OHS from a Strategic Perspective Series - Lesson 4
The key to understanding the importance of health and safety in your workplace is to comprehend the significance it plays in your overall cost analysis. STACS Inc. has developed this week long series guided towards assisting you in quantifying the costs of workplace injuries and comparing it to the costs of developing a successful health and safety program.
Lesson 4: The Cost of Workplace Injuries continued…
Brought to you from: Occupational Health and Safety in Ontario by Nora Rock
Categories of Costs:
“The costs of promoting safety at work fall into a number of general categories, including:
WSIA premiums, including supplementary premiums under incentive programs;
Top-ups provided to injured employees (if offered);
Costs associated with health care services offered at the workplace (for example, first aid or trauma counselling);
Fines and penalties levied under statutes or under the criminal or civil law;
The cost of personal protective equipment (PPE);
The cost of protective mechanisms on equipment or in the physical plant;
Costs related to upgrading equipment or facilities, either as a function of regular maintenance/modernization or in compliance with government orders;
Administrative costs related to documenting claims, conducting investigations, supporting the work of a JHSC, and managing ongoing claims and worker absences;
Costs related to health and safety benefit programs, for example, EAP’s;
Safety training and certification costs, either in-house or from outside providers;
Costs of safety promotion campaigns (signage, posters, program developer/delivery time); and
The cost of incentive programs, for example, awards and prizes.”
Justifying OHS Costs:
“Some business owners worry about how to justify the costs of health and safety compliance to their stakeholders. However, when viewed as a risk management measure, these costs become more palatable. The authors of Business results Through Health and Safety note that preventing injuries amounts, in many cases, to ensuring against the risk of business interruptions:
‘Ignoring or underplaying risks that may result in major interruption of the business is simply unacceptable from a shareholder or regulatory perspective…If an incident is serious (fire, explosion, significant employee illness due to toxic exposure etc.), it can put the operation out of business. This is not bad luck. It is bad and negligent management.’ (CME and WSIB 2001)
When this perspective is considered, it becomes clear that attributing safety promotion-related costs exclusively to ‘compliance’ is artificial. In many cases, injuries and illnesses occur because of problems in the business that can affect productivity in other ways. For example, if an employee is injured while recalibrating a piece of machinery, an investigation may reveal that the equipment required frequent adjustment and that its repeated malfunctions were causing unacceptable wastage of raw materials. Or if an employee was sickened because she was not properly trained about how to handle hazardous chemicals, the employer may learn through the accident, that its safety and environmental policies are not being communicated by supervisors to front-line staff. Is a costsly environmental accident at risk of happening because of mismanagement? Safety-related investigations often reveal root causes that have important productivity-related implications. Making a workplace safety is integral to good business:
‘Most of the businesses consistently achieving lower injury/illness rates have done this by using sound management practices. They have made safety option a business operative, not just because of concern for their employees, but because safety operation is a factor in their continuing business profitability and success. (CME and WSIB, 2001, p.2)’
OPPORTUNITY TO OFFSET OHS COSTS:
“To encourage employers to commit to safety, a number of programs exist that can help offset the costs of safety compliance. The NEER, CAD-7, and MAP incentive programs- which offer WSIA premium rebates for strong safety performers…and the Second Injury Enhancement Func (SIEF), a special WSIB program that seeks to offset some of the risks of hiring previously injured or disabled workers. Still other programs are available for employers willing to put in the time to investigate them.”
“The Safety Groups Program is a WSIB-sponsored program designed to facilitate the business-to-business transfer of safety knowledge and best practices. Schedule 1 employers who are in good standing with the WSIB are eligible to seek membership in an appropriate safety group. There are approximately 30 safety groups in existence, with the potential for more to be developed should interest allow. Safety groups can be industry-specific (for example, there are several ‘construction’ groups, a few ‘automotive’ groups, and one ‘education’ group) or in general in focus but regionally based (like the Kingston Partners for a Safety Community).
Each safety group has a ‘sponsor’- a member organization that serves as the group’s liaison with the WSIB. For example, the education group’s current sponsor is the Education Safety Association of Ontario.”
“Each year, member firms commit to initiating at least five actions from an Achievement List prepared by the WSIB to guide the work of the group. If a member meets the program’s participation requirements (which include performing a baseline OHS performance analysis and attending at least three meetings annually), it becomes eligible for a premium rebate. Rebates are determined based on the performance of the group as a whole: even if an individual member meets 100 percent of the participation requirements, the rebate the group receives will be based on the average performance for the group.”
Safe Communities Incentive Program:
The Safe Communities Incentive Program (SCIP) is designed for small business and provides a fixed premium rebate of 5 percent upon successful completion. Firms that participate in SCIP are not eligible to participate in the Safety Groups Program, which is targeted primarily at larger organizations, but SCIP participation does not preclude the receipt of additional rebates through the NEER, MAP, or CAD-7 programs.
A business is eligible if it pays less than $90, 2000 in annual WSIB premiums and is located in a participating community. A list of participating communities is available on the WSIB’s website.
When a business signs up for SCIP, its owner or a senior manager must complete a 16-hour program that covers the following topics:
Leadership in health and safety
The internal responsibility system
Hazard identification and assessment
Hazard controls and emergency response
Return-to-work and claims management
At the end of the program, the participant must submit a health and safety policy and a statement of health and safety goals to the WSIB for review. Upon the WSIB’s approval, the 5 percent premium rebate will come into force.