All organisations must design and implement a health and safety policy to keep employees safe. It is also a legal obligation under the Health and Safety at Work Act 1974 (HSWA) and other applicable legislation. However, some businesses ignore this regulation to try to avoid paying health and safety costs.
A violation of safety and health regulations can be costly too. Not only are court penalties involved, but so are illness absence costs, accident claims, and business reputation impact. It is also proof of a failure to fulfil a company’s moral responsibility to ensure a safe environment for its people and customers. That is why health and safety audits are essential for organisations.
In this post, we’ll discuss how much it costs to breach health and safety regulations, as well as why paying for health and safety audits and consultation is more efficient for business.
The Cost of Health & Safety Compliance vs a Fine
Most organisations’ credibility is damaged due to noncompliance with health and safety regulations. If an incident happens at your workplace due to poor risk management, the news will undoubtedly spread about your company’s lack of commitment to keeping employees, site visitors, or members of the general public safe.
If your company is discovered to have breached regulations, you might face penalties, fines, or even prison. Fines are the most prevalent punishment and one of the strongest deterrents to noncompliance.
The cost of compliance
Poor compliance with health and safety regulations, which results in a complaint, serious incident, accident, or fatalities, could be extremely costly to your company’s reputation. If an investigation conducted by the Health and Safety Executive or a Local Authority Environmental Health Officer reveals a lack of risk management on your side, you might be charged and seriously penalised in court through a fine and imprisonment. The average penalty for health and safety violations in the UK has climbed by 35% in a year.
For example, an international beverage business was fined £3 million plus £90,000 in additional charges when one of its employees died due to an ammonia gas leak. Another example is that, after a worker fell from a height and was gravely wounded, a relocation and refurbishing company was found guilty of breaching Section 3 (1) of the HSWA. Modus Workspace Limited was fined £1,000,000 and forced to pay £68,116.18 in costs. The investigation discovered that the London-based company had failed to guarantee that people not working for them were not exposed to danger.
This underlines the need to follow the appropriate procedures and put reasonable safety and security measures in place. You cannot always avoid incidents, particularly in an industry as volatile as a construction company, but you may lessen the penalties and keep your culpability level low by demonstrating that you have completed your obligations.
Investing in the proper training for your personnel and the appropriate tools for checking the environment your people and customers are in is crucial. A regular reassessment of your equipment and your health and safety regulations is a practical approach. Inform People includes all of this as part of our system. We designed our tools with health and safety in mind, but the applications extend well beyond that in multi-location businesses.
What is the nature of health and safety expenditure?
According to the HSE, an average of 610,000 employees were injured in workplace incidents between 2017/18 and 2019/20. Another 559,000 employees had a fresh bout of illness that they felt was caused or aggravated by their job.
The total expense of workplace self-reported injuries and illnesses was £16.2 billion in 2018/19, with employers covering £3.2 billion. Sickness contributed to 66% of this cost, with injuries accounting for 34%.
An estimated 38.8 million working days were missed because of work-related ill health and non-fatal workplace injuries in 2019/20. Stress, worry, or anxiety were responsible for 17.9 million days missed due to work-related illness, whereas musculoskeletal diseases were responsible for 8.9 million days.
Breach of Health and Safety Audit Compliance Fine
If a corporation breaches health and safety regulations or has a high-risk working environment or activity, an investigating authority, such as the HSE, may issue one of two kinds of enforcement notices:
Prohibition notice
When an inspector feels that a workplace or procedure is prone to accidents or personal injury, in that situation, they may issue a prohibition notice to prevent the work activity or process from continuing.
A breach of the law is not required for a prohibition notice to be issued. If the inspection authority considers the danger too serious, it may be issued. Once issued, the notification might go into effect immediately or be postponed on an individual basis.
Improvement notice
Unlike prohibition notices, improvement notifications allow an organisation to continue a certain work activity or procedure on the condition that employers first make specified efforts to eliminate or reduce the risks.
An improvement notice is often given when noncompliance or a violation of the law is discovered during an inspection. The improvement notification should include what needs to be fixed and when it needs to be done. Businesses are then required to carry out the instructions of the improvement notice by the specified timeframe.
HSE Prison sentences
The maximum penalty for failure to fulfil a duty under sections 2–6 of the Health and Safety at Work Act 1974 (HSWA) is determined by the date of the incident. The maximum punishment in magistrates’ court for offences committed before the 16th of January 2009 is a £20,000 fine. In the crown court, the maximum offence is an unlimited fine.
For offences committed between the 16th of January 2009 and the 12th of March 2015, the maximum penalty on conviction in magistrates’ court is £20,000 or imprisonment for a period not exceeding six months or both. In the crown court, the sentence is an unlimited fine or imprisonment for up to two years or both.
For offences that occurred on or after the 12th of March 2015, the maximum penalty in Magistrates’ Court is an unlimited fine and imprisonment for a time not exceeding six months, or both. The sentence in the Crown Court is an unlimited fine or imprisonment for no more than two years or both.
The most significant prosecutions taken by the HSE
Offences prosecuted are classified as separate breaches of health and safety regulations. A duty bearer may be charged with several offences in the same case. According to the most recent data on health and safety cases (at time of writing):
• In 2020/2021, the HSE prosecuted 199 cases, and in Scotland, the Crown Office, and Procurator Fiscal Service (COPFS) obtained a judgement, a 42% drop from the previous year.
• A conviction was obtained in 185 of the 199 incidents. A judgement was reached in 2020/2021 for at least one offence, with a conviction rate of 93%.
• Fines of £26.9 million were imposed on duty holders found guilty of health and safety breaches in 2020/21p, compared to £34.9 million in 2019/2020. The average fine was £145,00 per occurrence. This figure increased by 35% in 2019/2020 to £107,000.
How can organisations comply with health and safety regulations?
The simplest solution to prevent legislation breaches and prosecution is to guarantee that health and safety rules are followed inside an organisation. Your company is responsible for overseeing your employees’ health and safety.
As a result, conducting a regular audit may assist you in ensuring that the processes and training you have in place successfully identify new hazards, and that control measures are taken if issues are noticed. Conducting health and safety audits is a realistic and applicable approach to reducing accidents, incidents, and near-misses. It also demonstrates due attention and comprehension of the significant regulations of the Health and Safety at Work Act 1974.
Inform People will help you through the process and ensure that your health and safety tools work effectively. Our compliance and performance management software makes it simple and easy to create a custom safety audit checklist with all the features you need. Audits are a vital component of any successful health and safety management system, so if your company does not check to see how well its systems are performing, you may be passing up great possibilities to enhance productivity, raise quality standards, and even save costs.
Contact us to discuss how your company may benefit from actively managing the health and safety system.
