Select Committee on Environment, Transport and Regional Affairs Fourth Report


  STRENGTHENING THE REGIME

42. In addition to the discussion of whether and how the balance of the HSE's work should shift, witnesses put forward specific suggestions for strengthening the regime in other ways. The principal suggestions were as follows:

  • penalties should be more severe;
  • a public naming and shaming policy should be introduced;
  • use of the insurance industry; and
  • the role of workplace safety representatives should be changed.

Penalties

43. There is widespread consensus that the penalties awarded for health and safety offences are too low. Prosecutions can currently be heard in either the magistrates courts, which are able to award maximum fines of £20,000, or in the Crown Courts, which can impose unlimited fines and have the power to impose prison sentences. However, in practice the fines set are often derisory. RoSPA told us that "fines imposed by magistrates' courts for health and safety offences are too low and should be reviewed"[68] and the TUC described the fines as "nugatory".[69]

44. There are a number of cases which illustrate the inadequacy of the current regime. The most notorious recent case is that of the Medley Brothers, which was cited by a number of witnesses.[70] In this case a firm of asbestos removal contractors was sentenced to community service orders for employing children to remove asbestos. Commenting on this, the London Hazards Centre stated, "this act of criminal violence must be compared with prison sentences visited daily on young people for petty theft, criminal damage and assaults".[71] It called on the Government to "implement stronger laws that ensure that senior managers and directors can no longer evade imprisonment for failures of health and safety management".[72]

45. The HSE and the Government agreed with witnesses. The HSE commented that it "has long been concerned that the general level of penalties imposed by the courts does not match the real seriousness of health and safety offences".[73] And the Government concurred, telling us that penalties for breaches of health and safety law did not always match the severity of the offence and that it was in the process of reviewing whether the maximum penalties should be revised.[74]

46. The Howe case has provided some reason to be optimistic since it sets a precedent for courts to award higher fines. In this case—R v F. Howe & Son (Engineers) Ltd—the Court of Appeal imposed a fine of £15,000[75] and made it clear it believed that health and safety fines were too low. The HSE reported that this case also seemed to have resulted in a greater number of cases being committed to the Crown Court for sentence.[76] We welcome this judgement and also the Government's review of penalties, which is urgently required to strengthen the link between health and safety offences and fines. We recommend that the Government introduce legislation at the earliest opportunity to increase the level of fines available to the courts for health and safety offences. Penalties should be related a) to the seriousness of the injury and b) to companies' turnover/profit, and should be higher in defended cases.[77] They should also always be set at a level greater than the cost to the company of rectifying its unsafe work practices.

47. Witnesses also raised concerns about the inadequacy of the legal framework currently in place. Under the current law, before a corporate manslaughter charge can be brought, a degree of personal culpability (ie gross negligence on the part of an individual) needs to be proven. This has been difficult to prove and as a result very few corporate manslaughter cases have been brought. The Government is aware of the weaknesses in the current law on corporate manslaughter[78] and the Minister told us that "the Home Office will shortly be publishing proposals in response to the Law Commission's recommendation about a new offence of corporate killing".[79]

48. In 1996 the Law Commission published proposals to introduce new offences involving unintentional killing. It proposed the abolition of the common law crimes of 'involuntary manslaughter' and 'corporate manslaughter' and their a replacement with new statutory offences of 'involuntary manslaughter' and 'corporate killing'.[80] For the latter, management failure, rather than personal culpability, could be taken to be the cause of a person's death, thus removing the current disincentive to bringing a charge of corporate manslaughter. This would make it easier to prosecute a company and would help in raising prosecution levels. An interdepartmental working group has been set up to consider these proposals and has now submitted recommendations to Minsters. We have been advised that, depending on the outcome, there may be a consultation exercise in the early part of this year. We recommend that the Government brings forward legislation to introduce a crime of corporate killing as soon as possible.

Policy on 'naming and shaming'

49. The Centre for Corporate Accountability called on the HSE to introduce a 'naming and shaming policy'. Producing a 'league table' of the most frequently convicted companies over the last five years, the Centre argued, could assist in deterring firms from committing criminal offences: "companies would not want to be part of a league table of corporate criminals".[81]

50. We believe that such public airing is an important additional deterrent to companies which continue to operate dangerous work practices. We therefore welcome the HSE's announcement during our Inquiry that it will in future publicise the companies and individuals convicted of health and safety offences each year. We are also pleased to see the introduction of an initiative to increase publicity around impending prosecutions.[82] This, coupled with more meaningful penalties, should provide a greater deterrent.

51. However, while we believe that public shame will be an effective deterrent, we do recognise its limitations. These can be demonstrated by the experience of the Environment Agency, whose 'polluters' hall of shame' has been the subject of some criticism by witnesses in our inquiry into that agency.[83] We also have two specific concerns relating to the implementation of this policy in the health and safety arena.

52. First, such a policy can only work and be an accurate reflection of poor performance if it is based on a consistent approach to prosecutions across the country. We are concerned that there is evidence of some regional offices more actively pursuing prosecutions than others. For example, the Centre for Corporate Accountability reported that "the prosecution rate in Scotland (6.4 per cent) was less than half the rate in the Home Counties (13.3 per cent)".[84] When such variations are not simply reflections of geographical, sectoral or any other 'valid' difference they would need to be reduced to ensure that the naming and shaming policy can be taken to be an accurate reflection of health and safety standards, rather than a result of a more rigorous prosecution stance in some parts of the country compared with others. Variation in approaches between HSE's regional offices is further discussed below at paragraphs 102-105. The HSE should ensure that its naming and shaming policy is based on a fair and consistent assessment of health and safety performance. The policy should allow for appropriate adjustments to be made for differences in performance which are due to a company's size or sector, to present a fair picture of health and safety practices among employers.

53. Second, it should be borne in mind that a naming and shaming policy falls into the category of 'reactive' policy since companies or individuals are only 'shamed' once an injury or death has occurred. Reiterating the view that we put forward above on the appropriate balance between preventative and investigation work, the HSE needs to ensure that undue effort and focus does not go into the development of this new policy, at the expense of other preventative activities. We therefore recommend that the HSE carefully monitors the effect of its new policy on naming and shaming in order to ensure that the benefits outweigh any costs which may arise. We also recommend that the HSE establishes a 'hall of fame' to draw attention to the companies implementing good practice in health and safety.

Role of the insurance industry

54. We were initially drawn to the principle of using the insurance industry to penalise bad performance and reward good performance in companies' health and safety practices. A number of witnesses argued that this could be achieved by making the link between risk and insurance premiums more explicit. The principle behind this is that those companies implementing high standards present a lower risk, and should accordingly be charged lower premiums for their employers' liability insurance (and vice versa).[85] We looked at these proposals and at some of the research that has been done by other bodies.[86] However, the evidence on the extent to which insurance products can be used to improve health and safety practices is ambiguous.

55. A number of witnesses argued strongly for greater use of the insurance industry. RoSPA advocated methods by which the cost of the regulatory system might be passed on to those who create risk, including the adjustment of insurance premiums.[87] The TUC also supported intervention in the insurance market as a means of introducing stronger incentives for better safety standards.[88]

56. At first sight, these arguments seem persuasive. However we received evidence from the Association of British Insurers pointing to a number of practical difficulties in implementing this principle.

57. The over-riding difficulty concerns the competitive nature of the insurance market in the UK which mitigates against the introduction of financial incentives. In short, if a company finds its insurance premiums rise as a result of poor health and safety performance it can simply approach a different insurance company which is often willing to undercut the original quote. This was the conclusion reached by a number of studies.[89] The Association of British Insurers made the same point, commenting that "there is always an incentive for companies who wish to gain market strength to attract businesses by countenancing lower standards, and charging lower premiums".[90]

58. Second there are a number of other factors upon which insurance premiums are based which distort the creation of a more direct link between premiums and health and safety practices. Premiums are determined according to size of business; historic insurance claims record; and sector. Changes in these factors often have a greater impact on premiums than any health and safety issues. This, then, brings into question the ability of the insurance industry to effect change in this way.

59. Third, the Association of British Insurers argued that insurance premiums are too insignificant a proportion of running costs for the vast majority of companies and that "it is therefore possible that it would cost more [for the company] to change business practice than that change would be worth in premium reductions".[91]

60. In summary, the evidence from the insurance industry, and indeed from other studies, is that this is not an effective tool in the UK, in the context of the existing legislation. We therefore conclude that in practice it is very difficult to create an explicit link between insurance premiums and health and safety practices and that, as a result, the ability of the insurance industry to effect change is limited, except perhaps for high risk, highly capitalised firms where the cost of an accident may be high and may indeed influence premiums.

61. Nevertheless, insurance companies can do something to help. We were told that insurance companies offer safety and risk consultation services and survey premises in order to reduce risks and minimise the incidence of accidents and diseases.[92] This is an important service, particularly given the increasing need for the HSE to find ways of working with and through intermediary organisations (see paragraph 82). It is therefore important for the HSE to ensure that the advice being disseminated by insurance companies is fully compatible with the advice offered by the HSE and that the priorities they stress are those considered important by the HSE.

62. Moreover, pressure should continue to be applied to urge the insurance industry to do more to reward companies with high standards in health and safety. We are particularly concerned that at present, companies with such high standards appear to be subsidising those with poorer practices. We therefore recommend that the HSE and the Government take all possible steps to actively encourage insurers to adjust premiums and insurance conditions[93] to reflect good practice in health and safety.

Workplace safety representatives

63. One of the duties required of employers under the Health and Safety at Work Act 1974 is to consult with employees over health and safety matters. Within unionised workplaces this takes place through statutory safety representatives. This system has generally been found to work well, and a number of witnesses, primarily on the trade union side,[94] argued that there should be an expansion of the powers currently afforded to safety representatives.

64. Two main additional powers were suggested: an ability to change or stop dangerous work practices;[95] and a power to initiate prosecutions.[96] The London Hazards Centre[97] argued that such changes would result in a radical improvement in health and safety management and reduce the likelihood of serious accidents and injury. The key advantages appear to be that first, action can be taken on the spot and may therefore be more effective in preventing a potential accident than inspections by HSE which rely more on chance to 'catch' firms operating dangerously; and second, employees are often in the best position to understand the risks attached to their work processes. A further argument in favour of these proposals is that given HSE can only inspect a small minority of workplaces, concentrating on high-risk workplaces, extending the role of workplace safety representatives could help extend the HSE's 'reach'. Witnesses pointed to experience in other countries where, it is claimed, safety representatives with enhanced powers have been effective in improving health and safety in small and medium sized firms.[98]

65. The CBI was interested in facilitating the reporting of unsafe practices by workplace representatives or others, but it did not agree that they should be given increased powers. This, Mr Alesbury believed, "might promote antagonism between various parts of the company".[99] RoSPA was similarly unenthusiastic about the concept of enhanced powers for safety representatives, arguing that it would allow employers to avoid their responsibilities. It told us this would "dilute the primary responsibility of line management, there could well be unscrupulous line managers who would rely ... on the fact that their safety representatives have got these powers, not to do anything, in the hope that the safety representatives would pick the matter up".[100] Instead of giving one person increased responsibility or power, these witnesses argued that it was important for all employees to be encouraged to take appropriate action, if they felt their health and safety to be at risk.[101] Key to this, argued the CBI, was the promotion of a "blame free culture".[102]

66. Whilst we accept that all employees should be safety-conscious and be able to voice concerns, we believe that workplace safety representatives have an important role to play and would welcome in principle the expansion of powers of workplace safety representatives. However, we are concerned about the practical difficulties this would involve. Any changes in the law would only impact on some workplaces—for example it would not apply where there are no trade unions, or in small firms.

67. A further proposal which was put forward was the concept of regional or 'roving' safety representatives.[103] This would involve an existing trade union-appointed safety representative taking responsibility for inspecting workplaces of other employers (where members of their trade union work but there is no existing representative) in his/her region or area. This was suggested by the TUC and by two unions: the Broadcasting Entertainment Cinematograph and Theatre Union[104] and UCATT (the Union of Construction, Allied Trade and Technicians)[105] who claimed that "regional or roving safety representatives work effectively in Sweden".[106] We support this proposal, which we believe may be one way of better protecting the health and safety of casual workers or those in smaller companies, which the HSE has the most difficultly in reaching. As the TUC points out, "it does not seem to be a controversial issue".[107]

68. The Director General of the HSE told us that the Commission has published a discussion document[108] to look specifically at ways to improve employee participation in health and safety—particularly given the context of labour market changes and the decline in trade union membership. This document concludes that the status quo is not desirable, and puts forward a number of options for change including a strengthening of the legislation to increase the powers of safety representatives, and the introduction of roving safety representatives. The HSE has asked for responses on these and other options by 17 March 2000.

69. We recommend that the HSE initiate pilot schemes for roving safety representatives across the country.


68  HSE03 Back

69  HSE18, para11 Back

70  HSE06, HSE15, HSE23 Back

71  HSE15 Back

72  HSE15 Back

73  HSE25, para55 Back

74  HSE21 Back

75  The original fine of £48,000 was reduced after an appeal by the company to the Appeal Court Back

76  HSE25, para55 Back

77  ie where the defendant pleads not guilty Back

78  PQ94821-also see PQs 90242 and 78238 Back

79  Q377 Back

80  The Law Commission (Law Com No 237) Legislating the Criminal Code Involuntary Manslaughter. Item 11 of the sixth programme of law reform: criminal law 4 March 1996 HC 171 Back

81  HSE20a Back

82  The HSE announced on 22 November 1999 "an active policy of naming companies and individuals convicted in the previous 12 months". The measures announced include publication of an annual report naming companies and individuals convicted in the previous 12 months; this information also to be made available via the Internet; publication of penalties awarded by the courts; and enhanced publicity of impending prosecutions. (Q355 and HSE Press Release, No: E233:99, 22 November 1999) Back

83  See evidence submitted to the Environment Sub-committee's inquiry into the Environment Agency-HC829 (Session 1998-99) Back

84  HSE20, para21 Back

85  The Employers' Liability Compulsory Insurance Act 1969 requires employers to take out a minimum level of insurance cover against compensation claims from employees suffering ill health or injury at work. Employers must display a copy of their Certificate of Employers' Liability Insurance where employees can easily read it. Back

86  Tim Storrie, 1996, European Liability Insurance Market, FT Financial Publishing; European Foundation for the Improvement of Living and Working Conditions, An Innovative Economic Incentive Model to Improve the Working Environment, Dublin, 1996 Back

87  HSE03-RoSPA also suggested using other financial incentives such as grants, soft loans or improved tax allowances Back

88  HSE18, para21 Back

89  Including Tim Storrie, 1996, European Liability Insurance Market, FT Financial Publishing. However, it should be noted that other studies-for example, the European Foundation for Living and Working Conditions in their report on economic incentives to improve working environments-found that they may well be applicable in other insurance markets, such as France, which is less competitive than the UK. Back

90  HSE28, para3.9 Back

91  HSE28, para3.2 Back

92  HSE28, para 2.2 Back

93  HSE25, para45 Back

94  Including the TUC (HSE18, para 12)-also see HSE06, para12, HSE15, HSE23 Back

95  The issuing of 'provisional' improvement notices was put forward by the TUC (HSE18, para12, Q160) and the London Hazard Centre (HSE15) Back

96  See the London Hazard Centre who called for such representatives to be given powers to "initiate prosecutions against employers, which would establish the right of appeal over an enforcement officer's decision not to take action or prosecute". (HSE15).  Back

97  HSE15 Back

98  For example, Australia-HSE23 Back

99  Q55 Back

100  Q80 Back

101  Q80 Back

102  Q61 Back

103  The Broadcasting Entertainment Cinematograph and Theatre Union (HSE02) and UCATT (HSE23) suggested this. Also see HSE06 and Q161 Back

104  HSE02 Back

105  HSE23 Back

106  HSE23 Back

107  Q161 Back

108  HSC Employee consultation and involvement in health and safety. Discussion document Back


 
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