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There is a strong business case for providing occupational health services. A 2004 study concluded that investment in workplace health promotion can bring about cost savings of £10 for every £1 spent.
For employees and employers, there is increasing evidence that working is generally good for health.
Meeting employers’ legal obligations
The 1974 Health and Safety at Work Act (strengthened by many subsequent regulations) places a ‘duty of care’ on every employer to be concerned for the health and safety of its employees.
The specific obligations regarding occupational health are contained in the Management of Health and Safety at Work Regulations (1999). The regulations cover all workers (including mobile and home workers) and include specific requirements to:
- Assess risks. The regulations give guidance on what constitutes a ‘suitable and sufficient assessment’ of the risks to which employees are exposed at work.
- Record the findings of the risk assessment in a retrievable form available to employers, safety and other employee representatives and visiting inspectors.
- Implement preventative and protective measures. The regulations set out principles underlying the employers’ actions and require employers to make ‘such arrangements as are appropriate’, having regard to the nature of the risks and the size of the undertaking.
- Provide ‘such health surveillance as is appropriate’.
There are particular requirements within the regulations for new and expectant mothers and for young workers (aged under 18).
The regulations do not define the precise form of occupational health services. The model used should be designed to ensure that all the requirements are covered within the particular context.
Ignoring the requirements could have serious consequences:
| In September 2006, an employment tribunal found that one city council in Scotland (Dundee) breached the Management of Health and Safety at Work Regulations 1999 by having an inadequate management system to deal with occupational health risks and that an ‘Improvement Notice’ issued by the HSE was justified. The Council didn’t have in-house occupational health specialists or a contract with an external occupational health provider. The tribunal ruled that this breached regulation 5 of the management regulations, which states that employers should make arrangements to manage effectively health and safety, even though the regulation makes no specific reference to occupational health. Subsequently, the Council has developed a proactive ‘well-being’ strategy.
Failure to comply with an Improvement Notice issued by the HSE can result in prosecution, and in the Crown Court, this can result in an unlimited fine.
See: http://www.hse.gov.uk/enforce/enforcementguide/court/sentencing/penalties.htm |
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Invest to Save
Evidence suggests that money spent wisely on an occupational health service can be a sound investment:
Voluntary influenza vaccinations: Barts and the London NHS Trust saved £217,000 (direct and indirect costs) by offering employees voluntary ‘flu vaccinations. Subsequently, immunised staff had less (0.8 days) sick leave than the non-immunised group. In 2001-02 this saved the Trust 540 employee days – or more than two employee years.
Managing short term absence: HM Prison Service reduced sickness absence by 25% between 2002 and 2006 to 11.5 days per employee per annum. This amounts to a £38 million cost saving.
Carmarthenshire County Council introduced a professional in-house occupational health service in October 2005 which focused on social care and housing divisions. Setting up and running the service for one year cost £109,000. Subsequently, sickness absence has reduced by 1%, which equates to 6,525 employee days or £500,000.
Cost of occupational health services
Research found that the average cost of providing an occupational health service in the public sector is £30 per full-time employee per year.
Figure 1 Public sector organisations spent £30 per full-time employee per year on occupational health
Source: IRS (2007) ‘Role of occupational health services in managing absence’, IRS Employment Review Issue 878, 30 July 2007.
This echoes the finding of a survey of occupational health provision in NHS Wales in 2001-02, which found that average expenditure per full-time employee was £34. Expenditure ranged between £18 and £65.
The costs depend on the range of services provided as well as the method of delivery. The range reported in the IRS survey (above) went up to £750 per head in one organisation. A survey of 120 private sector firms by consultants Towers Perrin found that 0.59% of payroll was spent on occupational health (See www.towersperrin.com “UK Corporate Healthcare 2005”). If the average employment cost per head in those firms was only £25,000, this would suggest an average spend on occupational health of £147.50.
On average, small employers spend more per head on occupational health than larger organisations.
Figure 2 On average, smaller organisations spend more per head than large ones on occupational health services
Source: IRS (2007) occupational health’s role in managing sickness absence’ IRS Employment Review Issue 878, 30 July 2007
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To avoid the risk of legal action
While the primary purpose of occupational health in the public sector is to promote well-being and good health among employees, it can also help employers avoid the growing risk of prosecution and significant potential penalties. Wherever a risk to the safety of an employee or group of employees has been identified, the organisation has a duty of care to its employees and must take steps to overcome or mitigate that risk.
UNISON has illustrated this risk with examples where UK public sector organisations have been prosecuted for failing to protect employees against stress and have faced punitive awards to the employee, such as:
- £25,000 - macho management;
- £67,000 - failure to support an employee in facing violent members of the public;
- £85,000 - compensation for bullying, harassment and intimidation over a number of years;
- £175,000 - failure to readjust workload which was causing stress; and
- £203,000 - failure to support employee facing violence and abuse from the public.
In addition, employers incurred the legal fees and the cost of time spent dealing with the case. (Source: UNISON (2002) ‘Stress at Work, a Guide to Safety reps’ http://www.unison.org.uk/acrobat/12879.pdf )
While these are extreme cases, some common factors are apparent:
- in each case, the employee had a prolonged period of sickness absence. Arguably, if those organisations had effective case conference review systems, the awful consequences of stress (which included suicide and permanent disability) could have been avoided along with the prosecutions;
- frequently, absent employees faced a greater-than-normal workload on their return to work as work was not reassigned; and
- several of the high-profile cases have featured individuals who faced verbal aggression from the public.
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