John Dean, Sales and Distribution Director at healthcare provider HSA, spells out the costs of taking your eye off the managerial ball in terms of punishments, penalties and profit loss.

HR today involves tiptoeing through a minefield of red tape, dealing with an increasing stream of employment legislation and handling a mounting volume of employee grievances and disputes. And the potential downside of getting all this wrong is huge.

Employment Tribunals can award up to £56,800 for unfair or constructive dismissal. Additionally, they can require employers to pay a further £10,000 in costs, meaning that a single adverse judgment can play havoc with the bottom line of a small business as well as distracting management time away from the real business at hand.

Worryingly discrimination claims no longer have an upper monetary limit either and their potential for dreadful media headlines is enough to put the fear into any organisation.

According to the Equal Opportunities Commission, every year around 30,000 working women lose their jobs because of sex discrimination on the grounds of pregnancy.

Stress-related claims, now averaging over £50,000, can also be heard as discrimination cases at tribunal. As well as being heard as constructive dismissal cases in civil proceedings.

Recent research by the Health & Safety Executive (HSE) shows that one in five workers feel extremely stressed at work, and the problem is clearly not going away. As well as shifting legislative requirements, the courts are active in developing the law in a way that changes the imperative on managers to protect and promote their employees’ health. Overall, the expected duty of care level is rising, on a number of fronts.

VDU workers must, for example, be provided with appropriate eyesight tests at their request and suitable personal protective equipment must be given to employees who may be exposed to risks to their health and safety.

Regular inspections are carried out by the HSE, who do not anticipate becoming any less vigilant in this area despite departmental budget pressures.

HSE inspectors who spot irregularities can serve improvement notices, which give the company concerned a brief window in which to comply. Failure to do so could result in them being taken to a magistrates court, where there is a maximum fine of £20,000, or even to the Crown Court, where fines are unlimited.

For really shocking breaches, inspectors can also issue a direct prohibition notice which requires a firm to stop carrying out the work that was in breach of regulation until further notice. The impact that this can have on profitability can obviously be devastating.

Anyone who feels that this regulator can be ignored had better think again, because it issues around 11,000 notices a year. Some 1,000 of these end up as prosecutions, with an intimidating conviction rate of 89%. During 2003/4 one fine was as high as £700,000 with the average coming in at just under £15,000.

The HSE does, however, repeatedly emphasise that businesses that comply with its regulations and guidelines will have nothing to worry about in terms of either punishments or litigation. Meeting the standards of the Health and Safety at Work Act and associated Regulations are only enough to meet the statutory minimum requirement.

Courts are increasingly setting higher expectations on managers through new cases they hear. All management teams are therefore advised to pay due attention to the Management Standards for work-related stress that the Executive issued last November, and stay up to date with expert advice.

As with physical illnesses, the essential messages for management to grasp when attempting to tackle the problem of stress is that prevention is better than cure and the earlier a condition is treated the less it is likely to cost.

Apart from anything else, employers have a legal responsibility to look after their employees, to try to prevent them from becoming ill through work related stress and to take reasonable steps to help those that do become ill from it.

Getting help to deal with the basics is essential therefore, enabling management to focus on leveraging the up side of doing these things really well.

So companies that offer and pro-actively promote employee assistance programmes (EAPs), which provide stress counselling via a help-line backed up with the facility to have face-to-face appointments can put themselves on a stronger legal footing as well as do much to help to tackle absenteeism.

But a broader absence management package which aims to reduce absenteeism caused by physical as well as mental conditions, focusing on early intervention, can create significant competitive advantage through greater productivity.

Additionally the reduced costs of temporary staff and downtime finding permanent replacements for those unable to work, as well as improved staff welfare can make a massive difference to businesses. Indeed a recent survey by the HSE found that 90% of businesses believe that health and safety management done well positively affects staff morale as well as productivity.

These solutions do not need to cost the earth. HSA, for example, has recently launched WorkWell, which – for as little as £5 per month combines an EAP with cover for diagnostics, optical and dental check-ups and treatments, complementary therapies and child birth.

Using the benefits promptly can help prevent long lay-offs and the EAP and optical cover help fulfill legal obligations, as well as driving staff health self-promotion.

Implementing the right management safeguards and best practice protocols should not necessarily be perceived as only constituting a defensive tactic that focuses entirely on damage limitation. It can actually have a very positive impact on your business.

Doing the minimum may be enough to keep you out of court for a while but essential welfare and further promotion of wellbeing must go hand in hand to create truly successful businesses that are going to survive and thrive in the modern business world of the future.