Removal of 114-year-old employment right finally receives aggressive debate

17 Jan 2013| News

17 January 2013

  • The amendment will benefit no one except insurers and unscrupulous employers
  • It will complicate a previously clear and widely-accepted part of the law
  • It will make claiming compensation difficult and time-consuming for injured workers
  • The state will have to pay more to look after injured workers
  • There is no evidence of a ‘compensation culture’
  • The only justification appears to be ideological and takes an anti-worker stance

Having been introduced to the Enterprise and Regulatory Reform Bill at report stage, the government’s attempt to remove employers’ 114-year-old liability for workers’ health and safety at work has finally been aggressively debated for the first time. The discussion of Clause 61 – which overturns Section 47(2) of the Health and Safety at Work Act of 1974 – was undertaken in the Lords during the Grand Committee stage of the Bill, since it was legislated too late to be debated in parliament and was not subject to public consultation. The peers have discussed it once before, in a shorter and less involved debate, during an earlier reading of the bill.

The IER has been reporting on the progress of this legislation and has highlighted the danger of Clause 61. If the amendment goes through, the burden of proof of the employers’ negligence will fall to the worker. This means that if an employee is injured at work due to, say, faulty machinery, they will need to be able to prove the employer was aware of the problem and failed to act – an incredibly difficult feat considering the employer holds all of the evidence.

In the Lords on Monday (14 January 2013), Baroness Turner of Camden explained the changes to law and the implications of that change to workers that will come about if the amendment is passed:

“Currently, Section 47(2) of the Health and Safety at Work etc. Act states: ‘Breach of a duty imposed by health and safety regulations shall, so far as it causes damage, be actionable except in so far as the regulations provide otherwise’,” she began.

“In practice, this means that if a worker is injured and he can prove that the employer has breached his statutory duty, he is entitled to claim compensation. This is the basis on which workplace injury claims are usually brought. The law on this is clear, it is well understood by all parties, and legal appeals in this field have been almost unheard of in recent years. It has also been the basis upon which health and safety legislation has been drafted and passed by Parliament, with a dual purpose of setting out the criminal law, and giving people injured as a result of breach of that law a right to compensation,” Baroness Turner continued.

“Make no mistake about it:
if a cowboy is not afraid of sanctions
he will carry on behaving like a cowboy”

“Without this legal provision, the injured person would be obliged to rely only on the law of negligence to claim compensation. However, the law of negligence is much more complex, as the burden of proof lies with the injured worker, when it is the employer who holds all the knowledge about the workplace systems, tools, procedures and so on. This means that much more evidence has to be gathered, more witnesses interviewed, and more documents provided if the case is to succeed. This is time consuming, and can be a very difficult situation in which to succeed, because the guilty employer holds all the cards,” she explained.

The peer went on to dismiss the idea there is a “compensation culture” in the UK – the argument the government is relying on to justify Clause 61. Having worked for an insurance company herself, she argued that insurers are not soft as to pay-out in fraudulent cases – in fact, they are quite the opposite and make earning compensation as difficult as possible.

Lord McKenzie of Luton added to the Baroness’s argument, stating that the justification for the bill is currently quite a mystery. He noted that the government are claiming they are following the recommendations made by Professor Ragnar Löfstedt as part of his recent review of health and safety legislation. But in fact, the academic recommended a review of strict liability later this year, and has claimed several times – including at an IER event last year – that the government is misrepresenting his recommendations in order to do as they please.

Lady Browne of Ladyton also took issue with the myth of the “compensation culture”, noting the lack of realism behind this phrase is even noted in an impact assessment dated June 2012 from the Health and Safety Executive. The second paragraph of the report states: “The ‘compensation culture’ (of the perception of it) in the UK has been the subject of several reviews over the last few years, but no clear evidence has been presented for its existence”.

Lady Browne noted, however, that Professor Löfstedt’s report pointed toward overcompliance to health and safety legislation by some employers due to their belief in a compensation culture.

“We are starting off on the basis that there is no proper evidence for the fundamental underpinning of this argument in the first place,” she stated.

“If the problem is that some employers, particularly those whom Professor Löfstedt spoke to, have a perception that there is such a culture and that that is affecting the way they behave, the answer is to educate them,” the Lady added.

So if the government’s justification for the amendment is shaky at best, then what is their purpose in removing this fundamental workers’ right? Lord McKenzie identified one of the only gainers from Clause 61 – the insurance companies.

“The bottom line is that fewer injured employees will receive compensation. They, their families and indeed the state will pick up the consequences. Insurance companies will be the gainers. Justice will be denied,” he argued.

Lord McKenzie also commented on the only other gainer from Clause 61 – rogue employees – a point picked up by Baroness Donaghy, who once wrote a report on fatal incidents in the construction industry for the Department for Work and Pensions.

“It is a charter for rogue employers to avoid their obligations. Make no mistake about it: if a cowboy is not afraid of sanctions he will carry on behaving like a cowboy,” she stated.

Lord Monks, a non-executive director of Thompsons Solicitors, argued that the amendment was just another part of the government’s ideological drive to attack vulnerable workers.

“Insurance companies will be the gainers.
Justice will be denied”

“I see Clause 61 in a wider context: namely, that the direction of travel which the coalition has adopted is pretty clear. It is to keep chipping away in the name of deregulation at a range of rights, some more fundamental than others. When the opportunity comes along to chip away a bit more, it is taken,” he stated.

“The Bill enabled this late amendment to be added. It can be seen in the context of raising qualifying periods and other obstacles to justice, changing the personal injuries area, without touching road traffic accidents, which is the major problem area of a compensation culture, and generally moving to disadvantage the already vulnerable. It is a kind of convoy and Clause 61 is one ship in the convoy.”

Several of the Lords also criticised the lack of public consultation, or even warning, on the proposals and noted that as the changes to law appear at first to be a ‘technical amendment’, many people who it will effect will have absolutely no idea of the impact it will have on them and what their rights are.

The IER is calling for the removal of Clause 61 from the Enterprise and Regulatory Bill. As was made clear in the Lords, the changes will leave workers more vulnerable, will benefit no one but insurers and unscrupulous employers, will increase the burden on the NHS and taxpayers’ money to look after those injured at work and its only justification appears to be ideological.

No wonder the government avoided a public consultation.

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