The Victorian Workcover Authority’s (VWA) WorkHealth program is coming to the end of its five-year life. But what is the way forward? Has the $A600 million program achieved its aims?
Aims and Results
VWA’s annual report for 2008 (page 33) stated the following aims for WorkHealth, reiterated in the WorkHealth Strategic Framework 2010-12 (page 1):
“Over the long term, the program aims to:
- cut the proportion of workers at risk of developing chronic disease by 10%
- cut workplace injuries and disease by 5%, putting downward pressure on premiums
- cut absenteeism by 10%.
These goals aim to drive productivity and reduce health expenditure that is associated with chronic disease.”
None of VWA’s annual reports since 2008 have included any mention of these benchmarks. More…
The corporate wellness advocates have been able to estimate the return-on-investment (ROI) for their programs but there has been little research on the return-on-prevention, until recently. In 2012 the International Social Security Association (ISSA) determined that, in microeconomic terms,
“…there are benefits resulting from investment in occupational safety and health… with the results offering a Return on Prevention [ROP] ratio of 2.2.”
This means that for every one dollar spent per employee per year the potential return is 2.2 dollars.
The report also found that OHS provides, amongst other benefits:
- Better corporate image
- Increased employee motivation and satisfaction, and
- Prevention of disruptions.
But why bother costing harm prevention when there is already a legislative requirement to provide safe and healthy workplaces? Such a question usually comes from those whose understanding of OHS is principally compliance and who believe compliance equals safety.
The calculation of ROP, in the ISSA report at least, counters the belief that safety is always a cost with no economic benefit to the company. A positive ROP provides an opportunity to actively participate in the economic debate over productivity and, in some countries, austerity.
Occupational health and safety (OHS) regulatory agencies have existed for decades, originally with an enforcement role but increasingly aimed to prevention and education. It is fair to say the “2nd generation” of OHS regulators in Australia appeared in the 1980s. It is also fair to expect to be able to readily access the corporate memory and prosecutorial activity of the regulators, particularly since the growth in the Internet. Very recently WorkSafe Victoria reviewed its online database of OHS prosecutions excising prosecution summaries prior to 2012. This decision is a major weakening of the “state of knowledge” about workplace safety in this State, a decision that some have described as outrageous. How can one learn from mistakes if those mistakes are not made available?
Recently SafetyatWorkBlog criticised the focus on fatality statistics as a measure of success. Workplace fatalities are a convenient measure but can seriously misrepresent the status of workplace safety by ignoring psychosocial hazards and occupational illnesses. An infographic came through the SafetyAtWorkBlog inbox this weekend which illustrates the unhelpful obsession with fatalities but, perhaps more importantly, the risks of social media.
This infographic from US firm Compliance and Safety (purposely unlinked) is slickly produced for social media and blogs but is fundamentally invalid. The title at the top is a ridiculous comparison. “Is OSHA a wasteful regulatory nightmare or common sense that saves lives?” The Occupational Safety and Health Administration (OSHA) may be wasteful but how can this be compared to the amorphous and self-serving concept of “common-sense”? The implication is that common sense equates to a free-market regulation of workplace safety. The failure of the free-market approach to occupational safety, and to the environment, many decades ago is exactly the reason why regulations were introduced. There were too many businesses exploiting workers and the environment by creating harm without accountability. More…
For some months Australia’s Workplace Relations Minister Bill Shorten, has been talking about establishing a Centre for Workplace Leadership. This presents an opportunity for practical progress on OHS but it relies on someone joining the dots of occupational safety, workplace health and productivity – a highly unlikely occurrence.
In December 2012, Shorten started looking for a provider of the Centre, a facility that he described as
“…a flagship initiative of the Gillard Government and will play an important role in supporting our aim to increase workplace level productivity and the quality of jobs by improving leadership capability in Australian workplaces…
He also said that
“This will not be another training company. The Centre will drive a broader More…
In Australia and the United Kingdom, workplace health and safety compliance has been considered a prominent element of allegations of business “Red Tape“. On 21 January 2013, Victoria’s Treasurer, Kim Wells, announced new guidelines into red tape in that State’s government authorities and regulators. Wells’ media release states:
“Stage one of the reform will focus on the Victorian WorkCover Authority (VWA), VicRoads, Environment Protection Authority, Consumer Affairs Victoria and the Victorian Commission for Gambling and Liquor Regulation.” [emphasis added]
Wells also says that the Red Tape Commissioner, John Lloyd, will administer the system which runs like this:
“Ministers will issue statements of expectations to key regulators which will require them to outline by 1 July 2013 how they intend to reduce red tape. Our aim is to see regulators reduce the cost of high-impact or high- More…
The Victorian Government has repeatedly claimed that new Work Health and Safety laws would cost billions of dollars to introduce. It has justified this political decision with a summary of a report produced by PricewaterhouseCoopers (PwC) in April 2012. SafetyAtWorkBlog applied for the full report under Freedom of Information (FOI) and was rejected.
The Department of Premier and Cabinet’s FOI Officer indicated that the full report existed but that it was not being released as the FOI Act
“…exempts from disclosure a document that has been prepared by a Minister or on his or her behalf or by an agency for the purpose of submission for consideration by the Cabinet.”
The rejection is difficult to understand as the government had already released a 34 page summary.
SafetyAtWorkBlog has been very critical of the summary report due to the amount of disclaimers, equivocations and selected data sources in the PwC report. The estimated costs have appeared in discussions about the Work Health and Safety laws in other States so the full analysis of the laws by PwC would be enlightening. It was hoped that the full report would provide additional background and context to discussing the “costs of safety” but that is not to be.
OnlineMBA.com recently uploaded a video about “The True Cost of a Bad Boss“. It is a good summary of the spread of negative organisational and employee effects that can result from poor management poor understanding and poor communication. It is well worth remembering this spread when determining the best way to manage workplace safety and increase productivity.
Although the video is from the US, there is research evidence to support many of the points raised. In December 2012, Safe Work Australia released The Australian Workplace Barometer Report On Psychosocial Safety Climate and Worker Health in Australia, a report that has been largely missed by the Australian media. The report says that:
“A standout finding here is that depression costs Australian employers approximately AUD$8 billion per annum as a result of sickness absence and presenteeism and AUD$693 million per annum of this is due to job strain and bullying.” (page 6)
This is a significant impact on Australian business costs and, if one takes the OnlineMBA information concerning bad bosses, Australian bosses may need to undertake a considerable amount of self-analysis when lobbying for red-tape reductions and calling for productivity increases. More…
A lot of recent discussion of the impacts of workplace safety and productivity has centred on the Productivity Commission’s “Performance Benchmarking of Australian Business Regulation: Occupational Health & Safety” Report of 2010. However there was a 1995 report by the then-Industry Commission that can provide some broader context to the safety/productivity discussion. Recent evidence and research does not negate earlier reports and the safety/productivity debate should be considered over the longer time period, when there were different economic and political situations.
In 1995, the Industry Commission estimated the cost
“…to injured employees, their employers and the rest of the community of work-related injury and disease is at least $20 billion a year.” (page xiii)
(The March 2010 report stated the Australian Safety and Compensation Council
“…found the total economic cost of work-related injury and illness for the 2005-06 financial year to be $57.5 billion, representing 5.9 per cent of GDP.” Page 45)
The Industry Commission identified a ratio of costs associated with workplace injuries – 30-40-30:
“Around 30 per cent of the total cost
In 2012 many countries have been required to pursue economic austerity measures. A national or international economy rarely has any direct effect on safety management but the current economic status has led to an increase in harsh, or strong, political decisions and some of these decisions will affect safety management and professionals. One obvious manifestation of political safety decisions is the UK Government’s decision to allow small businesses to step outside its occupational health and safety (OHS) laws in its pursuit of reducing supposed “red tape“. This strategy is attractive to other government’s, including Australia’s, but the strategy could marginalise the safety profession even further if the profession remains insular and silent.
The Institute of Occupational Safety and Health (IOSH) has been campaigning for some time on the governments decisions to change its OHS laws in its quest for greater efficiencies and reduced business costs. In the last few months, IOSH has turned its attention to the proposed changes to the More…