The past month has seen an increase in the confirmed number of fatal workplace accidents and the second corporate manslaughter prosecution. Both should serve as a timely warning for company directors, HR Managers and other senior managers with health and safety responsibilities!
There has been an alarming rise in the number of workplace fatalities reported between 2010 and 2011. According to statistics from the HSE's annual review of reportable accidents, during this time 171 people were killed at work, compared to 147 in 2009 and 2010.
The biggest increase in fatalities came in the broad category of 'services sector', as well as in manufacturing, waste and recycling. The actual figures may well be higher, for example taking into account fatal accidents not reported to the HSE, or those accidents involving a death at work, but not investigated as a workplace accident. However, the overall fatal accident rate for last year was still less than the previous five year average and the UK's death at work rate is still one of the lowest in Europe.
The release of these figures also coincides with the second prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007. In July, the CPS announced that Lion Steel Ltd would be the second company to be prosecuted under the Act. A preliminary hearing was held in Manchester Crown Court on 2 August and the case is likely to progress further later this year.
One of Lion Steel's employees died in May 2008 when he fell through a fragile plastic roof panel on an industrial estate in Manchester. The company is also charged under section 2 and 33 of the Health and Safety Work Act etc 1974 for failing to ensure the safety of its employees. Under the Corporate Manslaughter Act additional charges for breaches of health and safety can be brought alongside the Corporate Manslaughter offence. Additionally, three directors are being prosecuted for individual gross negligence manslaughter and for individual offences under section 37 of the Health and Safety at Work Act.
This case follows the first conviction under the Corporate Manslaughter Act in February 2011 when Cotswold Geotechnical Holdings Ltd was fined £385,000. The Cotswold Geotechnical case was an anti-climax to the fanfare that accompanied the introduction of the Act. The Company had effectively been reduced to a shell by the time of the trial and the individual charges against the Managing director were dropped due to his ill health. It was also a small company with only 8 employees and not the type of organisation which the Act was introduced to catch.
The fine in that case was however the significant talking point. Cotswold Geotechnical applied for leave to appeal to the Court of Appeal against the size of the fine. In rejecting this, the Court of Appeal accepted that a significant fine had to be imposed, even if it meant that an unfortunate but inevitable consequence was the company being put into liquidation. In traditional cases under the Health and Safety at Work Act, the Courts have historically been reluctant to impose fines which would risk the defendant company going into liquidation.
The Lion Steel case could prove to be a better test of the Corporate Manslaughter Act. They are a medium sized company, having operated for over 50 years, with a number of directors and more than 100 employees. Some of the more challenging and uncertain aspects of the Act may be clarified such as who is "a senior manager", what weight is given by the jury to cultural factors and safety attitudes and what degree of causation is required in relation to any alleged "senior management failings".
However, the case does illustrate the wide array of regulatory charges, against corporate entities and individuals that are at the disposal of the CPS when prosecuting workplace fatalities. Given that the sentencing guidelines to the Act suggest fines for corporate manslaughter offences should seldom be less than £500,000, Lion Steel are likely to face a fine well in excess of this if convicted.
In addition, should the directors be convicted of individual gross negligence manslaughter (an offence which carries a maximum sentence of life imprisonment), they are likely to face a prison term of years rather than months. Of course, the threat of imprisonment doesn't apply to the section 37 offences as they pre-date the Health and Safety Offences Act, but they still face hefty fines and disqualification orders. We would not be surprised if further corporate manslaughter prosecutions were brought against other companies in the coming months, given the number of cases the CPS are currently investigating.
In view of the current spotlight on workplace fatalities, those people responsible for the organisation and management of workplace health and safety, irrespective of what level they operate at, cannot ignore their obligations. Depending upon the extent of their particular responsibilities in relation to formulating, implementing, managing and organising health and safety policies, procedures and practices, HR managers could well be classed as "senior managesr". Any health and safety failings by such people could put them and their organisation at real risk of a prosecution in the event of a workplace fatality or serious accident.
The Lion Steel case is a clear warning to businesses and senior individuals that the CPS is willing and able to prosecute alleged offenders for all relevant criminal offences, even those that carry the threat of imprisonment. The focus for all businesses and their senior management should be on good corporate governance, the creation of a positive health and safety culture and robust health and safety management systems.