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Health And Safety (Directors' Duties) Bill

These notes refer to the Health and Safety (Directors' Duties) Bill as introduced in the House of Commons on 12th January 2005 [Bill 22] HEALTH AND SAFETY (DIRECTORS' DUTIES) BILL            EXPLANATORY NOTES INTRODUCTION      1.     These explanatory notes relate to the Health and Safety (Directors' Duties) Bill as introduced in the House of Commons on 12th January 2005. They have been prepared in order to assist the reader of the Bill. They do not form part of the Bill.      2.     The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. SUMMARY      3.     The main purpose of the Bill is to impose an obligation upon all company directors to take all reasonable steps to ensure that their company is complying with health and safety law.      4.     The Bill also imposes an obligation upon large companies to appoint a director with responsibility for health and safety information, to ensure that the company has the procedures that will allow this director to undertake his duties and to make adequate arrangements within the company so that the health and safety information director can carry out his duties. 5.     The Bill states that the health and safety information director has a duty to take all reasonable steps to obtain safety information concerning the company and to pass this information to the board.      6.     The Bill also imposes an obligation upon the directors to take account of any information and advice provided to them by the health and safety information director. [Bill 22—EN]     53/4 BACKGROUND 7.     The Government, in its strategy document, Revitalising Health and Safety, published in June 2000, set out the importance of the conduct of directors to the health and safety of companies, and stated that it was the intention of Ministers to introduce legislation on directors' responsibilities when parliamentary time allowed. CLAUSE 1: HEALTH AND SAFETY INFORMATION DIRECTORS 8.     Clause 1(2) amends section 282 of the Companies Act 1985 by imposing an additional duty upon those companies which are neither small nor medium companies (as defined by section 247 of the Companies Act 1985) to nominate one of its directors as 'health and safety information director'. 9.     Clause 1(3) amends section 364 of the Companies Act 1985 so that the name of the health and safety information director is required to be set out in the company's annual return. CLAUSE 2: DIRECTORS' DUTIES 10.          Clause 2(2) amends the Companies Act 1985 by inserting four new sections in that Act after section 309C. 11.     Section 309D of the Companies Act 1985 imposes a duty upon directors of all companies to take all reasonable steps to ensure that their company is complying with the obligations imposed upon it by applicable health and safety law. The applicable law is defined as the following— provisions which are defined as "relevant statutory provisions" in the Health and Safety at Work etc. Act 1974 and which appear in Schedule 1 to that Act; provisions which, under the terms of another Act, have effect as if they were such provisions; primary legislation which is specified in Schedule 12A to the Companies Act 1985 (as inserted by Clause 2(3)); secondary legislation which is made under the primary legislation specified in Schedule 12A that relates to health and safety; and secondary legislation which is made under the European Communities Act 1972 that relates to health and safety. 12.     Section 309D also imposes a duty upon the directors of those companies which have a duty to nominate a health and safety information director to take into account the information and advice of that director when assessing what steps to comply with the duty that is imposed upon them. Section 309D also imposes a further duty upon these directors to make adequate arrangements within the company so that the health and safety information director can obtain the necessary information to carry out his functions. 13.     Subsection (1) of section 309E of the Companies Act 1985 sets out the duties of the nominated health and safety information director. These are divided into three parts. Subsection (1)(a) requires them to inform the other directors "not less than four times a year", of: how the company's activities are affecting the health and safety of its employees and other persons not in the company's employment, the adequacy of the measures taken by the company to ensure that it complies with health and safety legislation, and any further measures that may be necessary for this purpose. 14.     Subsection (1)(b) requires the nominated director to inform other directors promptly in relation to: any significant health and safety failure by the company and the steps that have been taken, or will be necessary, to rectify it, details of reportable incidents that the company has a duty to report under the relevant statutory provisions, the primary legislation listed in Schedule 12B to the Companies Act 1985 (as inserted by Clause 2(3)) and secondary legislation made under the primary legislation listed in Schedule 12B, details of enforcement notices served on the company or one of its employees under the relevant statutory provisions, the primary legislation listed in Schedule 12C to the Companies Act (as inserted by Clause 2(3) and secondary legislation made under the primary legislation listed in Schedule 12B, and details of any proceedings which have been brought against the company for an offence under any law relating to health and safety or for any offence arising out of a death. 15.     Subsection (1)(c) requires health and safety information directors to inform the board on the health and safety implications of its decisions.      16.     Section 309F of the Companies Act 1985 states that in determining what steps need to be taken by directors to meet the requirements of the duties imposed upon them, they should give consideration to any code of practice issued or approved by the Health and Safety Commission. 17.     Section 309G of the Companies Act 1985 states that Part 1 of the Health and Safety at Work etc. Act 1974 shall have effect as if sections 309D and 309E of the 1985 Act were existing statutory provisions within the meaning of Part 1 of the 1974 Act. CLAUSE 3: AMENDMENT OF THE HEALTH AND SAFETY AT WORK ETC. ACT 1974 18.     The amendment of section 16 of the Health and Safety at Work Act 1974 ensures that the HSC has the power to issue codes of practice in relation to the matters in Clause 1 of the Bill. TERRITORIAL EXTENT 19.     The Bill extends to England, Wales and Scotland. Health and Safety is a 'reserved matter' under the Scotland Act 1998.