Health and Safety Fines vs. the Cost of Compliance

All businesses invest in health and safety systems and planning—but do you know the difference between your average safety compliance spend and  negligence fines? New research from health and safety consultants at Arinite revealed that small and medium-sized enterprises (SMEs) invested in health and safety avoided a fine with a £75k difference.

According to the UK's HSE, businesses are fined an average of £147,000 per convicted case - totalling a massive £72.6 million. In contrast, the cost of health and safety compliance starts at £5k.

Manufacturing and construction industries typically receive the largest fines due to the work's nature: working from height, working with gas, and other dangerous activities. However, the average fine in utilities and extractive industries is far higher. In 2016, there were only 18 incidents in utility industries, but the average fine was £409,729—well above the industry-wide average of £147,000.

Average H&S Breach Fines

Bear in mind that this is only monetary costs. A major accident also means injuries and ill health sustained to workers, and PR costs when the offenses make headlines (learn How to Look After You Business' Safety Reputation). The HSE estimate that the total cost of injuries and ill health from working conditions in 2014/15 was £14.1 billion, £2.8 billion of which were covered by the employer.

Why Invest in Health and Safety Compliance?

There are many reasons a business should invest in health and safety, above and beyond the cost of a breach fine. Moral duty and care for staff, for example, are strong enough reasons alone (for a related discussion, see The Moral Safety Compass). Company policy and simple common sense also play a part, particularly in industries where health and safety planning is apparent (the case in manufacturing and construction, for example).

Bad publicity is also something all companies want to avoid. There have been high-profile cases damaging a company’s reputation beyond repair. The Smiler roller coaster crash at Alton Towers was the country's biggest health and safety incident in 2016, costing two teenagers their legs and leaving the company with a £5 million fine.

With all these reasons, why do many companies still fail to comply? The majority of major organizations are likely to have a written health and safety policy, an accident reporting system, and a health and safety pro (see How Many Safety Pros Do You Need to Hire? to find out whether you are adequately staffed). Most accidents are  avoidable, and while investment is a factor in preventing them, simple communication between employees and fostering a culture of safety can save lives.

Tips for Avoiding a Heavy Health and Safety Fine

It can be tough to judge how compliant one is. Helpfully, the Institution of Occupational Safety and Health (IOSH) has advice on how businesses can prevent fines.

The main factors increasing offence severity include:

  • Cost-cutting safety budget
  • Concealing illegal activity
  • Breaching a court order
  • Obstructing justice
  • A poor health and safety record

Factors reducing severity include:

  • Effective health and safety procedures
  • Evidence remedying problems
  • Decent cooperation with the investigation
  • A good health and safety record, without previous convictions

In 2019, it is worth reviewing your company's safety practices to ensuring above and beyond compliance above. While health and safety fines continue to dog some companies, the cost of compliance is cheap as chips in comparison, and therefore, the obvious choice.

This guest post by Luke Rees was originally published on Safeopedia website here.

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Luke Rees writes about issues related to the workplace; including stress, gas safety, as well as EU safety standards and how they are regulated.