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7/27/2019 Health and Safety is a Highly Regulated Area and Should Be a Priority for the Board
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Health and safety is a highly regulated area and should be a priority for the board. Putting
employees, customers and others at risk by not following the rules can amount to a criminal
offence, with the potential for substantial (possibly multi-million pound) fines for the
company, and fines and/or imprisonment for individual directors and employees.The approach to health and safety must be rigorous. Its important that both internal andexternal risks are identified and actively managed. This will mean working with contractors
and suppliers to eliminate bad practice: weak links in the supply chain leave you vulnerable
and increase your risk of prosecution.
Significant changes to the framework of health and safety legislation have been made in the
past few years, increasing further the challenges faced by companies and their directors.
A company's duties
Every company has a general duty to ensure the health, safety and welfare of its employees,customers, contractors and anyone else who may be affected by its activities. But theres an
important qualification to this duty: it applies only so far as is reasonably practicable. The
law is interested only in material risks to health and safety that any reasonable person would
appreciate and take steps to guard against. Fanciful or hypothetical risks can be ignored.
(See: R v Chargot Limited, below.)
This limitation on the general duty to guard against material riskso far as is reasonably
practicable allows a business to weigh a particular risk against the cost of preventative
action in terms of time, money and effort. If that cost would be grossly disproportionate to the
reduction in risk achieved, a decision not to take the action will be justified, and there will be
no breach of the general duty.
Its important to emphasise that, although prosecutions are frequently brought as a result of
an accident in which someone has been hurt, a company can be liable where no personal
injury has occurred. All the prosecution need prove is that a state of aff air sexisted that
posed a real risk to the health or safety of employees or others. It is the risk of harm that is
key, not that actual harm has been caused.
As well as this general duty to ensure the health, safety and welfare of employees and others,
there are other more specific duties that will apply to many businesses, depending on the
particular hazards and risks associated with each. Some of the areas covered are listed
below.
These more detailed regulations often impose absolute obligations to put a specific safety
measure in place or to avoid a particular hazard. In contrast with the general duty described
above, doing everything reasonably practical to comply may not be sufficient.
In addition, every employer is required to implement a management system for identifying
and managing risks. In practice, that means ensuring that:
risk assessments are made; employers have access to competent health and safety advice; employees are provided with relevant information and training;
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risks specific to certain employeesfor example, new and expectant mothers or theyoungare assessed separately.
R v Chargot Limited
Shaun Riley was driving a dumper truck at a farm near Chorley in Lancashire, shifting soil tocreate a car park. After a few successful trips, the truck tipped over and he was killed by the
load he was carrying. There were no witnesses to what happened. He had not been trained,
he was unsupervised and he was not wearing the seat belt that would almost certainly have
saved him.
Three parties were prosecuted for health and safety offences: his employer, the site
contractor and the contractors managing director. The prosecution rested its case on the
fact of the accidentthe employees death was enough to show that there had been a breach
of the duty to ensure his health and safety. The burden of proof then passed to the defendants
to establish, on the balance of probabilities, that it was not reasonably practicable for them
to do more than they did to prevent the tragedy.
The court supported this view, holding that, to be successful, the prosecution had to do no
more than identify a risk to the health and safety of employees or the public, provided it was
a material risk that any reasonable person would appreciate and take steps to guard against.
Further details as to the precise acts and omissions that caused the death were unnecessary.
Proof of accident or injury will generally be enough to show the risk was material, not
hypothetical. The burden is then on the business to show that it took all reasonably practical
steps to prevent it.
The employer was fined 75,000 and ordered to pay costs of 37,500; the contractor paid afine of 100,000 and costs of 75,000; the managing directors fine was set at 75,000 with
costs of 103,000.
Risk-specif ic duties
In addition to the general duty described earlier, more specific health and safety duties will
apply to many businesses, including:
F ir e safetyif you are an employer and own, control or manage premises, you musttake reasonable steps to reduce the risk of fire and ensure there is a safe escape route
if fire occurs. Fire risk assessments must be carried out. This applies to all buildings,structures and open spaces, but not to individual private dwellings. See:The
Regulatory Reform (Fire Safety) Order 2005
I nj ur ies, diseases and dangerous occur rencesemployers, the self-employed andthose in control of premises must record and report to the Health and Safety
Executive all deaths, major injuries, over three-day injuries (those that result in
someone not being able to undertake their normal work for more than three
consecutive days), diseases and near-miss accidents (known as dangerous
occurrences) that relate to work activities. See:HSE's guide to the Reporting of
Injuries, Diseases and Dangerous Occurrences Regulations 1995(92-page / 898KB
PDF)
Work equipmentif you provide equipment at work, you have a duty to prevent orcontrol risks arising from its use. You need to ensure that its suitable for its intended
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purpose and that its inspected and safely maintained. Whats more, you must provide
adequate information and training for those who use it. See:The Provision and Use
of Work Equipment Regulations 1998
Di splay screen equipment and work stationsemployers must carry out a riskassessment for work stations and provide adequate health and safety training for
those using them. They must also ensure users take regular screen breaks and areinformed of their entitlement to annual eye tests paid for by the company. See:The
Health and Safety (Display Screen Equipment) Regulations 1992
Manual handlingemployees must be given adequate training on safe handling andlifting techniques and told to follow the companys health and safety systems and
policies. See:The Manual Handling Operations Regulations 1992
A directors personal liability
The liability described in the preceding section is a liability of the business, usually a
corporate body in one form or another. But where a company is shown to have committed ahealth and safety offence, an individual director may also be found to have committed a
criminal offence (and this applies equally to a company secretary, manager or anyone else
acting in a similar capacity).
The case against a director can be proved if the offence by the company was:
commi tted with their consentthey were aware of the circumstances and positivelyendorsed it;
commi tted with their conni vancethey were aware of the circumstances but turneda blind eye;
attri butable to their neglectthey should have been aware of the circumstances andtaken action.
Despite this personal liability when things go wrong, the positive obligation to manage a
business in a way that ensures the health and safety of employees and others still rests with
the company, not its directors. There is no guarantee this will continue, though: the health
and safety duties of individual directors are constantly under review.
Penalties
A breach of health and safety law is a criminal offence, punishable in the case of a businessby a fine. In recent years, fines have increased, and the courts have made clear that they
should be large enough both to reflect the culpability of the business and to get the attention
of the shareholders.
Where the offence involves a fatality, fines between 100,000 and 500,000 are increasingly
common; larger companies can expect to pay more than 1m. (See: The Hatfield rail crash
and Balfour Beatty, below; and our guide onSentencing guidelines for health and safety
offences: level of fines.)
Prosecutions for health and safety offences may be dealt with in the Magistrates Court or
the Crown Court. In the former, the maximum fine is now 20,000 for most offences, which
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may in itself lead to a greater number of prosecutions. A broader range of cases can now be
taken to the Crown Court, exposing defendants to higher, unlimited fines.
A business found to have breached health and safety law can also be issued with an
enforcement notice that either requires:
specific action to be taken in a set time period; or a specific activity to stop or the use of particular plant or equipment to cease.
A director found guilty of consent, connivance or neglect is liable for an unlimited fine and to
a prison sentence of up to two years. Fines wont be covered by a directors and officers
insurance policy, or by any indemnity from the company (see:Indemnity and insurance
protection for directors, an OUT-LAW guide), and, of course, no-one can serve a prison
sentence for you. To make matters worse, once found guilty you can be disqualified from
acting as a director for up to 15 years.
So the consequences of a health and safety lapse by a director can be severe: a hefty fine,prison, and a long term obstacle to earning a living.
The Hatfield rai l crash and Balfour Beatty
Four people were killed when cracked rail tracks caused a train to derail approaching
Hatfield station. Balfour Beatty was responsible for maintaining the tracks. A faulty rail had
been identified 21 months before the crash and a replacement rail had been delivered to the
site six months before, but the repair had never been carried out.
Balfour Beatty was prosecuted for health and safety breaches, and the judge described itsperformance as one of the worst examples of sustained industrial negligence in a high-risk
industry [he had] ever seen. The company pleaded guilty and was fined 10m; Network Rail
protested its innocence but was convicted by a jury and fined 3.5m. Balfour Beatty appealed
and had its fine reduced to 7.5m.
The Court of Appeal judgment was not that a 10m fine for a systemic failure was wrong in
principle but that it bore too little relationship to the Network Rail penalty. (The implication
was that the Court thought the latter was too low, but fairness dictated that it reduce the
former to bring the two more into line.)
Among other points to come out of the ruling is that fines should be large enough to raiseconcerns among shareholdersbut that need not necessarily mean that they must be so large
as to reduce the next dividend or hit the share price.
Guidance for directors
To help directors deal with health and safety risks, and so avoid liability for themselves and
their companies, in 2007 the Health and Safety Executive, the body that enforces health and
safety law, teamed up with the Institute of Directors to produce guidelines,Leading Health
and Safety at WorkLeadership Actions for Directors and Board Members(12-page /
456KB PDF), which sets out an agenda for effective leadership by the board.
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The first step is to set the right tone at the top and for the board to provide effective
leadership from the top down. The guidance sets out three essential principles that underpin
good health and safety performance:
strong and active leadership; worker involvement and engagement; assessment and review.
A four-point agenda can be used to embed these principles into an organisations culture by:
planning the direction for health and safety policy; delivering on health and safety; monitoring performance; reviewing and checking compliance.
As mentioned inCorporate manslaughter, an OUT-LAW guide, directors and senior
managers who read this guidance and follow it will give their companies a better chanceshould they ever be investigated for a gross breach of the duty of care under the corporate
manslaughter legislation.
In addition, examples of conduct by directors and senior managers that can avoid or
minimise the risk of prosecution include:
receiving reports on safety performance and ensuring safety is discussed regularly atboard level;
leading by example and being visible; seeking and acting on competent advice when making policy and purchasing
decisions;
thoroughly considering requests for resources and justifying carefully any refusals; providing training to directors and senior managers on their health and safety
responsibilities;
checking the safety arrangements of key suppliers and contractors; setting personal objectives around safety performance; participating in a clearly defined management system for health and safety.
By contrast, the following are common examples of conduct by directors and senior
managers that can lead to their personal prosecution for health and safety offences, or at
least to prosecution of their company:
allowing safety risks to persist to save money; sanctioning or promoting unsafe working practices; approving and signing off inadequate risk assessments or method statements; failing to take a diligent approach to collective and individual responsibilities.
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