New sentencing guidelines for health and safety offences in England and Wales
that were confirmed last November come in to effect on the 1 February 2016
. Unusually the new sentencing arrangements will apply to all cases heard after that date irrespective of when the offence was committed.
Among the significant changes being made is a move from penalties based on profits to penalties linked to turnover. Turnover cannot easily be hidden; a business may only make a small profit (on paper) on a very large turnover. From now on it is turnover that the court will take into account.
In a 9 stage process magistrates and judges will have to consider issues including aggravating and mitigating factors, levels of culpability and harm. The guidelines create a matrix into which the details of the offence, the circumstances and turnover of the offender are plotted. This process then dictates the punishment.
Offending companies will be placed in one of four bands depending on turnover;
- Micro (with a turnover of up to £2m).
- Small (a turnover of between £2m and £10m).
- Medium (up to £50m).
- Large (more than £50m).
After 1 February fines could exceed £10m for serious health and safety breaches or £20m in corporate manslaughter cases, and even more for very large companies.
The previous starting threshold recommended for all corporate manslaughter convictions was £500,000, but under the new guidelines, a category A (high culpability) offence committed by a large organisation would start at £7.5m with a category range of between £4.8-£20m. A medium-sized company convicted of the more serious of two severity levels of Corporate Manslaughter Act breaches can expect a fine of between £1.8m and £7.5m, with a benchmark of £3m. For small organisations, a Category A offence would start at £800,000 with a category range of between £540,000-£2.8m. For micro-organisations the starting point for a fine after a high culpability corporate manslaughter offence will be £450,000, which is below the £500,000 suggested in the current guideline.
The changes should bring greater consistency to penalties imposed by courts across the country and to comparable businesses. The potential for higher penalties is in line with the government policy that the penalty for neglecting health and safety at work should be an incentive for all employers to effectively manage and comply with their duties.
Another significant change is that the guidelines specifically take account of exposure to risk of harm. Where previously a sentence has reflected the outcome of an offence from February the fact of the “exposure” to the risk of harm will be considered whether an injury has occurred or not. For example, where an employee has fallen from a ladder and suffered minor injuries, the guidelines could categorise this as a risk of death rather than looking at the actual injury e.g. a broken wrist.
The new sentencing guidelines have the potential to prove very costly to business when you consider that every year over 600,000 workers are injured in workplace accidents.
Businesses should be motivated to ensure their health and safety policies, procedures and management programmes are fit for purpose. Their risk assessments should be thorough and complete with action taken to make improvements where these are identified as necessary.
Peninsula BusinessSafe clients have access to management policies and arrangements, risk assessment guidance and a library of health and safety advice and information which if adopted and followed in practice should ensure continued compliance. Some will also have the assurance of regular visits by our BusinessSafe Consultants to evaluate their compliance; all will have access to our 24 hour Advice Service (0844 892 2785) where they can discuss existing and emerging concerns with our qualified and competent team of advisers.