The Sentencing Guidelines Council (SGC) has published a definitive guideline on the sentencing of corporations (rather than individuals) for corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007 (CMCHA came into force on 6th April 2008) and health and safety offences which result in death contrary to sections 2 and 3 Health and Safety at Work Act 1974 (HSWA).
Organisations can already be issued with an unlimited fine or be forced to improve safety in the workplace however the new guideline will also apply to health and safety cases other than corporate manslaughter cases where it can be proven that the offence was a significant cause of death and not simply that a death occurred.
The guidelines mean that on or after 15 February 2010, companies which do not adhere to health and safety regulations and breach their duty of care towards employees will face punitive fines. The Sentencing Guidelines Council has said that fines for companies and organisations "may be millions of pounds and should seldom be below £500,000".
It recommends that for other health-and-safety offences that cause death, fines from £100,000 up to "hundreds of thousands of pounds" should be imposed.
Significantly, the levies will also apply to incidents which happened many years ago if it can be proven that firms committed gross management failures which resulted in injury or death.
Additionally the Courts will now be able to issue publicity orders requiring that companies detail any prosecutions in "virtually all cases" of corporate manslaughter.
Justice Minister Maria Eagle stated:
"Fines hit irresponsible companies in their wallet, but public image is also extremely important. Forcing corporations and organisations to publicise their conviction will be a powerful deterrent, making them think of the reputational as well as financial risk of not taking their health and safety responsibilities seriously."
The use of publicity orders thought to be the first of their kind to be introduced in the UK, could compel companies to inform shareholders, customers and the local population (where prosecution involves local authorities, hospital trusts and police)of any such conviction, giving details of the case, the fine imposed and any remedial work that they have been ordered to carry out. A publicity order could also require the organisation to publish a statement via its own website or to place an announcement via the media.
A charge of corporate manslaughter can be brought against any organisation if:
the way in which an organisation's activities are managed or organised causes a person's death; and amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased. A substantial part of the failure must have been at senior level.
The offence applies to all companies and other corporate bodies. It also applies to partnerships and to trade unions and employers' associations, if they are an employer, as well as to government departments and police forces.
The guidelines announced coincide with new research from the Department for Business, Innovation and Skills (BIS) indicating that small businesses are suffering from a lack of confidence and awareness of managing employment law.
The BIS study shows that almost a third (32%) of the total sample report feel confident in their understanding of employment law and their role as an employer but 34% of respondents feel employment law obligations are ‘not relevant' to their business and a further 20% report that they understand their obligations but worry about getting it right.
Experts estimate that there may be a dozen prosecutions each year, but the Health and Safety Executive states that managers can avoid this by regularly reviewing and updating their safety measures, especially lone worker safety .
