The financial penalty imposed by the court will ordinarily be £500,000 or greater, as set out in the new sentencing guidelines. Fines of this magnitude could have a devastating impact on small and medium-sized businesses that have modest turnover and profit figures. In the case of very large businesses, it is expected that the fines issued could be much higher than this guideline minimum and may reach into millions of pounds.
However, financial penalties are only part of the story. Courts may also issue remedial orders, requiring businesses to address any specific health and safety failures it hasn't already dealt with. But the final sting in the tail is potentially the most damaging element of a corporate manslaughter sentence: the publicity order. A business served with such an order is required to make a public announcement giving details of the offence committed and the financial penalty imposed. The court will dictate how this announcement must be made but it is expected that national and local press announcements and a message on the business's own website will be usual practice. The reputational damage caused by a publicity order could end up costing businesses (especially large household names) far more, and take much longer to recover from than any financial penalty the court can issue. The potential costs of complying with a remedial order and publicity order will not be taken into account by the court in setting the fine and will be a further drain on businesses that may already be facing unprecedented financial pressure.
In light of these radical changes to the way in which corporate killing offences will be dealt with by the courts, now may be the time to reconsider how health and safety issues are managed in your organisation and to ask who is the most appropriate person to shoulder this responsibility.
Traditionally, many organisations have considered health and safety as an HR issue and it is a subject that has been added to the ever-increasing ‘to do' list of the HR manager. In an ideal world every business would benefit from employing a dedicated health and safety manager, but for many organisations this is simply not financially viable and for lower-risk service-sector organisations is not strictly necessary.
There is no right or wrong answer in the debate over where health and safety management should sit within any organisation. However, it is an issue that should be properly thought out, based on the risks posed to staff and the resources and expertise needed to address these. Clearly, the role of a health and safety manager in a call centre will be somewhat different from the role in a heavy manufacturing plant or road haulage firm.
Whoever is charged with overseeing health and safety issues, they must seek appropriate professional advice. The Institute of Directors' guidance on leading health and safety at work makes it very clear that the most important factor in effectively managing health and safety is to lead by example. All board members must actively promote a safety culture within the organisation and forget any notions of ‘it's not my job'. The overriding message for directors is that health and safety should be a key component of the business risk management strategy and all directors and managers (regardless of their title) should recognise that safety must be tackled with the same level of commitment as managing financial and reputational risk.
The new sentencing guidelines underscore the importance placed by the regulators on ensuring the safety and welfare of staff while at work. There is a clear intention to deliver a step change in the level of fines and range of penalties imposed on convicted organisations. Businesses must see this as a wake-up call and ensure the resources allocated to health and safety remain sufficient, even in hard times. For HR professionals overseeing health and safety compliance, it is now more important than ever that they are on top of these issues.
Alison Gray is a partner in the environment & safety team at Dickinson Dees