CIPD: Huge increase in company fines for health and safety offences @cipdlondon @cmi_managers #HR #Law

CIPD CIPD: Corporate manslaughter may cost larger organisations £20 million. New sentencing guidelines for courts dealing with corporate manslaughter, health and safety, and food safety offences were published recently. They will mean significantly higher fines for any case sentenced on or after 1 February 2016. Any HR professionals responsible for health and safety legislation compliance in their organisation, for example, those working in SMEs without dedicated health and safety departments, should be aware of the potentially devastating commercial consequences of future prosecutions.

The guidelines cover a huge range of offences. Examples of conduct which might expose an organisation to criminal sanctions include:

  • causing an outbreak of food poisoning due to a lack of proper hygiene at a food processing plant
  • neglecting residents at a residential care home
  • inadequate risk assessments on a building site where someone subsequently suffers an injury.

Previously, only corporate manslaughter and health and safety offences causing death were covered by specific guidelines and there was a sense that the process of calculating fines was insufficiently rigorous. Also, because courts do not deal regularly with health and safety matters, there was a lack of consistency in sentencing. In addition, there was concern that fines, particularly for larger organisations, did not fulfil the purposes of sentencing (punishment, deterrence, and public protection) and sometimes failed to reflect the seriousness of the harm caused and/or the culpability of the offender.

The most significant aspect of the new guidelines is a huge increase in fines for companies that are successfully prosecuted. In the past, fines for corporate manslaughter offences started at £500,000 and could go up to millions of pounds (the amount was unspecified); fines for health and safety offences causing death were £100,000 and upwards. In fact, fines rarely reached these minimums. The new guidelines provide a much more detailed calculation mechanism. For the most serious forms of corporate manslaughter committed by large organisations, for example, fines may be as great as £20 million.

The most important aspect of a company’s finances for the purposes of calculating any fine is turnover, rather than profit. The stated intention of such fines is to have a “real economic impact” and, in some cases, put a convicted organisation out of business. So it is important that any organisation considers its health and safety obligations properly.

Under the new guidelines, a convicted organisation must provide comprehensive accounting information to the court so that its financial status can be accurately assessed. If the court is not satisfied that sufficient reliable information has been provided, it may infer that the organisation can pay a fine of any size. So company directors (and, by extension, HR) will want to ensure that all requisite data is provided.

Sentencing guidelines only take effect once the worst has happened: a breach of health and safety legislation leading to prosecution and conviction. The aim of any organisation should, of course, be to avoid such situations. Whether the new penalty levels will prove an effective incentive to avoid prosecution is open to question. Statistics show workplace accidents and deaths are actually falling year on year. The number of organisations sentenced for health and safety and food safety offences has been decreasing since 2012 and the number of corporate manslaughter convictions is so small, it has barely reached double figures since the legislation came into force in 2008. It may be that better training or other measures might have a greater influence on compliance with legislation rather than ever harsher sentencing.

CIPD: VW offers staff amnesty in return for information on emissions scandal @cipdlondon @cmi_managers #HR #Law

CIPD CIPD: Whistleblowers must come forward before 30 November deadline, says employer. Volkswagen (VW) has urged employees with information about the emissions scandal to blow the whistle before 30th November and in return they will not face damage claims or lose their jobs.

The scandal, where some VW cars were producing 40 times the nitrous oxide emissions legally allowed in the US, is being investigated by American law firm Jones Day.

In a letter to employees, VW brand chief Herbert Diess said union employees who contacted internal investigators would be exempt from dismissal but might be transferred to other duties. The offer does not apply to managers.

Since the emissions scandal was uncovered, VW has not produced an explanation of what happened or who in the company is responsible. Diess said the offer was being made in the interests of “full and swift clarification” to “employees covered by collective bargaining agreements who get in touch promptly, but no later than November 30, 2015”.

The letter added that employees “may rest assured that the company will waive consequences under labour law such as the termination of employment, and will not make any claim for damages”.

While the company can ensure employees who whistleblow are not sacked, they cannot protect them from criminal charges.

Georgina Halford-Hall, operations director at Whistleblowers UK, said the case highlighted the overwhelming situation whistleblowers face. “Lots of people in management and the supply chain will know and will have turned a blind eye because it is about reputation over responsibility.

“The engineers ethical principles are clear – they do have to disclosure any actual or potential danger to the public or the environment. I would guess one of the key issues is that the business does not actually know how to handle whistleblowing. Businesses have policies and procedures in their organisations but somehow fail to follow them.

“My gut reaction is that this sounds like an ultimatum and not implementation and recognition of employee rights. [Volkswagen] also ought to be looking at why employees didn’t come forward sooner or what happened to those who did come forward and how the system became corrupted.”