Fee For Intervention – a necessary economic evil

WorkSafe Victoria’s Executive Director – Health and Safety, Ian Forsyth mentioned one of the necessary economic choices faced by the UK’s Health and Safety Executive (HSE) when speaking at a breakfast seminar in early February 2012.  He said that HSE is

“…under the pump politically [and] I think they’re either just, or about to, press the button on inspectors charging 133 pounds per hour for their workplace visits……If they find an issue they will be charging the employer 133 quid an hour and they hope to make 10 million pounds out of that”

The concept of fee for intervention (FFI) was new to most in the seminar audience and it needed more explanation and context although the seminar imposed tight time constraints.   Given the economic status of the United Kingdom such cost recovery methods are logical, if unpalatable.

Forsyth missed an opportunity to explain what was happening in the UK and whether this could occur in Australia but did say that we would likely hear the FFI screams from the business sector even in Australia.  That is not the impression being given by HSE or the business sector.  FFI has been established as a cost recovery measure not revenue raising as his comments above imply.

HSE has advised SafetyAtWorkBlog that the planned date for the “fee for intervention” (FFI) program is 1 April 2012, pending the successful passage of legislation.

The FFI issue was first suggested by the HSE in a consultative document in mid-2011.  A December 2011 Board paper confirmed that FFI was viable and went some way to explaining the FFI rationale:

“Firstly, it is reasonable that duty holders that operate in material breach of the law should bear the costs incurred by the regulator in putting things right, rather than the taxpayer. Secondly, it will provide an incentive for businesses to meet their obligations. Thirdly, it will provide a level playing field for those who do comply. Central to the scheme is the fact that compliant businesses will pay nothing and a contravention has to be significant – a material breach of law – to attract FFI. This ensures that the minimisation of costs incurred by any business within scope is in its own hands.”

The political attraction is clear – the health and safety of workers is back in the hands of the employer and the employer has an understanding of a base penalty/fee for non-compliance.  Of course there have been issues of concern in some UK sectors but these seem to be principally about inspectors applying the non-compliance too heavily or frivolously.  HSE believes that FFI is supported by a robust dispute resolution process and will be providing clarification on the matter in a guidance note.

FFI is an initiative that should be closely watched in other jurisdictions but must be considered in the current economic context of the United Kingdom.

Kevin Jones

reservoir, victoria, australia

9 thoughts on “Fee For Intervention – a necessary economic evil”

  1. Looks like messy enforcement to me.

    And I think it will all just back-fire if used here.

    As far as I can see the HSE have no ability to make infringement notice regs. Vic does, and the WHS Act has that curious thing of allocating the making of infringement notice to the “jurisdictional notes” schedule, but then says jurisdictions “must enact provisions…enable an infringement scheme..”. Probably done because the existing infringement notice making powers differed so much around Oz. In the complex business of legislation, ya just gotta keep ya thinkin’ and actions as “neat” as possible. Penalties by stealth aren’t neat.

    Looking at the extant NSW laws, it’s obvious there is a fairly wide spread of things a PCBU can cop an on-the-spot for. It’s how it should be for mine. User pays for an inspector lobbing and requiring safety improvements will surely be seen as a penalty via the backdoor, literally and figuratively.

    For mine, don’t go reaching for new tools until ya sure the ones you already have aren’t up to the job; and “I don’t wanna use ’em” is not the same as the tools ain’t up to the job.

  2. The HSE has formally advised the following:

    “Following consideration of the responses to the public consultation on the proposals to extend cost recovery, the HSE Board will recommend to Ministers the implementation of Fee for Intervention from 6 April. This means HSE will recover all of its inspection / investigation costs when a business or organisation, not otherwise covered in a cost recovery scheme, is in material breach of health and safety law. Businesses that comply with the law will not pay a penny.”

  3. The concept of fee for intervention (FFI) is very good. The revenue from inspections should be made available to the regulators to engage the required number of suitable inspectors to inspect all businesses regularly. However, before enforcing FFI, all applicable legislations should be reviewed to ensure that they are not outdated and fulfil the desired objectives. With suitable mechanism to resolve the disputes within a time frame, FFI will definitely bring discipline on both sides and contribute to the growth of the nation.

  4. I think it is important to stress that the UK HSE documents define the context in which the fee-for-intervention applies. They are not the equivalent of on-the-spot fines, with which many in Australia are familiar. My understanding is that the effectiveness of on-the-spot fines to acheive sustainable OHS change is questionable and that is why such fines are only in some jurisdictions.

    If the small- to medium-sized business sector is one of the most non-compliant sectors, how will the FFI be received?

    Also FFI only applies to visits from the inspectorate and the ratio of inspector visits to business premises makes physical enforcement problematic. I think the UK documents mention the likely limited impact of the FFI process.

  5. Becomes a self fulfilling prophesy in that, income earned by the inspectorate will encourage the appointment of new inspectors who in turn will raise the revenue levels given that the very large proportion of SME’s are non compliant on scores of levels.

    The outcome, with judicious and aggressive management will be a staggering increase in compliance and an equal reduction in workplace injury. I have banged on about on the spot fines for non compliance in many posts over the last year or so and it would seem that it doesn’t matter that much if it is revenue raising or cost recovery as long as the outcome is maximum compliance and significantly reduced injury.

    If you employ, you have a regulatory obligation and ignorance of the rules needs severe punishment.

    1. Hi Tony,
      I think the concept of on-the-spot fines is unklikely to bring significant or lasting change to a business any more than speeding fines have contributed to safer roads in Australia.
      As I think about it now, in contradiction of my earlier post, even the concept of fee for service is unlikely to bring significant or lasting change unless the service is initiated by the PCBU, as they attempt to bring their operations into compliance.
      Laws and punitive measure do almost nothing to change a person’s mind about an issue. Either they will comply out of their inherent moral and ethical position, in which case punitive measure rarely get exercised, or they will take the risk of not getting caught.
      Safety is no different.
      Similarly WHS Professionals will almost never change the minds of business leaders (CEOs & the like). Unless the leader is inherently seeking to be compliant they will rarely take advice that brings any significant change. If they are driven by the bottom line, then safety will rarely be considered, unless we can demonstrate that WHS contributes t the bottom line.
      Even though you and I know that it makes good business sense, it is almost impossible to demonstrate that a preventive measure actually contributed to the bottom line – that accident we claim to have prevented may never have happened anyway so how do you quanitify the contribution to profit?.
      This is why we get so frustrated when ‘nothing really changes’ in safety performance (or culture).

  6. To date (since the OH&S Act 2004) WorkSafe has not prosecuted any person or firm for Psychological Bullying. The concept or the meaning of the words in the Act or in their own published brochures are not understood by Mr Forsyth. I know of one case of very serious psychological bullying that when reported to them took two whole months to go to the workplace giving the employer time to make the Victim redundant, even though the position remained and was filled by a new employee. WorkSafe did not interview the Victim before they made their decision. WorkSafe never conducted any real investigation and are the sickest joke when it comes to dealing with workplace psychological bullying

  7. FFI makes a lot of sense to me when many business operators refuse to ‘pay’ for decent WHS in-house and/or consultancy advice.

    Where WorkCover provides a service to an individual entity they should be able to recover costs just as a consultant would be eligible to recover costs for advice/assistance given.

    The Employer then always has a choice as to whether to involve the Regulator as advisor or seek private support via employing “professional expertise” via in-house or consultancy services.
    Les Henley

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