Small Business Owners paying the price for Health and Safety failings

It has been possible to prosecute Directors under Section 37 of the health and Safety at Work Act since 1974. However, this was rare until Sentencing Guidelines and other legislation made it more likely for the HSE to successfully prosecute individuals.

The increase was first noticed in 2014/ 2015 with a 300% increase in charges across the 12 months period. This November alone saw reports of 4 Directors being sentenced for Health and Safety offences.

The Police, supported by the Health and Safety Executive, are also more open to pursuing charges of Gross Negligence Manslaughter following workplace fatalities.

Anyone taking the time to look at cases where individual Directors face personal charges will soon realise that these are more often than not small business owners. This could be down to poorer management of safety these size businesses or that Directors are closer to the day-to-day operation and therefore more likely to play a significant role in the events leading to the incident that promoted prosecution. Whatever the reason it is clear that Owners and Directors of small businesses seem to be more likely to face personal prosecution for H&S issues than those of larger organisations.

The Current Legal Situation

The basic provisions are contained in the Health and Safety at Work Act 1974 and these lay out the requirements that are put on employers in the workplace. Over the years there have been numerous additions to this act but ultimately it has remained the critical element of any health and safety obligation for employers.

Example requirements include the need to ensure that risks are assessed regularly and that measures are put in place to mitigate any risks that may arise. Where there are more than five employees the requirements are slightly greater with written policies having to be put in place and disseminated to the relevant individuals. These have to be reviewed regularly and will need to take into account factors such as the industry and experience levels of the employees involved. 

Manslaughter Concerns

One of the most dramatic changes came in 2007 was the of the possibility of corporate body being guilty of corporate manslaughter.

Again this is not a new concept and it has been possible for a director to find themselves facing such an accusation long before the 2007 Act came into force.

Critically the 2007 Act recognised that the standard offence of manslaughter did not fall neatly into the way that organisations worked and as such it became necessary to recognise different dynamics of the relationships in the workplace. In doing this it was stated that the managers or those with direct control would potentially be responsible for any deaths that occurred due to their action (or indeed inaction).

The test is that there had been a gross breach of duty of care that had ultimately caused the death of an employee by an individual in a ‘controlling mind’. Typically this will mean someone in a senior management role which in many cases will be the directors. These are criminal sanctions punishable in the same way as manslaughter outside of the workplace.

Fines for Corporate Manslaughter this year have exceeded £2 Million following for one business based in Scotland.

Policy Changes

As a result of this latest focus on health and safety issues it has become important for directors and senior management to look at ways in which they can potentially protect themselves. Scheduling in regular reviews of the policies and ensuring that all documentation relating to these reviews is kept accurately will assist in showing that efforts have been made to comply with their duties.

Controls are also important as it is often the case that those implementing the health and safety plans are not those directly using the plans or supervising them. For this reason a set of internal controls should be put in place to ensure that the processes are being followed even when those potentially liable are not directly involved in the overseeing of activities.

Other Health and Safety Issues for Directors

Sanctions

Where the Health and Safety inspectors have visited a company or been put on notice of a breach it is likely that an improvement order will be issued and the company required to make the changes dictated. If these are not followed there may be further financial penalties issued and any resulting deaths are likely to be viewed in a stricter way than had no remedial orders been made.

Critically the man sanction is an unlimited fine which can be levied on the company as well as on the individual directors. In certain circumstances directors could find themselves facing imprisonment. As well as the legal sanctions the publicity and PR can be very damaging particularly for the larger, more established companies that portray themselves as being careful employers.

Practical Tips

• Directors need to make sure that they fully understand their own personal liability.

• Those in a managerial capacity need to be determined and made aware of their responsibilities.

• Health and Safety policies need to be put in place with regular checks and updates scheduled.