Men took their lives in their hands when they went logging or coal mining in the 19th century. If a worker was injured or died families were left to fend for themselves. But since the 1970s New Zealand has compensated people who are injured through a government-owned scheme which is unique in the world.
The first New Zealand industry was whaling, which began in 1791 and was the largest early industry. Whalers faced dangers catching whales and rendering down blubber in large cauldrons.
Other early industries were based on felling timber and extracting natural resources such as gold or coal. Logging was dangerous work and accidents were common. Dozens of men were crushed by falling trees every year in the late 19th century. Branches flying off a falling tree were so deadly they were known as widow-makers. A timber worker clearing a logjam in a river had to be ‘almost as limber as a cat, it being near certain death to fall’.1
Māori climbed towering kahikatea trees for delicious seasonal berries, koroī, which ripen high in the canopy, and were eaten by the basket load. The harvesters – who fell to their deaths if they slipped – were recalled in the proverb ‘He toa piki rākau kahikatea, he kai nā te pakiaka’ (the bold kahikatea climber is food for the roots).
In mines and quarries, and on road and railway works, deaths by crushing were common. Miners were smothered underground, or died from drowning, sickness, or poisoning from handling dangerous chemicals. The death rate among ‘diggers’ in the gold mines was higher than for soldiers in the New Zealand wars.
Fatal and serious accidents were so common in coal mines that the miners had a saying, ‘There’s always blood on the coal’. They were paid by how much coal they produced, and this led to unsafe working practices. In 1879, 34 miners lost their lives after an explosion in the Kaitangata coal mine in South Otago. They were killed not just by the explosion, but by suffocation.
Jack Wood, a pioneer resident of the remote bush community of Mangapurua on the Whanganui River, remembered the dangers of shifting large logs with a draught horse. ‘It was necessary to unhook the horse and take the timber around an extra-sharp bend on rollers … We were just on completing the job when George had a very nasty accident for the block … ran up on his left hand, severing his small finger.’2
A lack of safety lamps in the mine meant that miners sometimes used ordinary candles underground and one of these caused the firedamp (methane gas from coal) to ignite.
Early colonial New Zealand was a maritime country dependent on coastal transport and overseas trade. Working conditions on its ships caused accidents. Apart from their constant risk of shipwreck, sailors worked high above deck on foot ropes, often in high winds and rain.
As manufacturing industries developed, new kinds of industrial accidents became common. Many woollen mill workers were girls as young as 14, and some had to work 18 hours a day. Tiredness led to frequent injuries from the machinery. By 1891 deaths from workplace accidents were higher than in Britain and much of Australia.
In 1882 the Employers’ Liability Act was introduced. This gave an injured worker the right to claim compensation from an employer who had contributed to causing an injury through negligence. Workers had no automatic right to compensation for their injuries, and sometimes had to sue their employers to prove negligence. These cases were expensive and often unsuccessful.
In 1891 the Factories Act set up the first system for inspecting factories and enforcing safety regulations.
In the notoriously hazardous mining industry, the government charged employers a levy from 1891 to compensate injured miners. Workers also set up their own life insurance schemes through their trade unions. However these combined funds were not enough to compensate for the large number of accidents and serious disasters. An explosion in the Brunner mine in 1896 killed 65 miners, leaving more than 200 women and children without an income. The surviving families sued the mine owners, but after a long legal battle they received only a small payout, leaving the community impoverished and divided.
In 1900 the Workers’ Compensation Act introduced a ‘no-fault’ principle. Compensation for industrial accidents no longer depended on proving an employer had been negligent. The act provided injured workers with weekly benefits, or compensated their families if they were killed at work. Employers were encouraged to take out insurance to cover themselves against payouts under the act. However the benefits paid were small and lasted for a maximum of six years.
For the first half of the 20th century workers continued to find it difficult to receive adequate compensation for injury or death at work. The watersiders’ union president, ‘Big Jim’ Roberts, told his members, ‘If you lose [your life], the stevedoring contractor or the shipowners will not supply you with another, nor will they keep your wife and dependants. When the workman is filling in his time in the local cemetery, they will go to the courts of law and try to deprive his dependants of their legal compensation.’1
After the First World War injured and frequently unemployed veterans were common all over the country, and many suffered hardships. It became clear that better systems were needed to compensate injured people and rehabilitate them into the workplace and ordinary life. The rise of the welfare state in the 1930s made the state seem the logical provider for compensation and rehabilitation.
Veterans from the Second World War were anxious not to repeat the social betrayal of the injured soldiers in the earlier war. In 1947 it became compulsory for employers to take out insurance against workplace injuries. Three years later a Workers’ Compensation Board was set up to insure workers whose employers failed to provide sufficient coverage for them, and to promote accident prevention. This board was funded by collecting levies from accident insurers and some employers.
The system set up by the Workers’ Compensation Act 1900 lasted for 70 years, but it did not cover motor vehicle injuries or non-work accidents, which became increasingly common. It was also often difficult for injured workers to claim compensation if employers and insurers used legal arguments to dispute their obligation to pay. These issues were examined in 1966 by a Royal Commission on Compensation for Injury in New Zealand, headed by Chief Justice Owen Woodhouse. The commission’s report recommended that the state should provide 24-hour, no-fault insurance for all personal injury. In return New Zealanders should give up the right to sue for damages arising from personal injury.
Sir Owen Woodhouse commanded torpedo boats and worked with Yugoslav partisans in the Second World War. His wartime experiences gave him first-hand knowledge of the impact of injury and death. He was made a Supreme Court judge in 1961, and in 1966 was asked to chair the Royal Commission on Compensation for Injury.
These recommendations were supported by both main political parties and adopted by the Accident Compensation Act 1972. This required all taxpayers, employers, self-employed people and motor vehicle owners to pay a levy to a state agency called the Accident Compensation Corporation (ACC). An amendment allowed for a levy from the government to cover non-earners. The amount of the levy was set by the government each year and varied depending on the risk of accidents in each industry, for example a coal miner would pay a higher levy than an office worker.
In 2008 ACC collected $3.7 million from all levies. ACC invested this money locally and internationally, and used it to fund accident prevention, accident compensation and accident rehabilitation.
In the early 2000s anyone who was injured could apply for ACC assistance, regardless of whether they were working at the time of their injury, or whether they were to blame for it. If their application was approved and they were working before the accident, they received compensation of 80% of their weekly income while they were not able to earn due to the injury. The costs of their treatment and rehabilitation were also covered. In 2007/8 almost 1,600,000 people had accident claims accepted by ACC. Only about 77,000 of those qualified for weekly compensation.
ACC spent part of its income from levies on campaigns to reduce the number of injuries, their severity and cost. Campaigns to reduce workplace injuries have focused on issues such as work-related driving while tired, occupational over-use syndrome (OOS), and hearing loss from loud noise.
In the early 2000s office workers easily outnumbered people in tough, dangerous physical work – but they were afflicted by injuries such as occupational over-use syndrome (OOS). New Zealanders tended to work long hours compared with other industrialised countries: 50 or more hours per week. Some occupations, such as farmers, fishers and truck drivers, were likely to work long hours and also work outside normal working hours. Lengthy work periods without rest added to their risk of workplace accidents. Workplaces were far safer, but workers continued to be killed, injured and infected with disease in their jobs.
One cause of work-related illness and death identified in the late 20th century was asbestos poisoning. Asbestos was widely used in New Zealand for most of the 20th century as a building and insulation material, but was banned in 1991. People exposed to asbestos do not usually suffer ill effects for at least 20 years, and this time lag helped to conceal the risks of using the material.
As well as the Accident Compensation Corporation (ACC) injury prevention campaigns, workplace safety was promoted by the Department of Labour’s occupational safety and health inspectors in the early 2000s, who could take employers to court for breaches of the Health and Safety in Employment Act 1992. This act required employers to eliminate, isolate and minimise hazards in the workplace. The Hazardous Substances and New Organisms Act 1996 set special requirements for handling explosive, toxic or other dangerous materials at work.
In 2009 the ACC system continued the basic principles outlined when it was set up, but it has been altered over time. The Accident, Rehabilitation and Compensation Insurance Act 1992 introduced experience rating, which set employers’ levies based on the amount of previous claims they had made. It reduced the level of payments that could be made for rehabilitation and compensation.
Since its introduction in 1974, the ACC scheme has been criticised at various times by trade unions, politicians and employers. A few ACC claimants have taken advantage of the scheme by claiming compensation after they are able to resume paid work. Critics think that because New Zealanders no longer have the right to sue for compensation, there is less incentive to prevent workplace accidents.
ACC’s monopoly on accident compensation has been claimed to be financially inefficient, and critics have queried whether the government should own an insurance scheme. In 1998 the Accident Insurance Act opened part of the scheme to commercial competition, but it was repealed following a change of government the following year.
An independent evaluation by PriceWaterhouseCoopers in 2007 found the ACC scheme achieved a level of benefits and performance comparable with Australia and other countries, at a lower cost, but political parties continued to campaign to reform ACC, and reintroduce private sector participation in accident compensation insurance.
Armstrong, Hazel. Blood on the coal: the origins and future of New Zealand’s accident compensation scheme. Wellington: Trade Union History Project, 2008.
Campbell, Ian. Compensation for personal injury in New Zealand: its rise and fall. Auckland: Auckland University Press, 1996.
Eldred-Grigg, Stevan. New Zealand working people 1890 to 1990. Palmerston North: Dunmore Press, 1990.
Tennant, Margaret. Paupers and providers: charitable aid in New Zealand. Wellington: Allen & Unwin and Historical Branch, Dept. of Internal Affairs, 1989.
The ACC site provides information about the corporation’s structure and functions.
The Department of Labour site has information about workplace safety.