25. Memorandum submitted by the Business
Services Assocation
The Business Services Association (BSA) is a
policy group for major companies providing outsourced services
to companies, public bodies, local authorities and government
departments and agencies. The combined annual turnover in the
United Kingdom of its 21 member companies is around £15 billion.
Member companies employ directly and indirectly more than 500,000
people.
BSA member companies are among the leaders in
providing services across the public sector. They are actively
involved in the majority of PFI and PPP projects across the whole
range of Government Departments and Agencies, NHS Trusts, Local
Authorities and Local Education Authorities. As such they are
engaged in implementing Government's agenda for modernising public
services.
The Association itself is closely involved in
working with Government to develop and deliver the principles
for modernising public services. As well as representing the providers
of relevant services, all employees of BSA member companies are
users of these services. This gives them and member companies
a clear perspective on quality and end-user requirements. Those
views are reflected in those of the Association in its submissions
to Government across a whole range of issues.
MANAGEMENT FAILURE
BY SENIOR
MANAGERS
The fact that the Bill will now allow collective
management failures to be considered in addition to individual
management failures serves two functions: firstly it will redress
the present inequity between prosecutions of small and large organisations
by allowing for the causal link to be extended, thus allowing
for the increased accountability of organisations with large numbers
of senior managers. Secondly it will serve to ensure that directors
with responsibility for Health and Safety within an organisation
are less likely to be held individually liable and considered
as automatic scapegoats.
We welcome the clear indication that cases may
only be brought in cases of systematic failure in management rather
than in the case of one off events. However, while the theory
of capturing the organisation's senior management is sensible
in the sense that those with overarching, strategic responsibilities
may be held to account for failing to ensure acceptable working
practices, we question the parameters of the term "senior
management". It is clear that it would be difficult to list
those roles which equate to senior management, especially in the
wide context of organisations covered by this legislation, nonetheless
it is felt that stated criteria—those who play a role in
making management decisions, or actually manage the activities
of an organisation as a whole or a substantial part of it, and
that those individuals should play a "significant" role
(ie decisive or influential)—will be a cause for dispute.
The admission in the introduction to the bill that "The definition
[of a substantial part of the organisations" activities]
will apply with different effect within different organisations"
highlights these complexities. From the context of BSA, we would
question whether it is intended that the Act places this responsibility
on Board level executives engaged in contracts for the provision
of outsourced services when it is clear that such individuals
have a lesser ability to direct policies and activities on a site
that is not under their control. In such situations senior management
are not able to exert the same levels of influence as senior management
responsible for a similar number of sites operated directly by
an organisation. While the aim of redressing the inequities of
the current situation with regard to smaller organisations is
recognised, it is felt that the current drafting may result in
prosecutions of high level groups or individuals who do not have
direct influence on working practices because the size of the
organisation would not allow for such a relationship. It is believed
that the current drafting may force parties to cite high level
management (even if their responsibility for corporate manslaughter
is ambiguous) in preference to not prosecuting at all for want
of a group or individual who is senior enough. Clear guidance
on this matter is required.
One of the key areas of concern for our members
is the allocation of liability for those organisations performing
outsourced services on behalf of another organisation. Whether
contracts are based in the public or private sectors the divisions
of responsibility and risk can be blurred. Typically employees
from the two parties will work closely with each other and in
those contracts that would be perceived to be the most successful,
where the boundaries between the staff from the two organisations
are imperceptible, the line of liability is unlikely to be clear.
The difficulties of apportioning blame for the incident, let alone
following the line of responsibility to senior management level
in either organisation is likely to prove difficult.
One of the key questions concerns whether, if
a service provider is complying with the terms of its contract
and service level agreement it can be held liable for an event
which may be the outcome of requirements attendant to the service
they provide. In effect, could a contractor be held liable for
a death caused by something that the client had decided not to
include in the contract terms (either because of price or other
strategic considerations) if it fell within the perceived scope
of their activities? If this scenario were to become reality,
future contracts would have to be written with this in mind, it
may even mean that contractors will have to insist that potential
clients make adequate health and safety provision during the bid
process, with the realistic consequence that organisations may
find themselves outbid as a result of exercising caution. For
those contracts already in operation, many of which may span long
periods of time, this would be an inequitable situation.
The inequity of the situation is also apparent
when it comes to managerial liability. Where a contract is let,
subject to the demands of a client, to an organisation carrying
out hundreds of similar contracts across the UK it would be extremely
unlikely that the national Health & Safety Director or any
other individual at such a level would have any say in or impact
upon the day to day running of an individual contract. Again,
in the case of outsourced services a Board level director has
even less influence than an individual in a similar position in
an organisation with direct control over sites because it is not
possible to have the same levels of oversight and active involvement.
While the draft makes it clear that individuals or groups will
not be prosecuted unless liability clearly exists, it also seems
that one of the fundamental problems with the draft is that it
seeks to place liability on those at the top of the organisational
structure in order to fulfil the need to create a public scapegoat.
We welcome the fact that the Code of Practice
proposed in conjunction with the Health Improvement and Protection
Bill will not impact upon the remit of these regulations and the
recognition by the Health Minister that it would be legally awkward
to prove that a hospital had corporate responsibility for an infection
that may have contributed to a death in which other factors were
involved. If this undertaking had not been made it would not have
been beyond the realms of possibility to envisage cases brought
with the aim of establishing a link between standards in hospitals
and deaths caused by hospital acquired infections in case law.
Exposing cleaning contractors with public sector contracts to
the risk of speculative claims being taken to the Director of
Public Prosecutions and possibly ultimately to the courts would
be a costly, and ultimately politically motivated move that could
result in severe financial losses to contractors who are part
of an entire team, all of whom impact upon the activities and
outcomes in a discrete situation.
GROSS BREACH
AND STATUTORY
CRITERIA
Use of the Law Commission's definition of gross
failure as conduct that falls far below what can be reasonably
expected in the circumstances is seen as sensible especially in
light of the fact that statutory criteria providing guidance on
what is recognised as "falling far below" is provided.
However, the raft of subjective tests in 3(2) are considered imprecise
and likely to give rise to an abundance of legal arguments.
APPLICATION
The extension of the proposals to include Crown
bodies (with the exclusion of those carrying out an exclusively
public function) is welcomed. There is no reason for such bodies'
entitlement to immunity from a piece of legislation relating to
workforce matters. In fact, as the indirect employer of nearly
six million individuals in the nation's workforce it is only right
that such bodies adhere to measures designed to improve on accountability.
When it comes to prosecution and sanctions,
the issues become yet more clouded for contractors in the public
sector. Would it be possible for a grouping of senior management
to include individuals from both the private and public sector
organisation? If so, how would any resultant fines be distributed,
especially in light of proposals that public sector bodies would
not be subject to financial penalties?
BSA is of the opinion that the application of
the Bill should be limited to subsidiary companies. As has already
been pointed out, it is felt that the obligation to prosecute
a member of the "senior management" team may result
in inappropriate prosecution, any attempts to prosecute board
level individuals at group level (where direction and growth,
rather than operational strategies are the main focus) is extremely
unlikely to result in the prosecution of an appropriate individual.
Subsidiaries have responsibility to see that policies set either
at board or subsidiary level are enforced, therefore it should
be these individuals named in any prosecution.
LIABILITY
The decision to rest liability on the corporation
rather than the individual is welcomed. As previously mentioned,
provisions for individual liability have the potential to discourage
individuals from taking up posts with direct responsibility for
health and safety, resulting in a situation that could potentially
contradict the overarching objective of Government to improve
the health and safety environment in England. Reference in Clause
3(3) to the Health and Safety at Work Act (1974) is encouraging
in that it confirms our assumption that individuals will not be
liable under the Corporate Manslaughter Bill in conjunction with
liability under the Code of Practice proposed as part of the Health
Improvement and Protection Bill.
INVESTIGATION AND
PROSECUTION
We are pleased to note that the expertise of
the HSE will be made use of in the investigation of Corporate
Manslaughter offences when appropriate. We also welcome the fact
that the draft Bill specifically requires the consent of the Director
of Public Prosecutions before proceedings can be instituted. However,
we do not feel that this will be an adequate stop on those parties
keen to harm the reputation of employers by instituting spurious
claims.
CONCLUSION
As has been highlighted, while the aims of the
bill are sensible, it is felt that the Government do not understand
the correlation between these aims and the particular considerations
of the outsourcing industry. We are of the view that if the Government
does not take our concerns seriously it risks the process grinding
to a halt when the Bill is finally enacted.
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