Tag: Corporate responsibility

The Senate inquiry into Australia Post should provide important lessons in OHS, HR, RTW and LTIFR

For decades OHS professionals have known that the Lost Time Injury Frequency Rate (LTIFR) does not accurately measure the safety performance of an organisation.  LTIFR can be manipulated and is responsive to single catastrophic events.  The consensus has always been that LTIFR is one indicator of safety improvement but should not be relied upon at that same time as acknowledging there is no real alternative to the LTIFR.

From an Australian Senate inquiry that is currently running and sparked, to some extent, from an ABC current affairs report in September 2009, it seems that the Australian postal service, Australia Post, is doing just that.

One of the attractive managerial elements of LTIFR is that it provides a figure from which incentives and rewards can be provided.  This is attractive to both OHS managers and employers because LTIFR provides a tangible benchmark.

Safety incentives and rewards have been contentious for decades but have come to the fore in this inquiry due to this type of accusation from one of the Australian trade unions, the CEPU ( Communications, Electrical and Plumbing Union):

Australia Post boasts that Lost Time Injury records are the lowest they’ve ever been. But those results haven’t been achieved by a safer workplace – rather by manipulating the injury management process to force people back to work and deny employees their rights.

Meanwhile, the same managers receive cash bonuses for reducing Lost Time Injuries in their sections.

The CEPU has documented extensive abuse of the injury management process.

Facility Nominated Doctors

Workers are being bullied into attending company-paid Facility Nominated Doctors.

FNDs are instructed to get people eligible for workers compensation straight back to work, before they’ve had to time to recover.

Australia Post has a commercial contract with InjuryNET, a private organisation, which gives Post access to a network of doctors.

InjuryNET guarantees it will reduce Lost Time Injury rates, lost hours and duration until return to pre-injury duties.

Where workers are not eligible for workers compensation, company doctors are instructed to find them unfit for duties, so Australia Post can direct them off work without pay, or sack them.

The CEPU has obtained email evidence that managers use the injury management process to get rid of ‘undesireable’ (sic) employees.

This is the language Australia Post management uses to describe injured workers.

Many of the attachment the CEPU has provided to the Senate Inquiry are not being publicly released because they include details of many cases of alleged mismanagement.  The CEPU has posted an example of Australia Post’s approach to injured workers on Youtube.

The Australian Government responded to pressure from unions and elsewhere and established the Senate inquiry with the following terms of reference.

“The practices and procedures of Australia Post over the past three years in relation to the treatment of injured and ill workers, including but not limited to:

  1. allegations that injured staff have been forced back to work in inappropriate duties before they have recovered from workplace injuries:
  2. the desirability of salary bonus policies that reward managers based on lost time injury management and the extent to which this policy may impact on return to work recommendations of managers to achieve bonus targets:
  3. the commercial arrangements that exist between Australia Post and InjuryNet and the quality of the service provided by the organisation:
  4. allegations of Compensation Delegates using fitness for duty assessments from Facility Nominated doctors to justify refusal of compensation claims and whether the practice is in breach of the Privacy Act 1988 and Comcare policies:
  5. allegations that Australia Post has no legal authority to demand medical assessments of injured workers when they are clearly workers’ compensation matters:
  6. the frequency of referrals to InjuryNet Doctors and the policies and circumstances behind the practices:
  7. the comparison of outcomes arising from circumstances when an injured worker attends a facility nominated doctor, their own doctor and when an employee attends both, the practices in place to manage conflicting medical recommendations in the workplace; and
  8. any related matters.”

Some submissions to the inquiry have been made publicly available, including a submission by Australia Post.  The company responds to each of the allegations included in the terms of reference.   A frequent response from Australia Post is that its actions do not breach the law be it privacy legislation, workers’ compensation or its own policies.  This defence is common for companies and organisations but it is often contrary to many of the arguments from the workers.

In the video above Brett Griffin describes the treatment from his managers at Australia Post as “wrong”.  It may be wrong but is it illegal?  This is the question that most Courts and judges face.

However this inquiry ends, the management of its employees seems not to have been to an acceptable level.  The safety and HR Management system seems not to have been working properly.  The evidence for this is the number of disgruntled employees and ex-workers and the existence of the Senate inquiry.

Clearly Australia Post’s conduct was not “best practice”.   In the company’s recently released annual Corporate Responsibility Report it says this under the section for People Management:

“The effective management of our human resources is, therefore, of vital importance to our brand strength, community engagement, service performance and financial returns. Over several decades, we have developed a set of policies and programs that are designed to protect and reward our people – including progressive industrial relations policies; proactive management of occupational health and safety; continuation of our successful injury management, rehabilitation and return-to-work programs; a strong commitment to diversity; structured workplace learning; and effective grievance procedures.”

RTWMatters said in an article on its website (subscriber access only) in late September 2009 this about Australia Post:

“Some of our team have had first-hand experience with Australia Post’s return to work. In the select number of cases they have dealt with the Australia Post system has been found to be frustrating and seemingly lacking in genuine interest in the employee. Perhaps our team has seen only isolated examples, not representative of the general approach – if so our opinion may be swayed by the appropriate data. Our experience is that the Australia Post system focuses on ‘process before people’.”

The “Senate Inquiry into Australia Post’s treatment of injured and ill workers” will undoubtedly provide important lessons that will be relevant globally on safety incentives, LTIFRs, return-to-work practices in a large organisation, rehabilitation provider conduct, and, most importantly, how to manage injured staff.  What should not be lost in any inquiry of this type is that the inquiry exists because people have been hurt and, they feel, unfairly treated.

Kevin Jones

[Kevin Jones is a feature writer for RTWMatters]

All non-confidential  submissions can be accessed as they are uploaded at http://www.aph.gov.au/senate/committee/eca_ctte/aust_post/submissions.htm

Asbestos Awareness Week calls for action

During Asbestos Awareness Week 2009 in Melbourne Australia the trade union movement pledged to begin a national strategy to control and remove asbestos from Australia.  This would have been a very tall ask any time in the last two decades but Asbestos needs to compete now with Climate Change for the attention of the media, the decision makers and the heartstrings of the community.

It is accepted that in the near future more people will be touched directly and indirectly by asbestos-related diseases but, at the moment, the issue is concentrated in low-income industrial suburbs and, as such, is still dismissed by some (often in suburbs with large trees and no pubs) as a disease that only strikes the blue-collar smokers.  The social inequity of asbestos-related diseases should be studied in some depth as it is likely to shame governments into action on this hazard.

Jim Ward - Australian Workers Union

At a seminar in late November 2009, a small audience in the Victorian Trades Hall was told of the success of the Tasmanian campaign in gaining government support for the removal of all asbestos by 2030.  Jim Ward of the Australian Workers Union spoke of the approaches to Goliath Cement (“The James Hardie of Tasmania”). Ward told how the CEO of Goliath did not blink at the request to remove asbestos.  Ward said this type of response has been repeated throughout Tasmania.

The audience also heard from several who are at the frontlines of dealing with asbestos-related diseases.  Vicki Hamilton and Tim Tolhurst spoke of the frustration of having inadequate disposal facilities in regional areas of Victoria.  The challenge here is immense as the temptation to bury asbestos in the back paddock when no one’s around is strong even though it is selfish and immoral.  Vicki and Tim showed how a structured program across the community is required because one cannot encourage the removal of asbestos until there is a place to safely dispose of it.

Vicki Hamilton of GARDS

Pat Preston, ex-CFMEU and now with the Asbestos Contractors’ Group, spoke of the legislative and operational problems faced by licensed asbestos removal contractors.  The holes and conflicts all complicate the process of asbestos removal and disposal and increase the cost, particularly of asbestos removal.

Several speakers pointed to the anomaly that the removal of asbestos from domestic buildings of less than ten square does not required licensed removal, thereby “encouraging” small volumes of asbestos to be hidden at the bottom of domestic rubbish bins.  The OHS risks to waste collectors are not dissimilar to those who dispose of toxic and trade waste down the toilet next to the workshop when WorkSafe or the union is not around.

Of course the audience and speakers seem to all agree that there is no safe level of asbestos exposure.  There are certain to be those in Australia who are “asbestos-skeptics” and many seem to have the ear of the decision-makers.

One speaker provided a fresh perspective that was very appropriate but surprising for a couple of reasons.  Anthony La Montagne, of the University of Melbourne, has undertaken ongoing research on job stress, cancer clusters and, clearly, asbestos issues.  La Montagne provided the glum news that several promising medical techniques for early detection of asbestos have come to nought.  The only effective risk reduction technique is for those who may have been exposed to asbestos to quit smoking as this smoking appears to exacerbate asbestos-related disease.

Several speakers noted that in the Asbestos Awareness Week 2008, there was a motion to have the Government undertake action on asbestos.  The resulting inaction was embarrassing and motivating with participants committing themselves to continuing to lobby for controls on asbestos.  This is going to be a considerable challenge if they continue through the same lobby process that they have applied for the last few years.

Tom Tolhurst of ADSVIC

The asbestos safety advocates should drop “awareness” from the week’s title because awareness equates to “aspirational targets”, former Prime Minister John Howard’s way of promising much and delivering nothing.  Just as everyone accepts that smoking causes lung cancer and climate change exists, people know that asbestos can kill.  Move away from awareness-raising to action.

Research the social inequity of asbestos in low-income areas.  Many domestic houses have asbestos houses or in their roofs, particularly in low-income areas which are also the areas where asbestos workers live.  If the reality and scope of this situation was proven to a level and in a format that policy-makers accept, the asbestos control option would be much stronger.  Even if the government continued its inaction, a case could be put to the discrimination tribunals and human rights sector to shame the government to represent all citizens equally.

Market the asbestos week.  White, pink and striped ribbons are becoming a fundraising cliché but the marketing of social health issues works.  There must be a coordinated approach to getting sponsors and support into the promotion of asbestos-related diseases on a large scale.  Once there is serious money behind the issue, one can fund research and present data that convinces decision-makers of the reality of the issue.

Pat Preston of Asbestos Contractors' Group

Undertake a public health cost-benefit analysis of asbestos-related disease, as one speaker advocated at the Victorian Trade Hall.  There are many lessons from the compensation issues of James Hardie Industries but one is that compensation creates wealthy (for a short while) families of dead workers and can do little of health benefit to the mesothelioma sufferers.  It is surprising that the fact has not clicked in the government mind that compensation for asbestos-related diseases provides an important but only symptomatic relief.  The government is applying paracetamol to an issue that requires surgery.

The union seminar was heartening in that it showed how many people are actually tackling the issue of asbestos-related diseases.  But it also operated under a cloud of frustration with an occupational and public health risk that is not receiving the government support that other similar matters are.  Trade unions are a vital part of any plan to control asbestos but just as many people in the leafy suburbs are isolated from asbestos risks, so the audience for the asbestos message is limited by the message remaining within the trade union context.

Tony La Montagne of the University of Melbourne

There needs to be a creative approach to generating sufficient community outrage over the unnecessary deaths of workers from asbestos so that the government cannot avoid action.  The James Hardie legal action and the lobbying of Bernie Banton, and others, was about compensation, about making a company accept its social responsibility, about making it pay.  It worked, but James Hardie still cannot afford the compensation bill that is the reality of decades of profits from a toxic substance that kills.

In 2009 several Australian Governments have helped out this company by contributing $A320 million to the company’s compensation fund.  Why?  When did the government decide to cover the costs of a company’s exploitation of workers?  This is on top of having to fund the public hospitals that have to deal with mesothelioma victims.  The government, and the taxpayer, is paying twice!

Let the company fail and allow the class action lawyers to pick over the assets.  Or better yet, keep James Hardie Industries alive and bleed it just enough so that it can fund the removal of its toxic legacy for the next thirty years.

Every shareholder in James Hardie that receives their dividend cheques from whichever country James Hardie moves to next (Zimbabwe cannot be far off) needs to understand that those dividends could be used to ease the pain of the workers who generated the corporate profits rather than contribute to their own bloated share portfolios.

Kevin Jones

Flawed basis for OHS decision-making

Most strategic plans made by OHS regulators in Australia are based on workers’ compensation statistics.  Everyone agrees that this is a huge underestimation of the work-related injury and illness rates but no one yet has tackled this information deficiency.

Australia’s OHS harmonisation might attempt this but it will not be until the government harmonises the States’ workers’ compensation system that Australians can have unified and consistent statistics.  Yet even then, the reliance on workers’ compensation data will continue to understate the significance of work-related injuries on the community.

The Australian inaction contrasts to activity undertaken in the United States by the Government Audit Office (GAO).  An October 2009 report by the GAO, released online on 16 November and discussed in blogs and one US newspaper, shows the state of OHS statistical play in the US through its audit of the operations of the Department of Labor’s Occupational Safety and Health Administration.

  • OSHA only audits 250 of the 130,000 high hazard worksites each year.
  • All of the data available is provided by employers.  Workers are not interviewed.
  • If the worker has left the company’s employment, they are unable to be interviewed.
  • “OSHA also does not review the accuracy of injury and illness records for worksites in eight high hazard industries because it has not updated the industry codes used to identify these industries since 2002. “
  • Statistics supplied to the Bureau of Labor Statistics by employers are not verified. (BLS is not required to do this)
  • The GAO identified disincentives on both employers and employees for reporting illnesses and injuries – potential job loss, fear of increasing workers’ compensation premiums or losing out on work contracts.
  • The disincentives may lead to a reduced medical treatment so as to avoid injury reporting and the issues associated with the reporting. (A third of health practitioners interviewed admitted to being pressured about workplace injuries)

On this last point, those OHS professionals who advocate safety incentive schemes may wish to consider the graphic below

Pressure From Workers to Downplay Injuries and Illnesses and Awareness of Incentive Programs

Of the 47% who said they were pressured to downplay injuries and illnesses, over 60% were from workplace s that had incentive programs.  This is a serious statistic that incentive advocates must address in their programs.

Australia has tried to gain greater accuracy to OHS data over many years.  The (then) National OHS Commission published several very useful statistical reports into various industries but they could not provide an easily understood national picture because of State variations on reporting criteria.  Australia is much less complex than the US and the task of achieving better OHS statistics should be easier, as long as there is the political will.

The importance of accurate statistics in decision-making at the policy level as well as that at individual workplaces cannot be overstated.  The GAO report summarises the significance in its report.

“Accurate injury and illness records are important because they assist Congress, researchers, OSHA, BLS, and other agencies in describing the nature and extent of occupational safety and health problems.  These records are also vital to helping employers and workers identify and correct safety and health problems in the workplace.  In addition, these records help OSHA evaluate programs, allocate resources, and set and enforce safety and health standards.  Without accurate records, employers engaged in hazardous activities can avoid inspections because OSHA bases many of its safety inspections on work-related injury and illness rates.”

Kevin Jones

My thanks to Workplace Professor Blog for bringing the report to our attention.

OHS must raise its profile in the debate of directors’ liability and accountability

The global financial crisis has highlighted many business management issues.  Probably one of the most contentious is executive remuneration which is based on the question “should executives receive performance bonuses when the company is not performing well, ie. not returning profits to shareholders?”  But underpinning even this question is one of accountability.

Business leaders, commentators, lawyers and politicians are comfortable in discussing financial and corporate accountability but extend that discussion to other areas of business and they respond with a confused stare or outright dismissal of the proposal.

This week, the Australian Financial Review newspaper ran a page one story: “Revealed: directors face harsher liability penalties.”  [None of the AFR articles are freely accessible online] The article revolved around Australian Government plans to “break an impasse between state governments over proposals to harmonise conflicting commonwealth and state directors’ liability laws.”

As should not be surprising from a business paper, the discussion centred on financial and corporate governance issues but OHS obligations were floating behind all of the business-speak.  This was particularly obvious with this paragraph:

“Federal ministers have expressed concerns that onerous directors’ liability rules increase the cost of directors’ insurance and discourage them from taking board seats.”

This paragraph shows that the first response to any corporate trouble is insurance.  This cowardly response is short-sighted and contributes to the unnecessary growth in litigation which the directors regularly complain and which increases the cost of liability insurance premiums.

It is also an acknowledgement that the introduction of new rules does not address the behaviour intended, it leads to investigating ways of avoiding accountability for one’s actions.

The second point of that paragraph is that people are more likely to refuse to participate than to undertake sufficient education that would allow them to perform the job better and with less risk.  The response should not be “it’s too risky so I won’t do it” but “let’s get better informed so that my decisions are more valid and the risk is reduced”.

It is clear that lawyers are running the agenda when semantics enter the argument.  The AFR article goes one to say “there are fears about confusion over the distinction between executive and non-executive directors”.  This confusion comes from the main concern of directors being to cover one’s arse rather than focusing on the job at hand and the corporate purpose.

The AFR article makes no mention of OHS but the accompanying article “Duty weighs heavily” by reporters James Eyers and Annabel Hepworth does.  Eyers and Hepworth look back through several decades of law reform investigations and reviews to show the history of similar director concerns.

But it is a more recent statistic that is the nub of the article.  A Treasurysurvey of directors from top Australian listed companies, in conjunction with the Australian Institute of Company Directors, found that

“…71 per cent of those surveyed had declined taking board seats mainly because of their fears of personal liability, while 46 per cent had resigned from a board position because of the issue.”

These concerns largely deal with false market rumours, manipulating securities prices, criminal cartels, consumer protection laws and others.  It is this company that the importance of taking responsibility for OHS should be pushed by the safety advocates but it seems that the business and corporate contexts of OHS are only ever discussed by the corporate lawyers.  And yet, OHS professionals complain about not getting heard at Board level.  Perhaps what is needed is one of these OHS professionals to take a business degree so that OHS can be described in terms business understand.

Of course the risk is that OHS may be found to be contrary to all the basic capitalist concepts and that the only way it can be applied in a business is for the application of legal “wriggle room” from the concept of reasonably practicable.

On 6 November 2009, Bob Baxt (a partners with law firm Freehills and the chair of the law committee with AICD) responded to the Eyers and Hepworth article with a personal opinion describing directors and senior managers already in the “firing line” from the corporate regulators.  He seems to see this as unfair but those executives are in the “firing line” because they are suspected of doing the wrong thing.

Baxt describes the “reverse onus of proof” as an “obnoxious device” and he may be right but he needs to consider why such a provision was introduced in the first place – business managers were not complying with their legislative obligations, they were avoiding responsibility, taking short cuts for personal wealth, having workers die and then winding up the company to avoid prosecution.

Too many business professionals focus on “cause and effect” and see injustice.  Yet if they looked a little further back and analysed the “causes” a bit more carefully they may just see that in many cases the regulatory changes have come about as a result of their own misdeeds.

The analysis of capitalism that resulted from the global financial crisis has faded very quickly as the markets rebound.  Companies are applying the same behaviours that led to that crisis.  Most business analysts and executives talk about leadership as the be-all and end-all but we should not be lead in the same direction as in the past as we are likely to end up in the same place.  True leadership is about accepting mistakes and heading in a fresh direction where such mistakes cannot be repeated.

Those who are bleating about how corporate executives are being bludgeoned by regulation and accountability need to get out of the leafy middle-class suburbs and the office buildings with bayside views and take some time to reflect on how we came to be in such an economic mess and why workers continue to get injured, maimed and killed.  It may just be that accepting responsibility is the new foundation required to build a humaneand profitable future.

Kevin Jones

Asbestos is an example of immoral economic growth

The financial newspapers often refere to a BRIC group of countries or, rather, economies.  This stands for Brazil, Russia, India and China and is used to describe the forecasted economic powerhouses for this century.  But there is also the risk of economic growth without morality.  India is a case in point and asbestos can be an example.

Pages from india_asb_time_bombThe health hazards of asbestos have been established for decades but only officially acknowledged more recently.  One would expect that when some countries ban the import, export and manufacture of a product that other countries may suspect that something may be amiss.

In the introduction to the September 2008 book “India’s Asbestos Time Bomb” Laurie Kazan-Allen writes

“Historically the burden of industrial pollution has reached the developing world much faster than the fruits of industrial growth” writes Dr. Sanjay Chaturvedi.  This statement is well illustrated by the evolution of the asbestos industry in India.  In the frantic rush for economic development, there has been a pervasive lack of concern for the health of workers and the contamination of the environment.  Sacrificing the lives of the few for the “good” of the many, the Indian Government has knowingly colluded in this sad state of affairs.”

Kazan-Allen is a longtime campaigner on asbestos.  In 2001 she put this question to the Canadian Medical  Association Journal.

“Chrysotile has caused and is continuing to cause disease and death worldwide. It is hypocritical for Canada to continue to produce chrysotile when it is not prepared to use it domestically. If chrysotile is unsuitable for Canadian lungs, how does it become suitable for Korean, Indian and Japanese lungs?”

A foundation of public health and workplace safety management is that bad practices, immoral practices, are corrected, not accommodated.  At some point the exploitation of others for the financial betterment of a few must end. Could that lead to a “compassionate capitalism” or is that just another term for “socialism”?  These semantics are being argued at the moment in the United States over health care but the question needs to be asked globally, just as it is on climate change and on the financial markets.

The global implications of poor OHS management and practices needs to be placed on the policy agenda not only of the ILO, United Nations and trade union movement, but the business groups, and professional associations who need to develop their social charters.  If those voices are not added to the debate, safety will also be a fringe issue and it is too important for that.

Kevin Jones

Good corporate advice tainted by poisonous product

In Matt Peacock’s book, “Killer Company“, an entire chapter is devoted to the legacy of the James Hardie chairman, John B Reid.  In Peacock’s talk at Trades Hall in October 2009, he mentioned that Reid had once published a book called “Commonsense Corporate Governance”.  The apparent hypocrisy of an executive of a company that knowingly sells toxic material while advising others on how to manage their corporation responsibly generated chuckles of disbelief in the Trade Hall audience.

Reid book cover 001SafetyAtWorkBlog obtained a copy of John Reid’s book to see first-hand that someone could do such a thing.  A sad part of all this is that the advice in the book is sensible but Reid’s “legacy” now taints all he does and all he says.

One random example of the advice he provides concerns dealing with consultants:

“Where, as with solicitors and auditors, it is imperative for the company to retain them, company staff need to be reminded that the professional advisers are paid for on the basis of the time that they spend on the company’s business. This is not predetermined by the nature of the task. In large measure it is affected by the decisions made and by the homework done within the company. What does this mean?

First, the imposition of new and more demanding, and frequently less precise, legislation on all manner of subjects has made management and, as a result, directors, nervous about things that directors 50 years ago would have dealt with very quickly-and inexpensively. Further, the increasing number of specialists necessary within a company’s own payroll is a result of this legislative epidemic, and has produced a reinforcement of this culture of caution and, occasionally, of fear.”

Safety professionals may want to take particular note of this corporate imperative.

Peacock points to the strict confidentiality clauses that Hardie included in any settlements in the 1970s.  Peacock writes (p 156)

“Secrecy indeed was Hardie’s byword, one endorsed by the chairman, who would later advise aspiring directors to ‘remain silent where there is criticism’.”

Reid recommended this in a bulleted list of ways to handle the media.

John B Reid, whose personal wealth was estimated at $A181 million in 2004, is not unique in advising companies while also having a tarnished corporate reputation.  Some argue that the adjective “good businessman” is a tautology.

There is no doubt that Reid was an active philanthropist and corporate citizen.  He was awarded an Order of Australia for “service to industry” – no citation is available to explain the decision.  In 2006, he received the Goldman Sachs JBWere Philanthropy Leadership Award.

Greek tragedies were full of hubris and examples of the single flaw that made good men do bad things.  If the plays of Euripides, Aeschylus and Sophocles have yet to be analysed for their advice to corporate executives, they should be, for not only do they show human flaws but human corporate flaws.

John B Reid’s book on corporate governance is an easy read and has valuable lessons but it is now a book that makes the reader feel dirty.

Kevin Jones

Revealing podcast on asbestos in Australia

On 15 October 2009, Matt Peacock, a journalist with the Australian Broadcasting Corporation and author of a new book on asbestos and the James Hardie company, “Killer Company: James Hardie Exposed” spoke publicly at Trades Hall in Victoria.

Killer Company cover 001Peacock has allowed an edited version of his presentation to be used as a SafetyAtWork podcast which can be downloaded.  In the podcast he discusses the conduct of the James Hardie boss of several decades, John B Reid; the pervasive nature of asbestos throughout the Australian community; the surveillance of opponents by the company; the immoral public relations campaigns and, generally, the conduct of a corporation that knowingly sold a product that was toxic and harmful.

One blogger reviewed the book and said

“Killer Company” clearly shows that JH directors were criminally negligent and showed no humanity or compassion for their victims and no remorse for their crimes.

Peacock produced several reports on asbestos recently.  Video and transcripts of his reports can be accessed HERE.

Peacock has also been interviewed extensively about his book.  A video interview is available HERE

Kevin Jones

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