executives – Page 64 – SafetyAtWorkBlog

Not all employers are the same

Recently SafetyAtWorkBlog reported the umbrage that the Australian Institute of Company Directors (AICD) felt about executive accountability, particularly in relation to OHS legislation. On 25 October 2009 the Australian Chamber of Commerce and Industry (ACCI) provided an example that should stop generalisations about employer associations , at least for a little while.

Below are extracts of the significant statements made by ACCI and attributed to its CEO, Peter Anderson:

“Safe Work Australia Week [is] an opportunity for employers and employees to step back and review their approach to ensuring safety within their workplace.

It is essential that at regular intervals time is taken to step back and take a fresh look at the bigger picture of workplace safety. Safe Work Australia Week presents an ideal opportunity to do so.

Company Boards and Senior Executive teams should regularly review their organisation’s strategy, culture, systems and commitment to workplace safety and make adjustments where needed. Safe workplaces are driven from the top.

However, managers, supervisors and all employees also need to take individual accountability for workplace safety. Workplaces with the best safety records have a culture of clear and shared accountability for safety from the first year apprentice to the Chief Executive. This is built on the empowerment and obligation of all employees to openly discuss workplace safety, report hazards and incidents, and collaboratively find the most appropriate ways of managing risks.

It is important that in the midst of the current debate about harmonised OHS legislation, the focus on day-to-day workplace safety does not slip. Legislation is not going to drive further improvements in OHS outcomes in Australia – people’s actions will. Governments and industry must look for ways to further provide small business in particular with the tools, information, advice and encouragement to effectively manage the challenges and complexities faced in ensuring workplace safety.”

The risk with any national week of special day is that the focus is on a specific moment rather than seeing the issue being raised as one that is relevant for an entire year. This is very much the problem with Safe Work Australia Week but it is not alone.

Significantly, ACCI makes a clear statement about executives being involved with the management of safety in their workplaces – the attitude and approach of “proactivity” the OHS model legislation is aiming at.

Equally significantly, ACCI discusses the individual accountability of everyone in a company for OHS. It specifies the elements in support of accountability

open discussion or (OHS regulators would say) consultation;
hazard and incident reporting; and
collaboration.

ACCI is on familiar turf when it says legislation should not be the motivation for change on OHS but employers and other commercial organisations must realise that self-regulation has never been more of an unpopular concept than in the wake of the global financial crisis. No one can trust business to do the right thing by shareholders, investors or employees. They want government to make business accountable.

The capitalist ideology says that the wealth created by business is shared with the masses through social and financial structures. ACCI is trying to rebuild the capitalist structure into a nice, friendly, warm and comforting capitalism because if it cannot, the government will impose social obligations on them. If the ACCI and other commercial bodies can do this, it will be impressive but the question can be asked why capitalism became so ruthless in the first place and did various employer associations advise companies to act cautiously and keep capitalism in line with the social obligations everyone has?

Workplace safety is an easy indication of the heartlessness of capitalists – increase profits by rushing production and encouraging shortcuts in safety; or not taking the time to train workers well enough that they can work without being harmed. But if capitalists are willing to try again and NOT follow the same pathways that have been shown to lead to economic destruction, then they should have our support.

Kevin Jones

Nice comparison on Directors’ complaints

In the Australian Financial Review in October 2009 there was an opinion piece (not available online) from the CEO of the Australian Institute of Company Directors (AICD), John Colvin, expressing concerns about the accountability of directors under legislation including the proposed OHS laws in Australia.

According to a report by Adam Schwab in the Crikey newsletter of 23 October 2009 (also not freely available online), Colvin wrote in the AFR:

“There are more than 660 state and territory laws which impose personal liability on individual directors for corporate misconduct. That is, a director is liable because he is a director, even when he may not have had any personal involvement in the breach…”

Schwab writes

“The AICD noted, the NSW courts have taken a hard-line enforcing the deemed liability laws. According to AICD data, between 2004 and 2008, 144 company directors were found guilty of OHS offences, of which 115 of those prosecutions occurred in NSW.”

Schwab then provides a comparison of risk that I wish I’d thought of:

“That means the proportion of directors convicted over these so-called onerous laws is 0.0068%. To compare, there is roughly a 0.04% chance of someone being struck by lightning. Therefore, based on the AICD’s own data, company directors are six times more likely to be hit by lightning than to be prosecuted. It also shouldn’t be forgotten, directors’ liabilities are almost always covered by indemnity insurance and most prosecutions result in a mere financial penalty.

While the NSW OHS laws result in occasional harsh results, to extrapolate one set of allegedly ill-advised laws across the country is much like a cry of wolf.”

This perspective will be an important one to remember when considering the submissions being lodged with Safe Work Australia on the OHS model laws by 9 November 2009. The corporate submissions particularly but also those from the OHS law firms that spruiker the exposure of company directors ruthlessly whenever OHS and accountability is discussed.

Some of us remember the “glory days” when industrial manslaughter was widely considered in some Australian States. (There is a noticeable absence of controversy of the industrial manslaughter law that is operating in the Australian Capital Territory)

Also important is the point that Schwab makes about indemnity insurance for Directors and Officers, a matter that has been discussed elsewhere in SafetyAtWorkBlog.

The amount of “get-out-jail-free” options available for directors should encourage more attention to alternative, non-financial penalties for breaches of OHS law. Over the last 24 hours the United States has been talking about replacing executive cash remunerations with stocks so that director’s incomes are reliant on the share price of the corporation which, in turn, relates to the quality of leadership from the director.

As long as Australia’s principle OHS penalties involve money, directors can buy their way out of trouble. If Australia’s Prime Minister, Kevin Rudd, can face an entire country and apologise for the bad behaviour of others, and the bad policies of other governments in relation to the interaction with indigenous peoples, why should company directors not have a similar obligation when their poor management of a workplace kills someone? If corporate executives are that keen on leadership, let’s see them apply some of the leadership that Rudd showed, and accept responsibility when they should.

Kevin Jones

CFMEU, IPA, Gretley Mine – political lessons

Readers outside of New South Wales may vaguely remember that in 1996 four miners died in a coalmine in the Hunter Valley 0f New South Wales. They may also remember that the was some press about the prosecution of some directors of the mining company. It was one of those incidents and court cases that should have gained broader attention that it did.

As OHS stakeholders in Australia ponder the ramifications of the Government’s proposed Safe Work Bill, it is important to also ponder the legal legacy of the Gretley mine disasater. It may provide non-NSW and non-mining readers with a better understanding of the resistance to the new harmonised laws from the mining industry in both New South Wales and Western Australia.

On 15 October 2009, Andrew Vickers of the Construction Forestry Mining & Energy Union used the Gretley saga as a justification to call for the harmoinised legislation and support systems to allow for variations to meet the special needs of the mining sector.

cover PHILLIPS 5.04925E-210RETLEY On the other side of political fence, Ken Phillips of the Institute of Public Affairs, a conservative thinktank, produced a document about the politics of the Gretley saga. The publication was supported by a video, available below. Phillips’ paper is a useful illustration of business’ opinions of the unions and New South Wales’ OHS legislation. This legislation is a centrepiece to the ACTU and union movement’s concerns and opposition to many elements of the current draft Safe Work Bill.

Prominent sociologist, Andrew Hopkins, has written about the OHS management issues raised by the disaster and its aftermath.

SafetyAtWorkBlog believes that these political and safety resources can provide a primer to many of the issues being discussed in the current debate on OHS laws.

Kevin Jones

Safe Work Bill, suitably qualified and professional plans

Dr Geoff Dell of Protocol Safety Management and a prominent member of the

Safety Institute of Australia (SIA), believes that the most crucial issue facing the safety profession in Australia is the lack of the requirement to use a “suitably qualified” safety adviser.

The Australian Government was recommended to include such a requirement in its draft OHS model laws but rejected the recommendation because

“an unintended consequence could be that persons conducting a business or undertaking would be encouraged to delegate their responsibilities”.

This is odd because the Safe Work Bill includes seemingly clear duties:

“The person who has management or control of a workplace must ensure, so far as is reasonably practicable, that the workplace, the means of entering and exiting the workplace and anything arising from the workplace are safe and without risks to the health of any person.”

Unless the “suitably qualified” person (undefined in the Safe Work Bill) is also the “person who has management or control of a workplace” who has to ensure safety, it is hard to see how the Government’s concerns about abrogated responsibility are relevant.

Dr Dell wrote to the Workplace Relations Minister, Julia Gillard, on behalf of the SIA.

“Our motivation for urging you for inclusion of a “suitably qualified” requirement in the model OHS legislation should not be misinterpreted as any desire on our part to diminish or eliminate the equally important requirement for companies to consult their workers, or the workers’ elected representatives, on issues and decisions relating to the workers’ health and safety. Collaboration of employers and workers in the delivery of appropriate workplace health and safety outcomes is an essential precept.

Rather, it is our strong view that when those workplace collaboration processes need the OHS advice of others, there is an important need to ensure the persons providing that advice have the appropriate credentials to deliver that advice to the maximum benefit of those involved at the workplace.”

The argument is repeatedly expressed as a comparison between a suitably qualified safety advisor and doctors or plumbers or other licensed or registered occupations. But the Government has twice now indicated that it sees no the risks of abusing such a formalised position outweigh the benefits – the first in not accepting a review panel recommendation and second by omitting the issue in the Safe Work Bill.

Should the safety profession, as a whole, continue to push the issue with an unsupportive government or should it accept that the battle is lost and begin a Plan B? A plan where, perhaps, the market begins to demand certainty about the skill level of their safety advisors to such an extent that a scheme of accredited safety professionals is an indispensable business resource?

This may be the tactic of the SIA in its support of an elite level of safety professional who must have a tertiary OHS qualification. It is certainly devoting considerable resources to the program, supported by hundreds of thousands of dollars from WorkSafe Victoria. The caveat of this approach is that the SIA gets control of the profession.

This is not the case with the professions with which the SIA likes to compare itself. Those professions have independent assessment bodies, ethics bodies and sometimes industry/profession ombudsmen.

What the safety profession needs to counter is the argument that the Government has accepted from somewhere, that business is highly likely to push its OHS responsibility to others if it can. The profession, and the SIA, needs to convince the Government that business will accept its OHS duties.

Dr Dell told SafetyAtWorkBlog that the Safe Work Bill has been written for lawyers by lawyers and seems aimed at what to do after an incident has occurred. It is about harm minimisation and not safety. He says that the preventative aim of OHS legislation has been severely diluted. In this he echoes some of the SafetyAtWorkBlog position that the new laws are not about safety management but about safety law, and have little bearing on the shop floor where hazards are most often faced and controlled.

It is also important to remember that OHS law was intended to be a law that could be understood by the layman and implemented by the layman. The new Safe Work Bill will be incomprehensible to anyone other than lawyers and even then, as seen from recent blog articles about Mike Hammond, Michael Tooma and others, the lawyers are unlikely to agree on interpretation and application.

Kevin Jones

[Note: Kevin Jones is a Fellow of the Safety Institute of Australia]

HWCA could be influential in Australia’s workers’ compensation reforms

Australia and New Zealand have a small strategic organisation called the Heads of Workers’ Compensation Authorities (HWCA, pronounced “howca” by those in the know). It is a regular meeting (some say “love-in”, others say “coven”) of the CEOs of the various workers’ compensation bodies in Australia and New Zealand. Over the next five years, as the Australian Government begins to harmonise/reform the workers’ compensation system, HWCA will be important to watch.

In early October 2009, HWCA met and endorsed a coordination strategy, that has yet to be publicly released. The main objectives of the strategy were noted in a media release (also not yet publicly available) to mark the latest meeting.

“To deliver best practice services to injured workers and employers to assist recovery: and

to build sustainable workers’ compensation schemes.”

The terminology of the first objective may provide a good indication of the type of organisation HWCA seems to be. “Best practice services”??? “Best practice” is one of the worst corporate jargons being used at the moment. This article at Wikipedia outlines the context of the phrase well.

“As the term has become more popular, some organizations have begun using the term “best practices” to refer to what are in fact merely ‘rules’….”

In other words, HWCA has a strategy to do what its member organisations should have been doing all along – enforcing the rules of good customer service and providing the best level of service to injured workers.

Perhaps it is the second strategic objective that best illustrates the aims of HWCA – to make sure that the workers’ compensation schemes do not lose money.

According to the communique that is released after every meeting (top points for open communication)

“HWCA agreed the Bio-psychosocial Rehabilitation Working Group would develop a national action plan regarding prevention of long-term disability and work loss, which will support the strategy.”

Prevention is the role of the OHS authorities in Australia and the Department of Labour in New Zealand. Clearly HWCA will be discussing these strategic aims with those in charge of preventing injuries and illnesses. But can the various WorkCovers and WorkSafes cope with biopsychosocial hazards? Surely HWCA will also be talking with all the NGOs who lobby on depression, anxiety, fatigue, stress, wellness, happiness ………….. (Get ready for even more influence for BeyondBlue)

Consultation will also be needed with the various government departments involved with health promotion, public and occupational. Not to mention the unions, employer associations and health professional bodies.

A strategy of such magnitude would require considerable resources and horse-trading through government ranks in all jurisdictions. It is hard to see this being achieved through a meeting of Chief Executive Officers, and should such a strategy be pushed through individual workers’ compensation bodies anyway?

To achieve true reform of workers’ compensation and to resist the substantial pressure that is likely to come from the Australian and international insurance companies, the Australian government is going to need considerable negotiating skills. Because of the involvement with the financially influential insurance companies, it is doubtful the intended reforms will be achieved. (HWCA already has discussions with the “Heads of Compulsory Third Party Insurers” according to the communique)

Almost as a post-script, it is noted that Greg Tweedly, CEO of WorkSafe Victoria, takes over the chairmanship of HWCA from the CEO of WorkCover NSW, Jon Blackwell. Tweedly is a very busy CEO and will become more so, if the rumour proves true that he will be joining the National Board of the Safety Institute of Australia.

As the chairmanship moves from New South Wales, so will HWCA’s administrative support. The next HWCA meeting is scheduled for 5 February 2010 and will be coordinated through the Victorian Workcover Authority or Comcare.

Kevin Jones

France Telecome becoming a case study

The managerial turmoil at France Telecome over a spate of work-related suicides is likely to become a case study in failed change management, firstly, and public relations, secondly.

A report in The Guardian on 6 October 2009, points to a (French) video of the company’s chairman and CEO, Didier Lombard, speaking to Telecome’s managers in January 2009. The paper reports that Lombard says

“those who think they can just stick to their routine and not worry about a thing are sorely mistaken”.

The article goes on to say

“He went on to suggest that staff outside Paris spent their time at the beach, fishing for mussels, adding those days were “over”.”

The last quote sounds like a joke between colleagues but as suicides had already occurred at the time of this speech, it was in poor taste even then.

For those outside of France, Lombard was set on the path of making the company relevant to contemporary ICT needs. A short article from 2005 says

“France Telecom Chief Executive Didier Lombard is merging telephone, Internet and mobile offerings under the Orange brand as part of a three-year program called NExT, an acronym for New Experience in Telecom services.”

There are similarities with a range of telecommunications companies that needed to change – British Telecom, New Zealand Telecom and Telstra to name a few. Telstra’s management change earlier this century with Sol Trujillo and Phil Burgess caused considerable shareholder and political turmoil with their change strategies.

Organisational change from administrative agencies to commercial entities can be a life challenge but it can be done with time and careful planning. The suicides at France Telecome seem to be an extreme example of how this process can be mishandled. However, just as with cancer clusters, the actual cause is often difficult to identify and sometimes can remain a mystery or coincidence. The circumstances at France Telecome need to be carefully studied from when the change management process began, well before the first suicide.

At the moment we are in the period of shock and panic responses by the company. Every suicide heightens this panic. Hopefully the measures being put in place now by the company will achieve a more considered, and long-lasting, corporate result.

Kevin Jones

Executive resigns over work-related suicides

According to various media reports, a senior executive of France Telecome has resigned due to the mismanagement of the organisational restructure of the company which has been happening for almost two years and that, some say, has led to suicides.

One report says:

“France Telecom’s deputy chief executive Louis-Piere Wenes had faced calls to resign from employees who say management policies are responsible for the firm’s so called “spiral of death”.”

A UK newspaper includes a quote from M. Wenes:

“Despite the hard edge of the technological and economic fight, especially in our business, nothing can justify men and women putting an end to their lives. Today, like before, I cannot accept it.”

France Telecome’s media statement reads:

“Louis-Pierre Wenes, the current Deputy CEO in charge of Operations in France, has asked Didier Lombard, Chairman and CEO of France Telecom, to relieve him of his responsibilities. Didier Lombard has accepted this request and thanks Louis-Pierre for all that he has accomplished since December 2002 and for the significant contribution that he has made to the turnaround and the performance of the Group.

As of today, Stephane Richard is appointed Deputy CEO in charge of Operations in France.”

UPDATE: 7 October 2009

Additional information and links available HERE

Category: executives

Not all employers are the same

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