Penalties — notices and fines

The Health and Safety at Work etc Act 1974 (HSWA) provides for three main systems of enforcement. These are:

• improvement notices;

• prohibition notices; and

• fines or imprisonment.

When an improvement notice is served, the employer must take action to put things right within a specified time. If the employer fails to comply, a prohibition notice may be issued, stopping the operation that is causing the hazard.

Inspectors have the power to issue an immediate prohibition notice, stopping an operation if there is a risk of immediate danger. A deferred prohibition notice may also be issued. Appeals against these notices must be made to an employment tribunal and can lead to a stay (delay) of execution of an improvement notice. There can be no delay in implementing a prohibition notice if the inspector believes that the risk of serious personal injury is imminent.

Fines are governed by the Health and Safety Offences Act 2008. There is a maximum fine of £20,000 for nearly all summary offences (those that can be heard by a magistrate sitting alone, rather than by a judge and jury and dealt with in a Magistrates Court), with unlimited fines in higher Courts. Judges can impose fines which consume or exceed company profits, even in cases where an employer has not been found to have deliberately cut corners to make a profit (R v FJ Chalcroft Construction Ltd [2008] EWCA Crim 770).

In 2013-14, the HSE prosecuted 582 cases, with a conviction secured in 547 cases, a conviction rate of 94%; prosecuted 988 offences, resulting in 881 convictions, a conviction rate of 89%; and prosecutions led to fines totalling £16.7 million, an average penalty of £18,944 per offence.

Local authorities prosecuted 92 cases, with a conviction secured in 89 cases, a conviction rate of 97%; prosecuted 199 offences, resulting in 192 convictions, a conviction rate of 96%; and prosecutions led to fines totalling £1.6 million, an average penalty of £8,225 per offence.

The annual figures are published on the HSE website at: www.hse.gov.uk/statistics/prosecutions.htm

Unions have long called for higher penalties for health and safety offences and have generally welcomed new sentencing guidelines proposed by the Sentencing Council in November 2014, although they say these do not go far enough.

The proposed new sentencing guidelines are for corporate manslaughter and health and safety (as well as food safety and hygiene) offences. The Sentencing Council says that new guidelines are needed because there is a lack of specific guidance for non-fatal health and safety offences; and because the guidelines for corporate manslaughter and fatal health and safety offences only cover those committed by organisations and not by individuals. It says there is also concern that some sentences have been too low, particularly those in relation to large organisations convicted of the most serious health and safety (and food safety) offences.

Following an analysis of current sentencing practice, it has proposed increasing sentence levels to ensure they are proportionate to the seriousness of the offence while taking account of the financial circumstances of the offender.

Under the proposals, sentences would be based on an organisation’s turnover and would mean that large companies convicted of corporate manslaughter would face fines of up to £20 million; while companies convicted of health and safety offences resulting in a fatality could face fines of up to £10 million.

Unions and the TUC broadly welcomed the proposals, but say that they do not go far enough. For example, the TUC says that courts should be recommended to seek a “forensic accounting audit” of a company’s means where there is doubt, and that courts should also take into account the position of parent or satellite companies.

In addition, the TUC and unions including the general GMB and Unite unions are concerned that the guidelines do not deal with “Phoenix” companies, which are wound up prior to conviction or sentencing only to reappear under a different guise later. Construction company UCATT has called on the government to outlaw this practice by allowing the HSE to apply for a freezing order from the court to prevent a company going into administration following the death of a worker.

And unions says that one of the biggest omissions in the guidelines relates to the issue of disqualification of directors. It compiled figures in 2014 showing that the disqualification of directors for health and safety failings is very rare, and a recent LRD Workplace Report analysis of prosecutions following work-related fatalities confirms that this is still the case. Just three directors were disqualified between 1 April 2014 and 31 March 2015.

Prospect said it would welcome consideration of creative, restorative justice solutions that may offer society greater benefits along the lines of community service, but in the workplace.

A January 2014 Department for Work and Pensions (DWP) report showed how the courts had been tougher on employers who breach health and safety laws following changes under the Health and Safety Offences Act 2008.

The report shows that more cases are being dealt with by the lower courts (86%) with higher fines (an increase of 60%) and more imprisonment sentences being handed down, as offenders can now be sent to jail for the majority of health and safety offences.

Health and Safety Offences Act 2008: Post legislative scrutiny Memorandum to the Work and Pensions Select Committee, can be downloaded at: www.gov.uk/government/uploads/system/uploads/attachment_data/file/271436/h_s-post-legislative-scrutiny-memo-january-2014.pdf