When the HSE published its annual statistics earlier this month, there was little surprise that construction remained an industry with a, "statistically significantly higher" than average workplace injury rate.
With around 6% of the nation's workforce but almost one third of work related fatalities, enforcement in the sector remains a key HSE priority. But how is this working in practice and what are the effects on a post-Brexit industry apparently at its weakest point in four years?
- Construction is one of our largest industries, contributing around 8% to GDP.
- The sector employs more than 2 million people.
- Fewer than 120 contractors are responsible for approximately one fifth of output.
- 85% of construction business are small (employing less than 15 people).
- Small construction businesses account for two thirds of fatal accidents within the industry.
- 43 construction workers lost their lives in 2015/16.
- Falls from height are the biggest cause of work related fatalities.48% of all fatal falls happened in the construction industry in 2015/16.
- Fee for intervention charges to the sector rose 26% in the past 12 months.
Construction is one of only three sectors still subject to proactive HSE inspection, a consequence of the ongoing battle to achieve consistent safety management across a diverse and risky profession.
The HSE's published Construction Sector priorities splits it efforts into three distinct categories:-
- Smaller sites/projects (<=15 people on site)
- Larger sites/projects (>15 people on site)
The HSE's conundrum is finding effective ways to educate and enforce across the spectrum of industry activities. On the one hand, the larger sites are well-resourced and managed but have the potential for catastrophic events. On the other, a proliferation of smaller sites exists where health and safety engagement is minimal and the primary (if not sole) motivator is completion to schedule and budget.
Of course the most powerful tool in the HSE's enforcement armoury is the ability to prosecute. We again saw the number of criminal court cases rise last year and the HSE continues to enjoy huge success; the conviction rate is 95%. And with the overwhelming majority of convicted defendants subject to a financial penalty, the new Definitive Sentencing Guideline implemented in February is having a telling effect on construction companies.
The new Guideline categorises defendant organisations by financial might, with turnover the accepted "blunt instrument" by which this is done. Businesses are either micro (turnover <£2m), small (£2m - £10m), medium (£10m - £50m) or large (>£50m). The mechanistic approach now adopted by the courts sees companies slotted into "category ranges" based upon an assessment of culpability, harm and, of course, their finances.
On its introduction, the Guideline was heralded as a means of addressing the perception that fines for health and safety cases needed to rise. Indeed, at the consultation stage it was recognised that, "fines…have in the past been criticised as too low relative to the harm caused, the culpability of the offender and, on occasions, to the means of the offender".
With the category ranges topping out at £10m per offence and a salutary warning from environmental sentencing that up to 100% of pre-tax net profit may be a suitable sum for a fine, the Guideline's implementation was a real source of (financial) concern. Within construction, worries abounded that fines based on turnover would have a disproportionately damaging effect on an industry with typically low profit margins. The expectation was that the new regime would deliver significantly higher headline grabbing fines, particularly for the larger organisations.
And in practice? We have seen more fines exceed £1m this year than we had seen in the previous 15 years combined. Where seven figure penalties were historically reserved for the public disaster or tragic cases of multiple fatalities, we now see fines at this level almost as a matter of routine. It is therefore true to say that larger organisations are getting bigger fines and the construction sector has been no exception to this.
However, the really interesting trends are amongst SMEs. Whilst we are yet to see a "large" construction business fined more than 0.1% of turnover, those in the "small" and "medium" categories are being deprived of far larger chunks of their turnover upon sentence. With penalties to date apparently running anywhere between 1.5% and 3.75% of revenues for breaches of health and safety law, the Guideline has perhaps unexpectedly created a new type of "squeezed middle". This is where the financial pain of sentencing is being felt most keenly.
On any assessment, the contribution of "small" construction businesses to the national industry wide fatality rate is disproportionate. With that in mind, when set in the context of safety performance rates in construction, it is to be hoped that the sentencing pattern evident to date will act as a deterrent, helping the HSE promote increased engagement with on-site safety management.