Select Committee on Work and Pensions Written Evidence


Memorandum submitted by CBI

  As the UKs leading business organisation, the CBI speaks for some 240,000 businesses that together employ around a third of the private sector workforce, covering the full spectrum of business interests both by sector and by size. Member companies, which decide all policy positions, include 80 of the FTSE 100; some 200,000 small and medium-size firms; more than 20,000 manufacturers; and over 150 sectoral associations. We are pleased to make this submission on behalf of our wide range of member organisations.

SUMMARY

    —    The framework under the Health and Safety at Work etc Act 1974 has been considerably distorted by various specific topic related legislation, mostly of EU origin, that is serving to add volume and confusion to the set of legislation that employers have to read, understand and implement.

    —    Businesses of all sizes want simple goal setting legislative backed up by good guidance in plain English on specific topics, coupled with an expectation of fair enforcement.

    —    The risk assessment basis for health and safety legislation has been a useful development to enable businesses to have a consistent approach to all operational risks.

    —    However, enforcers, consultants and others who are more used to dealing with specific duties are tending to extrapolate a single incident to a general risk and the current risk aversion publicity and culture is undermining the debate on acceptability and tolerability of risks at both expert and societal level.

    —    The legislation on corporate manslaughter coupled with developments on directors duties are instilling "blame" rather than "prevention" culture.

    —    HSE does have adequate resources and has access to historical and current information to ensure that they are applied to the areas of greatest risk and where action is most needed and this includes high hazard occupations.

    —    HSE is one of the most important actors in the chain of delivery of good health and safety standards but the effectiveness of inspection depends largely on the business reputation management profile.

    —    Further work is required to identify what, if any, factors surrounding migrant workers may make them more at risk of occupational accidents.

    —    Targets have a limited use and HSE should review whether they have the right targets and what other actors need to be mobilised to help achieve them.

PRESENT CONTEXT

  1.  It is important to set the context for this inquiry. UK occupational health and safety performance compares well to that of other European countries and developed nations worldwide. There has been a significant improvement in accident statistics in the UK since the introduction of the Health and Safety at Work etc Act 1974 (HSWA). Although some of this has been achieved from changes in employment patterns, technologies and industrial structures, the positive contribution by people at UK workplaces, the maturity of health and safety law and the risk management approach have been significant factors. CBI members also believe that the existence of an independent and adequately funded HSE has played a key role in the success achieved thus far.

  2.  It is noted that the decline in accident and incident rates has plateau-ed in recent years. The CBI believes that in the light of the introduction of the framework and supplementary directives and the development over the last 15 years of an extensive body of health and safety regulation, HSE should continue to focus on greater promotion activities and better guidance in order to improve standards. The CBI would not wish the HSE's limited resources to be diluted by activities that are not part of its core responsibilities.

  3.  The CBI views its relationships with HSC/E in a very positive light and will work under any new governance arrangements to continue a constructive dialogue and to ensure that our input reflects the consensus view of a wide variety of business interests.

  4.  We have answered the specific points of inquiry under the headings below.

THE LEGISLATIVE FRAMEWORK

Is the health and safety regulatory burden on businesses proportionate? Are EU directives interpreted and translated by HSC into UK law appropriately? Are businesses given appropriate guidance by HSE on their obligations under health and safety law? What impact will the Corporate Manslaughter and Corporate Homicide Act (2007) have on businesses' approach to occupational health and safety? Are director's health and safety duties appropriately covered by voluntary guidance? What influence does HSE have as a statutory consultee in local authority planning?

  5.  The CBI believes that the legal requirement to consult on health and safety has been the trigger for a culture of consultation within the HSE that has benefited all stakeholders. This has had the effect of including a wide range of opinions from employees, employers, scientists, academics etc into the policy formulation and development process. This has also assisted business compliance by giving business early warning of proposals, which allows them to anticipate and spread the costs of compliance. Furthermore the process of consultation enables options other than regulation to be considered to achieve the objectives and influence behaviour.

  6.  The current legislative structure provides comprehensive protection for employees and others working in a variety of circumstances. The HSWA has a balance of authority and responsibilities on virtually all duty holders involved in work activities. Changing patterns of employment have thrown up some challenges such as contractorisation and the growth of small firms but the CBI believes that the current regulatory system can be applied to these circumstances and supplemented by guidance and directing HSE's promotional activities to these areas.

  7.  The CBI strongly believes that the risk assessment basis is the most effective way of regulating health and safety because it balances the need for consistency and proportionality and enables regulation to adapt to changing circumstances, issues and technologies. HSE's approach to risk assessment provides objective and rational justifications for actions but the ability to apply these widely is constrained by outside factors such as public perception, political priorities etc. Business is concerned that the current image of health and safety is undermining dialogue on sensible risk management. The involvement of many others in the health and safety systems, insurance and compensation systems, consultants, enforcers and the media find public sympathy with the risk aversion message rather than the sensible risk management message. This is now a societal issue that will be challenging to turn around.

Regulatory burden

  8.  The overlay of detailed regulations from Europe has most recently distorted the regulatory burden on business with the result that detailed requirements have obscured the fundamental objective to control risks in a proportionate and sensible way and added to the volume which an employer must understand and deal with. The development of a range of topic based directives, that have been the source of most recent UK health and safety law, may have been inevitable in a Europe of many member states, all wanting to influence the agenda to best suit their national situation. However, some recent directives (such as the one on electromagnetic fields) have had little basis in sound science, principles of better regulation and cost effective contributions to real improvements in worker protection.

  9.  Business supports the careful case by case transposition, where we can co-ordinate the EU directive requirements and terminology with the UK legal principles. We would not wish to see copy over, as the legal interpretation of EU requirements directly into UK law would limit the ability of duty holders to use a more flexible risk based approach.

  10.  It is essential that both the UK and the EU continue with their simplification programmes so that employers understand the essential messages in order to improve compliance, which should strengthen worker protection. However, a wholesale renegotiation of the EU health and safety law would not now be a productive use of resources and the effort should concentrate on providing guidance of practical use to those at the workplaces.

  11.  CBI believes that simplifying regulation results in better, smarter legislation, which is easy to understand and comply with, improves levels of worker protection, and helps to secure stronger commitment and compliance from businesses. We support the objectives of the better regulation initiatives and the Hampton review and are pleased to note the HSE co-ordination and delivery to these programmes. They have taken the lead in publishing enforcement policies and simplification plans. Their inspection and enforcement has been risk based and they already have a modern suite of sanctions to draw on. They will have the opportunity to consider any relevant alternatives that may be appropriate from the outcome of the debate on the Regulation, Enforcement and Sanctions Bill.

Guidance

  12.  HSE has over many years provided much guidance on all aspects of legal compliance by consultation and engagement with a wide range of stakeholders and experts. This guidance is respected and used internationally. More recent guidance has been written for SMEs and this has improved its accessibility for experts and non- experts alike. Although there are now many sources of guidance at sector, national, European and international level, HSE guidance is seen as the official interpretation of legal compliance. An HSE audit of what of their stock is current and relevant would be useful. Revision of the useful and removal of the outdated would simplify the landscape for those seeking sources of authoritative information on compliance. We do not support the trend of HSE subcontracting development of guidance out to others as the authors have no disincentive to over specify in order to protect themselves.

Corporate Manslaughter and Corporate Homicide Act (2007)

  13.  Although it has been stressed that this Act does not impose new duties on businesses, most companies are taking the opportunity to review their health and safety systems to ensure they will withstand the inevitable new scrutiny that application of the Act could impose in the event of a work-related fatality. We would be concerned if this manifested itself in unnecessary acts of risk aversion such as outsourcing or offshoring high risk but well controlled company activities. Business has concerns that the enforcement of the Corporate Manslaughter and Corporate Homicide Act (2007) will undermine the prevention and sensible risk management approach to health and safety as enforcers will find it easier to pursue evidence for a case than try to argue with pressure groups that a case is inappropriate or not in the public interests etc. This will add uncertainty to businesses and could unnecessarily undermine business reputations. The recent proposals for sentencing guidelines signal that, in the event of a fatality businesses will have substantially more to lose and it should be anticipated that they will respond appropriately to protect their assets and reputation.

Directors' duties

  14.  CBI member companies believe that director leadership plays a key role in good health and safety performance, that improvement in director leadership is needed to improve health and safety outcomes, that credible and clear guidance on director leadership for health and safety is essential and that current legislation needs to be effectively enforced. CBI members are opposed to the development of further specific directors' duties in health and safety legislation for four main reasons:

    —    Specific duties on directors will add to company bureaucracy, insurance costs and may lead to unnecessary risk aversion.

    —    There are already legal duties on directors in the wider context of the Companies Act 2006. Directors have to satisfy standards for company activities, systems and stakeholder interests and it is for them to make the judgement of where the balance lies in the often competing and conflicting demands on resources. There is legislation to disqualify directors in certain circumstances. Specifying duties in one area of corporate activity may prejudice the flexibility of directors to act properly and proportionately in other areas.

    —    The general legislation on companies and directors has been recently reviewed and enacted. Now is not the time to develop separate primary legislation on directors' duties in health and safety. It does not fit with the Government Better Regulation Agenda.

    —    The apparent disparity of numbers of prosecutions of directors of small firms compared with large firms as a basis for developing specific health and safety duties on directors is fundamentally flawed. The cohort of prosecutions is so small that conclusions cannot be drawn. Statistically there are far more small firms than large firms in the UK. The complexity of large firm structures, responsibilities and authorities makes the linkages between cause and effect and the clear attribution of blame inherently more difficult in large firms than in small firms. More and specific law on directors' duties will not equivocally address this challenge.

  15.  The way forward to motivate directors in enhancing health and safety performance is to utilise properly the current legislation. CBI members endorse and are actively using the latest succinct and relevant guidance developed by the IoD and HSC to reinvigorate training for directors on their health and safety duties in the context of the new legislation on overall company performance for enhanced stakeholder value.

HSE as a statutory consultee in local authority planning?

  16.  The views and expert information provided by HSE to local planning authorities is respected as far as it goes. As with the advice from other statutory consultees it can be taken into account or ignored if there are more pressing local needs. However, there is a need to question the use of such expert and tailored HSE resources, when their advice can be ignored. The development of up to date generic advice for local planning authorities could be a short-term challenge for a long-term gain.

HSE RESOURCES

Does the HSE have sufficient resources to fulfil its objectives as the health and safety regulator and meet its PSA targets? Does HSE allocate its budget efficiently? Are there areas of HSE's operations that require additional investment?

  17.  Business is well used to working in a highly competitive environment with finite resources and understands the need for priorities to be established within which there is sufficient flexibility to respond to changing work situations. The priorities for HSE and other enforcing authorities is an important public debate that has at its heart the funding of public services and the way that the demands of the public are satisfied. It is overlaid by legal frameworks that were established without reference to discussions on taxation and funding of public services. Although there are efficiencies that can be made to get more out of less from all public bodies there is a limit to this that the public and others must recognise. Setting priorities in a transparent way and sticking to them in the relevant time frame and circumstances is the practical way to proceed

  18.  There are some 4,000 staff at HSE, considerable scientific support at HSL and much internal and external guidance. It is essential that these resources are applied efficiently and effectively. HSE resources should be targeted at work related activities that primarily involve the employer-employee relationship. Its priorities in relation to public safety should be when HSE expertise and legal powers alone can make a significant contribution to the prevention of similar incidents. This will particularly be when the public are inadvertently exposed to the same risks as employees rather than when they make a choice about their involvement in the activity.

Targets

  19.  The CBI supports the setting of targets, but is concerned that in practice they can distort priorities and are limited because they can apply only to areas that are quantifiable. The PSA targets were chosen at the time on rather fragile evidence of the baseline statistics. If targets are set, they should be set in close consultation with stakeholders, taking into account the wider context, and structured in a way which enables them to support the achievement of objectives, rather than become the objectives in themselves. The danger is that the PSA targets can be achieved statistically by means that do not relate to improvements in health and safety performance.

  20.  HSE alone cannot achieve its demanding PSA targets; it requires the whole of the health and safety system and most importantly the contribution of all at the workplace to help achieve them. The CBI supports the objectives of the HSE work with large organisations that are able to influence large part of the customer and supply chain and amplify the HSE effort to improve health and safety systems and help achieve PSA objectives.

Budget allocation

  21.  The detail allocation of HSE budget is not in the public domain. As with all rapidly moving policy and enforcement areas it is never easy to remove funds from any particular area. Improvements may continue for a while but in the longer term the vacuum may be filled by others with a different agenda and can create undesirable changes that then require further effort to get back on track.

  22.  Business sees a continuing need for HSE and business resources to be provided to train inspectors in technical competence and business systems. Business does incur costs by supporting this training activity and the business contribution should be recognised.

  23.  It is essential that HSE places priorities and provides resources for those sectors that have the greatest risks and those performers within the sectors that are not making a positive effort to make improvements.

INSPECTION, ENFORCEMENT AND PROSECUTIONS

What impact has the reduction in inspection rates had on standards of occupational health and safety? Does HSE get the balance right between prevention and enforcement? Are penalties for health and safety offences proportionate? Should the removal of its crown immunity be a priority for HSE? How effectively do HSE and local authorities interact in their inspection roles?

  24.  There is no clear evidence that inspection is related to standards of health and safety but business believes that a proactive HSE is the important piston applying pressure to the whole system. It motivates others to take actions. Removing that pressure could send signals to others in the chain. A one off hit from any of the actors cannot achieve sustained health and safety performance, be they enforcers, publicity campaigns, and employer and worker interventions. Action needs to be continuously refreshed to deal with industry, technology, issue changes and new worker and employer entrants.

  25.  If HSC/E is concerned about inspection rates they should explore the reasons why. The numbers of HSE inspectors who actively and routinely do inspection visits remains reasonably constant. Lower inspection rates may reflect, administrative burdens, training requirements, efficiency, travel to sites, complexity of issues etc.

  26.  Whilst inspection, enforcement and education campaigns must take priority, the HSE policy work has been influential in providing co-ordination with other government departments, particularly where there are overlapping responsibilities. The HSE approach to risk based regulation has been useful in influencing other regulatory regimes and the common interpretation of risk across government. Business is not able to look at health and safety in isolation; rather it manages health and safety within the wider business management process, together with other facets of management. However, there is a need for a more pragmatic approach by all enforcers who are now not able to fall on specific duties, but may be using risk assessment (within a risk averse culture) to attempt to impose higher standards. Allowing discussion on health and safety to become a matter of ridicule is not in society's interests.

Enforcement

  27.  Business supports and expects the need for a balance between prevention and enforcement but from the business perspective this balance is not achieved. Prevention should be the dominant role. However, most enforcement action arises from investigation of reported accidents and incidents. This indicates that the compliant and reporting companies are more targeted for enforcement than those who do not report accidents. This reinforces the advantages of not reporting incidents and accidents.

  28.  There are sentencing guidelines for the imposition of fines for health and safety offences that are intended to provide consistency and comparability with other offences. For offences heard in Crown Court, the imposition of unlimited fines has always been possible. There is no higher monetary sanction and judges have used their powers recently to impose punitive fines. It is important to consider the sanction in relation to the offence which for health and safety is usually a lack of or an inadequate a provision or system and is not necessarily related to the injury.

  29.  Removal of Crown immunity for HSE should go hand in hand with removal of Crown immunity for other government departments and enforcement authorities. It should be given a priority as business sees it as an important signal that it is operating on a level playing field.

  30. There will always be a challenge where overlapping and often conflicting risk control measures may be required. E.g. fire safety, road safety, environmental health, food safety provisions. Businesses often have to develop local understandings to clarify who provides advice, enforcement and agreement on acceptable standards. The most common business concerns relate to inconsistency amongst Local Authorities and in particular comparing the approach of LAs that have a general role with those that have particular expertise. There are also currently a number of trials ongoing with LOPS, LAPS, Retail Enforcement Pilot etc and there is a need for clarity to measure progress. Many national businesses would prefer one key authority to agree national (including Scotland, Wales and Northern Ireland) policies and then local intervention should be focused on the application locally of the policy not the policy itself.

HAZARDOUS OCCUPATIONS

Is HSE doing enough to improve health and safety standards in hazardous occupations, in particular: is HSE doing enough to tackle the rise in fatalities in the construction industry? is HSE doing enough to tackle offshore health and safety risks in the oil and gas industry? is HSE doing enough to maintain health and safety standards in the chemicals industry?

  31.  It is important that HSE resources are applied proportionately to those sectors where the risk are greatest, eg construction and also for other high-risk sectors, agriculture, offshore, etc.

Sites subject to permissioning regimes

  32.  The public need particular reassurance of the safety of the high hazard industries such as chemicals, oil and gas. These industries are subject to permissioning regimes that impose considerable costs on business to have an audit trail that proves compliance with health and safety legislation. Such businesses put considerable effort into risk management to ensure their continued survival, sustainability and reputation management. HSE should diligently, efficiently and fairly enforce those permissioning regimes.

  33.  In relation to chemicals, although HSE is the competent authority for REACH they should recognise that there is a conflict between liabilities that can arise for businesses handling chemicals from the REACH and occupational health and safety frameworks. HSE should be sensitive to the considerable administrative burden placed on businesses manufacturing, importing and using chemicals by the REACH regime.

Increased Charging for inspection of sites subject to charging regimes

  34.  CBI members have expressed serious concern about the proposals to substantially increase, significantly above inflation in April 2008, the charges under the relevant regimes (onshore major hazards, gas pipeline safety and offshore oil). The consultation has been late (started in Oct 2007) and partial. The proposal to extend charges at sites subject to charging regimes, to include all health and safety activities, should be reconsidered so that business can see that the charging basis is fair and transparent.

Construction

  35.  For the construction industry HSE should be careful not be overreact to the recent rise in fatalities without adequate analysis of the causes as we may not be developing the right solution. Although construction activities have the highest incidence rate of fatalities, the figures show that a steady decline in construction fatalities over the past 15 years has been reversed for 2006-07 though in such a small numerical sample there is little statistical significance. However, we cannot afford to be complacent and CBI supports the construction sector framework for action to address the issues. This builds on the good practice from the major construction and building services contractors who have shown leadership in H&S management with the result that numbers of fatalities have fallen in their sector. This will provide an exemplar for other sectors in construction where the fatalities have risen. After all the recent changes in construction health and safety regulation, any further legislation would be counterproductive. HSE could play a more active role in helping to ensure that supply chain initiatives do not generate excessive paperwork or lead to a duplication of effort, since this can distract from the identification and reduction of significant risks, particularly in smaller businesses.

MIGRANT WORKERS

Are migrant workers more at risk of occupational accidents? Does HSE do enough to protect migrant workers from health and safety risks?

  36.  Business believes that all workers should be provided with the same level of health and safety and employment protection. They should be provided with the health and safety information, training, instruction, supervision and safe systems of work so that they know what to do and why they have to do it to ensure their own safety and that of their colleagues.

  37.  Responsible businesses recognise that migrant workers may need to be provided with language skills to ensure that they understand and act on information and instructions. There are many examples of such businesses providing interpretation until the intensive language training is effective. Businesses mention that when the safety systems are explained and understood, migrant workers are often most compliant.

  38.  There is a need for HSE to investigate further whether migrant workers are more at risk of occupational accidents and if so, what factors contribute to this. Until this is done we may not be providing the right policies and practices to tackle the problems.

OCCUPATIONAL HEALTH

What must HSE do to meet its PSA targets for ill health and days lost per worker? Does HSE do enough to embed vocational rehabilitation in the workplace?

  39.  The PSA targets for ill health and days lost due to ill health are the most challenging as the statistical baselines are most fragile. This is not an excuse to not have such targets but is a note of caution about whether, when and how these targets can be judged to be achieved. The reporting arrangements for such figures are not holistic and do not involve access to information from the medical profession. It is not easy to clearly attribute many of the causes of ill health and absence to working conditions without incurring considerable costs.

  40.  There is no single source of ill health figures that can be relied upon. Even combining most available public sources, official HSE reportable diseases, claims for prescribed industrial diseases, self reported ill health, medically validated schemes for particular diseases all require considerable manipulation to contribute to a fair overview.

  41.  Again HSE is not the sole actor that will influence the PSA targets for ill health. GPs will make a major contribution from the advice offered to them and passed onto their patients on the best way to manage musculoskeletal and mental health conditions. GPs, patient/employees and employers working together in making reasonable adjustments to accommodate and rehabilitate people back to appropriate work will provide the major contribution to help HSE achieve the PSA targets.

  42.  Vocational rehabilitation involves a multidisciplinary approach and businesses are putting considerable resources into investigating what works, when and why. There are many service providers offering physiotherapy, employee assistance, support programmes, retraining, counselling, occupational health services, and cognitive behavioural therapy. Some of these are in the occupational health and safety domain and others in employment provisions. HSE does not have competence in all areas and can make a contribution to inform and embed vocational rehabilitation in the workplace, alongside others.

  43.  CBI member companies recognises the importance of rehabilitation for the individual, the business and the state and is working in various initiatives to support measures to increase the availability of rehabilitation programmes if they are established in a way which supports business competitiveness

  44.  In the provision of occupational health services and rehabilitation services, CBI views flexibility as important. The focus for HSE should be on access and competence rather than imposing prescriptive requirements. CBI members require flexibility for access to occupational health services to be related to workplace risks rather than prescriptive periodic workplace medicals for employees. This system would be more costly and bureaucratic with the highest proportion of costs falling on small firms and not necessarily delivering any higher standards of health in the working population.

  45.  The challenge with the health work and wellbeing agenda is that it is an extensive shopping list of initiatives that are linked but there are too many different working groups/ activities that businesses is unable to get clear messages that make the business case. It is essential that benefit provisions, tax incentives and current medical practice are all aligned to reinforce the message that work is better for health and wellbeing than worklessness.

CBI

January 2008





 
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