Few other functions know the workplace and employees quite as well as HR. In many ways, managing health & safety is no different to managing any other part of a business; the core being the management of employees and how they work. Laura Thomas, Head of Corporate Criminal Defence team Birketts
Recent changes for organisations regulated by the Health and Safety Executive (HSE) in the form of the Fees for Intervention scheme (FFI) have increased the financial risks for breaching health and safety law. For the time being those managing HR in organisations regulated by local authorities (e.g. retail, offices and hotels) may breathe a sigh of relief, but a greater move towards Government bodies covering their costs may mean in future that similar schemes are adopted by local authorities. It is, therefore, important for all HR professionals to understand the reasoning behind and operation of FFI. Those who break health & safety laws will be liable to pay the costs of the HSE investigating ‘material breaches’. This will lead to an organisation paying £124 per hour for their ‘services’. HSE argues that staying compliant is the most effective way of avoiding unexpected costs.
FFI naturally prompted much discussion; “is this simply a fee generating exercise”? Having originally been due to be implemented on the 6th April 2012, the new legislation, which came into force on 1st October 2012, comes in the form of the Health and Safety (Fees) Regulations 2012. In March 2011 the Minister for employment announced the Government’s policy to reform health and safety. As a result, the HSE issued a consultation paper with a proposal for cost recovery. The consultation ran between July and October 2011 with the outcomes published by the HSE in December 2011.
The purpose of FFI is to allow the HSE to recover the cost of formal intervention. An organisation could be made to pay the costs of the HSE performing its function where there has been a material breach of health and safety law. The main principal behind the reform is that the costs associated with any breaches of health and safety law would fall onto the duty holder and not the taxpayer. The consultation raised a number of concerns including: The HSE changing its priorities to maximise receipts; Harm to the constructive relationship between the HSE and business; The definition of material breach and reliance upon the inspector’s opinion; That FFI can be triggered by a letter dealing with a material breach; Financial impact upon businesses, particularly SMEs; and The integrity of the disputes process.
Businesses that are compliant will not pay the cost of the HSE inspection. FFI will be triggered when there is a material breach. A material breach is one which where ‘in the opinion of the inspector a breach of health and safety law has been identified, which requires formal intervention in supporting the business in putting matters right.’ Formal intervention can take the form of a letter, instant visit report, email or notice. Considering this point, one can see why concerns were raised at the concept of 'material breach'. One inspector might consider an issue to constitute a material breach and another might not. There is no objective benchmark at which to set the standard. HSE have tried to address this in guidance for its inspectors (to be found on HSE website) but reality dictates that inspectors vary widely in experience and character, meaning their interpretation of situations will inevitably differ. Inspectors are required to record their reasons in writing, which provides some comfort, as this can then be objectively analysed but, as outlined later, the dispute process is largely internal to the HSE and could be timely and expensive if unsuccessful.
There is a two stage process of appeal. This allows an initial appeal to a senior manager at the HSE. If unsuccessful, the appeal may be progressed to a disputes panel consisting of a senior employee of the HSE and an external business representative. If the appeal is successful then any fees paid will be refunded, but if unsuccessful after stage two, the hourly rate of £124 will be applied for the appeal process itself. As noted, it remains to be seen if this appeal process provides any objectivity to the issue of 'material breach', and no costs will be sought from an investigation that does not lead to formal intervention. The scheme will be reviewed after the first 12 months of operation and thereafter within three years of it coming into effect.
