Business Ethics and Law

Morals and Money

• Moral expectations of good standards of health and safety:
  • Definition of morals: concerned with or relating to the distinction between good and bad, or right and wrong behavior according to conscience or principles.
  • Moral obligations consider beyond just our responsibilities to the health, safety, and welfare of our employees.
  • Employers owe a duty of reasonable care to anyone affected by their activities, including contractors, visitors, members of the public, customers, and suppliers.
• Financial costs of incidents (insured and uninsured):
  • Employers' Liability Insurance in the UK:
    • Legally required to insure against the injury or ill-health of employees.
    • Minimum cover of five million pounds.
  • International standards:
    • ILO Convention C121 and national legislation.
• Direct and indirect costs:
  • Direct costs: immediate costs of the accident, including damage to equipment, loss of worker, and fines or compensation.
  • Indirect costs: less obvious costs, such as replacement labor, clean up, loss of sales, and loss of confidence of the workforce.
• Uninsured costs:
  • Estimated at about ten times the amount of the actual incident.
  • Include indirect costs, such as repair or replacement of damaged machinery or equipment, and hiring additional labor.
• Benefits of health and safety:
  • Improve production and product quality.
  • Boost motivation within the workforce.
  • Lower staff turnover rate.
  • Save on retraining and job advertising costs.
  • Improve organization's image and reputation.
  • Develop goodwill and stronger relationships with other organizations.
  • Result in further business and profitability.

National and International Standards

• UK legislation:

  • Employers' Liability (Compulsory Insurance) Act 1969.
  • Minimum cover of five million pounds for Employers' Liability Insurance.

• International standards:

  • ILO Convention C121.
  • ILO figures: 2.78 million deaths per year, 374 million non-fatal work-related injuries each year, and 3.94% of global Gross Domestic Product.
  • ILO resources: https://www.ilo.org/global/topics/safety-and-health-at-work/lang--en/index.htm and https://www.ilo.org/dyn/normlex/en/f?p=NORMLEX- PUB:12100:0::NO::P12100_ILO_CODE:C121.### Why We Should Manage Workplace Health and Safety

• In some countries, employers must have internal resources to manage workplace health and safety, which includes investigating accidents and incidents, attending court, and facilitating enforcement officer visits.

Morals and Money

• Employers can face financial losses due to accidents and incidents, including:
  • Loss of expertise and experience
  • Loss of morale and bad publicity
  • Product and material damage
  • Lost production time
  • Legal costs
  • Investigation time and administration
  • Fines
  • Supervisors/first aider time
  • Overtime and temporary/relocated labor
  • Additional recruitment and training
• Example: An engineering firm faced a total cost of £80,000 due to an accident, including wages for the injured worker, lost production, replacement worker wages, increased insurance premiums, and fines.

The Force of Law – Punishment and Compensation

• Employers must comply with health and safety laws to avoid punishment and compensation.
• Sources of law:
  • Statute law: written law introduced through the parliamentary process, e.g. Health and Safety at Work etc., Act 1974.
  • Common law: precedents and case law.

Statute Law

• Statute law includes:
  • Acts of Parliament: general duties and provisions for Regulations and Approved Codes of Practice (ACOPs).
  • Regulations: specific details on hazards and activities, e.g. Management of Health and Safety at Work Regulations 1999.
  • Approved Codes of Practice: recognized interpretations and methods to comply with legislation, e.g. Workplace (Health, Safety and Welfare) Regulations 1992.
  • Official guidance: best practice and recommendations.

Criminal Law Liabilities

• Employers can face criminal law liabilities, including:
  • Fees for Intervention (FFI) for material breaches of legislation.
  • Powers of inspectors, e.g. enforcement notices, simple cautions, and prosecution.
  • The Corporate Manslaughter and Corporate Homicide Act 2007.

Civil Law Liabilities

• Employers can face civil law liabilities, including:
  • Tort/delict of negligence.
  • Duty of care (neighbour principle).
  • Breach of statutory duty, e.g. providing a safe place of work.
  • Vicarious liability.
  • Contributory negligence.### Regulation and Compliance
• The Workplace (Health, Safety and Welfare) Regulations 1992 emphasize compliance, and if an organization chooses not to follow the Code, they must have sufficient evidence to prove their measures achieve compliance.
• These Regulations are easier to amend than legislation, allowing for quicker guidance to industry.

Absolute and Qualified Duties

• Absolute duties use the word "shall" and require unqualified compliance.
• Practicable duties use "shall" but may be qualified by "where practicable," meaning it is feasible to do so.
• Reasonably practicable duties also use "shall" but may be qualified by "where reasonably practical," considering effort, time, and money proportionate to risk level.

Guidance and Codes of Practice

• Official Guidance notes are provided by the Health and Safety Executive to give a greater understanding of Regulations and best practice advice.
• Codes of Practice (ACOPs) provide information that organizations can adopt into procedures and safe working practices.

Common Law and Statute Law

• Common Law is based on judicial precedent, with decisions made by judges passed down through time.
• Statute Law is established by Parliament, with laws created through a parliamentary process.

Criminal Law

• Criminal Law deals with offences against the state, with punishment and compensation for wrongful acts.
• Burden and onus of proof lie with the prosecution to establish guilt beyond a reasonable doubt.
• Criminal law is mainly concerned with statute law.

Civil Law

• Civil Law deals with private individuals seeking compensation for wrongdoing (torts).
• Burden of proof is based on the balance of probabilities (51%).
• Civil law is mainly concerned with common law.

Health and Safety Executive

• The Health and Safety Executive (HSE) advises the Secretary of State in creating and amending regulations.
• HSE provides information and guidance for all industries and enforces regulations for directly regulated industries.

Health and Safety Executive for Northern Ireland (HSENI)

• HSENI is a non-departmental public body responsible for occupational health and safety in Northern Ireland.
• HSENI collaborates with the Health and Safety Executive to ensure effective delivery in the UK.