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Unit GIC1 · Element 1

Why We Should Manage Workplace Health and Safety

Three arguments carry the case for managing health and safety: it is the right thing to do, the law demands it, and accidents cost real money. This element looks at each one, then at the people inside and outside an organisation who share the work.

5 pages, about 16 minutes to read

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Use all three arguments when you ask management to actThe moral caseDuty of care to staffEvery worker has a rightto go home safeHarm is never acondition of employmentFamilies and society areaffectedThe legal caseLaws set minimumstandardsEnforcement notices,fines and prisonCivil claims forcompensationA criminal record limitscareersThe financial caseCheck policy terms andexclusionsUninsured losses vary byincidentLost output, repairs,hiring, contractsReputation is hard torebuild
Figure 1.1 Three arguments for managing health and safety

1.1 Morals and Money

Moral and societal expectations of good standards of health and safety

Morals are the shared rules of behaviour that a society uses to decide what counts as right and what counts as wrong.

Most practitioners agree that the moral argument should come first when an organisation decides to control risk. Without it, an employer may slip into treating the wellbeing of the workforce as less important than profit. Nobody should be hurt or made ill simply because of the job they do. The main moral reasons for providing a safe workplace are listed below.

The financial cost of incidents

Incident costs fall into two overlapping pairs: insured against uninsured, and direct against indirect. Understanding both pairs shows why the true bill is far larger than most managers expect.

Insured and uninsured costs

Insurance may cover some incident costs, but it does not remove the full financial consequences. HSE identifies uninsured losses and reputational damage among the business costs of poor health and safety. The balance depends on the incident and the policy; there is no universal ratio of uninsured losses to insured costs or premiums.

Insured costsSubject to policy termsexamples depend on the coverUninsured costs, paid by the employerlost time of the injured and of colleagues · supervision timedamaged plant, product and raw materials · repairshiring and retraining · overtime and temporary labourproduction delays · investigation time · emergency suppliesfines · legal costs · lost contracts · damaged reputationIllustrative iceberg: no fixed ratio of insured and uninsured costs
Figure 1.2 Insured costs sit above the water and uninsured costs below

Insured costs are costs covered by the relevant policy, subject to its terms, limits and exclusions. Medical expenses, compensation or property repairs may be covered, but none should be assumed insured without checking. Uninsured costs fall on the organisation and can include:

Direct and indirect costs

Direct costs are immediate expenses that can be measured and that arise straight from the accident. Examples:

Indirect costs are the hidden expenses that sit underneath an accident. They cannot be measured at once, yet they affect productivity, operations and finances. Examples:

Direct costsFines imposed by criminal courtsFirst-aid treatmentSick payRepair or replacement of equipment andbuildingsLost or damaged productImmediate emergency responseIndirect costsStaff time spent investigating,reporting, visiting hospital andattending courtLower morale, productivity and qualityRecruiting, training and recoveryovertimeCustomers losing goodwillDamage to public imageDamaged industrial relationsvs
Figure 1.3 Direct and indirect costs of an accident
Page 1 of 5 in this chapter · page 1 of 39 in the book

Summary notes for Element 1 · Cheat sheet · Glossary. A study aid, not published or endorsed by NEBOSH.

Written by Imran Qureshi (NEBOSH)