The Cost of Failure
Managing safety is not easy. You must make tough decisions, work with tight budgets, make sure work deadlines and targets are met, and at any point what seems the best decision at the time could turn into a serious mistake. Here are a few brief examples that help to focus the mind from January 2023:
1 – (Civils) A Civil engineering firm has been fined more than £4m after its workers twice struck overhead powerlines while working on the M6 motorway causing cables to land in the path of passing vehicles
2 – (Workplace Transport) A wine and drinks supplier has been fined after a visiting HGV driver was killed after being hit by a forklift truck at its depot in Salford. The company were fined £800,000.00
3 – (Engineering Workshop) A company has been fined after a worker’s hand was pulled into a large drill causing severe injury and were fined £76,000.00
4 – (Roof Work) – A company has been fined £120,000 after a dad died following a fall from the roof of a building site.
When things go wrong injuries occur and in worst case scenarios even a fatality may also occur, which will result in the business and or an individual of the business being investigated, ultimately cost are incurred and can be defined as Direct and In-direct costs.
The following are some examples of Direct and In-Direct costs that may occur:
Direct and In-direct Costs
– Extra wages – overtime – temp labour
– Lost production – Late delivery penalties
– Sickness Pay
– Liability to fulfil contracts
– Damage to plant, equipment, product
– Fines and legal costs
– Management time for investigation
– Insurance increased costs
– Enforcement action costs
– Loss of expertise or key personnal
– Loss of business reputation
– Compensation claims
When considering how you are going to manage health and safety, ask yourself and other members of the team the following questions:
- What if a serious workplace accident occurred?
- How would your business cope,
- What would the effects be,
- How would it make you feel especially if the accident was similar to one of the example prosecutions above.
So, how can you take control of the company’s future to reduce those costs and what can you do to protect yourself and your workforce?
It is worth considering a simple method referred to as the PDCA method which breaks down into:
Plan: As a management team, sit down and agree an effective health and safety management policy. Produce a policy that is an integral part of your organisation’s culture. Communicate the policy to everyone within the organisation. Make sure Health and safety has a regular slot on your meeting agendas and not just production targets.
Do: You will need an effective management system in place in order to successfully implement the policy. Ensure health and safety arrangements are adequately resourced, obtain competent health and safety advice and make sure employees are involved in decisions that affect their health and safety also.
Check: Monitoring and reporting is essential. Maintain audit records to demonstrate the effectiveness of management structures and risk controls for health and safety. Review the information held regularly and implement small cycles of change to continuously improve the policy and its implementation.
Act: A formal documented review of your health and safety performance is necessary. It allows you to establish the principles that have been embedded in the organisation and it tells you if your system is effective in managing risk and protecting people. This can be via an in-house or external audit identifying both controls in place and any that are not which require attention.
Although the above examples are on the high end of fines, consider an everyday scenario where a business has received a visit from the enforcing authorities and have found that the use of a forklift truck is not in line with current regulations. They provide fees for intervention costs of say 10 hours work at the current rate of £163 per hour, which may result from preparing reports, gathering advice, obtaining specialist advice, discussing issues with you and talking to your staff. Other factors may be how long the inspector’s visits last for, the time it takes investigating your case and time spent on taking action against your business, so overall in this example approximately £1630.00.
So, in the overall scheme of business improvement, why not evaluate what is required and PDCA to ensure your statutory obligations are in place this may have cost you £200.00 for a service, £250.00 for a thorough examination and £250.00 for putting an employee through training. So, the Dilemma is do I risk getting caught and not spending £700.00, which in real terms would have cost you £1630.00 plus the £700.00 to be able to use the forklift truck in line with my duty of care, it makes good business sense to control your business risks and everyone gets to go home safely.
Author: Paul Jackson, Health & Safety Advisor at Howarths