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Background

In 2000 the Government published its strategy on health and Safety 'Revitalising Health and Safety. One of the planks of the strategy was the need for greater corporate responsibility and a review of the role of directors. The strategy called for two things. Firstly that the HSE develop a code of practice on Director's responsibilities and secondly that 'The Health and Safety Commission will also advise ministers on how the law would need to be changed to make these responsibilities statutory so that Directors and responsible persons of similar status are clear about what is expected of them in their management of health and safety. It is the intention of ministers, when parliamentary time allows, to introduce legislation on these responsibilities.'

Since then we have had the voluntary guidance (twice in fact) but, almost ten years after the strategy was launched, we are still awaiting the promised legislation. The Health and Safety Commission did in fact discuss the issue but were unable to reach a consensus on how to change the law. While the other plank of corporate responsibility finally because law last year nothing has happened in respect of a legal duties on directors.

The issue has not however gone away. In addition to calls for action from trade unions and victim support groups, many safety professionals and safety journals have backed the call for legislation. In July 2009 the independent inquiry into construction, chaired by Rita Donaghy, recommended 'that there should be positive duties on directors to ensure good health and safety management through a framework of planning, delivering, monitoring and reviewing'. Four days later the Work and Pensions Select Committee also called for a legal duty on directors to be introduced as soon as possible.

The current position

The Health and Safety at Work Act (HSW Act) says 'it shall be the duty of every employer to ensure, as far as is reasonably practicable, the health, safety and welfare of all his employees' It also places a duty on employers and the self-employed to conduct their business in a way that does not expose the public to risks to their health or safety. These are positive duties. This means that the courts can prosecute them not just because of something they have done, but because they have failed to do something. Most prosecutions take place because of that. There are also duties imposed on designers, manufacturers, importers and suppliers. Employees also have a duty to take reasonable care of themselves and others 'who may be affected by his acts or omissions'.

Most prosecutions for breaches of the HSW Act are against employers. However in the case of most workplaces, the employer is not an individual but a company or public body. So the prosecution is of the body. In some cases individual managers are also prosecuted, but in most cases the prosecution is of the company or organisation that is the employer.

However that organisation really only exists as a piece of paper. You cannot put a company or local authority in jail if it kills someone. However companies do not make decisions, individuals do

.

The HSW Act does however mention directors, but unlike employers, directors have no positive duties imposed on them. Section 37 says a director can be prosecuted if an offence committed by the company or other body 'is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate'. This is very different from the situation of employers who have a positive duty to protect the health and safety of their workforce.

What the law means in effect is that a director can only be prosecuted for something they have done, or if they have neglected to carry out a duty that they had. As the HSW Act does not impose any duty on directors they can only be prosecuted if it was part of their duty as a director in the organisation to do something. This means that while it may be possible to prosecute a director who is given responsibility for health and safety or who has specific duties that relate to safety as part of their role, directors who choose to take on no responsibility cannot be prosecuted unless you can show that they specifically did something which contributed to a death or injury. This is more likely to be able to be demonstrated in small organisations where directors have a day to day involvement in operational issues, than in large organisations where the role of directors is seen as strategic. Of the those cases taken under section 37, none are of the directors of large companies and most have been against the 'hands-on' managing directors of small building companies, gas fitters or similar SMEs where a death or injury could be attributed to the actions or neglect of the individual.

If a death takes place a director can be prosecuted for manslaughter but only if they are shown to have been criminally negligent. However such prosecutions are extremely rare and, again, can usually only be used against directors of small companies.

There is a power to disqualify a director for health and safety failures under the Companies Directors Disqualification Act 1986, but that is very rarely done. In fact research for the HSE only managed to identify 7 cases where this had been used since 1986 and in every case the director had been prosecuted under section 37 of the HSW Act. At the same time there are many companies that have been prosecuted on several occasions for breaches of the HSW Act where no application has been made for their disqualification.

Need for change

Many directors of both public bodies and private companies do in fact take an interest in health and safety. 65% of larger companies claim that health and safety appears on the agenda for board meetings, and 58% have nominated a member to champion health and safety at board level. Both of these are key recommendations in the current voluntary guidance.

However that means that 35% of companies have boards that never have health and safety on the agenda of their board. This is despite eight years of voluntary guidance stating that they should do so. Additionally, only 31% of boards set targets for health and safety. This is another recommendation within the voluntary guidance.

That means that those who set the strategic direction of an organisation, who allocate resources and who oversee operations often have no awareness of the health and safety implications of their decisions. They can make decisions on resources, or on staffing, without considering what that may mean to the health or lives of those that they employ. This can have serious implications as the report into the management of BP after the Texas City disaster showed.

The current law means that if a board of directors refuses to have any involvement in health and safety, however bad the record of the company, there is almost nothing that can be done to force them to take responsibility beyond disqualification (which is almost never done).

It is clear that the voluntary approach has failed to ensure that directors in all organisations, public and private, take responsibility for the health and safety of the staff they employ. Even if it has led to a majority of boards of organisations receiving regular reports on health and safety, or appointing a 'champion' at board level, there is still nothing that can be done about those companies that do not. These are companies where the only concern of the board members is the bottom line. It is because of these organisations that we need a specific legal duty on directors. Directors of companies who are already complying with good practice will have nothing to fear from such a duty. It is only those who think they can continue to get away with ignoring the call for corporate responsibility who would be at risk if they continue to run organisations that put the lives of their workers at risk.

What change is needed?

Over the years a number of proposals have been made for changing the law to make directors more accountable for their actions (or lack of them).

One proposal, contained in a private members bill was is changing company law to place 'a duty upon all company directors to ensure that their company complies with health and safety law'. Unfortunately such a duty would only apply to the directors of companies, and not to the boards of public bodies such as health trusts or local authorities.

In 2003 a bill was introduced in parliament under the 'ten minute rule', to require companies to appoint a health and safety director. Although this bill (which was never debated) would have applied to the public sector as well as the private sector, it could have led to 'scapegoating' whereby the board placed all responsibility for health and safety on one person but continued to ignore their own collective obligations.

A third proposal has been for the development of an 'Approved Code of Practice' under the HSW Act. While this would be welcomed, a Code of Practice can only relate to an existing duty under the Act.

This leaves changes to the primary legislation itself, the Health and Safety at Work Act. Two suggestions have been made. The Centre for Corporate Accountability has proposed a new duty on directors to ensure that their organisation is fulfilling the existing duties placed upon them. This however relates the duty on directors to other duties and is likely to be confusing.

A second proposal, considered by the HSC in 2006 proposed 'a general duty on individual directors, framed in terms of a general duty, 'to take all reasonable steps to ensure health and safety'. The duty would be placed alongside the stand-alone section in the main body of the HSW Act alongside the other main sections such as 2 and 3 and would complement the long established, general duties placed on duty-holders by the HSW Act which are qualified by 'reasonable practicability' and, as is the case with this duty, are goal-setting rather than prescriptive. Therefore, we would anticipate that the duty would fit relatively easily into the existing legislative architecture for occupational health and safety.' this would be a considerable step forward, however this duty needs to be developed so that it is clear what is expected of directors.

The preference of the TUC would be for a new general duty on directors, under the HSW Act, as suggested to the HSC in 2006, but backed up with an Approved Code of Practice which spelled out exactly what directors should do. This could be based on the current voluntary guidance. It would mean that directors, individually and collectively would have to take steps to assure themselves that their organisation was ensuring health and safety, but through the provisions of an Approved Code of Practice it would be made quite clear to directors what this means in practice.

This new duty would be the biggest driver yet in changing boardroom attitudes towards health and safety.

Briefing document (1,900 words) issued 15 Dec 2009