A couple of high-profile, corporate cases recently have highlighted what happens when organisations panic. When they try to fix one problem, but unwittingly create another elsewhere.
And, in case anyone was wondering whether it was all worth it, it also underlines the importance of having robust legislation to ensure that organisations do the right thing, not just try to fix today’s problems.
Sainsbury’s fined £1 million
This was a health and safety case which happened during Covid, which resulted in not only Sainsbury being fined £1 million, but also resulted in very serious injuries to a lady on a mobility scooter.
As the pandemic began to hit, Sainsbury’s in Newbury were keen to get their health and safety correct to protect both customers and staff. So, they put together a queueing system outside the store, the likes of which many of us became familiar with during 2020.
The problem was that the tape they used to divide the lanes was so weak that customers either broke it deliberately, or the plastic barriers below it blew over in the wind. So, they decided to use something altogether more robust, and pretty well unbreakable. The problem was that the parcel strapping was black, not easily seen and at head height for anyone on a mobility scooter.
The lady involved endured life changing injuries when she failed to spot the tape fixed between two car park pillars.
Sainsbury’s were investigated and prosecuted by the local Health and Safety Executive. The judge recognised that they were trying to do their best in difficult circumstances. However, no health and safety risk assessment had been carried out. If they had, they would hopefully have spotted the danger immediately.
As no risk assessment was carried out, and the result of the serious accident that occurred was found to be the fault of the organisation, Sainsbury’s were duly fined £1 million. Something that will have a big impact on the store and organisation’s reputation and profitability. Let us not forget that all of the supermarkets continued to have a pretty profitable time during the pandemic which could explain the size of the fine.
The investigating officer stated “I think the message to take from this is to not to take your eye off the ball. Consider all areas of potential hazards and risk assess.”
“If Sainsbury’s had carried out an adequate risk assessment, I am sure staff would have considered the potential outcomes. Of course, the circumstances of the pandemic played a role in this, but I think the lesson to take is that it is easy to be distracted, and think you’re doing the right thing in one area, but actually find yourself creating another issue somewhere else.”
The victim is likely to also have a very strong and expensive personal injury claim.
The P&O situation
We have not really had to comment too much on P&O’s current, lamentable situation. There has been enough coverage about it in the press.
But it, like the Sainsbury’s case, shows exactly what happens when the organisation takes a short-term view and either ignores the consequences, or thinks it can get away with it.
By the admission of their Managing Director, P&O Ferries (not P&O cruises, who are a completely separate company and entirely innocent, but whose reputation has also been badly affected), the organisation knew they were breaking the law. Nevertheless, they decided that the cost of doing so and any subsequent fallout was preferable than continuing to pay the lawful UK national minimum wage or above to their workers.
Not only were they relying on a slightly perverse provision in the law that said ships registered overseas were not subject to UK employment law, even on UK routes, but they had also cynically re-registered a number of their ferries a few years ago to take advantage of this loophole.
The subsequent fallout has surely cost them far more than the savings that they make on the hourly rate for their crew. Their failure to even carry out the minimum of consultation, let alone the statutory 45 days, shows why we have such laws.
Their fairly weak argument that they had lost £100 million the year before during the pandemic so that they could not afford to continue, scarcely holds water. Especially when their parent company had just spent £250 million on sponsoring the European golf tour.
The immediate outcome has been that the Government has rushed through a change in the law to ensure that any new crew have to be paid the national minimum wage. We suspect that the fallout for P&O will continue for many years, and we wonder whether they will have a viable future in the UK. If they are relying on insurance cover to cover the costs of the losses from their actions, that may not happen given the fact that they made a conscious decision to break the law on collective redundancy consultation.
If they had operated in exactly the opposite way, done proper group redundancy consultation and supported their workers throughout all of this, the public probably would have come flocking back. How their rivals must be rubbing their hands with glee.
In a tight labour market, they are unlikely to be an attractive employer to anyone other than a seafarer from abroad, who regards c. £5 per hour as a good deal.
So, what is the learning from these two cases?
Large employers are no more immune from getting matters wrong than SMEs if they fail to follow good professional advice. Always take a holistic view when making business decisions, be it traffic flow as part of a car park risk assessment through to making large scale redundancies.
Follow the basic legal requirements, take a reasonable and considered approach as opposed to a knee jerk one. Always consider the reputational as well as safety risks arising from rushed decisions, or calculated ones designed to get around the law.
The guidance provided in this article is just that – guidance. Before taking any action, make sure that you know what you are doing, or call an expert for specific advice.