The Corporate Manslaughter and Corporate Homicide Act 2007, which has now come into effect, will leave thousands of businesses within the transport and distribution sector at risk of folding overnight unless they can demonstrate employee training and health and safety precautions within the workplace are regularly monitored, experts warn.
The Act is designed to drive down the number of fatal accidents in the workplace.
From now any such accidents will be subject to a police investigation rather than the Health and Safety Executive.
The warning comes from Phil Brown, managing director of online HR toolkit creator Youmanage.
Mr Brown said: “This new piece of legislation makes it easier for businesses to be prosecuted in the event of an employee being killed at work.
“Before the Act was brought in, businesses could only be convicted if policies were controlled by one individual.
“As most companies are headed by more than one manager it made it difficult to bring about successful prosecutions.
Statistics show there have only been half a dozen successful cases in the last 16 years and none of these were against large companies.
“As of now if a company is unable to demonstrate its management systems are regularly maintained and monitored, and always adhered to, it could face closure overnight.”
In 2006/7, 241 people were killed at work. In the event of an accident, if a company is unable to prove that its employees were given proper information during their induction or that necessary training requirements were kept up-to-date, it could face substantial fines – enough to put some companies out of business overnight.
An advisory panel has suggested fines should equate to around 5% of the firm’s annual turnover, rising to 10% or more in extreme cases and dropping to 2.5% in cases where companies can prove mitigating evidence.
Mr Brown urged businesses to take all reasonable steps to safeguard themselves from legal proceedings under the Act by ensuring that all staff receive the necessary training to do their jobs.