District Court Sets Aside WorkSafe Improvement Notice
In late 2025, the District Court set aside an improvement notice issued by WorkSafe to Pharmalink Extracts Limited (PEL). The notice related to alleged failures to comply with provisions of the Health and Safety at Work (Hazardous Substances) Regulations 2017 (Regulations).
Background
PEL uses extraction processes to obtain materials from natural materials like krill and green shell mussels.
One of the extraction processes uses a mixture of carbon dioxide and ethanol under very high pressure and heat. This mixture, known as CO₂‑expanded ethanol (CXE), is contained inside sealed equipment. In these conditions, CXE does not behave like liquid ethanol and does not carry the same fire risk.
Despite this, in November 2024, a WorkSafe inspector issued an improvement notice because it believed ethanol, a flammable liquid, was being used in a building at PEL’s site that did not meet required safety standards.
The notice said PEL must either upgrade the building to meet those standards or apply for a regulatory exemption.
The Appeal
PEL challenged the notice in court. It said the substance used in the extraction equipment was CXE, not ethanol. PEL explained that if there were a leak, the real risk would be a flammable gas or vapour, not a liquid, and that this risk was already being properly managed.
PEL also argued that forcing it to follow rules for flammable liquids would interfere with its existing safety systems and could make things less safe for workers. For that reason, it said WorkSafe’s approach did not align with the purpose of health and safety law.
The Court’s Findings
The Court looked at whether WorkSafe’s decision to issue the improvement notice was unreasonable. It found that WorkSafe had misunderstood the regulations by focusing on how ethanol is classified in isolation, rather than on what substance was actually being used by PEL. process.
Based on expert evidence, the Court accepted that the substance in use was CXE, which behaves differently from liquid ethanol. If a leak occurred, the real risk would be a flammable gas or vapour, not a liquid, so gas‑based controls were the correct safety measures.
The Court found that WorkSafe relied on the wrong considerations and ignored relevant evidence by treating the process as if it involved separate ethanol and CO₂ under normal conditions. It also rejected the idea that WorkSafe could default to ethanol’s classification simply because CXE does not have its own formal classification.
Importantly, the Court held that WorkSafe’s approach conflicted with the purpose of health and safety law, as it would have required safety controls that increased, rather than reduced, risk. For those reasons, the improvement notice was found to be unreasonable and was set aside.
Practical Implications for PCBUs
For PCBUs, the case confirms that health and safety compliance must be based on the substance and risks that actually exists in practice, not just the classification of component.
Further, controls must be matched to the real hazard posed by the process, as applying incorrect controls can increase risk rather than reduce it.
Where operations are complex or novel, early expert evidence is critical to explain how the process works and what risks genuinely arise.
Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.
