Health and safety reforms could tip struggling firms over the edge

Under-pressure employers have been warned that a new law means that one health and safety failing could push them into the credit-crunch abyss.

The Institution of Occupational Safety and Health (IOSH) said falling foul of tough new safety regulations could spell the end for firms already struggling with the economic downturn.

The Health and Safety (Offences) Act comes into force on 16 January, quadrupling the maximum fine for minor health and safety breaches from £5,000 to £20,000.

IOSH president Nattasha Freeman said: “Companies that play at health and safety will find it tough to survive the current economic climate.

“Those firms with poor health and safety practices, or firms that fail to provide a safe environment for their employees, could face the prospect of incurring increased financial penalties at a time when they really cannot afford it.”

Freeman added: “We’ve already seen many well-known high street firms collapse under the financial pressure of the economic climate. One needless accident during such challenging times could also spell the end for your company.”

Regulatory expert Pauline Munro, Legal Director at Pinsent Masons, says the new legislation introduces significant potential liabilities for senior managers it is important that HR managers make their senior management teams aware of the potential risk their management teams are facing and that they do face personal liabilities in circumstances when they get it wrong.

A number of big names in the retail, construction, property and travel sectors have already bitten the dust due to the economic chill in the past few months. Woolworths, Zavvi and Waterford Wedgwood all entered administration over the Christmas period.

The new health and safety law will pile further pressure on struggling employers. It will also pave the way for prison sentences of up to two years for individuals found guilty of health and safety breaches.

Laura Cameron, a partner at law firm McGrigors, said: “This is a significant toughening of the sanctions that can be used against directors for breaches of health and safety law. It will almost certainly lead to higher fines and now prison sentences.”

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