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Employer liability - back to the future…

6 September 2013

The Enterprise and Regulatory Reform Act will change the basis on which EL claims can be pursued against employers. However the practical implications in terms of claims outcomes may not be a significant as the Act suggests, as discussed below by Mark Fowles of our Exeter office below. From underwriting and risk management to claims settlement, an understanding of why claims risks may not be all that different under the  new regime will be key to making good decisions.

Enterprise and Regulatory Reform Act 2013 Section 69: The background European framework

Framework directive 189/319 (enacted in English law as management of Health and Safety at Work Regulations 1992) gave birth to six daughter directives:

  • workplace directive, enacted as Workplace Health and Safety and Welfare Regulations 1992
  • work equipment directive, implemented as Provision and Use of Work Equipment Regulations 1992
  • personal protective equipment direction, enacted as Personal Protective Equipment at Work Regulations 1992
  • manual handling of heavy loads directive, enacted as Manual Handling Operations Regulations 1992
  • Display Screen Equipment Directive, enacted as Health and Safety Display Screen Equipment Regulations 1992
  • carcinogen directive, enacted as Control of Substances Hazardous to Health Regulations 1994.
Professor Löfstedt & Lord Young

In Oct 2010 Lord Young reported at the request of the Government in ‘Common sense, common safety’. In Nov 2011 Professor Löfstedt published his report entitled ‘Reclaiming health and safety for all: an independent review of health and safety regulation’:

“My aim was to identify a suite of reforms that would deliver a simplified H & S legislative framework that is evidence-based and risk –based and to ensure that it is applied in a fairer and more consistent way. This in turn can help businesses and employees to understand more easily what they need to do to keep workplaces safe”

The Löfstedt report contained a number of proposals and recommendations in connection in particular with:

  • reporting procedures
  • the self-employed
  • the concept of reasonable practicability/ strict liability
  • the simplification of the regulatory framework and consistency of enforcement of Health and Safety regulations.

In Jan 2013 Professor Löfstedt at the invitation of the Government undertook a brief review entitled ‘Reclaiming health and safety for all: a review of progress one year on’:

“An amendment to the Enterprise and Regulatory Reform Bill 2012-13 is being used by the Government to deliver the recommendation of strict liability. The amendment has proved to be highly controversial and has provoked much debate…I have also been lobbied by many interested stakeholders including PI law firms and trades unions. My understanding is that the proposed amendment to the H & S at Work Act reverses the current position on Civil Liability. This means that, unless exceptions apply, claims for compensation in relation to breaches of H & S legislation will need to prove that the employer has been negligent. The approach being taken is more far reaching than I anticipated in my recommendation and, if this amendment becomes law, I hope that the Government carefully monitor the impact to ensure that there are no unforeseen consequences.”

The recommendation to which Professor Löfstedt referred was:

“I recommend that regulatory provisions that enclose strict liability should be reviewed by June 2013 and either qualified with either ‘reasonably practicable’ where strict liability is not absolutely necessary or amended to prevent civil liability from attaching to a breach of those provisions.”

Impact assessment

The Government carried out an impact assessment which proposed two options:

  • to target strict liability duties and either qualify them with ‘reasonably practicable’ or prevent civil liability from attaching to them
  • prevent civil liability from attaching to all duties under H & S regulations by amending section 47 HSWA Option two is preferred because identifying individual strict liability duties is complex and would require amending a large number of regulations. Option two is single change to reverse the effect of existing clause of HSWA which would be significantly easier for employers and other  stakeholders to understand and is therefore likely to have more impact in changing perceptions of the ‘compensation culture’ and the behaviours which result in over compliance with H & S at work regulations.
Passing of the act

The act and in particular Clause 69 had a somewhat rocky passage. The House of Lords proposed amendments including wrecking amendments. The Commons rejected those amendments and in what is know as ‘ping-pong’ the matter came back to the House of Lords which eventually, despite some passionate speeches, voted in favour of not insisting on their amendment.

Enterprise and Regulatory Reform Act 2013 Section 69

Clause 69 of the act achieves the Government intention of implementing Option 2 of their impact assessment by amending section 47 of the Health & Safety at Work Act 1974. In its new form the Health & Safety at Work Act 1974 provided that a breach of a health & safety regulation shall not give rise to a civil claim for damages. The consequence is that in order to succeed in a civil claim for damages the employee will have prove common law negligence on the part of his employer.


The Clause will apply in respect of all accidents occurring after the passing of the act. However, it awaits implementation by means of regulations or otherwise by the Government.

Effect and consequences (intended or otherwise) – Is the Six Pack dead? Common Law

The common law is evolving – the standard statement Swanwick J and Stokes v Guest approved by the House of Lords in Barber v Somerset County Council:

“…the overall test is still the conduct of the reasonable and prudent employer, taking positive thought for the safety of his workers in the light of what he knows or ought to know; where there is a recognised and general practice which has been followed for a substantial period in similar circumstances without mishap, he is entitled to follow it, unless in the light of common sense or newer knowledge it is clearly bad; but, where there is developing knowledge, he must keep reasonably abreast of it and not be too slow to apply it; and where he has in fact greater than average knowledge of the risks, he may be thereby obliged to take more than the average or standard precautions. He must weigh up the risk in terms of the likelihood of injury occurring and the potential consequences if it does; and he must balance against this the probable effectiveness of the precautions that can be taken to meet it and the expense and inconvenience they involve. If he is found to have fallen below the standard to be properly expected of a reasonable and prudent employer in these respects, he is negligent.”

There is also a duty to take into account regulatory standards- Statutory duties may be evidence of good practice which a reasonable employer should adopt. See Franklin v Gramophone company Ltd 1948, National Coal Board v England 1954, Bucks v Slough Metal Ltd – see Stephenson LJ:

“The employer… should acquaint himself with the statutory provisions applicable [to the work] which the employee is meant to do and do his best to make sure that the men he employs do the work know of them and understand them and the duties they impose… the employer must try and make the law of the land a rule of the factory.”

English legislation introduced to implement European directives should also be construed in the light of the wording and purpose of the particular directive. Marleasing S A v La Commercial Internacional de Aliementacion S A 1990 (European Court of Justice):

“In applying the national law, whether the provisions in question were adopted before or after the Directive, the national Court, called upon to interpret is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189.”

The English courts are therefore under a duty in their capacity as organs of the state to seek to bring English law into line with European law. See Hide v Steeplechase Company Ltd (Cheltenham Racecourse) & ORS.

The Direct Effect

To ensure effective implementation of European Law the ECJ has recognised that provisions whether of the treaty, community, regulations, decisions or directives may give rights to individuals of each member state which should be recognised and enforced by the national courts of member states.

In the case of articles of the treaties these may be relied upon by an individual or another private person. In respect of Directives they may be relied upon only against an emanation of the state.

In respect of health & safety the principle article of the treaty is unlikely to be construed as being sufficiently precise to give rights.

In relation to the Directives, these can only be relied upon against emanations of the state, which include:

  • police authorities (Johnston v Chief Constable of the Royal Ulster Constabulary)
  • public health bodies (Marshall v Southampton and South West Area Health Authority)
  • local authorities (Fratelli Costanzo Sp A v Comune di Milano)
  • tax authorities (Becker v Finanzant Münster Innenstadt)
  • privatised water companies (Griffin v Southwest Water Services Ltd)
  • governing bodies of voluntary aided schools (NUT v St Mary’s Church of England Junior School Governing Body)

The Directives do not provide for enforcement. Enforcement is left to the national authorities of member states but see Rewe Handelsgesellschaft Nord nbh v Hauptzollampt Kiel:

“It must be possible for every type of action provided by national law to be available before the national courts for the purpose of ensuring observance of Community Provisions having direct effect, on the same conditions concerning enforceability and procedure as would apply were it a question of ensuring the observance of national law.”

English law will continue to provide for compensation for injuries in the workplace. It is hard to see, whether on the authority of Marshall v Southampton SW area Health Authority or generally why it should not be the case but the remedies in respect of direct enforcement should include actions for damages, if compensation is the chosen remedy, that must make full reparation for the full loss and damage sustained through the infringement.

The Francovich effect

An action may lie against the United Kingdom were European Court of Justice to take the view that the lack of provision of civil remedy within the English implementation of the directives amounted to improper or incomplete implementation see Francovich Bonifaci v Italy where Italy was successfully sued for a total failure to implement a directive relating to the protection of employees in the event of insolvency into national law. Three requirements must be met; the rule which has been breached must have been intended to confer rights on individuals although the provision concerned need not itself be directly affected. Second, the breach must be sufficiently serious. Third, the failure to implement the directive must cause loss to the individual.

Finally, watch this space and be prepared to brush up your common law negligence.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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