Health and Safety Penalties vs. Compliance Cost

All organizations invest in health and safety systems and planning, but do you understand the difference between average safety compliance costs and fines for negligence? According to a new study from Arinite, a health and safety consulting firm, small and medium-sized businesses (SMEs) that invested in health and safety avoided a £75k punishment.

Businesses are penalized an average of £147,000 for each convicted case, totaling £72.6 million, according to the UK’s HSE. Health and safety compliance, on the other hand, starts at £5,000 or less.

Due to the nature of the work: working from heights, working with gas, and other dangerous activities, the manufacturing and construction industries generally earn the highest fines. The average fine in utilities and extractive industries, on the other hand, is far higher. Although there were only 18 instances in the utility industries in 2016, the average fine was £409,729, well exceeding the industry average of £147,000 for the year.

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Remember that these are merely monetary costs. A severe accident can result in worker injuries and illness, as well as public relations consequences if the violations make the news. According to the HSE, the overall cost of work-related injuries and illnesses in 2014/15 was £14.1 billion, with the employer covering £2.8 billion.

Why Should You Invest in Health and Safety Compliance?

Aside from the cost of a fine, there are numerous reasons why a company should invest in health and safety. Moral obligation and concern for employees, for example, are compelling considerations in and of themselves. In industries where health and safety planning is evident, company policy and simple common sense also play a role (the case in manufacturing and construction, for example).

All businesses desire to stay away from negative publicity. There have been high-profile examples that have irreparably damaged a company’s reputation. The Smiler roller coaster crash at Alton Towers was the country’s worst health and safety event in 2016, resulting in the loss of two adolescents’ legs and a £5 million fine for the corporation.

Why, with all of these considerations, do so many businesses still fail to comply? The majority of large companies have a documented health and safety policy, an accident reporting system, and a health and safety professional. Most accidents are preventable, and while financial investment is a factor in preventing them, simple employee communication and establishing a safety culture can save lives.

Tips on How to Avoid a Major Safety Penalty

It’s difficult to assess one’s level of compliance. The Institution of Occupational Safety and Health (IOSH), for example, offers tips on how employers might avoid fines.

The following are the primary criteria that contribute to the severity of an offense:

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

It’s worth examining your company’s safety measures in 2022 to ensure that they go above and beyond compliance. While health and safety fines continue to plague some businesses, compliance is a bargain in comparison, making it the logical decision.