HEALTH & SAFETY - DIRECTORS AND SENIOR MANAGERS

Developments in the area ofhealth and safety make it essential for directors and senior managers to revisit their health and safety responsibilities:

• Corporate Manslaughter and Corporate Homicide Act 2007.
• Fines for Health and Safety Breaches are on the increase and fines exceeding £100,000 for health and safety offences are now relatively common.
• Employees can seek injunctions against employers who fail to comply with health and safety regulations.
• The courts are reflecting the public desire that companies and individuals be held to account in the criminal courts for their health and safety record following death or injury in the workplace.

There is a common law duty on companies to provide a safe and healthy place of work for its employees and to ensure that others who may be affected by its activities are not exposed to unnecessary risks. That common law duty has been around for a long time. The regulatory regime with regard to health and safety becomes ever more robust and with the advent of the new law relating to corporate manslaughter it is an opportune time for businesses to revisit their health and safety practices and policies.

Current law

The Health and Safety at Work Act sets out the basic health and safety duties of a company, its directors, managers and employees.

The range of legal obligations is extensive. The most important are:

• Employers are responsible for ensuring the health and safety of their employees and those who have been affected by their activities so far as reasonably practicable.
• An employer must assess and review the work related risks faced by its employees and by others affected by the company's activities. This risk assessment must be "sufficient and suitable."
• An employer must make and give effect to appropriate arrangements for the effective planning, organisation, control, monitoring and review of the preventative and protective measures.
• An employer must audit the adequacy of these procedures.
• One or more competent persons must be appointed to implement the measures needed to comply with health and safety law.
• An employer must provide its employees with understandable and relevant information and training on the risks they face and the preventative and protective measures to control those risks.
  
  

Employers with over five employees must also:

• Produce a written health and safety policy.
• Describe the arrangements for putting the policy into practice.
• Bring the policy and any revision of it to the attention of employees.
• Revise the policy whenever appropriate.
• Record appropriate arrangements for the effective planning, organisation, control, monitoring and review of the preventative and protective measures.
• Record the significant findings of risk assessments and any group of employees identified by it as especially at risk.

A breach of the statutory obligations will constitute a criminal offence by the company, leaving it open to a range of sanctions.

Thames Trains was fined £2 million after pleading guilty to breaches of the Health and Safety at Work Act for the Paddington train crash.

Individual liability

An individual director, company secretary or senior manager of a company can be held criminally responsible for health and safety offences where:

• The company itself is found guilty of a health and safety offence.
• The offence was committed with the consent or connivance of or was attributable to any neglect on the part of the director or manager.
• "Consent" means knowledge and awareness of the circumstances and the risk which caused the health and safety failure.
• "Connivance" means knowing and not doing anything about the risks.
• "Neglect" means unreasonably breaching a duty of care.

In addition, a director convicted of a breach can, in certain cases, be disqualified from being a director for up to two years.

Manslaughter

An individual commits manslaughter where he causes a death through gross negligence. The jury must be satisfied that:

• The defendant owed a duty of care to the deceased.
• There had been a breach of this duty of care.
• The breach was so grossly negligent that the defendant can be deemed to have had such disregard for the life of the deceased that the defendant's conduct should be seen as criminal and deserving of punishment.

Prosecutions of company directors for manslaughter are hard to secure but there has been an increase:

• In July 2004 the managing director of a company was convicted of the manslaughter of a young apprentice killed in an explosion at Princess Yachts International Yard. The managing director was sentenced to twelve months' imprisonment.
• In September 2005 a company director was sentenced to twelve months' imprisonment for the manslaughter of an employee at a paper recycling business.
• In January 2005 a managing director was sentenced to fifteen months' imprisonment after an employee fell through a skylight.

Since 1990 it has been possible to charge a company with manslaughter but successful prosecutions have been very difficult:

• It was impossible to secure a prosecution of P&O Ferries in relation to the Herald of Free Enterprise disaster.
• The Court of Appeal threw out seven charges of corporate manslaughter against Great Western Trains.
• Corporate manslaughter charges were dropped against Network Rail in relation to the Hatfield rail crash.

Criminal offences, generally speaking, require not only a criminal act but a criminal state of mind. It is extremely difficult to show that a company has a criminal state of mind when it comes to manslaughter.

Corporate Manslaughter and Corporate Homicide Act

The objective of the Corporate Manslaughter and Corporate Homicide Act was to overcome the difficulty of attributing a criminal state of mind to a company. The Act comes into force on 6 April 2008 and establishes the new offence of corporate manslaughter.

Corporate manslaughter arises where the way in which an organisation's directors and senior managers manage or organise the organisation's activities in such a way that a person's death is caused. There is no requirement to show that the company has a criminal state of mind. A company is guilty of corporate manslaughter if the way in which its activities are managed or organised amounts to a gross breach of a duty of care and causes a person's death.

The way the senior management of the organisation manages or organises its activities must make up a substantial element of the breach of duty which causes the death.

The term "senior management" is defined to mean those persons who play a significant role in the management of the whole or a substantial part of the organisation's activities.

Steps to be taken

Most companies have already taken many of the necessary steps as part of their risk management policy and, in any event, pride themselves on taking a responsible attitude towards the safety and welfare of their staff. However, the advent of the new offence means that it is opportune to look at the management and organisation of the enterprise from a safety point of view to ensure that all necessary steps have been taken.

The ultimate responsibility for health and safety rests with the board and the senior management. The board must establish policies and procedures which ensure compliance with relevant health and safety legislation.

Furthermore, the board must ensure that the system of controls which has been put in place works properly and ensure:

• Ongoing review. The board should receive and review reports on a regular basis on internal health and safety controls from those charged with day to day health and safety management.
• Annual review. The board would be well advised to undertake a specific annual assessment of health and safety policies specifically reviewing risk, the company's ability to respond to risk, the scope and quality of management's ongoing monitoring of the system and significant control weaknesses that have occurred.

In short, the board would be well advised to have health and safety as a standard agenda item and perhaps once a year have a board meeting focused solely on health and safety. There is a responsibility on each director and senior manager to consider health and safety and form his or her own view on whether the company's processes are effective in managing health and safety risks. Once the board and/or senior managers become aware of any deficiencies within the company's health and safety control systems, remedial action should take place and there should be an immediate reassessment of the procedures for assessing the effectiveness of controls.

HSC Guidance

The HSC has published guidance notes to assist all board members and senior managers to understand their health and safety responsibilities and to better manage health and safety within their organisations.

The guidance contains the following recommendations:

• The board needs to accept its collective role in providing health and safety leadership in the organisation.
• Each member of the board and each senior manager needs to accept his or her individual role in providing health and safety leadership for the organisation.
• The board must ensure that all board decisions reflect its health and safety intentions as articulated in the company's health and safety statement.
• The board needs to recognise its role in engaging the active participation of all members of the organisation in improving health and safety.
• The board must ensure that it is kept informed of and is alerted to relevant health and safety risk management issues.
• The board should appoint one of their number to be the "Health and Safety Director" to have overall responsibility for health and safety.

Board level responsibility

Directors and senior managers must ensure that they are kept informed on a regular basis of the company's health and safety risks and performance. To achieve this, companies would be well advised to assign responsibility for health and safety to a director or, possibly, alternatively allocate health and safety responsibilities to a senior manager. The appointed individual should be charged with keeping the board regularly informed of health and safety matters.

It must, however, be borne in mind that responsibility for health and safety does not stop with the health and safety director or the senior manager to whom responsibility has been allocated. A collective effort is required to manage the health and safety of a company.

Government Strategy Documents

The Government is anxious to ensure that directors and senior managers take direct responsibility for improving health and safety standards in the workplace.

The Government is keen that:

• Employers take their health and safety responsibilities seriously, involve the workforce fully and properly and effectively manage risk.
• Address new and emerging work-related health issues.
• Achieve higher levels of recognition and respect for health and safety within the business.

Risk management and insurance

The advent of the new law relating to corporate manslaughter means that however well managed an organisation, the organisation will be well advised to look at the management and organisation of its activities from a health and safety point of view. Having done that, it would be sensible to ensure that employers liability insurers and public liability insurers are aware of the process that has been undertaken in the hope that good risk management will have a favourable impact on insurance premiums