise yourself with the job and to show the trainee. These could include: The employer s safety and health policy; Employer health and safety rules, hazard identification and controls; Plant and process operating rules; Material safety data sheets. Language and Cultural Considerations It s important to recognise language and cultural issues which may arise in the place of work. You need to take these factors into account when providing information, training and supervision. Information must be provided in a way which can be easily understood by the person receiving it. Points to Remember in Training The first step is to put the trainee at ease. Remember that the work, plant or substances, and the place of work itself, may all be unfamiliar to the trainee. This can make them tense and unsure. Explain that you are training them to work safely and why. Quote examples of past accidents and show how these can happen if safety rules are not followed. Don t talk too fast. The work, plant or substances are familiar to you because you know them. They may seem strange to someone encountering them for the first time. Speak slowly if English is not the employee s first language, or instruct in the employee s language. Don t use jargon or technical terms with which the trainee may be unfamiliar. If you must use these terms, show or explain what they mean. Try to avoid being interrupted while you are carrying out training. It breaks your train of thought and interferes with the trainee s ability to understand. Don t show impatience or irritation if the trainee doesn t respond in the way you expect. Often, training may require more than one session. It may be helpful to explain to the person how long their training will take. What to Cover When explaining a job or operation, explain and demonstrate the whole job or operation from start to finish. Explain the key points and the hazards to which the employee is exposed while doing the work, using the plant or dealing with the substances and the steps ISSUED BY THE OCCUPATIONAL SAFETY AND HEALTH SERVICE, DEPARTMENT OF LABOUR, WELLINGTON, NEW ZEALAND

48 the employee must take to avoid being harmed. Also explain the hazards the employee may create, both to the employee and other people, and the steps that must be taken to minimise those hazards. Encourage the employee to ask questions. Now, return to the first step. Ask the trainee to watch the first step being done. Ensure the trainee is in a position to see clearly. Encourage questions. Then let the trainee demonstrate to you. Get them to demonstrate slowly and explain as they do so. Make sure their explanation covers all the key points in the work, as well as the potential hazards and how to avoid them. If they make a mistake, correct them. The rest of the steps should be treated in the same way. Again, don t forget to encourage questions. After you ve explained and demonstrated each step, and the trainee has done the same, have them repeat the entire operation from start to finish while you observe closely. Don t be tempted to take over let the trainee think from one step to another. Correct any faults as they occur. Have the trainee repeat the operation until you re sure that: 1 They know how to do the job. 2. They know what the key points are. 3. They know the hazards involved in the work, plant or substance. 4. They know how to avoid these hazards. 5. They know to report any apparent fault, defect or malfunction that may arise. 6. They know how to use the necessary safety clothing, equipment and materials and where these are kept. 7. They know what to do if an emergency arises. Make sure the trainee knows that if in doubt they should ask you and not try to work things out on their own. Steps in Training These procedures may be summed up as follows: 1. Explain The activity or process. How it works. Hazards and how to avoid them. How and when to use safety equipment. The need to replace safety equipment which is damaged. How to stop and start machines. How to check and adjust before starting or using equipment Location and operation of other controls. Purpose of guards and safety devices. Correct work methods to be used. Emergency procedures. 2. Demonstrate Slowly and clearly in logical sequence all points listed above, while carrying out the activities. 3. Get Trainee to Explain All points covered under 1 with the process or activity. 4. Get Trainee to Demonstrate Have the trainee run through the operation slowly, step by step, and explain as they go, until you re satisfied that they understand the hazards, the precautions to be observed and are familiar with the operation. Don t leave the trainee on their own until you re satisfied they are sure of what they are doing and fully understand your instructions. 5. Follow-Up Check periodically to ensure the trainee doesn t get into difficulty. Make sure they don t find an unsafe short-cut, or become overconfident and careless. 6. Provide Job Instructions Have job procedures printed and give a copy to the trainee. Keeping a Record It s advisable to keep a record of the training given to employees, the skills they have attained and what further training may be needed. The record should be signed by the employee. Verifying Previous Training If you employ someone who claims to have knowledge, experience or training in a previous job, you should verify this by sighting the certificates they have received and by observation of the trainee as they demonstrate their skills and knowledge. You should document these verification procedures and keep a record. These procedures are especially important if the employee has had an absence from the trade or a similar type of work.

49 An Introduction to Employers Rights and Responsibilities under the Health and Safety in Employment Act

50 INTRODUCTION Promoting sustainable and productive relationships between employers and employees based on mutual trust and confidence is a key component of employment legislation. Working environments that are as safe and healthy as possible are a significant part of a successful employment relationship. Legislation the Health and Safety in Employment Act 1992 and the amendments of 2002 are designed to contribute to achieving this goal. This guide introduces you to the elements that underpin workplace health and safety from the effective date of the Amendment Act, which is 5 May Achieving a safe workplace requires an informed employer constructively working with their employees to identify hazards and manage them. Every workplace is different. New Zealand s legislation recognises this by providing a framework for employers (with the help of employees) to address health and safety in the way that is most appropriate for each workplace. 2

51 The recent amendment builds on this framework and enhances it in three ways: It extends consistent coverage to sectors of the economy that were previously excluded. It focuses on relationships within the workplace, by providing for employee participation. This reflects and builds on the good faith requirements of the Employment Relations Act, which are specifically included in health and safety legislation for the first time. It makes the responsibilities of employers and employees clearer and easier to understand. Some employers and employees will be affected by this legislation for the first time. Others will find that the legislation reflects the good practice they already follow in their workplace. This guide aims to answer your questions about the health and safety framework and your responsibilities, explains the key changes that result from the Amendment Act, and sets out how to deal with questions and issues. Further information or assistance is available through the Department of Labour s Workinfo service ( or ). 3

52 Contents The Law and employers What does the Act set out to do? How does the Act fit into the New Zealand Injury Prevention Strategy? Who is covered by the Health and Safety in Employment Act? What are my responsibilities as an employer? What is a workplace? Avoiding and reporting injury What is a hazard? What do I do about hazards? How do I decide what is all practicable steps in my circumstances? What if something happens that I was genuinely unable to predict? What types of hazards should I be looking for? Are any new hazards covered by the Act? Employees What is employee participation? What could participation involve? What if we can t reach an agreement? Do employees have responsibilities? What are the functions of health and safety representatives? Who can be health and safety representatives? What training can health and safety representatives receive? What is a hazard notice? Can employees refuse to work in some circumstances? What is the role of unions under this legislation? Who enforces the Act? What is OSH? What is the Maritime Safety Authority? What can Health and Safety Inspectors do? What do I do if there is an injury or near miss? Compliance and penalties How are investigations conducted? Improvement Notices Prohibition Notices Infringement Notices Prosecution Prosecution by third parties Fines Help and information Regulations, Codes of Practice and Best Practice Guides MSA Appendix A How does employee participation work?

53 The Law and employers What does the Act set out to do? The purpose of the Health and Safety in Employment Act is to provide for the systematic management of health and safety at work. It requires employers and employees to maintain safe working environments, and implement best health and safety practice. It recognises that successful management of health and safety is best achieved through good faith co-operation in the place of work and, in particular, through the input of persons doing the work. Many New Zealand workplaces already have effective systems in place to ensure the workplace is a safe environment. There are real benefits to you in ensuring a safe workplace. These include improved productivity, avoiding lost time due to illness and injury, and higher rates of staff retention. Reducing the social and economic costs of injury and illness is also a priority for society as a whole. The Health and Safety in Employment Amendment Act 2002 updates legislation by providing clearer requirements and more effective enforcement. The amended Act ensures that all employers are tested against the same standard and are provided with a framework for improving health and safety in the workplace. How does the Act fit into the New Zealand Injury Prevention Strategy? The HSE Act forms a part of the overall workplace health and safety framework. Putting in place effective safety programmes will also qualify some employers for ACC levy discounts. Who is covered by the Health and Safety in Employment Act? The Act places duties on employers, self-employed people, contractors and principals to provide effective systems for the protection of employees and visitors to places of work. Employees also have responsibilities and roles under the Act. 5

54 Employees are defined in the same manner as under the Employment Relations Act, and include: air, rail and maritime employees loaned employees people doing on-the-job training or work experience. Visitors include customers, delivery and courier company employees and other people legally in the workplace. Volunteers are included for some purposes and under restricted circumstances. If you require further information on the coverage of volunteers it is available through the Workinfo centre ( or What are my responsibilities as an employer? You have a responsibility to make the workplace safe, and to ensure the health and safety of those working in or visiting the workplace you control. To achieve this you are expected to: systematically identify hazards systematically manage those hazards manage hazards by eliminating them, isolating them or minimising them, in that order of preference provide suitable protective clothing and equipment to staff provide safety information to staff provide training or supervision so that work is done safely monitor the health of employees to ensure that their work is not having a detrimental effect on them provide opportunities for employees to participate in all of the above. What is a workplace? The Act has a broad definition of a place of work. Essentially, it is anywhere that an employee is doing work, whether on your own premises or not. It includes your physical premises, a worksite under your control, and equipment employees operate on your behalf. It also includes places like lunchrooms, forecourts and corridors that an employee may pass through during the course of their work. Where a vehicle or commercial vessel is used by an employee doing your business it is also defined as a place of work, even if the employee provides his or her own motor vehicle. This does not include travel to and from work except in some limited circumstances. 6

55 One type of work area is treated differently. If you employ or engage someone to work in your home, such as a cleaner or plumber, you have no legal duties to them under this Act. However this approach does not carry over to other people s homes. If you employ homeworkers (such as caregivers or telemarketers) you are responsible for their health and safety whether they are working in their own home or in someone else s. Avoiding and reporting injury What is a hazard? The definition of the hazards you must manage is broad. A hazard is any potential or actual source of harm. It may be an activity, arrangement, circumstance, event, occurrence, phenomenon, process, situation or substance. A hazard includes a situation where a person s behaviour may be an actual source of harm to the person or another person. Examples of potential workplace hazards include: a work process (for example, how an employee uses machinery or equipment) the physical environment (for example, working at height, underground, or at sea, and working at high or low temperatures) the equipment used (for example, is electrical equipment properly installed? are brakes effective?) an external factor (for example, the possibility of robbery where large amounts of money are kept) an input to the work process (for example, are cleaning materials toxic in some circumstances?) the work organisation (for example, are shifts and breaks designed to minimise fatigue and disruption of sleep?) access to critical information (for example, are instructions available at an appropriate literacy or language level for employees in the workplace?) the construction of the premises (for example, is flooring safe when wet? are people exposed to asbestos?) 7

56 the impairment of an individual employee (for example where a diabetic employee misses meals due to work pressures). Your hazard assessment should also take account of any previous injuries or work-related illness that may have occurred. What do I do about hazards? You are required to examine all aspects of the workplace to identify and then systematically assess hazards. Recording your hazard assessment and regularly reviewing it particularly when changes are made to the workplace and/or work processes can form the foundation for a health and safety policy and plan in your workplace. You also need to review your plan when you receive new information about the effects or management of a hazard. You are required to take all practicable steps to eliminate or manage each hazard. Your plan should consider whether it is practicable to eliminate each hazard, or whether a plan for managing each hazard should be developed. You are required to do as much as is reasonably practicable to eliminate, isolate or minimise the impact of any hazard. Engaging employees in hazard management as part of your agreed employee participation system will make this a more manageable proposition. There will not be a simple answer for every hazard and a judgement has to be made bearing in mind: the nature of the harm or injury that could be caused the probability of that harm occurring the availability of information on managing the hazard the cost and availability of safeguards. For many hazards there are known protections available, such as protective equipment. It is your responsibility not only to provide the protection but also to ensure it is used. Also, hazards can often be eliminated, for example using substitute substances that are not harmful but are equally effective. In some industries regulations still set minimum standards that you must comply with, whilst in others you may look to Approved Codes 8

57 of Practice to provide solutions. These are available from Workinfo ( or Where these are not available, your industry association may have developed best-practice documents on the matter or be able to suggest a way of dealing with the problem. Many industries have developed or are developing best-practice guides. The Accident Compensation Corporation (ACC) and the Occupational Safety and Health Service (OSH) have produced a guide to assist small businesses develop health and safety systems. It is titled Improving Workplace Safety and Health for Small Business and is available from Workinfo ( or or from ACC (on 0800 THINKSAFE ( ) or How do I decide what is all practicable steps in my circumstances? The steps you need to take will sometimes be clear but may also sometimes involve balancing operational issues, achievability and cost. Cost alone will not be seen as an excuse for failing to take action. The cost needs to be weighed up against the nature of the hazard, the severity of the harm that would occur and the situation in your business. An employee agreeing to accept a risk is not acceptable, and does not remove your responsibility. It is worthwhile documenting your reasons for taking any action you decide upon, and then reviewing these decisions as new products or processes come on the market. What may be accepted as reasonable at one level of knowledge and cost may be seen as insufficient some time later. A key to meeting a test of all practicable steps is systematic management. Systematic management of health and safety includes: identifying hazards in a systematic manner eliminating or isolating those hazards that can be eliminated or isolated taking steps to minimise the likelihood of harm occurring from the remaining hazards (including providing warnings and other information) 9

58 identifying whether there are specific regulations covering your industry, and complying with those regulations providing protective clothing and equipment or ensuring that employee-provided equipment is suitable and ensuring that it is used properly training your employees about safe working practices recording and managing any accidents that occur, and reviewing and correcting their causes monitoring the health of employees, and responding to any illness caused by workplace activity responding to the advice of Inspectors designing work practices and working hours in a manner that supports a safe working environment. What if something happens that I was genuinely unable to predict? The Act makes clear that you are only required to manage hazards that you know about, or that it is reasonable to expect you to know about. This does not reduce the necessity to regularly and systematically review hazards and processes and to put in place systems for managing them. What types of hazards should I be looking for? You can identify hazards by asking the questions: What harm can occur to persons working for me? How can that harm occur? These questions need to be applied systematically to your workplace to be sure you identify those hazards not obviously apparent or where harm has not occurred in your business. 10

59 Are any new hazards covered by the Act? The Act does not require you to identify any specific hazards that were not recognised as such before the law changed. But, because hazards were not well understood in the past, the Act now makes clear that hazards include events that cause an employee to be at greater risk of causing themselves or others in the workplace harm, whether those events occurred in the workplace or elsewhere, provided that you were aware of the employee's situation or ought reasonably to have known about it. These fall into three categories: 1. Continuing events in the workplace identified during hazard identification, such as: the design of shifts and rosters jobs with inherent stress or pressure, such as policing or air traffic control seasonal peak workflows, periods of staff shortage, and high requirements for overtime jobs that regularly include long days because of travel before, after or during work. 2. Occasional circumstances where a one-off workplace or individual reason needs to be considered, such as: periods of workplace restructuring, where employees feel vulnerable or personal relationships are strained after employees are part of or witness to a robbery, fire or accident after an employee has suffered a bereavement when there is a long-term health problem with an employee or within the employee s family. 3. Personal issues affecting an employee, including: impairment caused by alcohol impairment caused by prescription or other drugs, whether legal or illegal work-related stress fatigue depression difficulty coping with a serious family problem or crisis. 11

60 Recognising and helping employees to cope with these issues well is good human resource management. Where they create a risk of harm to the employee or others, the Act requires you to take all practicable steps to provide a safe and healthy environment. Your role is to manage the workplace situation, not the private lives of your employees. Each employee shares the responsibility to recognise and manage problems himself or herself. This includes handling non-work issues sensibly. As with other hazards, your responsibility only extends to matters you can be reasonably expected to recognise or be aware of. Further information or assistance is available through Workinfo ( or ). Employees What is employee participation? Employee participation is central to the Health and Safety in Employment Act. It provides a range of mechanisms for employee participation. Apart from the legal requirements, research shows that it pays to have employees participate in workplace safety through reducing both the number of injuries and their cost. The Act promotes working co-operatively and in good faith with your employees (and, where applicable, their union) to establish an effective arrangement for your workplace. Good faith behaviour is provided for in the Employment Relations Act and includes meeting, exchanging views and being honest with each other. Many workplaces already have effective systems and strong co-operation, and in those cases reviewing and confirming the current practice may be sufficient under the amended Act. Other workplaces will have systems that have ceased to be effective, and reviewing the system with employees can be a mechanism for identifying new ways to work together effectively. 12

61 What could participation involve? The legislation does not impose any particular system of employee participation. Each workplace can take a practical approach that suits it. This might be: the election of a health and safety representative employee surveys hazard identification by teams external audits that involve employees in the process regular weekly meetings where work is reviewed and systems discussed anything else that will work in your work situation. Sometimes a health and safety committee including both elected employee and management representatives could be the answer. Where you employ 30 or more employees, you must have an agreed employee participation system. Where you employ fewer than 30 employees, an agreed employee participation system is mandatory if one or more employees request it. Even if they don't request a system, you must still provide opportunities for employee involvement in health and safety issues. Where employers are required to have a system for employee participation, the Act gives employers and employees six months to come to an agreement on the best approach in their workplace. The diagram on page 29 outlines the process for agreeing on such a system. A booklet, Involving Employees in Safety at Work, has been produced to assist in developing an employee participation system and is available through Workinfo ( or What if we can t reach an agreement? If you need assistance in agreeing with your employees, or their union on their behalf, on a system for their participation in managing health and safety matters, the mediation services provided by the Employment Relations Service can help you work towards a solution. 13

62 If an agreement is required and can t be reached, a system is set out in the Act (described in the diagram on page 29 of this brochure). This system becomes mandatory if you and your employees have been unable to reach agreement within six months from the latest of these dates: the date of enactment of the HSE Amendment (5 May 2003); or the date at which you employed 30 or more employees; or the date on which one or more employees requested a system. Do employees have responsibilities? Yes. Employees are required to take all practicable steps to ensure the safety of themselves and others in the workplace. This includes considering both the things they do and the things they omit to do (such as not using safety gear). You should make clear to employees their responsibilities to use safety equipment provided and to wear protective clothing. The expected level of an individual employee s responsibility will often be seen to increase with knowledge and seniority, but your overall responsibility to ensure a safe workplace remains. Practicable steps the employee can take also include reporting to you any hazards or incidents, so that you are able to investigate and put safeguards in place. What are the functions of health and safety representatives? Where there are employee health and safety representatives in the workplace, their role is to foster good health and safety practice in the workplace. The focus is on: positively promoting health and safety through constructive engagement with you identifying hazards and employees concerns, and working with you to solve them supporting fellow workers who have suffered an injury, including involvement in making arrangements for return to work and rehabilitation acting as a conduit for communication of health and safety concerns and where appropriate recording differences of opinion by way of a hazard notice. 14

63 As you develop your health and safety programme, additional roles may be created for the health and safety representative(s). These may include participating in employee induction programmes, employee training, and decisions on purchasing equipment. The representative(s) will normally participate in any health and safety committee, and communicate to other employees about the issues it considers. Where there is a union in the workplace, it will be able to offer support and information to the representative(s). Any employee representative should be given reasonable time in which to carry out their role and be provided with the necessary resources. In the end, though, you must make the necessary decisions about health and safety issues after taking employees input into account. Who can be health and safety representatives? Only employees who have worked more than 180 hours in the past 12 months are eligible to be health and safety representatives. What training can health and safety representatives receive? Health and Safety representatives are entitled to two days paid leave each year to attend approved courses. You should receive at least 14 days notice of their intention to take leave. You cannot unreasonably decline leave but leave can t be taken at a time that would unreasonably disrupt your business. This entitlement is subject to a cap in each workplace, so that in those workplaces where there are a number of health and safety representatives the leave provisions are not an excessive burden to the business. Where you and your employees (and, if applicable, their union) agree, different provisions for leave may be negotiated. This could provide for on-site and/or in-house training arrangements. Information on leave entitlements and approved courses is available through Workinfo ( or 15

64 What is a hazard notice? Once a health and safety representative is trained, he or she is authorised to issue hazard notices. When a hazard is identified in the workplace, the first response of a health and safety representative should be to inform you and seek to reach a suitable solution. Both you and the representative should undertake these discussions in good faith and with an open mind. Where agreement cannot be reached because you do not believe that a hazard exists, or because a solution acceptable to both of you cannot be found or implemented, the representative may decide to issue a hazard notice. (See below the section on infringement notices : a hazard notice may be a warning that could result later in an infringement notice from an Inspector.) The Act provides that such a notice: must describe the hazard identified; and may identify steps to deal with the hazard. Once a hazard notice is issued, the health and safety representative can notify an Inspector, who may decide to visit the workplace to review the issue. Receipt of a notice does not require you to take any specific action, and there is no requirement that work cease in the area or on the equipment concerned. But the notice is a strong indication of the concerns held by the representative, and you should only not respond if you reasonably believe you need to do nothing more. Your response, and reasoning, may be important if an accident occurs and it may therefore be useful to document your decision. Can employees refuse to work in some circumstances? An employee may initially refuse to perform work that he or she believes is likely to cause serious harm. An employee may only continue to refuse to carry out that work if, after discussing the matter with the employer, the matter is not resolved and the employee still believes on reasonable grounds that the work is likely to cause serious harm. 16

65 In the first instance, you and your employees (and their representatives if necessary) should be working together in good faith to identify the cause of any problems and resolving these issues yourselves. If this is not successful, you can call your local regional OSH office. Telephone numbers for each regional OSH office are in the blue pages of your White Pages and an Inspector can arrange to visit your workplace. The employee who refuses to do work because it is likely to cause him or her serious harm must do any other work reasonably requested by the employer. If they remain unresolved, such problems may be dealt with as an employment relationship problem under the Employment Relations Act. Advice and assistance is available from the Workinfo contact centre ( ). The staff can suggest the appropriate form of assistance or mediation services. What is the role of unions under this legislation? Like everyone else, unions are required to act in good faith to help resolve health and safety issues. The rights of unions under the Health and Safety in Employment Act flow from the rights of registered unions to represent their members, which are granted under the Employment Relations Act. Unions expressly have a right of entry to the workplace to deal with health and safety issues, and have a right to represent members collectively on health and safety matters. If employees wish, their union can represent them in developing a system of participation and in any employment relationship problem that emerges while seeking to agree on a system. However, the legislation covers the entire workforce whether they are collectively represented or not. Therefore it is important for you to consider the interests of employees who are not in the union as you establish systems, processes, representatives and/or a committee. 17

66 Who enforces the Act? The Act is primarily enforced by the Occupational Safety and Health Service (OSH) of the Department of Labour, but other organisations can be approved to undertake enforcement in specialist areas. Currently the Maritime Safety Authority (MSA) is approved to enforce the Act in its area of expertise, and in the future other agencies may be approved. In most cases an individual employer will only have to deal with one agency. What is OSH? The Occupational Safety and Health Service is a business unit of the Department of Labour. OSH also has responsibilities under the Hazardous Substances and New Organisms Act. OSH employs over 280 staff in 21 offices throughout New Zealand. These include specialist advisors, inspectors, educators and information officers. OSH undertakes a range of activities to deliver the government s principal objective of preventing harm to employees at work. This includes research, working with industries to develop codes of practice and recommended best practice, and providing advice to both employers and employees. It also involves inspecting, and if necessary ensuring compliance by, companies that fail to maintain a safe working environment. OSH can be contacted on Workinfo ( ), and information is available through What is the Maritime Safety Authority? The principal objectives of the Maritime Safety Authority of New Zealand (MSA) are: to undertake activities that promote a safe maritime environment to provide effective prevention of maritime pollution to provide an effective response system to marine oil pollution. The Authority has always looked after the occupational health and safety of seafarers, but previously did this through other legislation. From 5 May 2003, the Authority administers the provisions of the Health and Safety in Employment Act as it affects those working about commercial vessels. 18

67 Further information or assistance is available from the Maritime Safety Authority through or freephone on What can Health and Safety Inspectors do? Inspectors from the relevant agencies may enter a place where work is being undertaken at any reasonable time to: ascertain whether the Act is being or has been or is likely to be complied with take all reasonable steps to ensure the Act is complied with investigate accidents or complaints take samples and collect evidence if needed. The only exception to this right is entry to a home where work is being undertaken. In this case, the agreement of the occupier or a warrant from a court is required. A reasonable time is one that is necessary for an Inspector to carry out his or her functions efficiently and effectively, not on the convenience of the person in charge. Inspectors are not required to provide notice of their intention to visit a workplace, but are required to produce their certificate of appointment (identification) to the person in charge on arrival. How Inspectors undertake their task depends on the nature of the visit. They may just visit to offer advice. During investigations and inspections they will often question both the employer and employees, and may take statements from both. This could include both general and specific questions about working conditions, material used, or the nature and performance of equipment. In particular an employer (or person in control of a place of work) has a duty to provide statements to Inspectors about health and safety matters affecting employees. However when giving such a statement employers do not have to give information or answers tending to incriminate themselves. An Inspector must warn employers before taking such a statement that they are not required to give answers that would tend to incriminate them. Inspectors may be supported in this activity by other OSH staff or other experts under their supervision. 19

68 Both employers and employees have a duty to assist and not to obstruct Inspectors. This means providing sufficient information and access to enable Inspectors to carry out their functions and not hinder them. If you feel that you require assistance in dealing with these enquiries, you may have your legal or other advisor in attendance. Your employees have the right to seek union or legal advice. What do I do if there is an injury or near miss? Dealing with any injured person and the scene In the case of a serious harm injury, you should notify OSH or the MSA by telephone or fax as soon as possible after you are aware of the event. You should not interfere with the scene except to prevent further injury to persons or damage to property until an Inspector has been contacted and determined the appropriate action. Where the police are on the scene to investigate, you should also follow their instructions. Recording All workplaces must maintain a register of accidents that caused harm, or that could have led to harm ( near misses ) to either employees or others visiting the workplace. This includes long-term or past activities that may have led to an industrial illness. Any health or safety problem, regardless of how serious or minor, should be recorded. This information provides the basis for developing plans or actions to avoid future harm. Your register should record: the worksite the name, address, occupation or job title of the person involved in the incident if an employee, his or her service details details of any medical treatment provided the time and date of the incident details of the site of the incident, what happened and the cause details of the injury the remedial action taken in response to the hazard that led to the problem. 20

69 The employer or the employer s representative should sign each entry. In workplaces where there is access by non-employees, whether customers or suppliers, all employees should be aware of the need to monitor and report accidents involving these people. You can download a copy of an accident register from Notifying and reporting of serious harm Cases of serious harm should be reported to OSH or the MSA as soon as you are aware of them. Serious harm refers to either an accident or an illness that arises from work-related activity that causes permanent or temporary severe loss of bodily functions. Examples include: amputations burns requiring specialist attention loss of consciousness for any reason damage to hearing or eyesight poisoning respiratory disease or cancer arising from the work environment. Any accident or illness that causes a person to be hospitalised for a period of 48 hours over the following week is also considered serious harm and should be reported. The exact range of harm that is considered serious harm is listed in the Act, and you can access this through or through MSA msa.govt.nz.you can also access the approved reporting form through these sites. Follow-up would consist of ensuring that any remedial action is taken as soon as possible and that additional steps are included in your hazard management process. Investigating The reports and investigations are used to assess the cause of the harm, identify whether inadequate systems or systems failures contributed, and consider what remedial action is appropriate. It is therefore important you provide clear and accurate information. It is best to set out the key details of the event in writing as soon as possible afterwards. 21

70 Involving those employees affected in a review of what occurred, and working with the health and safety representative in your workplace, can be a good way to identify and deal with the problem in a way that all of the parties understand and accept. Any incident should be seen as an opportunity to improve the work environment and work practices. Compliance and penalties You have the primary responsibility to comply with the Act in the way that best suits the particular situation so that employees and others are safe. How are investigations conducted? OSH or the MSA has the initial responsibility to investigate breaches under the Health and Safety in Employment Act. The compliance regime has a number of levels that are designed to provide ongoing opportunities to respond to issues and ensure safe workplaces. This compliance regime is intended to focus employers and employees on prevention of harm. Inspectors will discuss your safety management system during visits, check if they are working in practice and may enter into correspondence to assist and encourage you to improve processes or equipment in your workplace. Where deficiencies in the safety management system are identified, you must have solutions put in place as soon as is practicable for the particular workplace. 22

71 Improvement Notices Only an Inspector can issue an Improvement Notice. This will happen where they believe that the person receiving the notice is failing to comply with a provision of the Act or has failed and is likely to fail again. The notice outlines: the provision breached the Inspector s reason for believing the person is in breach the specific nature of the failure a date by which compliance should be achieved. At the Inspector s discretion, the notice may also outline steps that can be taken to correct the fault. The Improvement Notice must either be handed to the person to whom it relates, be given to the person in charge of the workplace or activity at the time of the Inspector s visit, or be sent by registered mail to either of those people or to the principal of the company. There is no specific penalty applied by an Improvement Notice, but failure to comply is itself a breach of the Act, and could lead to an Infringement Notice or prosecution. An appeal over the notice may be taken to the District Court, which can vary, rescind or confirm the notice. Prohibition Notices Only Inspectors can issue a Prohibition Notice. This stops particular processes or machinery. This will happen where the Inspector believes there is a likelihood of serious harm because of non-compliance. It has immediate effect and remains in force until the problem is rectified to the Inspector s satisfaction. It is intended as an immediate solution to an imminent threat. Sometimes, therefore, a Prohibition Notice can be issued without warning if a sudden significant risk is reported to, or noted by, an Inspector. The Prohibition Notice must specify: the hazard to which it relates the Inspector s reason for believing it will cause harm the activity or area that is prohibited. 23

72 It can also specify the steps to be taken to eliminate or minimise the likelihood that harm will result. The notice will be attached or displayed by the Inspector close to the area of risk, and a copy will be given to the person apparently in charge of the process, area or activity. It is an offence not to comply with a Prohibition Notice or to remove a Prohibition Notice before the problem has been rectified to the Inspector s satisfaction or before an appeal against the notice has been taken and heard by the District Court. The Court may vary, rescind or confirm the notice. Infringement Notices Only Inspectors can issue an Infringement Notice. An Infringement Notice is a mechanism for imposing a penalty ranging from $100 to $4000 on a person or company that has, despite prior correspondence or notices (including hazard notices issued by health and safety representatives), failed to ensure that all practicable steps have been taken to remove a hazard. The Infringement Notice is commonly known as an instant fine, but you have up to 56 days to pay or challenge it. The notice is issued by an Inspector and must be issued within 14 days of the Inspector becoming aware of the hazard. Inspectors are to take into account a number of issues in establishing the level of the penalty, including the level and extent of actual or possible harm, the employer s previous safety record and the employer s ability to pay. On receipt of an Infringement Notice the offender has the choice of paying the fee or seeking a hearing in the District Court. It is unlawful to insure against the fine imposed by the Infringement Notice, or any other fine that may be imposed under the Act. If an offence is continued or occurs again, the same process of warning and Infringement Notice can apply, or OSH or the MSA can lay a more serious charge. 24

73 Prosecution Where there has been a breach of the Act, prosecution is considered as an option. Prosecution action seeks to both penalise and deter where persons have failed to meet their responsibilities under the Act. Persons with responsibilities include employers, employees, selfemployed, principals, contractors and persons in control of a place of work. Officers, directors and, in some circumstances, agents may be charged in relation to failures by a company or other body corporate if they actively participated in the failures. The legislation gives a period of six months from the time when an Inspector could reasonably have known of an offence to investigate and lay charges if appropriate. When considering prosecuting, OSH or the MSA act in accordance with the Solicitor General s Prosecution Guidelines and internal policy guidelines in order to ensure consistent and appropriate action is taken. Prosecution by third parties In the event that an Inspector decides not to prosecute, and: where an Infringement Notice has not been issued; and when a compliance order has not been issued then other parties, such as an injured employee or customer, may seek to commence a prosecution. 25

74 Fines Fines under the Act range up to $500,000, but most offences carry a maximum fine of $250,000. When the courts consider the penalty to impose they take into account a range of considerations under both the Health and Safety in Employment Act as amended in 2002 and the Sentencing Act These include: the level and nature of risk or harm the prior history of health and safety practice in the workplace the culpability of the organisation or employee the ability to pay. Help and information Dealing with health and safety in the workplace is a key part of establishing both effective employment relations policies and work design. Looking at the issues that confront you in a way that considers both, and drawing on the knowledge of your employees, is the best way forward. Employer and industry associations can also provide advice. You can obtain assistance through your local Employers Association. Their contact details are as follows: Employers and Manufacturers Association (Northern) Inc [email protected] Employers and Manufacturers Association (Central) Inc [email protected] Canterbury Employers Chamber of Commerce [email protected] Canterbury Manufacturers Association [email protected] Otago-Southland Employers Association [email protected] Two Services of the Department of Labour, both of which can be contacted through the Workinfo contact centre ( ), can also assist: The Occupational Safety and Health Service (OSH) has primary responsibility in this area, and can answer both general and technical questions on your health and safety practices. The Employment Relations Service (ERS) can provide information and assistance in other areas, such as the management of employees health and safety performance. 26

75 These Services work closely together to ensure that problems are resolved at the earliest possible opportunity. Those in the maritime area can obtain assistance and advice from the Maritime Safety Authority on (04) or toll free on or the website at msa.govt.nz. Regulations, Codes of Practice and Best Practice Guides A range of material is available to assist you in creating a safe workplace and complying with the legislation. These include Regulations, Approved Codes of Practice and Best Practice Guides. Regulations provide mandatory minimum standards in some industries and for some specific hazards. The website has a list of these industry regulations. Approved Codes of Practice are developed in conjunction with specific industries and lay down acceptable ways of managing particular processes, equipment or substances. They do not cover all situations, however. These Codes are not mandatory, but are designed as a guide for managing hazards. Alternative protocols or practices you might develop in your workplace must be at least as effective as the Code. In the event of a hazard being identified by an Inspector or health and safety representative, your practice may well be tested for effectiveness against any relevant Code of Practice. Best Practice Guides are developed voluntarily by OSH, ERS and specific industries and encourage sharing of the best solutions to health and safety problems and employment relationship issues. ACC also has a range of injury prevention material and expertise available. To access the information, go to or call 0800 THINKSAFE ( ). ACC Injury Prevention Consultants can be contacted at ACC Branch Offices. 27

76 MSA The Maritime Transport Act (1994), through Maritime Rules Part 21 and 80, requires owners/operators of all commercial New Zealand ships to operate under a Safety Management System which includes the hazard identification and management systems described in this publication. Maritime Safety Inspectors at 10 MSA District Offices will be carrying out some of the functions of Health and Safety Inspectors under the Health and Safety in Employment Act. Further information on health and safety about commercial vessels in New Zealand, and reporting requirements for accidents, incidents and serious harm (mishaps) are available on the MSA website at 28

77 Appendix A How does employee participation work? The diagram below sets out the requirements for employee participation in workplace health and safety matters. For more detail you can contact the Workinfo service ( or Every employer has to provide reasonable opportunities for employees to participate effectively in ongoing improvement of health and safety in the workplace Does the employer need to develop an employee participation system in order to do this? Fewer than 30 employees 30 or more employees One or more employees requests a system NO YES Employer not required to agree to an employee participation system, but such systems are an effective way of involving employees in health and safety Adopt the system set out in the schedule to the HSE Act EITHER Employers, Employees and, where applicable, their union(s) must seek to agree a system OR Fewer than 30 employees 30 or more employees Confirm that an existing system is acceptable to all parties; or seek to agree a new system Hold election for health and safety representative Hold election for 1 health and safety representative for each type or place of work or other grouping, OR a maximum of 5 health and safety representatives as members of a health and safety committee NO The system must take into account the requirements of the HSE Act and schedule, including a review process System confirmed/agreed within 6 months? YES System in place Review system For further information refer to 29

78 This booklet is a guide only and may not be accurate for all situations. It should not be used as a substitute for legislation or for legal or other expert advice. January 2003

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84 Form of register or notification of circumstances of accident or serious harm Required for section 25(1), (1A), (1B), and (3)(b) of the Health and Safety in Employment Act 1992 For non-injury accident, complete questions 1, 2, 3, 9, 10, 11, 14 and 15 as applicable (business name, postal address and telephone number) 1 Particulars of employer, self-employed person or principal: 2 The person reporting is: an employer a principal a self-employed person 3 Location of place of work: (shop, shed, unit nos., floor, building, street nos. and names, locality/suburb, or details of vehicle, ship or aircraft) 4 Personal data of injured person: Name Residential address Date of birth Sex (M/F) (employees and self-employed persons only) 5 Occupation or job title of injured person: 6 The injured person is: an employee a contractor (self-employed person) self other (employees only) 7 Period of employment of injured person: 1 st week 1 st month 1-6 months 6 months-1 year 1-5 years Over 5 years non-employee 11 Agency of accident/ serious harm: machinery or (mainly) fixed plant mobile plant or transport powered equipment, tool, or appliance non-powered handtool, appliance, or equipment chemical or chemical product material or substance environmental exposure (e.g. dust, gas) animal, human or biological agency (other than bacteria or virus) bacteria or virus 12 Body part: head neck trunk upper limb lower limb multiple locations systemic internal organs (specify all) 13 Nature of injury or disease: fatal fracture of spine puncture wound other fracture poisoning or toxic effects dislocation multiple injuries sprain or strain damage to artificial aid head injury disease, nervous system internal injury of trunk disease, musculoskeletal system amputation, including eye disease, skin open wound disease, digestive system superficial injury disease, infectious or parasitic bruising or crushing disease, respiratory system foreign body disease, circulatory system burns tumour (malignant or benign) nerves or spinal chord mental disorder (If not enough room attach separate sheet or sheets.) 14 Where and how did the accident/serious harm happen? 8 Treatment of injury: None Doctor but no hospitalisation First aid only Hospitalisation 9 Time and date of accident/ serious harm: Time am/pm Date Shift Day Afternoon Night (employees and self-employed persons only) Hours worked since arrival at work 10 Mechanism of accident/ serious harm: fall, trip or slip hitting objects with part of the body sound or pressure being hit by moving objects body stressing heat, radiation or energy biological factors chemicals or other substances mental stress 15 If notification is from an employer: (a) Has an investigation been carried out? yes no (b) Was a significant hazard involved? yes no Signature and date / / Name (capitals) and position

85 Incident and injury investigation What is serious harm? Below is the definition of Serious Harm from Schedule 1 of the Health and Safety in Employment Act The definition is relevant to employers duties to manage hazards, notification requirements, employees rights to refuse to do dangerous work and inspectors powers to issue prohibition notices. Serious harm means death or harm of a kind or description declared by the Governor-General by Order in Council to be serious for the purposes of the Act; and seriously harmed has a corresponding meaning. Until such an Order in Council is made, the following types of harm are defined in Schedule 1 as serious harm for the purposes of the Act: 1. Any of the following conditions that amounts to or results in permanent loss of bodily function, or temporary severe loss* of bodily function: respiratory disease, noise-induced hearing loss, neurological disease, cancer, dermatalogical disease, communicable disease, musculoskeletal disease, illness caused by exposure to infected material, decompression sickness, poisoning, vision impairment, chemical or hot-metal burn of eye, penetrating wound of eye, bone fracture, laceration, crushing. 2. Amputation of body part. 3. Burns requiring referral to a specialist registered medical practitioner or specialist outpatient clinic. 4. Loss of consciousness from lack of oxygen. 5. Loss of consciousness, or acute illness requiring treatment by a registered medical practitioner, from absorption, inhalation or ingestion, of any substance. Any harm that causes the person harmed to be hospitalised for a period of 48 hours or more commencing within 7 days of the harm s occurrence. * In deciding whether or not temporary severe loss has occurred the Department of Labour (DoL) uses the following questions: 1. Is the employee suffering from pain or health impairment that is significantly more than discomfort? 2. Is the pain or health impairment severe enough to prevent an employee from using part of the body? 3. Is the condition likely to be temporary? If the answer to ALL THREE questions is YES, then the injury is regarded as temporary severe loss (and DoL should be notified). Identify injury trends Make sure you examine your injury data regularly as this will help you to identify trends. As an example, you might identify a high proportion of sprains and strains in your workplace. From this analysis you might then go on to target manual handling injuries with a discomfort, pain and injury workshop. Investigate near misses Make sure you encourage reporting of all near misses in your workplace as this is an ideal way to identify hazards that may not be adequately controlled. Who must record and report accidents and injuries? Principals, employers and self-employed people must keep a register in the prescribed form of all accidents that harmed or might have harmed any person in a workplace controlled by them. The prescribed form is available from the Department of Labour website. Any accidents that constitute serious harm must be notified to the Department of Labour. For further information For more information visit or call the Department of Labour helpline on For more detailed information, consult the Health and Safety in Employment Act (1992), the Health and Safety in Employment Regulations (1995) or the document How to implement safer workplaces, available from ACC. You can also: check the Regulations, Approved Codes of Practice, Standards, or other guidance relevant to your industry, usually available from your industry body or Standards New Zealand; or talk with external consultants. YES Notify If you determine the accident is Serious Harm, notify the nearest regional Department of Labour Office by phone or fax as soon as possible on Other organisations to notify: owing to any kind of transport New Zealand Police at sea Maritime New Zealand in an aeroplane Civil Aviation Authority on the road or railway New Zealand Transport Agency owing to radioactive substances National Radiation Laboratory involving a crime New Zealand Police No interference at scene Do not disturb the scene of the accident until cleared by a health and safety inspector or unless it is necessary to save the life of, prevent harm to, or relieve the suffering of, any person; or maintain the access of the general public to an essential service or utility; or prevent serious damage to or serious loss of property. Provide the Department of Labour with written notice (using the required form from the Department of Labour website) of the circumstances within 7 days Treat Ensure injured person gets appropriate treatment immediately Investigate Determine if it was a Serious Harm accident NO Collect Collect information about the incident or injury. Use appropriate investigation form. PEOPLE: Talk to the victim, eyewitnesses and others doing similar work PROCEDURES: Check procedures in place and used ENVIRONMENT: Examine the environment and equipment yourself and ask others Analyse Analyse the information following the ACC Worksafe Injury Model Take action Act to prevent future incidents and injuries. Record any hazards identified in the Hazard Register and ensure they re appropriately controlled Feedback Report findings to staff, injured person, health and safety committee and the manager Monitor Ensure actions implemented and hazards controlled, also monitored as required. Check changes haven t created new hazards The ACC Worksafe Injury Model To get to the real causes of incidents and injuries, it is important to consider all contributory factors. Using the ACC Injury Causation model to investigate incidents will help you determine the real causes of the incident. Refer to the ACC publication How to Implement Safer Workplace Practices for an example of an investigation. 1. Culture factors, decisions and organisational processes How are things done around here? What priority is given to health and safety and is it adequately funded and resourced? How do employees demonstrate their commitment to health and safety and are they encouraged to behave in a safe way? Is risk-taking sometimes part of the organisational culture? Is such risk-taking driven by productivity demands and/or financial rewards? Is there a health and safety strategy and is health and safety integrated into the business: in planning and organising? in individual development and training? during decision-making about machinery, equipment and resourcing? in relation to production goals? i n toolbox meetings, team and management meetings? 2. Systems factors, injury-producing systems and environments Did any systems (or lack of them) contribute to the incident or injury? Was there a hazard management system in place and, if so, were significant hazards managed, including: activities, tasks and manual handling? substances and chemicals? monitoring of hours of work? physical and mental fatigue? Was an induction training system in place? Did it include temps, labour hire staff and new staff? Is there on-the-job training? Is there a system to ensure employees and managers are trained in workplace health and safety issues? Were the correct tools, material and protective equipment available? Were the maintenance systems for these items effective? Were environmental factors, such as noise, temperature, light and ventilation involved? Was it necessary to monitor any of these? 3. Tasks factors, actions and movements What was being done at the time? What was the person(s) doing? Task factors that may contribute to an incident or injury include: ineffective (or no) safety procedures awkward or prolonged postures repetitive movement and/or manual handling working in awkward or confined spaces the way equipment was used (or not used) the use (or non-use) of suitable Personal Protective Equipment. Were the movements hurried in some way? 4. The event What happened? Was it a work-related: injury? occupational illness? ache and pain? near miss? 5. Post event What happened after the event? Was the injury or illness dealt with promptly and correctly? Was the scene controlled well? Was a rehabilitation plan initiated? ACC4440 March 2011

86 Employee participation What things should a health and safety representative be involved in? Health and safety representatives are selected from amongst the workforce, normally by election. They can have a number of roles, which include: working with the employer on health and safety issues maintaining effective communications within the workplace on health and safety matters being a point of contact for employees who have health and safety concerns talking to the employer about employee health and safety concerns and trying to find an agreed solution helping to induct and train other employees on health and safety issues assisting injured workers to return to work safely and where appropriate, help the employee to work with the employer and relevant authorities to seek a solution to problems. From the employer s point of view, the employee representative can act as an early warning system for emerging problems, as a conduit for ideas and as a key problem-solver in the workplace. A representative needs three types of support to be effective: training regular access to the employer time to fulfil the role and management support in fulfilling their role. Health and Safety Committee Having a standing committee is a traditional mechanism for consulting on health and safety in larger workplaces and is effective as long as you ensure that the committee does not become an end in itself. Health and safety committees need to be solution-focused, not agenda-focused, and need to be integrated into other planning streams in the business. Committees work best when the participants have the training, access to information and time needed to fulfil their function. The committee also needs to be broadly based and visible and to actively encourage employees to bring issues to it. Most committees have a balance of managers and employees and a balance across the range of work areas in the company. The committee needs to be of a workable size, with the ability to establish specialist sub-committees if issues arise that need intensive concentration or expertise in a specific area. A foundation of success is having agreed terms of reference, and understanding the decision-making process. Equally, a committee should have as a primary role, developing and promoting active health and safety initiatives for the workplace and not be distracted with other issues. Every employer has to provide reasonable opportunities for employees to participate effectively in ongoing improvement of health and safety in the workplace Does the employer need to develop an employee participation system in order to do this? Fewer than 30 employees One or more employees requests a system Employer not required to agree to an employee participation system, but such systems are an effective way of involving employees in health and safety Adopt the system set out in the schedule to the HSE Act Fewer than 30 employees Hold election for health and safety representative NO 30 or more employees Hold election for 1 health and safety representative for each type or place of work or other grouping, OR a maximum of 5 health and safety representatives as members of a health and safety committee YES System in place Review system NO 30 or more employees Employers, Employees and, where applicable, their union(s) must seek to agree a system EITHER OR is acceptable to all parties; or The system must take into account the requirements of the HSE Act and schedule, including a review process System confirmed/agreed within 6 months? YES Things to think about when developing an employee participation process What are the elements of the workplace? Identify the various work environments and processes and the existing strategy for identifying and managing hazards. Is everything covered? Are there areas where the processes or responsibilities are unclear for example, mobile or loaned workers? Who participates? How do supervisors and employees currently participate in the system? How are participants selected? How do they report to the broader workplace? Are there any groups or interests that are not currently participating? What records are kept and used? Are systems in place to meet the requirement that accidents, near misses and employee illnesses are recorded? Are these records used in a way that builds a safer workplace? How do individual issues and incidents contribute to assessing hazard management more broadly in the workplace? How are hazards identified and managed? Who is involved? Are people aware of, and competent in, the system of hazard management? Are there gaps in the system or in participation? How are views exchanged? Identify all the opportunities for exchanges of views and the current effectiveness of each. Are you taking full advantage of tools like lunchroom meetings, suggestion schemes, surveys, in-house newsletters, training courses and so on? How are decisions communicated? What are the mechanisms to make sure that everyone knows about health and safety decisions that affect them? How clearly are the reasons for changes conveyed? How much paid leave is required for health and safety training? The table below will help you figure out the maximum number of paid days leave an employer is required to give for health and safety training. This number is based on how many employees are employed by the employer as at 1 April in that particular year: Employees at the specified date in a year days days Maximum total number of days paid leave that an employer is required to allow to be taken day for every 8 employees or part of that number 281 or more 35 days plus 5 days for every 100 employees or part of that number For further information For more information visit or call the Department of Labour helpline on For more detailed information, consult the Health and Safety in Employment Act (1992), the Health and Safety in Employment Regulations (1995) or the document How to implement safer workplaces available from ACC. You can also check the Regulations, Approved Codes of Practice or Best Practice Guidelines relevant to your industry, usually available from your industry body; or talk with external consultants. ACC4441 March 2011

87 Information and training Good training practices Encourage trainees to relax Explain a task then demonstrate Mirror. Get trainees to explain and demonstrate back to you Correct mistakes and get trainees to repeat the action. Multiple mistakes, or one serious mistake, suggest training hasn t been understood and that the trainee is not safe to work unsupervised. Arrange further sessions and maintain supervision until training is completed successfully. Check. Re-visit trainees a few weeks after they ve completed training to ensure no bad habits have crept in. When not to train Employers have responsibilities to young employees. Check the Health and Safety in Employment Regulations (1995) before you hire. Young people may not be old enough to do the work even if you ve trained them. Identify needs New staff, new environment, new processes, new equipment, certified training expiring and hazard controls can all create the need for training Develop plan Consider the type of training, the delivery (in-house or outsourced), assessment and how to maintain safety while you re training Deliver training Confirm trainers and venue. Ensure training is conducted and trainees are assessed. Is further training and supervision required? Maintain a central record of training Review needs Continuously review training effectiveness. Monitor need for training in safe working practices, dealing with hazards and emergency procedures. Ensure you always have first aid-trained staff. Maintain health and safety representative training. Seek feedback from staff on the status of their current needs Provisions you need to be aware of The HSE Act sets out general duties for all parties under law. The Health and Safety in Employment Regulations (1995) spell out specific legal duties and requirements. Approved Codes of Practice, Codes of Practice and other guidance that relates to hazards in workplaces do not have the force of law but rather provide guidance on the best way to comply with the law. However, they are not the only way to comply with the law and if you have an alternative method that is as good or better, you are free to use your own method. New Zealand Standards and AS/NZS provide requirements and guidance for a wide variety of subjects and industries health and disabilities, business management, environment and management of noise, to name a few. Your duty to train and supervise Under S13 of the HSE Act, employers must ensure all employees have the knowledge, experience and adequate training to ensure that doing their work won t expose themselves or others to harm. If they don t, they must be supervised by someone who does have that knowledge. Employees or their supervisors must also be properly trained in the use of protective clothing or equipment that may be required. Staff on loan An employer must make sure any employees they lend can do the work safely, and also that employers borrowing the staff understand all their HSE Act obligations. If you borrow staff from another employer or provide work experience or regularly use volunteer workers, you must treat them as if they were your own employees and meet all your obligations to them under the HSE Act. Information you must provide Under S12 of the Health and Safety in Employment Act 1992 (HSE Act), every employer must give employees ready access to key information about their place of work, plant or substances they work with. This information must be delivered in ways they can reasonably be expected to understand. The information must cover: what to do if an emergency arises in the workplace what identified hazards employees may be exposed to in the workplace and how to minimise the chances of harm that these hazards may pose to both themselves and to other people all identified hazards that the employee may create through their work and how to minimise the likelihood that these hazards will be a cause or source of harm to other people where all safety clothing, devices, equipment and materials are kept. Employers must also ensure all health and safety representatives have ready access to sufficient information to perform their functions effectively. In some situations, hazards to employees or in the workplace may be monitored under the terms of the HSE Act. Employers must give employees access both to their personal results and to those of the group being monitored, while ensuring no information is released that may identify or disclose anything about any other individual employee. Record-keeping Information about accidents, near misses and serious harm has to be kept in the prescribed form. This applies to employers, the self-employed and to principals. A template of the approved register can be downloaded from For further information For more information visit or call the Department of Labour helpline on For more detailed information, see the booklet How to implement safer workplaces, available from ACC. You ll also find useful information at these websites: ACC4442 March 2011

88 How to manage contractors A note about this process The emphasis of this process is on contracts awarded by tender but much of the process recommended is equally applicable to other contracting situations. Obviously the steps expected of a principal to a photocopier service contract would be different to those expected of the principal to a contract for a major building alteration. The photocopier owner may only require a brief verbal exchange of relevant health and safety information. However, the practicable steps expected of the principal to a major building contract would be extensive. How to assess health and safety capabilities If you haven t worked with a business before or they re new to the industry and have no health and safety record, you ll need to do your own assessment. Use this checklist: Sight a copy of their health and safety policy Ask if they re in any of the ACC incentive programmes Check whether they ve had Department of Labour (DoL) improvement notices or prosecutions Verify their qualifications to do the work Get references Check their skills in managing hazards and investigating incidents Ask about their staff training and view training records Ask how they ll audit health and safety through the contract. What is......a contractor Someone who is not an employee, engaged to work for gain or reward. Often referred to as an independent contractor....a principal A person or business that engages someone else who is not an employee, to work for gain or reward. A note about price The courts have made it clear that safety is just as important as tender price when entering into a contract. Pre-tender Health and safety issues Tasks and documentation Determine the work that Conduct an initial appraisal of major hazards and an overview of likely risks needs to be contracted out, associated with different options to complete the contract work. Incorporate considering broad health and this information into the relevant tender and contract information developed safety implications. for the tendering contractors. Pre-qualifying the contractor Health and safety issues Tasks and documentation Assess capability of potential Use a pre-qualification questionnaire to assess health and safety management tenderers. and, depending on the scale or significance of the hazards, a detailed appraisal of technical competence. Tender Health and safety issues Tasks and documentation Develop and agree on a Provide relevant information to the tenderers through the information for health and safety plan for the tenderer documentation. As the principal you should provide information and project. answer questions specific to the job, assist with the completion of the hazard assessment and method statements, where appropriate. Awarding the contract Health and safety issues Tasks and documentation Develop a job-specific health The contract itself will often draw on the tender documents above. As the and safety plan. principal you may use job registration or permits-to-do work to inform the assessments. You should provide information and answer questions specific to the job and assist with completion of the hazard assessment and method statements where appropriate. Incorporate a health and safety plan in the contract. Include agreed detail of lines of communication, responsibilities, accountability, safe systems of work, method statements, use of client services etc. Monitoring the contract Health and safety issues Tasks and documentation Monitoring/checking Check and ensure contractor performance meets the standards. Meet as throughout duration of appropriate to plan for and resolve health and safety issues. Provide and contract. collect reporting, notification and hazard management documentation as required by the contract. Post-contract review Health and safety issues Tasks and documentation Concluding review to Review the health and safety performance during the contract so that all determine success or parties can learn from the experience. Post-contract evaluation form. otherwise of the contract. Duties of principals Principals must take all practicable steps to ensure that none of their contractors, subcontractors or their employees, are harmed doing any work that they have been engaged to do. As a minimum a principal should include health and safety issues in all planning and contracting processes and should actively discuss these issues with their contractors. Principals cannot contract out of this obligation. A principal also has to keep a register of all work accidents or incidents that harmed or might have harmed their contractors and also a register of accidents and incidents caused by the work of their contractors that might have harmed anyone else. Principals must phone or fax their regional DoL office as soon as possible to advise of any incident involving serious harm. Can I rely on a contractor to manage safety on the site? A principal to a contract cannot distance themselves from what is occurring in a place of work simply because the employer is more directly related to, and responsible for, employees carrying out the work. Nor can the principal always satisfy their legal obligations by retaining a competent contractor if, for example, it is reasonably practicable for the principal to stipulate safety standards in advance or to take steps if unsafe practices are observed on site visits. For further information For more information visit or call the Department of Labour helpline on For more detailed information, consult A principal s guide to contracting to meet the Health and Safety in Employment Act 1992 available from the DoL and How to implement safer workplaces available from ACC. You can also: check the regulations, approved codes of practice or best practice guidelines relevant to your industry, and standards, usually available from your industry body or Standards New Zealand; or talk with external consultants. Glossary of terms Permit-to-work systems are often used in high-hazard situations. These are specific, formal procedures used to control hazardous work (eg entry into confined spaces, hot work, plant, electrical work and pipeline breaking). Method statements describe how the work will be done rather than just provide a specification of what the work will be. In the construction of a bridge, for example, the method statement would describe the process of the construction ie the sequence of building pillars, precast components, on-site assembly etc. ACC4443 March 2011

89 Managing hazards in the workplace What is... a hazard? An activity, arrangement, circumstance, event, occurrence, phenomenon, process, situation or substance (whether arising or caused within or outside a place of work) that is an actual, or potential cause, or source of harm; and includes: a situation where a person s behaviour may be an actual or potential cause of harm to the person or another person; and without limitation, a situation described above resulting from physical or mental fatigue, drugs, alcohol, traumatic shock or another temporary condition that affects a person s behaviour. a systematic process? Hazards have to be identified systematically. Your process could include: task analysis process analysis area analysis near-miss reporting accident reporting early reporting of pain and discomfort occupational hygiene surveys hazard audits reports from staff. a significant hazard? It s something that is an actual, or potential, cause or source of: serious harm harm that is more than trivial, with effects that relate to the extent or frequency of exposure to the hazard harm that wouldn t normally occur or be detectable until a significant time after exposure to the hazard. Harm means illness, injury or both; and includes physical or mental harm caused by work-related stress. taking all practical steps? It means taking all practicable steps, taking into account: the nature and severity of the harm employees may suffer how much is currently known about the harm and the chances of it occurring how much is currently known about potential solutions and their effectiveness the availability and cost of those solutions. Minimising hazards: additional responsibilities If minimising a hazard is the only option, there are several additional requirements you must meet: provide suitable protective gear and ensure it s used monitor employees exposure to the hazard do everything you can to monitor the hazard s effect on employees health. That includes taking all practicable steps to get employees consent to take part in your monitoring programme. Identify Identify all hazards with a systematic process eg task or process analysis, near-miss reporting system Significant Eliminate First, take all practicable steps to eliminate the hazard eg re-design a compactor for hands-free loading, replace solvents with non-toxic substitutes Isolate If it can t be eliminated, take all practicable steps to isolate it eg install machine guarding, restrict access to the site Minimise If it can t be eliminated or isolated, take all practicable steps to minimise the hazard eg train workers, provide protective gear For further information Not significant Control Introduce effective control Record and review Keep a record of all your hazards and controls and review regularly for effectiveness Hazard register templates are available from ACC or the Department of Labour. For copies or more information visit or call the Department of Labour helpline on For more detailed information, consult the Health and Safety in Employment Act (1992), the Health and Safety in Employment Regulations (1995) or the document How to implement safer workplaces, available from ACC. You can also check the Regulations, Standards, Approved Codes of Practice or Best-Practice Guidelines relevant to your industry, usually available from your industry body or Standards New Zealand; or talk with external consultants. Everyone has responsibilities Employers must: Take all practicable steps to ensure the safety of employees at work. Specifically, they must: provide and maintain a safe working environment provide facilities for employees safety and health ensure all plant is safe for employees to use ensure employees aren t exposed to hazards in or around their work have procedures in place for dealing with emergencies. Self-employed people must: Ensure their actions or inactions do not cause harm to themselves or other people. Principals who engage self-employed people, contractors or subcontractors must: Do everything practicable to ensure contractors, subcontractors and their employees are safe. A person in control of a workplace must: Take all practicable steps to protect people working in that workplace including employees, contractors or subcontractors and their employees and also other people who are there lawfully eg pedestrians, customers, enforcement or compliance officers. Employees must: Take all practicable steps to ensure their own safety at work. This includes wearing or using suitable protective clothing or equipment. Employees must also ensure they don t do anything that might lead to someone else being harmed. Information employers need to provide Employees must be given, and have ready access to, information they can understand. There must be information about: what to do in an emergency what hazards employees may be exposed to and what they need to do to keep themselves safe the ways an employee s work may create a hazard for others and how that can be avoided where safety gear, special clothing or materials is kept. Health and safety representatives must have ready access to enough general and workplace-specific health and safety resources to be able to do their work. ACC4444 March 2011

90 Emergency readiness in the workplace Potential emergencies Fire Flooding Chemical spill Power failure Vehicle accident Protests Earthquake Heavy snow fall Serious injury Gas leak Armed robbery Bomb threat Tsunami Working alone Information technology failure Legal obligations Employers are to ensure safety of employees and every employer must do everything practicable to ensure the safety of employees while at work. In particular they must: (a) Provide and maintain a safe working environment for employees; and (b) Provide and maintain facilities for their employees safety and health while at work; and (c) Ensure that plant used by any employee at work is so arranged, designed, made and maintained that it is safe for the employee to use; and (d) Ensure that while at work, employees are not exposed to hazards arising out of the arrangement, disposal, manipulation, organisation, processing, storage, transport, working, or use of things either in or near their place of work and under their employer s control; and (e) Develop procedures for dealing with emergencies that may arise while employees are at work. Do you need a fire evacuation scheme or procedure? To find out if you need an evacuation scheme or procedure for your building, answer yes or no to the questions below: All buildings Are hazardous substances stored? Are early childcare facilities provided? Is specialised care for people with a disability provided? Is specialised nursing, medical or geriatric care provided? Are people in lawful detention? Can 100 or more people gather in a common venue? Identify Identify all potential emergencies that could affect your business Plan Develop a plan. Take into account your legal obligations, eg for a fire evacuation scheme. Check ACC s How to implement safer workplaces and the Civil Defence website Implement Ensure the plan is communicated to all staff, contractors and visitors. Buy equipment, clothing, signage and resources. Where appropriate, appoint wardens and train them Maintain Hold practice drills at least every six months. Debrief after practices. Replace wardens who leave Review Debrief after each practice drill. Determine what is working well and what needs improvement. Keep everyone informed on the discussion and the outcomes. On an ongoing basis ask yourself how well are your emergency procedures meeting your needs? For example, are emergency procedures really understood by visitors? Do people fill in travel details when they are off site? If not, what needs to be changed to get the system working? Unsprinklered buildings Are there facilities for more than 10 employees? Can 100 or more people gather for different purposes or activities? Is accommodation provided for more than five people? If you answered YES to any of the questions above, you will need an evacuation scheme which must be approved by the Fire Service. If you answered NO to any of the questions, you will still need an evacuation procedure. For more information visit The health and safety committee role in emergency readiness Planning for emergencies should involve senior management, the health and safety committee and specialist advisors. For example, you might consider inviting the Fire Service to call at your premises to discuss issues or perhaps phone them to discuss what specialist training they have available. The health and safety committee must be seen to have the authority to develop an emergency plan, so consider appointing yourself or a senior manager as the team leader. This will demonstrate management commitment and legitimise the committee. First aid kits These are the suggested minimum kit contents: a manual giving general guidance on first aid, which you can buy at any bookshop or from a training provider 20 individually wrapped, sterile, adhesive dressings (assorted sizes), appropriate to the type of work (dressings may be of a detectable type for food handlers) two sterile eye pads two individually wrapped triangular bandages (preferably sterile) clasps or safety pins to tie bandages individually wrapped moist wipes or saline solution two stretch bandages six medium-sized, individually wrapped, sterile, unmedicated wound dressings approximately 12 cm x 12 cm two large, sterile, individually wrapped, unmedicated wound dressings approximately 18 cm x 18 cm two pairs of disposable gloves one resuscitation mask. For more information visit the Department of Labour website For further information Visit or call the Department of Labour helpline on For more detailed information, consult the Health and Safety in Employment Act (1992), the Health and Safety in Employment Regulations (1995) or the document How to implement safer workplaces, available from ACC. Other useful websites: ACC4445 March 2011

91 Your safe driving policy Helping you to manage work-related road safety and keep your employees and vehicles safe on the roads.

92 This booklet has been developed by the NZ Transport Agency and ACC, acknowledging the support of the Department of Labour. This booklet is available to download. Simply search Your safe driving policy on ACC s or the NZTA s websites or you can order hard copies from ACC at If you have further queries please contact: ACC, PO Box 242, Wellington 6140 or phone or visit their website NZ Transport Agency, PO Box 2840, Wellington 6140 or phone or visit their website Published August 2007 Reprinted October 2010 ISBN This publication is intended to provide general information to the public about safe driving practices. Every effort has been made to ensure the quality and accuracy of this information. However, readers are advised that the information provided does not replace or alter the laws of New Zealand and other official guidelines or requirements or replace any legal requirement. You should also be aware that any such legal requirement may be replaced or amended subsequent to this publication. Readers should, therefore, take specific advice from qualified professionals before undertaking any action based on information contained in this publication. The authors of this publication do not accept any responsibility or liability whatsoever, whether on contract, tort, equity or otherwise, for any action taken, or reliance placed, as a result of reading any part of this publication or for any error, inadequacy, deficiency or flaw in, or omission from, the information provided in this publication. 2 Your safe driving policy

93 Co Contents ntents Why have a safe driving policy? 3 Don t be put off! 3 What s in it for you? 3 What exactly is a safe driving policy? 4 Why it s so important in the workplace 4 Where the savings are made 5 The facts 6 The cost to business 6 Leading factors in crashes 6 Writing your policy 7 The preparation 7 Who your policy needs to apply to 8 How do these drivers use the vehicles? 8 Setting out roles and responsibilities 9 Making people responsible 9 What s in your policy? 11 The must haves 12 Choose vehicles with high safety ratings 12 Buying, hiring or equipping company vehicles 12 Maintain your company vehicles properly 13 Quick tips vehicle safety 14 Create safer drivers through training and education 15 Licensing 16 Address driver behaviour 17 Prohibit speeding 17 Prohibit drink-driving and other drugs 17 Address driver distraction 18 Address driver fatigue 19 Your safe driving policy 1

94 Transport service drivers 20 Other drivers 21 Quick tips fatigue 22 Promote the use of safety belts and other safety features 23 Hiring and disciplinary procedures 23 The facts 24 What to do if employees use their own vehicles for driving for work 24 The could haves 26 Fuel efficiency 26 The facts fuel efficiency 27 SAFED NZ 28 Incentives/Disincentives/Rewards 29 Personal health education 30 Next steps 31 Getting the message across 31 Sample key messages 31 Promotional ideas 31 Measuring your policy s success 32 Quick tips 33 Recording crashes 33 Case Studies 34 Fighting fatigue on campus 34 Driver training pays off for transport company 35 Fuel efficiency focus at Fulton Hogan 37 ACC develops internal safe driving guidelines 38 Road safety pack proves handy 39 What to do now? 40 Other useful websites 40 2 Your safe driving policy

95 Why have a safe driving policy? Encouraging good driving is good business. Having a safe driving policy can protect your staff and enhance your reputation, both within your own company and with your customers. A safe driving policy is easy to set up and can save you money. No matter what kind of company you run, how big it is or how many vehicles you have, implementing even small safe driving initiatives can reduce injuries, save lives and save your business money. This booklet tells you in detail why you need a safe driving policy and provides ideas that are easy to include in your safe driving policy. Don t be put off! This isn t a daunting task and it s not a big booklet to get through. Really! We ve made it easy for you to implement a safe driving policy. This booklet is a summary of what you need to know and include in your own policy. However, if you go online to or you can search A sample safe driving policy to download a safe driving policy template that you can adapt to fit your business. What s in it for you? Having employees who are safe on the road means you can reduce injuries among your workers, save money and increase productivity. You can also: > enhance your company s reputation > improve workplace morale and wellbeing > comply with the law (particularly the Health and Safety in Employment Act 1992 ( and the Land Transport Act 1998 ( govt.nz/legislation). Go to these websites to read more about your responsibilities under these Acts > reduce your company s overall environmental impact > put your business on a preferred supplier list for organisations that will only contract companies with safe driving policies and/or good environmental practices. Your safe driving policy 3

96 What exactly is a safe driving policy? It s all about having systems and policies in place in your business that mean you: > buy or hire vehicles with a high safety rating > provide driver education to any employee who drives a vehicle for work > reduce the potential for driver fatigue and distraction even among employees who use a vehicle to commute to and from work > reduce the number of infringement notices received, e.g. for speeding > reduce the risk of serious injuries if the worst happens, by promoting the use of safety belts, providing incentives to ensure safe driving and having processes in place to manage poor driving behaviour among your staff. Ultimately, a safe driving policy is about protecting your staff and your company because, as any business person knows, both injuries and replacing a damaged vehicle are expensive. Why it s so important in the workplace A safe driving policy helps you meet your obligations under the Health and Safety in Employment Act 1992 (HSE Act). A vehicle is considered a place of work and employees who are mobile are covered by the HSE Act. There are also specific requirements under the Land Transport Act, for example, the Chain of Responsibility requirements that you also need to manage as part of your business. These requirements mean that anyone who causes or influences a driver to exceed speed limits or maximum gross weight limits or to work outside of their work time or log book requirements can be fined. Directors can also be fined the same penalty as the company. Work-related road safety applies to anyone who drives as part of their work, irrespective of vehicle ownership or type (including motorcycles). Although the HSE Act doesn t apply to commuting, a sad fact is a large number of fatalities and injuries happen when employees are commuting. In fact, it s estimated that work-related crashes including commuter crashes account for around half of all workplace deaths. Then there are the thousands more who are injured. 1,2 1 Bronwen McNoe et al (2005). Work-related fatal traffic crashes in New Zealand , Journal of the New Zealand Medical Association, 118(1227). 2 Murray, W., Pratt, S., Hingston, J. & Dubens, E. (2009). Promoting Global Initiatives for Occupational Road Safety: Review of Occupational Road Safety Worldwide. 4 Your safe driving policy

97 It s important that once you ve created a safe driving policy you incorporate it into your company s health and safety policy and procedures and ensure all staff know about it especially those who drive as part of their jobs. Why not make the safe driving policy part of your company s code of conduct? Then your employees will know exactly how much importance you put on keeping safe on the roads. Where the savings are made Having a safe driving policy will save you money. Consider the potential savings through: > lower insurance premiums > lower crash repair bills > lower maintenance costs (e.g. in tyre wear) > reduction in lost productivity, fewer sales missed or fewer interruptions to service > less sick leave and lower temporary staff costs > reduced payments to third parties who might be involved in a crash. Then there are the savings that can be made on fuel bills by promoting better travel planning and more economical driving. There s also a good chance that having a safe driving policy as part of your health and safety policy could save you money on your ACC levies, too. For more information about levies, go to Your safe driving policy 5

98 The facts The cost to business A survey 1 of 85 New Zealand organisations taking part in a road safety workshop showed: >> on average they had 33 crashes or collisions per year, involving one in four work vehicles >> the annual cost of motor fleet insurance claims averaged $57,915 >> the annual hidden cost of motor fleet insurance claims (including vehicle downtime) averaged $121,286 >> the average number of road injuries or fatalities per year was 10. Insurance Council of New Zealand data estimates that during 2008 New Zealand businesses claimed approximately $400 million in insurance owing to commercial vehicle crashes. The ACC Injury Cost Calculator can help you work out the real impact on your financial bottom line. at-work/injury-cost-calculator/index.htm Leading factors in crashes During 2008, there were 11,647 reported crashes resulting in injury or death. The five leading factors were: >> failure to give way or stop (2,773) >> a driver not seeing or looking for other road users (2,349) >> an inattentive or diverted driver (2,734) >> travelling too fast for the conditions (1,608) >> an alcohol/drug-affected driver (1,900). Of course, several causes can contribute to the same crash. 1 Dr Will Murray (April 2007). Improving work-related road safety in New Zealand a research report, Department of Labour, Wellington, p 17 and 7. 6 Your safe driving policy

99 Writing your policy The preparation Before you write a safe driving policy, you need to do some preparation so you can decide what to put in it. First you need to: > identify the types of vehicles you use, including motorbikes, and some of their features. Are they leased or do you own them? > identify how your drivers use vehicles. Do they carry loads? What are their driving hours, etc? > identify the level of driver licensing and training. Are your drivers licensed for and trained to drive these vehicles? > add up how much you spend on fuel; as we will discuss later, aiming to lower your fuel costs also improves driver safety. Then analyse your crashes, vehicle accidents, damage, personal injuries, near-misses incidents and traffic offences: > where and at what time of the day did these occur? > what were the causes and who was at fault? > did bad driver behaviour cause the crashes? Was there any drink-driving, speeding, fatigue, not wearing safety belts, failing to give way? > did driving manoeuvres cause the crashes? Could extra driver training (such as in how to move into and out of traffic safely, reversing, and how to do u-turns) have helped? Find out how much those accidents and infringements cost you, including in: > traffic fines (use infringement notices to identify areas for improvement) > insurance excesses and premiums > repairs, replacements and vehicle maintenance > lost sales and productivity > sick leave, hiring casual staff to fill in for injured staff or replacing staff whose infringements led to their dismissal > payments to third parties. Your safe driving policy 7

100 If you don t already collect this type of information, start doing so now. Set up a system to record it and build up a comprehensive picture for your business make someone responsible for doing this. Six to 12 months of data should give you enough to work from. Don t forget to involve those who have a direct say in the company s transport issues, such as the fleet, health and safety, and human resources managers. Not only do you need their help to spread the word among other staff, these people can help you to compile the information you need. Who your policy needs to apply to Your policy needs to apply to everyone who drives for work purposes. Take a look at these categories and decide where your employees fit. Your policy needs to apply to them all. General drivers: drivers whose main jobs are not driving for the organisation but who might be required to drive from time to time. Commercial drivers: professional drivers whose vehicles are operating in a licensed transport service these drivers are subject to additional driving rules set out in legislation. Employees who drive but aren t drivers : employees such as sales people and mobile bank workers people who drive company or pool vehicles most working days but driving is not their main profession. Drivers who drive for some of their time: for example, trades people using vehicles to travel between jobs or office workers using pool vehicles occasionally. Employees who drive their own vehicle for work purposes: employers still have responsibility under the HSE Act to ensure both the driver and their vehicle are safe when they re using their own vehicle for work, just as if they were driving a company-owned vehicle. How do these drivers use the vehicles? Think about how these drivers use the vehicles, including: > how long do they spend driving? Do they drive on rural roads or urban roads? > how old are the drivers? Are their licences valid for their vehicles? 8 Your safe driving policy

101 > are they trained? Have they done driver self-management or defensive driving courses? > what loads, if any, are carried? (This could be anything from display stands, sales materials and suitcases, to dangerous or heavy goods) > are their loads secured? > how often are passengers carried? > are safety belts always worn? > how many tickets have been received for speeding or other infringements? > do they use high-hazard routes? Setting out roles and responsibilities You also need to think about which staff are going to be responsible for carrying out which parts of the policy. While everyone who drives is ultimately responsible for ensuring they follow the policy, others especially management will be responsible for specific parts of the policy. Making people responsible In your policy you will need to set out the tasks for which people are responsible, such as: > ensuring the policy is followed and all procedures are actually implemented > holding staff driving records, ensuring staff are trained and licensed, and assessing their skills. Regular checks of driver licences should be made > buying company vehicles, licensing and servicing them, and keeping records of this > recording and analysing crash results, maintenance costs and driver behaviour > promoting the policy and measuring its success. Then there are the responsibilities of all employees who drive. Their responsibilities are to: > comply with the New Zealand Road Code and all traffic laws, rules and regulations Your safe driving policy 9

102 > comply with the safe driving policy > attend driver training > avoid aggressive road behaviour > advise their managers of speeding tickets, crashes and breaches of traffic regulations > report all injury crashes to the police within 24 hours > hold current driver licences for the correct classes of vehicle and ensure that endorsements are valid > drive in a way that conserves fuel and not make unnecessary trips > notify of any near-misses. 10 Your safe driving policy

103 What s in your policy? There are several aspects to developing a safe driving policy. To make it easy for you, we ve split them into two parts the must haves (the minimum your policy should include) and the could haves (additions we recommend). The must haves your company will: > choose vehicles with high safety ratings > maintain them properly > have procedures to deal with poor driving behaviour and remember to incorporate your safe driving policy into the company s health and safety policy and make it a vital part of your code of conduct > create safer drivers through training and education and ensure all drivers are licensed and trained to operate the vehicles they drive > address driver fatigue, distraction, speed, drink and drug-driving and the use of safety belts and other safety features. The could haves your policy could also: > include some focus on fuel efficiency > use employee incentives for safe driving behaviour and procedures to deal with poor driving behaviour > encourage healthy eating, sleep, work and exercise habits that assist safe driving, as these can improve driver safety. What you put in your policy should address the problems identified in your preparatory analysis. Again, don t forget to involve your staff, especially when looking at how to raise awareness of driver safety and efficiency or fatigue. Your safe driving policy 11

104 The must haves These are aspects that are considered essential to having a robust, effective and efficient driving policy that will keep your employees safe, while saving you and your business a lot of stress and money. Remember, these are the minimum recommended requirements to write up in your policy more information that will beef up your policy follows. Choose vehicles with high safety ratings The following features are recommended for new vehicle buyers: > Electronic Stability Control (ESC) : systems that use sensors to detect and prevent a vehicle going out of control > four-star minimum ANCAP (Australasian New Car Assessment Program) crash rating: safety ratings based on crash test results (see > head-protecting side or curtain airbags. Buying, hiring or equipping company vehicles When you buy, hire or equip a company vehicle, you should also consider: > choosing an easily visible colour, such as white or red > good rearward visibility and/or a rear-view camera > active safety belt reminders > active head restraints to reduce whiplash > a three-point safety belt and head restraint for the centre rear seat > automatic daytime running lights > speed warning devices > type of transmission. If they are doing a lot of travel in a large city, then an automatic transmission may be better > a cage to protect the driver from any loose loads moving forward in a sudden stop. 12 Your safe driving policy

105 Fleet buyers are also advised to consider alcohol interlocks. These prevent a vehicle being started if any alcohol is detected when the driver blows into a breath-testing device. Maintain your company vehicles properly Shortcuts in vehicle maintenance can cost lives. Vehicle faults were reported as a contributing factor in around 446 of all crashes during The most common faults were worn tyres, punctures, faulty brakes and insecure loads. You could be charged by the police for any part of a vehicle that is below certificate or warrant of fitness (WOF or COF) standard (even if these are current) and fined up to $2,000 for operating an unsafe vehicle. Well maintained vehicles also save on fuel. Your policy for vehicle maintenance should include: > following the manufacturers maintenance requirements and schedules: don t forget about scheduling for vehicle downtime and only allow qualified personnel to service the vehicles > tyre checks: tyres are cited as a factor in more than half of fatal crashes where vehicle defects are a contributing factor, so tyre pressure and tread depth should be checked regularly (specify in your policy whose responsibility this is) > safety belt checks: look for fading, fraying, cuts and flexibility > rust checks: if on the main structural parts of any vehicle, rust can be dangerous and should be repaired immediately. Rust removed early also stops spreading and saves money > exhaust system checks: regular inspections protect occupants from carbon monoxide poisoning > special equipment: all vehicles should be fitted with a fire extinguisher, a first aid kit, a torch, a reflective vest and an emergency triangle. Put a system in place for drivers to report vehicle faults and make sure these are actioned and the drivers told what was done to fix the problems. You should also provide a safe, uncluttered area for vehicle servicing and parking. Your safe driving policy 13

106 Quick tips vehicle safety >> To find out which are the safest vehicles to buy or hire, see the safety performance of new vehicles from the Australasian New Car Assessment Programme (ANCAP) at it is strongly recommended you choose at least a four-star vehicle. See also the used-car safety ratings for older vehicles. >> Buy air-conditioned vehicles if your drivers will be travelling in hot and damp weather air conditioning helps to combat fatigue and demists windows. However, be aware that it s not always the most fuel-efficient way to cool a vehicle. >> Buying vehicles with extra safety features, and maintaining them well, will improve their re-sale value. >> Vehicles that travel long distances need more frequent servicing. 14 Your safe driving policy

107 Create safer drivers through training and education Consider who needs what level of training, such as staff who drive company or pool vehicles, inexperienced drivers, staff recently involved in accidents or offences, and those who drive their own vehicles to work. Choose the best driving programme for your money. Courses vary from driver seminars to practical advanced driver training courses. Overseas experience suggests that companies should provide regular training sessions because one-off sessions are not enough. Courses to consider include: > your own internal courses: regular staff meetings to discuss driving issues can help to develop and maintain a road safety culture > corporate defensive driving courses: teaching drivers to identify dangerous situations and make adjustments to avoid a crash 1 > individually designed driving courses: delivered by individual providers to suit specific staff needs 2 > courses for special vehicles: such as forklifts 3 and four-wheel drive vehicles 2 > first aid courses: these could help employees to cope if they are involved in a crash or come across one > transporting dangerous goods courses 3 > driver assessment: these are 40-minute driving sessions carried out by a NZ Transport Agency (NZTA)-approved driving instructor, which assess a driver s hazard identification as well as search, control and trafficobserving skills. Training requirements and programmes can then be recommended. 2 For more information about accredited training courses and programmes, visit the website for Tranzqual, the industry training organisation for transport and logistics. 1 For details on defensive driving courses visit the AA website at 2 For a list of local driving instructors, refer to your Yellow Pages or visit the Institute of Driving Educators website at 3 A list of approved course providers is available on the NZTA website at Your safe driving policy 15

108 Licensing It is your responsibility as an employer to ensure that any employee who drives any kind of vehicle is legally able to do so. That means they must have the right category of licence and it must be valid, i.e. it must not be suspended, expired or revoked. There are ways you can check that your employees licences are up to date and valid. Driver Check Contact the NZTA to subscribe to Driver Check so you can be notified if new and existing staff are licensed drivers. Remember that vehicles driven by unlicensed drivers can be impounded by the police, so companies need to check the validity of their employees driver licences before allowing them to drive company vehicles. Rental companies are responsible for ensuring they only rent vehicles to licensed drivers. TORO (Transport Organisation Register Online) This is the NZTA service that enables transport operators (TSL or PSL holders) to maintain a register of drivers in their employment. Certain transport organisations are required by law to maintain such a register, including details about their drivers licences, which must be available for inspection by NZTA and the New Zealand Police. TORO is an online registry system that allows transport organisations to meet their legal commitments. Operator Rating System (ORS) The Operator Rating System (ORS) aims to provide a fair and accurate indication of both the safety of an operator s fleet and the operator s compliance with land transport safety legislation. ORS will let operators know how well they re complying with legislation, help customers find and support operators that have good safety records and allow the NZTA to target regulatory activities where they are most needed. For more information visit 16 Your safe driving policy

109 Address driver behaviour Prohibit speeding As a major cause of crashes, speeding must be prohibited. Not only can you save lives and serious injuries, you save on fuel consumption and cost. When a crash happens, the seriousness of any injuries is directly related to the speed the vehicles were going. Speeding is not just about exceeding the speed limit. It can also be about driving too fast for the conditions, such as on wet or icy roads, in heavy traffic or while cornering. Your safe driving policy should help to lower speed by: > making sure staff have enough time to travel between destinations > making staff responsible for paying their own speeding tickets > making speeding a disciplinary issue > providing regular educational sessions on driver responsibility > ensuring managers communicate that meeting deadlines is not an excuse for speeding. Prohibit drink-driving and other drugs Driving under the influence of drink, drugs or medication that affects driving ability must be prohibited. To help cut such driving: > be a responsible host and provide food and non-alcoholic drinks at functions > provide courtesy vans from work functions > encourage the use of taxis and designated drivers > provide regular educational sessions on driver responsibility > inform staff that they must notify you if they are taking any medication that could cause drowsiness or impair their driving in any way > consider implementing an alcohol and/or other drug testing policy. Your safe driving policy 17

110 Address driver distraction Driving is a complicated task requiring continuous concentration. Overseas studies have shown that anything that diverts a driver s attention for more than a second can significantly increase the likelihood of a crash, near-miss or incident. In 2009 it became illegal to use a hand-held mobile phone when driving. Using a mobile phone to make, receive or end a call when driving is now only legal if: > the driver does not have to hold or manipulate the phone to do so (i.e. the phone is completely voice activated); or > the mobile phone is securely mounted to the vehicle and the driver manipulates the phone infrequently and briefly. Drivers are not allowed to create, send or read text messages under any circumstances. It s recommended that drivers minimise the potential for distraction by switching phones off while driving. Where staff need to stay in contact on the road, they should pull over in a safe and legal place before returning a call. To minimise distraction while driving, your policy should encourage staff to: > switch off mobile phones when driving (research shows that talking on even a hands-free phone significantly decreases a driver s performance) > ask passengers to be quiet if the driver is having difficulty concentrating > ensure windscreens and mirrors are clean and adjust in-vehicle controls (including the radio/stereo) before setting off > if unfamiliar with the route, check on a map or navigation system before commencing a journey (or pull over when checking routes) > ensure that goods carried are properly secured (see the NZTA s Guide to Safe Loading and Towing for Light Vehicles resources/glovebox-guide-safe-loading-towing. For heavy vehicles refer to the official Road Code for heavy vehicles resources/roadcode/heavy-vehicle-road-code/index.html) > take regular breaks rather than eating, drinking or smoking while driving. A note about smoking: while the Smoke-free Environments Act 1990 allows smoking in a work vehicle if everyone using that vehicle gives written consent, to protect the health and safety of your staff it is recommended that all work vehicles be smoke-free and that smoking while driving be prohibited. 18 Your safe driving policy

111 Address driver fatigue Fatigue is more than tiredness it is weariness or exhaustion. Unfortunately, fatigue can impair driving long before you nod off at the wheel. People who drive for work travel about three times the distance of the average private motorist and often work long hours, so they have a higher risk of becoming fatigued. However, fatigue also has the potential to affect all staff, whether they drive as part of their jobs or simply drive to and from work. The most common effects of fatigue on driving are: > difficulty keeping your vehicle within the correct lane > heavy or sore eyes and frequent or slow blinking > frequent yawning > having to take sudden corrective actions because of a lack of concentration > unintentionally speeding up or slowing down, so you find yourself making unnecessary changes in speed > daydreaming and/or realising you don t remember the last stretch of road you drove over > not reacting in time or appropriately to avoid a dangerous situation. Fatigue can affect your performance at any time when you are fatigued: > it takes longer to understand what is happening around you, at work or on the road > your reactions are slower and your ability to concentrate is reduced > your judgement of risk is reduced > you are more likely to succumb to discomfort, pain and injury conditions, such as strains and other aches and pains, and are more likely to have a slip, trip or fall. Under the HSE Act 1992, employers are responsible for ensuring the workplace is safe. This includes having systems to assess and control the contributors to fatigue, particularly when employees use machines or vehicles at work. Your safe driving policy 19

112 Transport service drivers A transport service driver is anyone who drives a vehicle in a licensed transport service or drives a vehicle for hire or reward. Examples are courier drivers, taxi drivers, bus drivers and truck drivers. For these drivers, all the hours spent working which might or might not include driving are counted as work time. If you employ these drivers, you have a legal responsibility to ensure they comply with the requirements, including making a record of work and rest time in their logbooks, if they are required to maintain one. Work time limits for transport service drivers > In general, drivers must take a break of at least 30 minutes after 5.5 hours of work time, no matter what type of work takes place during that period (so even if they re not driving). > Drivers can work a maximum of 13 hours in any 24-hour period. They must then take a break of at least 10 hours, as well as the standard half-hour breaks required every 5.5 hours. > Drivers can accumulate work time of up to 70 hours before they must take a break of at least 24 hours. > While not a legal requirement, it is recommended that driving between midnight and 6am be kept to a minimum because this is the body s natural time for sleep. Many people also experience low energy late in the afternoon. See the NZTA s website for information on work time and log book requirements: requirements.html. Remember, even if a driver is within the maximum work time hours, they can still be fatigued. Compliance with the work time rules might not be a defence. It s your responsibility to schedule their work so they have time for rest breaks and recovery. The HSE Act also sets out similar responsibilities for employers. To manage fatigue, you need to consider what s happening for your employees both at work and at home. Use strategies (such as work and time management, along with encouraging healthy living and eating) in combination and customise them to suit individuals and situations. Fatigue can only be managed effectively if you and your staff work together. 20 Your safe driving policy

113 Other drivers Even if your staff are not constantly driving, their risk of driver fatigue could be high if: > they are not getting adequate good-quality sleep > they work shifts or extended hours > their work is monotonous > family or personal circumstances are creating stress > commuting especially for longer distances or at high-risk fatigue times. Raising awareness of these risk factors and how to reduce them will have benefits for you and your staff. If employees have to make long-distance trips, do not expect them to drive to the limits set for commercial drivers. Ten-minute breaks every two hours are advised, as well as a good sleep the night before a long trip. Again, driving between midnight and 6am is not recommended. Drivers should know: > about time management: how to plan their trip and allow plenty of time > about getting plenty of sleep before a long journey > that caffeine, loud music and opening the windows are not solutions to feeling weary > the benefits of taking a short nap of around 20 minutes > about stopping driving immediately if they re sleepy > about eating sensibly during a long journey, which means staying away from high-fat, high-sugar foods (refer to the commercial drivers section at > about, if possible, sharing the driving. Managers should: > plan meetings or events to start later and end earlier to accommodate staff travelling long distances to attend > consider offering an overnight stay if meeting times can t be adjusted for safety > reorganise work that s done during the low-energy times of the day > encourage the use of taxis or arrange transport if fatigue has been identified as a risk. Your safe driving policy 21

114 Quick tips fatigue >> The only cure for fatigue is quality sleep; not caffeine, winding the window down or turning up the music. Considering both the home and work environments is important because there might be out-of-work factors making your staff fatigued. >> When recording incident, crash and near-miss data, also record the time of day to see if it could be linked to fatigue. >> Find ways to rotate work and vary tasks to minimise fatigue make sure staff don t do too much overtime. >> Consider the provision of rest facilities, nutritious food and access to drinking water. 22 Your safe driving policy

115 Promote the use of safety belts and other safety features Wearing a safety belt increases the chances of surviving a crash by 40%. Front and rear safety belts must be used at all times it s the law. The fine for not wearing a safety belt is $150. To ensure safety belt wearing: > do not pay fines on behalf of staff > offer incentives to increase safety belt wearing > hold educational sessions on driver responsibility and risk. Safety belts are part of Warrant of Fitness (WOF) and certificate of fitness (COF) checks. A damaged or worn safety belt can break or stretch in a crash or even in sudden stops. Safety belts can be affected by: > deterioration from ultraviolet light (sunlight) > fraying from rubbing on fittings > cuts or holes in the fabric > changes in flexibility or suppleness. In 2009, 73 people who were not wearing safety belts were killed in crashes. At least 26 of those lives would have been saved if they had worn the belts available. Hiring and disciplinary procedures These can be linked to your safe driving policy. For example: > seek permission from potential employees to check their licence status through Driver Check (see page 16) or Transport Organisation Register Online (TORO) ( > undertake disciplinary action (including potential dismissal) when procedures aren t followed > include driving behaviour requirements in the company s code of conduct > make sure employees have the correct licence class/endorsement for the type of vehicle they ll be driving > consider a small test for employees to ensure they can perform basic manoeuvres, for example, parallel parking and reversing. Your safe driving policy 23

116 The facts During 2008: >> drivers being affected by alcohol or drugs was a contributing factor in 103 fatal traffic crashes, 441 serious injury crashes and 1,156 minor injury crashes, which equates to 31% of fatal crashes and 14% of injury crashes. These crashes resulted in 119 deaths, 582 serious injuries and 1,726 minor injuries. The total social cost of crashes involving alcohol or drugs was about $841 million >> speeding was a contributing factor in 111 fatal crashes, 415 serious injury crashes and 1,311 minor injury crashes, which equates to 34% of all fatal crashes and 15% of all injury crashes. These crashes resulted in 127 deaths, 569 serious injuries and 2,060 minor injuries. The total social cost of crashes involving drivers speeding was about $875 million >> diverted attention was identified as a contributing factor in a total of 1,438 crashes (12% of all crashes), of which 41 were fatal crashes, 207 were serious injury crashes and 1,190 were minor injury crashes. These crashes resulted in 42 deaths, 245 serious injuries and 1,636 minor injuries. The total social cost of crashes involving diverted attention was about $413 million. What to do if employees use their own vehicles for driving for work 1 Employers owe the same duty of care under health and safety law to staff who drive their own vehicles for work as they do to employees who drive company-owned, leased or hired vehicles. Here are some practical things you can do to manage this properly: > consult staff: make sure they are fully aware of the company s safe driving policy and that this also applies to them when they use their own vehicles 1 The content for this section has been drawn from The Royal Society for the Prevention of Accidents: 24 Your safe driving policy

117 > set specific boundaries around own-vehicle use: consider specifying a maximum distance for which an employee can use their own vehicle, after which a company-owned or hire vehicle should be used. This also makes financial sense if staff are reimbursed for the distance travelled usually a company-owned or hire vehicle is cheaper. To ensure minimum vehicle standards are met in employees own vehicles, consider: > crashworthiness and minimum safety features: you might agree that things such as restraints, airbags, ABS and ESC are minimum safety features an employee needs in their vehicle before it can be used for work. Vehicle crashworthiness information can be found at > agree minimum conditions of use. Minimum conditions of use might mean that an employee using their own vehicle for work must: > ensure the vehicle is properly registered, has a valid WOF and valid insurance for business use (and is only used in accordance with that cover) and is properly serviced according to the manufacturer s recommendations > show, on request (and at specified intervals) documentary proof of the above > agree to conduct regular vehicle safety checks (see below) > not carry loads for which the vehicle is unsuited (such as treat their car like a van) > not carry hazardous materials > only carry the number of passengers for whom there are safety belts > not use the vehicle in conditions for which it was not designed (e.g. off-road). Ensure your employee and their manager clearly understand they are responsible for checking these details and carrying them out. If the vehicle is found to be unsafe, stipulate it can t be used for work until it s fixed. Also, make sure the employee knows that even though they are driving their own vehicle, they are on company business and must comply with your company s rules and procedures. Your safe driving policy 25

118 The could haves This section has additional material that will make your safe driving policy even more wide ranging and thorough. Before you include any of these suggestions in your policy, it s a good idea to consult an employment lawyer to check them against the Employment Relations Act 2000 and your employees contracts, as they might require specific agreements to be written into contracts. Fuel efficiency There might not seem to be an obvious link between fuel efficiency and safe driving but overseas studies have shown that there is a direct, positive link between fuel-efficient driving and crash reduction. Other benefits can include: > lower fuel costs > lower environmental impacts > enhancing your company s reputation, with your employees and the public. Some ways to improve your fleet s environmental performance are: > consider fuel efficiency and size of vehicle when purchasing/leasing vehicles if your employees mostly take short trips, you re better off including some smaller, more economical vehicles in your fleet > if many trips are to the same destination, think about introducing a vehicle pooling system keep a vehicle booking record in a place where staff can easily see if there is a ride available > encourage staff to reduce vehicle use by combining meetings and other activities in one trip > ensure vehicles are regularly and well maintained vehicles that are well tuned are more fuel efficient and less polluting, while driving on poorly inflated tyres uses more fuel > consider if it is even necessary to take the vehicle. Could other transport be more appropriate? Or could meetings be held via video or phone conferencing? > consider how your staff get to and from work is there a way to encourage more active travel like walking or cycling? 26 Your safe driving policy

119 Educate staff on fuel-efficient driving habits this can be built into an existing driver education programme. For example: > faster driving burns more fuel driving over the speed limit on the open road can increase fuel costs by up to 10%. It also increases wear and tear on vehicles, as well as driver stress > if a vehicle is stationary for more than 30 seconds, it is more efficient to switch off the engine than let it idle > short trips are less efficient a cold engine uses 20% more fuel than a warm one > vehicles air conditioners can use about 10% extra fuel, so at speeds of less than 80 kilometres per hour, opening windows might be a more cost-efficient way of cooling the vehicle. See for more information on how to reduce fuel consumption and how different vehicles perform. If you want more information on setting up a workplace travel plan to encourage staff to travel to and from work by public transport, on foot, by bike or by vehicle share, go to The facts fuel efficiency A study of New Zealand s road freight and transport sector reported that changes in driver behaviour alone could reduce fuel consumption by 35%. Further savings were possible through better maintenance and other measures. 1 Saving fuel can also improve road safety. An Australian study found that the fuel consumption of vehicles involved in crashes was higher than that of vehicles not involved in crashes. It found that speed reduction and smooth driving gave both safety and fuel-economy benefits. 2 1 P Baas and D Latto (2005): Heavy vehicle efficiency prepared for the Energy Efficiency Conservation Authority; Transport Engineering Research Ltd, Auckland, p iv. 2 N Haworth and M Symmons (2001): The relationship between fuel economy and safety outcomes: Monash University Accident Research Centre, Melbourne, Australia, p 56. Your safe driving policy 27

120 SAFED NZ The Ministry of Transport and the NZ Transport Agency have launched Safe and Fuel Efficient Driving New Zealand (SAFED NZ) a driver development course for truck, bus and coach drivers. The course helps organisations reduce fuel and maintenance costs, reduce CO 2 emissions and improve safety. The New Zealand programme has been adapted from a successful scheme in the UK, which has been offered on a commercial basis for over six years, and has trained more than 20,000 drivers. SAFED can achieve real benefits in terms of safer driving and fuel efficiency, meaning fewer injuries and fatalities on roads, less accident damage to vehicles, fewer unproductive hours for vehicle repair, the potential for reduced insurance premiums and lower costs for businesses. To find out more about SAFED NZ, or to find your nearest instructor, visit 28 Your safe driving policy

121 Incentives/Disincentives/Rewards In many situations, safe driving comes down to attitude. You can provide safer vehicles, give your drivers practical and technical skills and set up systems to reduce fatigue but your employees must have the right attitude to driving. Improving and celebrating employees attitude towards safer driving can be done through using rewards and incentives. Some ideas include: > rewards, such as prizes for a given number of years with no at-fault crashes (tell staff what the reward will be so they have something to aim for) > penalty points for breaches of the policy > a driver profile system (for example, 1 4 points = friendly reminder; 5 10 points = written warning; 11 or more points = risk losing vehicle and/or must pay for an advanced training course themselves; additional breaches of policy = risk losing their job) > setting up a bonus scheme to reward safe and efficient driving > setting up a pool of money that is added to each month if there are no at-fault crashes the amount accumulates and is used to fund an end-of-year staff function or reward > putting results in a public area in the workplace, such as a noticeboard or intranet > encourage health checks for employees to ensure they are fit for the road > making driver training count towards career development. Your safe driving policy 29

122 Personal health education Safe driving is affected by the overall health of staff. If they re coming to work tired and worn out, their driving will be affected. Your safe driving policy could look at personal health education in the areas of: > stress and sleep > healthy breakfasts and eating > exercise > reorganising work that s done during the low-energy times of the day > workload and hours worked. Encourage your staff to keep a healthy lifestyle. Consider offering tips and resources to help them improve their diet and exercise habits not only will this make them safer drivers, it will also improve their work abilities. As an employer, you can also take a look at your shift and work schedules to see if there s a better way that work can be organised to avoid the chances of your workers becoming fatigued. 30 Your safe driving policy

123 Next steps Once you ve created your policy, you need to make sure that your internal audience (your staff) know about it but it s also good to consider whether this is something you should tell your external audience (your customers and business contacts) about, too. Getting the message across To successfully implement a safe driving policy, all staff need to know exactly what is expected of them. Think about the key messages you want to get across. Then communicate them using clear, concise language. Repeat these messages in as many places as possible staff meetings, inductions, newsletters, management meetings, noticeboards, intranet, , etc. Sample key messages: > CUT OUT CRASHES follow the new safe driving policy > SLEEP IS THE ONLY CURE FOR FATIGUE > LEARN TO DRIVE again > BE SMOOTH drive to save fuel > LET S GET TOGETHER vehicle pool and cut down vehicle trips. Promotional ideas > Put the policy in all staff induction packs. > Include a regular feature in staff newsletters. > Feature a safe driver of the month. > Keep crash reports and promote internally and externally the savings in injuries/crashes and costs to the organisation. > Produce stickers with key messages. > Offer a workplace challenge that involves a central social fund a certain amount can be added when departments achieve a clean slate at the end of each month or quarter. Your safe driving policy 31

124 > Enhance your reputation externally by advertising the fact that you have a safe driving policy at every opportunity some customers will select who they do business with on whether they drive in a manner that s safe for other drivers and safe for the environment. Measuring your policy s success You also need to consider how the success of your new policy will be measured. A good way to do this is by recording any increase or decrease in: > the number of crashes involving company vehicles > the number of at-fault crashes involving company vehicles > fuel consumption > the number of traffic infringements received > the cost of repairs and maintenance > other financial costs associated with vehicle use > the average cost of workers vehicle-related compensation claims. You can then use these figures to analyse how well your new policy is working and what improvements need to be made. It s a good idea to organise an annual review and link the results to the performance of your managers or organisation s objectives. 32 Your safe driving policy

125 Quick tips Recording crashes >> When recording crashes, look at the cause of the crashes without apportioning blame. You want to determine whether any issues need addressing in the company, such as are work schedules unrealistic? Are staff overworked? Are there disincentives if staff are late? >> Set up a register to record the number of crashes/incidents involving your company s vehicles. The register should show the crash incidence per 10,000 kilometres driven (or similar) and the cost of repairs and vehicle replacements per 100,000 vehicle kilometres over a period. Your safe driving policy 33

126 Case study Fighting fatigue on campus After Massey University opened its Wellington campus, the size of its fleet and the amount of staff travel increased dramatically. So, unfortunately, did the rate of driving-related incidents and analysis showed there were particular issues with driver fatigue. In 2004, the University introduced its safe driving policy, a major part of which was aimed at alerting staff to the dangers of fatigue. Staff must now take steps to avoid fatigue if they will be off campus or in transit for 11 hours or more or if they will be driving for more than five hours in a working day. These steps include: > taking breaks of at least 10 minutes every two hours > staying overnight, taking the train or sharing the driving with a colleague rather than driving between Wellington and Palmerston North on top of a full day s work. The policy has been publicised widely through campus newsletters and health and safety committees. It s now a management responsibility to ensure that employees are not being put at risk with expectations of a long day with time on the road. This message is reinforced by fleet managers when the University s vehicles are taken out. The University has also introduced defensive driving courses. Any employee who gets a speeding ticket or is involved in an incident anything even as minor as a dent is expected to attend one of these courses. 34 Your safe driving policy

127 Case study Driver training pays off for transport company When Lower Hutt-based transport firm LG Anderson introduced driver safety training in 2000, it met a less-than-enthusiastic response. Many staff had been in the business for years and didn t want to be told how to do their jobs better. Managers realised they needed more than a tick-box approach to get buy-in from staff. They stressed their main motivation was the drivers welfare that their main concern was to ensure the drivers got home safely to their families at the end of the day. To earn the drivers trust and credibility, it wasn t enough to just say it we had to show we really meant it, one manager, Craig, said. Consulting and involving drivers is key. The onus is on staff to report safety issues and they are encouraged to give feedback and spearhead improvements. However, management follow-through is essential, in that good ideas from staff must be picked up and acted on quickly. Also, any faults or hazards the drivers point out must be fixed promptly. As one example, an employee noted that keeping toolboxes permanently on larger trucks trailers would mean drivers wouldn t have to carry tools along slippery connecting rails in the rain. The change was made and is now standard practice. New staff go through a strict induction process, including driver awareness training, then ongoing training, both theory and practical. Also, periodically all drivers get a full in-cab assessment, with a focus on assisting and learning, rather than examining them. The turnaround in attitudes has been marked. The number of complaints from private motorists common in the transport industry has dropped from several per week to fewer than one per month. Recent driver safety training held on a Saturday morning got full attendance and no grumpy comments, says Craig. He has also noticed that seven years or so ago, 80% of the new ACC claims would be back injuries but in the past four years there have only been a couple. While some of this is owing to modern technologies, a good portion of the credit has to go to the drivers being educated in health and safety. Your safe driving policy 35

128 Building a positive safety culture has been the focus of health and safety at Anderson s. It s not about a paper trail but about having staff on board with the vision, says Craig. I dread having a critical accident and losing a staff member, so everything we do towards health and safety will reduce the chance of that happening. At Anderson s, this dedication to health and safety starts with the interview process and looking for a compatible health and safety attitude in the new drivers it hires. However, as in any workplace, Craig says complacency is an issue so regular reminders are required but that gives him the opportunity to get across new and helpful information or approaches. 36 Your safe driving policy

129 Case study Fuel efficiency focus at Fulton Hogan Fuel efficiency and environmental performance are a major focus at Fulton Hogan Bay of Plenty. Nationally, Fulton Hogan uses more than 1.2 million litres of fuel per month, accounting for 15% of its operational costs. Rising fuel prices prompted the company to set up the Smart Drive programme to reduce maintenance, save fuel and protect the environment. Posters at worksites around the country emphasise key fuel facts for example, that efficient driving can reduce fuel use by 10 30%, and that an hour of idling generates the same engine wear as 190 kilometres of highway travel. Overcoming some of the entrenched myths about idling has been one of the biggest hurdles, with many drivers wrongly believing it s better for diesel engines to let them idle, rather than turning them off. The Bay of Plenty branch has taken the environmental focus a step further by joining GreenFleet, run by the Sustainable Business Network. The branch has undertaken a staff awareness programme that included a training day with an exercise involving a trip to the supermarket, revealing marked differences in time, distance and fuel consumption. This helped highlight the importance of good travel planning and the impact of driver behaviour on fuel use. With recent advances in its data management, Fulton Hogan Bay of Plenty hopes to introduce an incentive scheme to reward improvements in fuel efficiency. It has also taken part in the GreenFleet tree planting scheme, with more than 300 native trees planted in the region to offset its transportrelated carbon emissions. Your safe driving policy 37

130 Case study ACC develops internal safe driving guidelines ACC is reaping the benefits of new driver guidelines, developed with the help of this guidebook, current best practice and the buy-in of its staff. Previously the organisation s safe driving policy came in the form of a Motor Vehicle Policy developed and managed through its procurement team but it wasn t enough. While it touched on aspects of vehicle usage, what to do following an accident and who paid for speeding infringements, it didn t give staff and managers clear guidelines on what safe driving was. It also didn t ensure that all staff who used vehicles for work were protected from the hazards they faced while driving or operating the vehicles. Working together, ACC s Contract Manager from procurement, its Programme Manager for Public Safety and the ACC Safety and Wellbeing Manager reviewed the organisation s current Motor Vehicle Policy. They then went over Your Safe Driving Policy, developed by ACC and the NZTA, and looked at current best practice in order to both review and update ACC s internal Motor Vehicle Policy, particularly ensuring it included safety and wellbeing elements. The team also used the process to develop an internal document on safe driving, which became known as The Safe Driving Guidelines. These Guidelines outlined alcohol and drug use restrictions, changes to rules and practices around mobile phone use and what internal processes would occur if an employee got a ticket or committed a driving offence. The new Motor Vehicle Policy and Safe Driving Guidelines were sent to all managers, with all drivers or users of ACC vehicles required to read both documents and sign Employee Declarations. These Declarations were then kept on site as proof that the employees had reviewed and accepted ACC s Policy and processes for using vehicles for work. ACC says it will review the new Policy and Guidelines annually and any trends and changes in internal processes or external legislation will be incorporated into them. The organisation says it s very pleased that by using a project team with diverse skills from procurement, internal safety and wellbeing, as well as external expertise on best practice it has been able to develop exemplary guidelines that will protect its staff and its business. 38 Your safe driving policy

131 Case study Road safety pack proves handy Road safety-focused thinking by New Zealand Steel paid off by saving injuries and earning the company invaluable public goodwill when an employee was able to help out at a late-night road accident. New Zealand Steel-related vehicles make up a large proportion of traffic in the rural Franklin district where its plant is based. In recognition of this, the company has brought a community focus to its safe driving code of practice. It runs driver education campaigns on a range of topics, including fatigue, and educates staff about road regulations and conditions in the surrounding area. It also maintains regular dialogue with the local council on roading and safety issues. Luckily for a group of motorists, in 2006 the company s driver safety promotion included giving all staff a Christmas take-home road safety pack, with items including a torch, jumper leads and a reflective triangle for emergencies. Early in the following January, the pack came in handy for one employee who came across a three-car accident late at night. After he helped the occupants to safety, another minor crash happened because the accident wasn t visible to other drivers. Using a hi-viz arm band and torch from his pack, he alerted other vehicles, almost certainly preventing further crashes before emergency services arrived. Because of his quick thinking and his well equipped vehicle, all those involved received only minor injuries. New Zealand Steel received positive coverage in local press when the media picked up on the story. Also, by publicising its employee s quick actions internally, it helped to highlight and reinforce further the safety message to staff. Your safe driving policy 39

132 What to do now? Now you ve read this booklet, it s time to write your own safe driving policy. You can either use the information in this booklet to compile your own or go to or and download a safe driving policy template. We ve tried to make it easy for you, so this template can be saved to your computer and adapted to fit your own business. Once you ve got your policy up and running, let the NZTA and ACC know how your safe driving policy is working for your company and what savings/ investments have been made. Our contact details are in the front of this booklet. Other useful websites For advice on setting up a workplace travel plan: see the guide at For information on fuel efficiency: see For guidance on selecting safer vehicles: see the ANCAP crash test ratings and/or used-car safety ratings at Department of Labour: see the guide to the Health and Safety in Employment Act 1992 at ACC: for more resources to help prevent injuries both in and out of the workplace see As we said in the beginning this isn t a big task, so don t be put off. Even small changes in how your employees drive, and the fleet you use, will undoubtedly save you money in lost-work-time injuries, vehicle repairs, insurance premiums, fuel and much more. 40 Your safe driving policy

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137 Tips for employers some things to consider when managing fatigue Employers can help lower the risk of their employees becoming fatigued at work. Here are a number of suggestions you might consider: Look at how work is structured and find ways to rotate work and vary tasks to reduce boredom and loss of concentration Develop a fatigue management plan or policy specifically for the workplace and in consultation with employees Recognise the benefits of power naps and allow employees to have short power naps Help people stay alert by minimising or eliminating the time that they spend working on their own Confine higher risk activities to times when two or more people are present Allow employees to take self-selected breaks Provide information, awareness and training of your workforce in fatigue and sleep issues Manage overtime processes based on previous work and future scheduled work Record incident, accident and near miss data and link the data to work design and time of day factors Length of shifts consider the physical and mental demands of the work Some common Myths Coffee will help keep me awake. The effect of coffee, which contains the stimulant caffeine, only lasts for a short while. I m young and don t need as much sleep. Everyone needs sleep. Most people need seven to eight hours sleep during each 24 hour period. I m a good driver. This may be true, but if you drive while fatigued you may misjudge your surroundings or have slower reaction times. The risk of an accident is greater. A boost of fresh air will revive me. Fresh air may help you feel better for a very short while but ONLY SLEEP will solve your fatigue. remember the only cure for fatigue is SLEEP. Fatigue l e m p l o y e r b r o c h u r e What is fatigue? Fatigue is tiredness, weariness or exhaustion and can result in: A reduction in performance in all types of work physical and mental Loss of energy and ability to concentrate Slowing in reaction times, and the ability to respond to sudden changes in circumstances Increase in the likelihood of making mistakes Affecting a person s memory. Ensure lighting is effective, premises are well ventilated and temperatures are not extreme. Recognise that fatigue can affect everyone at your worksite regardless of their role E F E F Encourage employees to talk about any fatigue problems while at work and provide a mechanism to support the individual Provide rest facilities, kitchen facilities and access to drinking water. For more information visit or call 0800 THINKSAFE. ACC4148 Printed July 2007

138 What causes fatigue? The main cause of fatigue is the lack of SLEEP and rest between daily activities. This can be linked to the: Time of day that work takes place Length of time spent at work, and in work related activities Duration of work related tasks and the environment in which they are performed Quantity and quality of rest gained prior to and after work period Activities outside of work, such as family commitments and second job. Our body temperature drops at night to make us sleepy and then rises in the day to make us alert. These benefits can start building within as little as five minutes. E F Our digestive system slows down at night to allow our hormone system to repair our bodies while we sleep Improve a person motor skills Boost energy levels Exposure to bright light will help set our body clocks to daytime. Improve concentration Lower stress levels. What time of the day are you most at risk? Research confirms that our bodies want to sleep in the early afternoon and in the early hours of the morning. You are at most at risk of having a fatigue related accident during these times. What are the signs of Fatigue Watch out for: Everyone is at risk Yawning or feeling drowsy Impatience and slow reaction times Sore or heavy eyes All workers are at risk of fatigue. However, people working long hours and those who work shift work are at higher risk of fatigue. Poor concentration Impatience Not remembering the last few tasks Lapses in concentration or reduction in performance. This is because on an average, people working long hours or shift work are likely to get one or two hours less sleep per 24 hours than if they were working during the day. Our body clock If you do not get enough sleep, your body goes into sleep debt. You owe yourself more sleep and the only way to repay this debt is by SLEEPING. If you do not catch up on lost sleep you are in greater risk of suffering from fatigue. Our bodies have a clock that programmes us to sleep at night and stay awake during the day. There are a number of reasons for this: The benefits of power naps We have cells in our brains that make us respond to night and day A power nap of less than 40 minutes can: Encouraging your employees to take a power nap has many benefits for both the body and brain. Power naps are an important way of managing fatigue in the workplace. Research shows that even a short power nap can significantly reduce the chances of a person having a workplace accident due to fatigue. Remember, the only cure for fatigue is SLEEP. Do employers have a responsibility to manage fatigue? Employers have responsibility under the Health and Safety in Employment Act 1992 to take all practicable steps to ensure the safety of employees while at work. To achieve this the employer is required to manage all significant hazards. In many work settings fatigue should be addressed as a significant hazard. Employers must have a system to effectively identify, assess and control whether fatigue is a significant hazard in their place of work. Employees also have the responsibility to take all practicable steps to ensure their safety at work. Self management and awareness of the impact of fatigue is essential. Fatigue can only be effectively managed if both individuals and organisations work together.

139 Calculate your driver fatigue rating Use the questions below to see if you are affected by fatigue. Risk factors Score If the statement is true for you write in the score Less than 6 hours sleep in the past 24 hours 3 Less than 14 hours sleep in past 48 hours 2 Awake for more than 16 hours 3 Worked night shift in the last 3 days 2 Have a sleep disorder 3 Driving between 1pm and 3pm 1 Driving between 12pm and 6am 3 Had any alcohol at all in last 2 hours 2 Either driven for more than: 5 hours without a break 2 Or driven for more than: 8 hours without a break 3 Add up the column to calculate your total score Check your crash risk If your score is less than 4 Prevention: You are on the way to being fatigued: be sure to have regular breaks from driving, keep drinking water and eat regularly. If your score is 4 Caution: You are at risk of being a road hazard: you re at risk of having micro sleeps and need to stop for a 20 minute power nap if you find it hard to concentrate. If your score is 5-7 Warning: You are a serious driving hazard: you should stop driving but if you have to keep driving, have a 20 minute power nap now! If you score 8 or more Danger: You are an extreme driving hazard: do not drive at all, you need to stop driving until you ve had a full night s sleep (at least 8 hours). See reverse for tips on good habits that will help you avoid driver fatigue Fatigue - Wake up to the danger Adapted from information provided by the Automobile Association and Dr Phillipa Gander.

140 How to reduce the risks of having a fatigue related crash Plan ahead Be sure you get several good nights sleep in the week before your road trip. Decide how far you ll go each day and where you ll take breaks along the way. Stopping to see something interesting can make a holiday journey fun. Avoid driving at high-risk times You re more likely to be affected by fatigue if you drive: between midnight and 6am between 1pm and 3pm, when many of us have an energy slump during the hours when you would normally be asleep. On the road Share driving if you can. Stop regularly every couple of hours for a refreshing break out of the car. Don t think you can beat driver fatigue by drinking caffeinated drinks, winding down the windows or playing loud music. Keep alert Eat light and often, and avoid big meals of sugary or fatty food, which can sap your energy. Drink lots of water to keep hydrated this will help keep you alert. If you re a front seat passenger stay awake. You can play a vital role in helping your driver stay alert. What should you do if you feel tired? If you feel drowsy or are struggling to concentrate, STOP. Don t hang on until you get there. If you can, swap drivers or have a 20 minute power nap. It s important you don t sleep for longer than 20 minutes, though or you may go into deep sleep which can be hard to wake up from. Remember, if you re tired, you shouldn t be driving you should be asleep! For more information about driver fatigue, check out the ACC website ACC4640 Printed May 2008

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173 About GST (Registering for GST) Page 1 of 2 30/07/2012 You are here: Home GST (Goods and services tax) Registering for GST About GST GST (Goods and services tax) Te take hokohoko About GST What is GST? Goods and services tax (GST) is a tax on most goods and services in New Zealand, most imported goods, and certain imported services. GST is added to the price of taxable goods and services at a rate of 15%. What are taxable goods and services? Goods include all types of personal and real property, except money. Services covers everything other than goods or money, eg TV repairs, doctor's services and gardening services. Taxable goods and services are part of the business or taxable activity. This means you supply or receive taxable goods and services for a consideration (money, compensation, reward) but not necessarily for profit. We refer to taxable goods and services as "taxable supplies". Taxable goods and services don't include: goods and services supplied by businesses that aren't registered for GST, and exempt supplies such as: letting or renting a dwelling for use as a private home interest you receive donated goods and services sold by a non-profit body, and certain financial services. Note: We also refer to goods and services as "supplies" or "assets". How does GST work? GST is a tax that you collect on behalf of the government. You charge GST in your sales and income and claim it back for your purchases and expenses. You then calculate the difference in your GST return to work out if you have to make a GST payment to us or if your receive a GST refund from us. Here's how to calculate your GST: You charge GST at 15% for sales and income. Calculate GST by multiplying the sales and the income figure by 3 then dividing by 23. You claim GST at 15% for purchases and expenses. Calculate GST by multiplying the purchases and expenses figure by 3 then dividing by 23. Note: Multiplying a sales or purchases amount by 3 then dividing by 23 enables you to find out the GST amount. Subtract this amount to get the GST exclusive amount.

174 About GST (Registering for GST) Page 2 of 2 30/07/2012 Being registered for GST helps your business Completing regular GST returns helps keeping your records up-to-date and accurate. Generally, businesses prefer to work with GST-registered businesses. Charging GST enables you to work with this tax money over your taxable period (one-monthly, twomonthly or six-monthly) before filing your GST return by the due date and, if applicable, paying GST back to us. If you purchase goods and services from someone who's GST-registered, you'll be charged GST and you'll be able to claim it back sooner than waiting until your income tax return is filed. Find out more Who needs to register? Get ready to register What to do after you registered Next steps Working out your GST Additional calculations - exempt supplies Date published: 21 Apr 2011 Copyright 2012 Inland Revenue

175 Who needs to register? (Registering for GST) Page 1 of 2 30/07/2012 You are here: Home GST (Goods and services tax) Registering for GST Who needs to register GST (Goods and services tax) Te take hokohoko Who needs to register? Find out who is required to register for GST and learn about special types of registration. Required to register for GST You must register for GST if you carry out a taxable activity and if your turnover: was over $60,000 for the last 12 months, or is expected to go over $60,000 for the next 12 months (This equates to $5,000 per month. If your turnover is $5,000 per month and you expect to maintain that level all year, you'll need to register for GST.), or was less than $60,000, but you include GST in your prices, for example taxi drivers who have included 15% in their taxi fares. You can choose to register for GST even if your annual turnover it less than $60,000. This is referred to as voluntary registration. Exception: You are not obliged to register for GST if your turnover exceeds $60,000 because you sell plant or other capital assets when you are: ceasing any taxable activity substantially or permanently reducing the scale of any taxable activity, or replacing the plant or assets. Important: If you're required to register for GST, you must apply within 21 days of becoming liable. The timeframe is based on self-assessing your situation. We may charge penalties if you fail to register. What is a taxable activity? A taxable activity is an activity carried out continuously or regularly by a business, trade, manufacturer, professional, association or club. It includes any activity that supplies, or intends to supply, goods and services to someone else for a consideration (money, compensation, reward) but not necessarily for profit. We refer to these goods and services as "taxable supplies". Taxable activities don't include: work for salary or wages being a company director hobbies or any private recreational pursuit private transactions such as the occasional sale of household or domestic items, or exempt supplies, such as: letting or renting a dwelling for use as a private home interest you receive donated goods and services sold by a non-profit body, and

176 Who needs to register? (Registering for GST) Page 2 of 2 30/07/2012 certain financial services. What is my turnover? Your turnover is the total value of taxable supplies made excluding GST for all your taxable activities. In most businesses, the annual turnover will be the total value of your sales and income, including any: grants or subsidies received barter transactions, and imported services. Special types of GST registration The table below lists special types of GST registration and describes them briefly. You can also use the links to find out more about each type. Registration type Description Find out more... Voluntary GST registration GST registration of nonprofit bodies GST registration of separate branches or divisions GST group registration GST registration of an agent or representative Find out more Avoiding interests and penalties Get ready to register Voluntary registration applies if you can choose to register for GST because your taxable activity has an annual turnover of less than $60,000. If you register a non-profit body for GST, you may apply to us to treat each branch and division separately. If you operate your business in separate branches you may wish to register branches or divisions for GST separately. If you register for GST as a group, you'll elect a group representative to file GST returns on behalf of the group. You may need to register as an agent or representative if you take over part or all of the taxable activity on behalf of a GST-registered person. Registering for GST voluntarily Registering non-profit bodies for GST Registering branches or divisions for GST separately Registering for GST as a group Registering for GST as an agent or representative Date published: 29 Sep 2010 Copyright 2012 Inland Revenue

177 Business Ngā Ūmanga GST do you need to register? IR 365 October 2010 This factsheet helps you decide if you need to register for GST. If you decide to register you can do this at go to Get it done online, GST registration or you can complete the GST registration (IR 360) form. For more information about GST go to What is GST? GST (goods and services tax) is a tax on most goods and services supplied in New Zealand by registered persons. It also applies to most imported goods, and certain imported services. GST of 15% is added to the price of taxable goods and services. If you re a GST-registered business, then you pay GST on your supplies and collect GST on your sales. The difference between these two is what you pay to Inland Revenue. Deciding to register Are you carrying out a taxable activity?* NO You can t register YES Is your turnover # for the last 12 months more than $60,000? YES You re required to register NO Do you expect your turnover to exceed $60,000 for the next 12 months? YES You re required to register NO Do you charge GST in your prices (even if your turnover is less than $60,000)? YES You re required to register NO You re not required to be registered for GST Keep an eye on your turnover as soon as you re aware it may go over $60,000 (average $5,000 per month) you ll need to register Note: Not sure if you charge GST in your prices? If you re part of an organisation or company, check with them to see if GST is included, eg, taxi drivers. If not, do you show GST on receipts etc or tell your customers they re paying GST? * What is a taxable activity? Any activity carried out continuously or regularly by a business, trade, manufacturer, professional person, association or club. It includes any activity that supplies, or intends to supply, goods and doesn t include: working for salary and wages, being a company director, hobbies or any private recreation pursuit, private transactions such as the occasional sale of household or domestic items, making exempt supplies. # How is turnover calculated? The total value of taxable supplies in all your business activities, including grants and deducted when determining your turnover.

178 STEP 2 Choosing how to account for GST Accounting basis The way you choose to claim and pay your GST is called an accounting basis. There are three methods of accounting for GST. The two most used methods are the payments basis and the invoice basis. Accounting basis Payments basis Invoice basis Hybrid basis Payments basis Who can use it A registered person can use this basis if the total amount of sales: $2 million or less, or $2 million in any 12-month period month. A registered person with turnover of more than $2 million may be able to use this basis. Go to (keyword: GST-registered). Any registered person can use this basis. Any registered person can use this basis, but it s not commonly used by small businesses. Using the payments basis you account for GST at the end of the taxable period that you make or receive the payment in. The payments basis is a good way to help pay GST to us after you ve received payment from your customers and you only claim GST for the purchases and expenses you ve paid for. Note: Around 78% of businesses choose the payments basis for their GST accounting basis. Invoice basis Using the invoice basis you claim GST when you receive an invoice and you account for GST at the earlier of issuing an invoice or receiving payment. This means if you ve issued or received an invoice during a taxable period then: you ve given to your customers (regardless of whether you ve received a payment or not), or received (even if you haven t raised an invoice), and tax invoices you ve received from your suppliers (regardless of whether you ve paid your supplier). Hybrid basis A less frequently used method is the hybrid basis, which is a combination of the invoice and payments bases. GST on sales and income is accounted for using the invoice basis and GST on expenses and purchases is accounted for when payment is actually made. This method can be complicated and is not commonly used by small businesses. Taxable periods/filing frequency ie, monthly, two monthly or six monthly. This may also Taxable period Monthly Two monthly Six monthly Who can use it Any registered person. If taxable supplies* exceed or are likely to exceed $24 million in any 12 months you must use a monthly period. Any registered person provided they don t meet the criteria for having to use the monthly period. A small business whose turnover hasn t exceeded $500,000 in the last 12 months and is unlikely to exceed this in the next 12 months. * Taxable supplies are goods and services you provide in your business. Monthly choose monthly returns if you re entitled to frequent GST refunds, such as exporters. Two monthly months. Preparing your GST accounts every two months helps keep you on top of your GST requirements. Many businesses say that completing GST returns every two months helps them keep in touch with business progress. Six monthly Preparing your GST accounts every six months may be an option for smaller businesses with fewer transactions. of your total sales: months. GST and provisional tax if you re liable for provisional tax your taxable period will need to be aligned with your balance date.

179 STEP 3 Registering for GST If you re required to register, or wish to voluntarily register, you can do this on our website Get it done online. Does your business entity have an IRD number? (If trading in your own name, use your own IRD number) YES NO Choose an accounting basis and a taxable period Apply for an IRD number complete the IR 596 # form online or request one by phoning Register for GST at or complete the IR 360* form and send it to us Receive that you ve been registered You re now ready to start carrying out your GST responsibilities Note: If your business is a new company, you can apply for an IRD number and register for GST at the same time as registering your company, all at * GST registration (IR 360) # IRD number application - non-individual (IR 596) STEP 4 Completing the online registration or IR 360 Here are some notes to help you complete your registration. Question 4: This is the address where your business is physically located. This may be your home or somewhere else. Question 5: This is where you want the mail for GST to go if it s different from the location address. If it s a PO Box number please show your box lobby, eg, Wellington Mail Centre. If you re unsure what your box lobby is or whether you have one, please contact NZ Post on Note: If your tax agent/accountant will be doing your GST returns don t put their address here. Ask them to give us the address for your GST mail. Question 8: When you re in business we re required to supply your business description to the Accident Compensation Corporation (ACC) for their records. For help determining your business industry description and code number go to or contact ACC on Questions 10 and 11: When you register for GST you choose how you want to account for GST and how often Taxable periods opposite). Question 12: Normally when you register for GST your registration is effective from the date you apply, but it can be some time in the future. For example, Joe will be opening his grocery store on 1 April He is getting all his paper work completed beforehand and will register for GST in February 2011, so requests the start date to be 1 April In exceptional circumstances you can apply to backdate your registration. This may be approved if you can show that it would be unfair not to make your registration effective from the date you ve requested. Examples of what we d consider include whether you: you ve made over the period. If you re backdating your registration you ll need to complete the GST registration (IR 360) form. For more information on backdated registrations see (keywords: GST backdated registration). STEP 5 What happens next? Once we ve checked the details on your registration your IRD number) We automatically send you your GST returns. Now that you ve registered you need to: them to us Don t forget you need to deregister when you re no longer in business or charging GST see

180 Voluntary registration If your turnover is less than $60,000 and you don t charge GST in your prices you don t have to register for GST. However, you may wish to voluntarily register. Things to consider Advantages You can claim back GST on purchases, including capital items. Non-profit bodies branch and division registered separately. However, each branch or division must maintain its own accounting system and: Branches and divisions with a turnover of: You can claim back GST on secondhand goods purchased from someone who isn t registered that you ve bought to use in your business. You can claim GST on business set-up costs. register voluntarily register. Completing regular returns helps keep your records up to date and accurate. Disadvantages You need to account for GST on all of your taxable supplies. Complying with GST requirements takes time, as You can t claim GST paid on exempt supplies. You need to pay GST on the current market value of assets when you sell them or deregister. Online tools Tool for business is an interactive tool that explains what you need to know about business tax. Go to (keyword: tfb). File your GST return online by going to Get it done online. What is a non-profit body? Any society, association or organisation: and property to any of its members, proprietors or shareholders. Examples include charitable organisations, sports clubs, parent teacher associations (PTAs), churches, social clubs. Special registration For information on separate branches, divisions, groups and agent or representative types of registration, see our website (keyword: registration). Other resources Don t forget your accountant, tax agent and lawyer are also able to help you with any queries or problems you may have. Go to our website for information, services and tools. Secure online services login to check your account information, file an employer schedule, confirm personal tax summaries and update your family details and income. Get it done online complete and send us forms and returns, make payments, make an appointment to see us and give us feedback. Work it out use our calculators, worksheets and tools to help you manage your tax business like checking your tax code, or your filing and payment dates. Forms and guides download our guides, and print forms to post to us. Contact us for full details of phone numbers, addresses and contact options. You can also subscribe to our newsletters, go to FREE ADVISORY SERVICE Our business advisory officers run free tax seminars and workshops for new businesses and organisations. For more information or to register to attend one of these sessions go to (keyword: workshop) or phone The information in this document was current at the time of publication. Please refer to our website for the most up-to-date information.

181 IR 360 GST registration July 2012 If you need more information about registering for GST read our booklet GST do you need to register? (IR 365). You can view this or download a copy from our website Please answer all questions and sign the declaration. 1. IRD number (8 digit numbers start in the second box. ) 2. Print the full name of the person or entity, eg partnership, trust or society, or the registered name of the company (don t show a trade name). If the person or the entity registering doesn t have an IRD number, complete and attach an IRD number application form with this registration 3. If the trade name is different from the name shown above, print it here. 4. Print the street address of the place of business (don t show a box number). Street address 5. Print your usual postal address if it is different from the street address. If you use a tax agent to prepare your GST returns don t show their address here. Please ask them to give us the address for your GST mail. 6. Print contact telephone number(s). 7. Your address Suburb or RD Street address or PO Box number Suburb, RD or box lobby Business Mobile phone or after hours Fax Town or city Town or city 8. Business description and code. To determine your business industry description and code go to If you are unable to identify the correct code call ACC on We ll use this to automatically register you for our online updates and newsletter. You can opt out at any time. Code Business description 9. You must register for GST when you are conducting a taxable activity and it meets any of the following conditions. Was your turnover (taxable supplies) in the last 12 months more than $60,000? Yes No Do you expect turnover (taxable supplies) in the next 12 months to be more than $60,000? Yes No Do your prices include GST? Yes No If you answered Yes to any of these questions you are required to file GST returns from the date at Question 12. Please go to Question 10. If you answered No to all of these questions you don t need to register for GST you can destroy this application. If you are conducting a taxable activity, but don t meet any of these conditions you may choose to voluntarily register for GST. If you are unsure if you are conducting a taxable activity please read GST do you need to register (IR 365). Do you wish to voluntarily register for GST Yes No 10. Tick to show the GST accounting basis you want to use. Payments (cash) basis complete the application below Account for GST when you receive a payment. Claim GST when you pay for your purchases and expenses. Invoice (accruals) basis (go to Question 11) Account for GST when you issue an invoice or receive a payment, whichever comes first. Claim GST when you receive an invoice for your purchases and expenses. Hybrid basis (go to Question 11) Account for GST when you issue an invoice or receive a payment, whichever comes first. Claim GST when you pay for your purchases and expenses. Application to account for GST using the payments basis Tick the option which shows why you wish to adopt the payments basis of accounting for GST. You are a non-profit body. The total value of taxable supplies in: the last 12 months was not more than $2 million, or the next 12 months is not likely to be more than $2 million. If you expect to exceed $2 million in a 12-month period, please give details below why the payments basis would be most appropriate. Take into account the nature, volume and value of taxable supplies and the type of accounting system used. 11. Tick to show how often you want to file GST returns. One-monthly complete the application over the page Two-monthly (go to Question 12) Six-monthly complete the application over the page

182 Application for alternative taxable period Tick the option that applies to you. I/We wish to adopt a one month taxable period. I/We must adopt a one month taxable period because the total value of taxable supplies will exceed or is likely to exceed $24 million in any 12 months. I/We wish to adopt a six month taxable period because the total value of taxable supplies in: the last 12 months did not exceed $500,000, or the next 12 months is not likely to exceed $500, What is the start date of your GST registration (this is normally the date you apply from, but it can be a future date in some instances). Remember once you are registered you must file GST returns from your start date. Start date 13. Will you make exempt supplies? Yes No Most common exempt supplies include: renting out domestic property as a private dwelling interest you receive the sale of donated goods and services by a non-profit body financial services. 14. Are you an exporter? Yes No 15. Are you an importer? Yes No 16. When you are registered for GST you will need to: keep records detailing your income and expenses work out the GST on your income and expenses complete and file GST returns pay any GST owing to Inland Revenue. We would like to help you understand what is involved in being GST registered. Your answers to the following questions will assist us in working out what information and services you might find useful. This may involve one of our tax advisors contacting you to discuss how we might help. a. Will you be using an accountant or tax professional to prepare or help you with your GST returns? Yes No b. Have you worked with GST in New Zealand before? Yes No c. Initially, how difficult or easy do you think you ll find it to carry out all of the above tasks? Very difficult Quite difficult Quite easy Very easy 17. Print the full name of the person we should contact regarding this registration in case we need to clarify anything. First name(s) Surname Contact telephone number. 18. If at any time you expect a GST refund how do you want it paid? Tick one option. To my bank or other deposit account. (We recommend this as you will receive your refund faster.) Code Branch Account number Suffix Name of account By cheque. (Cheques will be made out to the name you show at Question 3.) 19. Declaration I declare that the information given on this form is true and correct. Signature / / Date Please check that you have answered all the questions, then sign the declaration. Send the completed form to us at the postal address for Other under the Inland Revenue listing in your local phone book. Privacy Act. We may exchange information about you with other government departments or their contracted agencies. You may ask to see the personal information we hold about you by calling us on Unless we have a lawful reason for withholding the information, we will show it to you and correct any errors.

183 IR 324 October 2010 Smart business quick reference summary sheet Goods and services tax (GST) GST is a tax on goods and services supplied in New Zealand by GST-registered persons. It may also apply to imported goods and certain imported services. It is generally charged and accounted for at a rate of 15%. Anyone who carries on a taxable activity, or who intends to do so from a definite date, may register for GST. How GST works Most goods and services supplied in New Zealand have GST added to the price. The exceptions are goods and services supplied by businesses not required to register for GST, and exempt supplies. GST-registered businesses charge GST on their sales and income and claim back the GST on their purchases and expenses. To claim the GST you have paid, you need to complete a GST return. If there s GST to pay, you pay this amount to us. If there s GST to be refunded, we ll pay you this amount. Businesses not registered for GST can t charge GST on their sales and income, or claim back the GST on their purchases and expenses. Registering for GST You must register for GST if your turnover (sales from taxable activities), including certain imported services you receive: was over $60,000 for the last 12 months, or is expected to go over $60,000 for the next 12 months (ie, $5,000 per month). You can choose to register even if your turnover is less than $60,000. If you need more information read our factsheet GST do you need to register? (IR 365). What to do after you ve registered When you ve registered for GST you must: charge GST at 15% (0.15) on all your sales, except those exempt from GST (see below) give tax invoices to GST-registered persons within 28 days of being asked to keep GST tax invoices when you buy items for your business hold a tax invoice to claim a GST credit for a supply of more than $50 (including GST). Tax invoices must show certain information, which is also fully explained in the GST guide (IR 375) fill in your GST return and send it and any payment to us by the due date keep records to support the figures in your GST returns write to us for approval if you want to keep your records outside New Zealand. Supplies exempt from GST GST can t be charged on some goods and services these are called exempt supplies. The most common exempt supplies are: letting property as a private dwelling interest you receive the sale of donated goods and services by a non-profit body certain financial services. If you want to know more about exempt supplies see our GST guide (IR 375). Your GST accounting basis There are three ways of accounting for GST payments, invoice or hybrid. You should choose the accounting basis that best suits your business. If you want to change your accounting basis after you ve registered, you need to put your request in writing. Payments basis claim GST when you pay for your purchases and expenses and account for GST when your customers pay you. This basis can only be used if the total value of your taxable supplies in any 12-month period is $2 million or less, or the nature, value and volume of your supplies makes this basis the most appropriate one for you. Invoice basis claim GST when you receive an invoice, and account for GST when you issue an invoice or receive a payment, whichever comes first. Hybrid basis claim GST when you pay for your purchases, account for GST when you issue an invoice or receive a payment, whichever comes first. This method isn t commonly used by small businesses.

184 How often do I file GST returns? You prepare your GST returns to account for GST. The period covered by the GST return is called the taxable period. The three taxable periods are: Monthly if your annual turnover is over $24 million in any 12 months you must file your returns monthly. This taxable period benefits registered persons such as exporters who regularly get GST refunds, but is also available to all registered persons. Two-monthly if your turnover is up to $24 million you can choose this option. This is the standard option for filing GST returns. Six-monthly you can choose this option if your turnover is under $500,000. Due dates We send you a GST return showing the due date for filing and making any payment. The due date is the 28th of the month following the end of your taxable period, except for return periods ending: 30 November the due date is 15 January of the following year 31 March the due date is 7 May. If the due date for your GST return falls on a weekend or public holiday it will be due the next working day. Remember, send in your GST return and payment on time to avoid late filing penalties, late payment penalties and interest. Working out the GST in a price Depending on whether the total price includes or excludes GST, use the following methods. For a single GST-inclusive amount, multiply the total by 3 then divide by 23 to get the GST portion. If an item or service costs $100 including GST, multiply $100 by 3 then divide by 23 = $ This is the GST portion. To add GST to a single GST-exclusive amount, multiply the total by 15% (0.15). If an item or service costs $50 excluding GST, $50 x 0.15 = $7.50. The GST-inclusive amount is $ Cancelling your GST registration You can cancel your GST registration if: you dispose of your business, or scale it down so your annual turnover is less than $60,000. You have certain obligations when you cancel your registration. For more information call us on Need to know more? These publications contain more information: GST do you need to register? (IR 365) GST guide (IR 375) You can read these at or you can order copies by calling Remember to have your IRD number handy. We offer a free business tax information service to new businesses and organisations to help them meet their tax responsibilities. This service is available to both individuals and groups. Most Inland Revenue offices also have a kaitakawaenga Mäori officer who can help Mäori organisations and individuals with their business tax responsibilities. Our Smart business (IR 320) guide also explains your basic tax responsibilities. To find out more about these services call us on Our advisory service is free

185 Keeping records (Running a business) Page 1 of 2 30/07/2012 You are here: Home For businesses and employers Running a business Keeping records For businesses and employers Keeping records It is important you keep accurate and complete records. Your business records should include banking information, proof of income and expenses, cash books and wage books. You can also get free advice from a Business tax information officer or a Kaitakawaenga Maori if you need assistance with your record keeping. Business tax information officers Inland Revenue's specialist Business tax information officers offer free tax education and advice to new businesses and smaller organisations. Keeping a wagebook Provides some tips and a visual example of entries in a wagebook Keeping accurate, complete records Introduces the different areas of record keeping and links to further detail on each Records of income Learn what records of income you should keep for tax purposes Tax invoices Provides a visual example of a tax invoice. Deposit books Provides information on keeping a deposit book including a visual example. Cashbooks Provides information on recording sales and purchases in a cashbook, including a visual example. Banking records and drawings Learn what kind of banking records to keep for tax purposes and how to record money withdrawn for personal use or personal money introduced to the business Records of expenses Learn what records of expenses you need to keep for tax purposes

186 Keeping records (Running a business) Page 2 of 2 30/07/2012 Petty cash books Provides information on keeping a petty cash book and gives a visual example. Keeping records on computer for audit If you have computerised accounting and record systems, you need to make sure that these are set up and maintained correctly. We can accept data in a variety of formats for audit purposes. You need to consider how you will access older data if you upgrade or change your system. Did you know? From May 2008 people applying for new IRD numbers will receive a nine digit number. As an employer, your payroll system will need to be able to accommodate both eight and nine digit numbers. Date published: 24 Nov 2004 Copyright 2012 Inland Revenue

187 IR 272 April 2009 Taxes and the taxi industry Information about tax issues for taxi drivers and owner-operators

188 Self-employed or an employee? It s important to know whether you are self-employed or an employee as this affects your tax situation and the returns you have to file. Please read this section carefully. Employees have PAYE (pay as you earn) tax deducted from their wages before they receive them. They do not have to keep business records, or account for GST. Their employer does this for them. Self-employed people have to keep their own business records and account for their own tax. They may have to register and account for GST and they can claim the expenses of running the taxi business. An employer may be a self-employed person (owner-operator) who engages owner-operators or employs drivers, or be a taxi company which does this. Employers must deduct PAYE tax from all their employees wages, and pay it to Inland Revenue. But, if the people working for them are self-employed, the employer may not have to account for PAYE. Deciding whether someone is self-employed or an employee can be complicated. Arrangements between taxi owners and drivers are often verbal, which can cause confusion over the exact terms. Written contracts can help sort out the tax status of the parties involved. To help you work out whether you are self-employed or an employee, we ve set out some of the common arrangements between owners and drivers below. If you are still not sure where you fit in, phone us on to discuss your situation. 1. Owner drives the taxi and does not employ a driver The owner holds a passenger service licence (PSL) and a class C licence. The owner is the only one who drives the taxi. They are self-employed for tax purposes. 2. Owner drives the taxi and employs a driver The owner holds a PSL and a class C licence, and drives the taxi. The owner takes on someone to drive the taxi at other times. The owner is self-employed for tax purposes. How the driver pays tax depends on the conditions explained in example 3.

189 3. Owner does not drive a taxi but employs a driver The owner holds a PSL but does not drive a taxi. A driver with a class C licence does the driving. The owner is self-employed for tax purposes. The driver s tax situation could be one of the following. If the driver is paid a set wage and has little control over the hours worked, they are an employee. The owner must deduct PAYE from the driver s wages and pay it to Inland Revenue. If the driver pays a fixed lease to the owner for the use of the taxi, the driver is most likely self-employed. If the driver pays the owner a percentage of takings (usually calculated excluding GST) the situation is not so clear cut. If the driver takes the risk of a loss, pays the running costs, pays the fixed costs (such as insurance) and controls the use of the taxi, then the driver is most likely self-employed. If the owner takes responsibility for most or all of these things, the driver is most likely an employee. 4. Taxi organisation owns taxis and employs drivers The organisation could be a sole trader but is usually a limited liability company, or a cooperative company that has owner-drivers as shareholders. The person who owns the business holds the PSL. The drivers all have class C licences. An owner-operator is self-employed for tax purposes. How the drivers pay tax depends on the conditions explained in example Taxi organisation controls a pool of relief drivers A taxi organisation has a pool of part-time drivers available for taxi owners to use as replacements when required. The person in charge of the taxi organisation must hold a PSL, and so must the individual owner-operators or drivers employed. The taxi organisation and the independent owners would be selfemployed for tax purposes. The relief drivers tax situation depends on the conditions explained in example 3.

190 Income tax returns Income tax returns must be filed every year. They usually cover the tax year from 1 April to 31 March. Salary and wage earners no longer have to file an IR 5 return. As long as you have given your employer the right tax code you should pay enough tax during the year. However, some people may need an end-of-year square up. clear cut. If the For example: if you only worked part of the year, or you paid child support, and earned more than $200 in interest or dividends you may either receive a refund or have some tax to pay. You can check whether you are required to request an end-of-year square up by phoning us on If you are self-employed you must file an IR 3 tax return each year, no matter how much you earn. These returns are due by 7 July each year unless you have a tax agent. If a partnership operates taxis, it must file an IR 7 return showing all the income. The partners must file IR 3 returns to show their share of income from the partnership. A registered company must file an IR 4 return. The due date for filing is 7 July unless you have a tax agent. person in charge st the individual tuation depends If a tax agent looks after your income tax, you may be able to file your return later than the due dates shown above. Your tax agent can give you more information about this. Employer returns If you are a taxi owner who employs other people, you must deduct PAYE tax from payments to your employees. You then file PAYE forms with your payments to Inland Revenue each month. When you register as an employer we send you all the information you need to meet your tax obligations. We also send you the payment forms for your PAYE each month, before the due date. For more information, please see our First-time employer s guide (IR 333). You can read this on our website at or you can order a copy through INFOexpress, by phoning

191 Goods and services tax (GST) Registering for GST If you are self-employed and your takings (turnover) are over $60,000 for any year, you must register for GST. This applies whether or not you own or lease the taxi. If your turnover is less than $60,000 you can still register voluntarily. To work out whether you need to do this, read our booklet GST do you need to register? (IR 365). If you register, we ll send you a copy of the GST guide (IR 375). Accounting for GST Once you ve registered for GST, you have to account for the GST on your turnover and deduct the GST on your business expenses (if GST is charged). The difference between the two is the amount you pay Inland Revenue or that we refund to you. You can t claim wages as a GST expense. You work out your GST payment or refund on a GST return, which you file to Inland Revenue either monthly, two-monthly or six-monthly. There are strict rules for record keeping and invoices for GST. The GST guide explains these. Fare schedules and GST Taxi operators who charge GST in their fares must be registered for GST. This should be clearly indicated on the fare schedule displayed. This rule applies even if the taxi operator s turnover is less than $60,000 they must still file GST returns to Inland Revenue. GST on employees earnings If you are a taxi owner with other drivers working for you, you must account for GST on all the takings for the taxi including those earned by the employee drivers. Do not take out the wages before you calculate the GST.

192 Record keeping If you are self-employed, you must keep good records so we can confirm your accounts and tax returns. You must keep all your business records for seven years. For more information on records, read our Smart business (IR 320) booklet. You can view this on our website or request a copy by phoning INFOexpress on For more help If you need help with your tax obligations, you may find these publications useful. Employer s guide IR 335 First time employer s guide IR 333 GST do you need to register? IR 365 GST guide IR 375 Smart business IR 320 Self-employed or an employee? IR 336 You can read copies of these publications on our website (see below), or order them by phoning INFOexpress on remember to have your IRD number ready. If you would like to discuss your tax situation, please phone Customer service quality monitoring We randomly record calls made to Inland Revenue to monitor and improve the quality of our customer service. Please note that we store these recordings securely for a limited time and destroy them after use. Inland Revenue s website If you would like more information about Inland Revenue, visit our website at This site contains general tax information, copies of most of our publications, public rulings and answers to commonly asked questions. We update our site regularly.

193 TAX GUIDE FOR THE TAXI AND SHUTTLE INDUSTRIES Information to help your business IR 135 October 2010 Help is at hand This tax guide gives you, as a self-employed person, an overview of your tax entitlements and responsibilities. If you need more detailed information, please refer to the publications mentioned in this guide, by going to Forms and guides. You can also get copies of many of these publications by calling Note In the taxi and shuttle industries it may be difficult to tell if you re self-employed or an employee. It s very important to make the distinction, because the tax responsibilities are quite different. If you re unsure about this issue, please read our leaflet Self-employed or an employee? (IR 336). Starting out in business We ll give a discount to individual taxpayers who receive self-employed or partnership income, and who make voluntary payments of income tax either in their first year of business, or in the year before they start paying provisional tax. To see if you qualify read our guide Smart business (IR 320). The number of provisional tax payments you ll need to make depends on how often you file GST returns and which provisional tax option you re using. RECORD KEEPING When you decide to go into business, start keeping accurate records right away, because it s much harder to work backwards at a later date. Record keeping is important because it helps you file accurate returns and proves to others that your figures are correct. There are also good business reasons to keep records: Keep all of the following: at your conclusions. We recommend you file your records in a logical order so you can retrieve them easily when necessary. How long must you keep your records? Keep all your business records for at least seven years from the end of the tax year or the taxable period they relate to. Even after you stop operating your business, you still have record keeping responsibilities. For more information about record keeping, please read our guide Smart business (IR 320). Separate business bank account Keep a separate bank account for your taxi or shuttle business. Use your business account when you bank your takings (every day) and when you pay your business expenses. Don t use your business account for private transactions, and when you withdraw money from the business for personal spending, make sure you record it as drawings. A business bank account will make it easier to keep your business and private affairs separate. INCOME TAX Every year you re in business, self-employed or receive income that isn t taxed at source you ll need to file a tax return with us. business expenses. 1

194 NET INCOME Income tax is paid on your net income, which is calculated by the Schedule of taxi income at the back of this guide to calculate your net income. Due dates Most people in the taxi and shuttle industries have the standard 31 March balance date. If this is your balance date you file your return and pay your tax on the standard due dates. Contact us if you have a different balance date and you re not sure when you need to file your return and pay your tax. For more information go to (keywords: due date) Returns If you re filing your tax return yourself, you must send it to us by 7 July (you can file it later if we ve approved an extension of time). If your return is prepared or filed by a tax agent (accountant) with an extension of time, they ll have until 31 March the following year to file. Payments year or 7 April if your return is prepared or filed by a tax agent with an extension of time. Provisional tax If your tax to pay at the end of the year, ie, your residual income tax (RIT), is more than $2,500 you may have to pay income tax in instalments during the following year. This is provisional tax. It s not a separate tax, but a way of paying your income tax as you receive income through the year. Because income from running a business doesn t have tax deducted before you receive it, you ll have to pay provisional tax. How much will I need to pay? There are three ways to work out how much provisional tax you have to pay for the following tax year the standard option, the estimation option and the ratio option. Standard option To calculate your provisional tax you add 5% to your RIT for the immediately preceding tax year. Example If you haven t filed your tax return for the immediately preceding tax year, you can still use the standard option by calculating it in one of these ways. tax year was more than $2,500, calculate your provisional tax by adding 10% to the total. year was $2,500 or less, you don t have to make any provisional tax payments, you just need to file your return and pay any tax by the due dates. If your RIT is over $2,500 when you file your income tax return you ll need to pay provisional tax based on the RIT plus 5%, paid equally on the remaining instalment due dates. For provisional tax instalments due on or after 1 October 2010 for the 2011 year and for all instalments for the 2012 year, the percentage increase has been removed. For individuals: When calculating your provisional tax instalments for the 2011 year (for instalments payable after RIT reduce it by 5%. For more details go to Estimation option Estimate your income for the year and then calculate the last estimate becomes final at this date. Use the worksheet in your tax return guide to calculate your estimated income and provisional tax. Example Estimated untaxed income $ 80,000 Tax on this income $ 21,010 Provisional tax payable $ 21,010 If you choose to estimate your provisional tax you can t change to another option during that tax year. 2

195 IR 135 October 2010 Ratio option This option is only available if you re registered for GST. Provisional tax is payable based on your GST taxable supplies for each two-month period. We calculate your ratio percentage and you multiply this by your previous two months GST taxable supplies. This gives you the amount of provisional tax you need to pay. Number of instalments payable The number of provisional tax payments you ll need to make depends on how often you file GST returns and which provisional tax option you use. tax in our publications Income tax summary sheet (IR 325) and Provisional tax (IR 289). Income All the fares you earn in your taxi business are taxable whether your customer pays by voucher, taxi card, cash or barter arrangement. Any tips are also taxable. Other income Most income you receive from outside your taxi business is also taxable and needs to be included in your tax return, eg, interest, dividends, rental income, wages and other self-employed income. Expenses expenses: arising from your gross business income you have incurred from running your business. Schedule of taxi income (IR 138) form at the back of this guide. Non-deductible expenses Example Taxable supplies for previous two months $ 58,741 Provisional tax payable $ 3,465 fine they may be able to claim a deduction) drawings (money you take from your business for private spending). Garaging expenses If your car is garaged at home, you may be able to claim expenses, eg, minor painting costs, minor repairs, or a percentage of your rates, mortgage interest or rent. Uniforms Money spent on everyday clothing is generally considered to be a private expense. If you buy distinctive work clothing or a uniform that clearly identifies your business and would not normally be worn for private purposes you can claim the purchase cost and drycleaning. Depreciation Depreciation is an allowance recognising that fixed assets lose value through wear and tear. Calculate the depreciation for a fixed asset, then: Example Joe buys three sets of trousers and shirts to wear while working. He puts his company s logo on one set of the clothes. Although he uses the three sets of clothing for work he can only claim for the set with the company logo. ie, the asset s cost price less all depreciation claimed since you bought it. Keep a schedule showing your fixed assets, your depreciation calculations and the adjusted tax values of the fixed assets. For more information, read our guide Depreciation a guide for businesses (IR 260). Go to our website Work it out for a list of depreciation rates and a calculator that can work out how much you can claim. Adjustments A common one is the private use adjustment, eg, you may own a computer that s partly for business use and partly for private use. The adjustment ensures you only claim the business portion of the expenses. If you use your taxi to travel from home to work, or for any private use, you ll need to separate the running costs of your vehicle between business and private use. These adjustments are made based on logbook records. For the self-employed (not a company, trust etc) there are three options you can use: actual business costs, logbook records or mileage rates. 3

196 Example of a logbook Sometimes Ross has to use his taxi to get the household shopping and take the children to school. The details Ross records in his logbook are shown below. Vehicle logbook (3-month period) Meter reading (at start of period) 15,165 Date Journey Meter reading Reason for trip Driver s signature From To Start Finish Distance (km) Home School 15,165 15, Taking kids to school Home Grocery shop 15, Grocery shopping Hastings Airport 16,485 16, Drop wife at airport Airport Hastings 17,525 17, Pick up wife Private distance 205 Meter reading (at end of period) 17,775 For more information on adjustments, read our guide Smart business (IR 320). Total distance travelled (17,775 15,165) 2,610 Example of adjustments Private use of a motor vehicle Ross has travelled a distance of 2,610 km in three months. The distance for private use is 7.85% ( 205 km) ( 2,610 km) expense. Depreciation adjustment Ross s taxi has an adjusted tax value of $30,000 He uses the diminishing value rate for depreciation which is 36% (including 20% loading). The depreciation is calculated as: Step 1 Opening adjusted tax value $ 30, Depreciation ($30,000 x 36%) $ 10, Step 2 Total depreciation $ 10, Less 7.85% private use (non-deductible) $ GST (GOODS AND SERVICES TAX) GST is a tax on most goods and services in New Zealand which charge GST on the goods and services you supply and claim GST on goods and services you use in the business. From 1 October 2010 the GST rate is 15% (prior to 1 October this was 12.5%). account for GST on your supplies made (eg, income) and claim GST on supplies you received (eg, expenses). If the GST on sales exceeds the GST on expenses, you pay us the difference. If the GST on expenses exceeds GST on sales, we ll refund the difference. Do you have to register for GST? business is more than $60,000 in any 12-month period, or you expect it to be more than $60,000 over the next 12 months. If your annual turnover is less than $60,000 you can choose whether you register for GST. If your fare schedule includes GST, you must register for GST, even if your annual turnover is less than $60,000. If you re not sure please discuss with the company you re driving for. 4

197 IR 135 October 2010 GST returns categories of GST return, each one covering a different period of time (the taxable period). Return category Taxable period Who can use this return category? A B C 2 months (periods ending on the last day of January, March, May, July, September and November) 2 months (periods ending on the last day of February, April, June, August, October and December) 6 months (you can choose when each 6-month period ends) Anyone who is registered (except those with an annual turnover of more than $24 million) Anyone who is registered (except those with an annual turnover of more than $24 million) Only those registered with an annual turnover of $500,000 or less D 1 month Anyone who is registered. Category D must be used by those with an annual turnover of more than $24 million. Note: If you re liable for provisional tax your taxable period must align with your balance date. Due dates The due date for GST returns and payments is the 28 of the month following the end of the taxable period. There are two exceptions to this. If your GST return period ends on: For example, if you have a taxable period ending on 30 June, the return and payment are due by 28 July. But if the taxable period ends in November, the return and payment are due by 15 January the following year. The due dates are printed on the GST return. What income is subject to GST? If you re registered, you must charge GST on your fares, and If you have other sources of income, you may have to pay GST on those too. Please contact us if you re unsure. If your fare schedule includes GST, you re considered to be registered for GST (even if you aren t), so you must file GST returns and pay the GST collected. Expenses you can claim Generally, you can claim GST on supplies if: private expenses. Garaging and uniform expenses and uniform expenses. For more details, please read Expenses on page 3. Normally, if you can claim the expense for income tax you can also claim GST. But you can t claim GST on mortgage interest or Adjustments income tax, a common adjustment for GST purposes is the private use adjustment. Our GST guide (IR 375) has full details on GST adjustments. 5

198 Accounting for GST When you register, you choose how you re going to report your GST transactions to us and record them in your bookkeeping system. This is called accounting for GST. There are three ways to account for GST: Accounting basis You return the GST on your fares You claim the GST on your expenses Who can use this accounting basis? Payments When your customer pays you When you pay for them Registered persons with an annual turnover of $2 million or less Invoice Hybrid When you issue an invoice or receive a payment, whichever comes first When you issue an invoice or receive a payment, whichever comes first When you receive an invoice When you pay for them All registered persons All registered persons Choosing an accounting basis On the payments basis you generally account for GST in the period you make or receive your payment. This method is suitable for small businesses using a cash accounting system. On the invoice basis you claim GST when you receive an invoice. Account for GST when you issue an invoice or receive a payment, whichever comes first. This method is suitable for a business selling a lot of items on credit. On the hybrid basis you claim GST when you ve paid your expense but return the GST on your income when you ve issued an invoice or received a payment, whichever comes first. This method is suitable for a business buying items on a credit basis but selling on a cash basis. This method can be complicated to work out so we recommend you get a tax agent if you use it. For more information about GST, please see our publications GST do you need to register? (IR 365) and GST summary sheet (IR 324) EMPLOYER RETURNS If you re a taxi or shuttle owner who employs other people, you write to you when you register as an employer, telling you where to find information about meeting your tax responsibilities on our the due date. For more information about employer responsibilities, please read our guide First-time employer s guide (IR 333). superannuation contribution tax) combined is $500,000 or WORKING FOR FAMILIES TAX CREDITS These are entitlements for families who have children 18 or under living with them. It s not a benefit, but recognises that not everyone can comfortably afford all the costs of bringing up a family. How much you might be entitled to depends on how many children you have and how much you earn. For more information, please see our booklet Working and raising a family (IR 201). 6

199 IR 135 October 2010 GETTING IT RIGHT Here are some of the most common mistakes made by people in the taxi and shuttle industry and how to avoid them. Avoid these mistakes Do it correctly Where to get more information Paying expenses from cash takings (this can mean you under-declare your income) Not registering for GST when your turnover exceeds $60,000 Not registering for GST when your fare schedule includes GST Not clearly establishing your employment status (employee or independent contractor) with your taxi owner this can cause tax problems Not keeping adequate records Not accounting for private use of business assets (income tax and GST) Claiming private expenses (income tax and GST) Not declaring all your income (income tax and GST) Make sure you add back your expenses when you calculate your day s income Register with us as soon as it becomes clear your turnover will exceed $60,000 over the coming year Make sure you register even if your turnover is less than $60,000 If you ve charged GST you re considered to be registered, even if you haven t officially done so Clearly establish your employment relationship Keep all invoices and receipts, write up your cashbook regularly and file your paperwork in order Contact us if you have any questions GST do you need to register? (IR 365) Contact us if you have any questions Self-employed or an employee? (IR 336) This can be a complex issue, so please contact us if you re unsure Smart business (IR 320) Make private use adjustments Smart business (IR 320) GST guide (IR 375) Remember to claim only expenses related to your business Please don t forget cash jobs and any casual work Smart business (IR 320) GST guide (IR 375) Contact us if you have any questions Not filing returns or paying tax on time Please remember your due dates Use the Tax due date calculator at (keywords: due date calculator) to produce a list of all the tax filing and payment dates that apply to you Not accounting for GST when you sell an asset (eg, your taxi) Not accounting for GST when you keep an asset after you deregister The sale of business assets is generally subject to GST and you can generally claim the GST when you buy a business asset GST guide (IR 375) Make an adjustment in your final return GST guide (IR 375) 7

200 ARE YOUR TAX AFFAIRS SORTED? the best thing you can do is make a voluntary disclosure. This means telling us about tax you owe us, before we find out. If you make the voluntary disclosure before you re told you re going to be audited, you get these benefits: some circumstances If you make the voluntary disclosure after you re told you re going to be audited (but before the audit starts), you get these benefits: deliberately evaded tax). USEFUL FORMS Over the next three pages there are forms designed to help you account for your income and expenses and complete your tax returns. These forms have been specially tailored for the taxi and shuttle industries. Tear out the forms and photocopy them, so you ll always have a supply. For more information about voluntary disclosures, please read our booklet Putting your tax returns right (IR 280). ARE YOU HAVING DIFFICULTY MANAGING YOUR TAXES? We recommend you use a tax agent a person who helps people Pages. Look under Accountants Chartered accountants or Taxation consultants. In most cases, if you use a tax agent, you ll get extra time to file your income tax returns and pay your end-of-year tax. Generally, you can claim the fees you pay to your tax agent in your income tax and GST returns. 8

201 MONTHLY CASHBOOK Information to help your business Date Who I paid Amount GST Fuel oil RUC Vehicle costs Airport tolls Phone and RT fees Home garage Stationery Staff wages and PAYE Bank fees Drawings Other expenses Details of other expenses Amount paid including GST (if any) If charged eg, COF, rego, insurance, repairs, car wash % of home rates, insurance, rent/ mortgage interest Stationery cards, logbook, receipt book One-offs or seldom: eg, purchase of vehicle signage, meter, ACC, area knowledge test, polishes etc MONTHLY TOTALS Copy these MONTHLY TOTALS into MONTHLY SUMMARY SHEET Note: some of these columns may not match the columns on the MONTHLY SUMMARY SHEET.

202 MONTHLY SUMMARY SHEET Information to help your business Totals of April May June July August September October November December January February March ANNUAL TOTAL FARES RECEIVED Cash Dockets Charge cards VEHICLE EXPENSES COF Fuel and oil Insurance Loan interest Registration Repairs and maintenance Road user charges Tyres GARAGING EXPENSES Power Rates Insurance Rent/mortgage interest ADMINISTRATION ACC Airport tolls Bank fees Communication Company levies Equipment rental/ repairs Medical/police licence Public liability insurance RT fees Stationery Uniform Voucher discounts Wages paid OTHER EXPENSES Copy the MONTHLY TOTALS from your MONTHLY CASHBOOK (previous page) into this sheet, and then put the ANNUAL TOTAL from this sheet into your Schedule of taxi income (IR 138) on page 13.

203 Schedule of taxi income IR 138 October 2010 IRD number (8 digit numbers start in the second box. ) Revenue fare received A Less expenses Vehicle Certificate of fitness Depreciation Fuel and oil Insurance Repairs and maintenace Road user charges Tyres Sub-total Loan interest Less private use % Registration Total B1 Home garaging expenses Power Rates Depreciation Sub-total Insurance Less private use % Rent/mortgage interest Total B2 Administration ACC Airport tolls Bank fees Communication Company levies Depreciation (other than vehicle and garaging) Equipment repairs/rentals Medical/police licence Public liability insurance RT fees Stationery Uniform Voucher discounts Wages paid Other expenses Total Total expenses Add up all the expenses (Boxes B1 B3) above and print the answer in Box C Subtract Box C from Box A and print the answer in Box D Gain or loss on disposal of fixed assets (put any loss in brackets) B3 C D E Net income If Box E is positive, add Box E to Box D and print the answer in Box F If Box E is negative, subtract Box E from Box D and print the answer in Box F Detach this page along the perforated line and staple it to the top of page 3 of your return. Remember to complete your return, sign it and send it in. F