Institute of Employment Rights Quality of Working Life 24th June 2008 The Quality of Working Life: Promoting a Healthy Agenda Tuesday 24th June 2008 The Adelphi Hotel, Liverpool Sponsored by

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update Steve Tombs

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update Some positive aspects of the Act: no longer necessary to prosecute first an individual director or senior manager, in order to prosecute an organisation - possible to prosecute the organisation on the basis of the management failure of the organisation the offence no longer only applies to companies

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update Some positive aspects of the Act: there are useful criteria to assist a jury in determining whether a management failure is ‘gross’ has raised issues of sentencing (below…)

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update But, some of these have their own limitations: there are a number of significant exemptions that will limit the effect of the removal of crown immunity it is still necessary to link the management failure to failures at a senior manager level

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update Two key uncertainties: how broadly will the courts define ‘senior management’? how will they interpret ‘substantial’ failure in relation to the senior manager link?

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update Key Related Issues: Commencement of Act: 6 April 2008 Director Accountability? Resources? The Shift from Enforcement? - material and ideological

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update 2005: Hampton Review March 2005: Better Regulation Task Force, Less is More: Reducing Burdens, Improving Outcomes Nov. 2006: Legislative and Regulatory Reform Act 2007: Regulatory Code, “Regulators should recognise that a key element of their activity will be to allow, or even encourage, economic progress and only to intervene when there is a clear case for protection.”

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update SAP, Aggravating factors affecting degree of culpability: failure to act upon advice, warnings etc failure to respond to employee concerns financial or inappropriate motives corporate culture of breaches

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update Sentencing recommendations: fine of % of turnover 5% as ‘baseline’ publicity order

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update CCA’s analysis of 44 fines imposed following death: 4 companies fined between 0.001% and % of turnover 16 companies fined 0.1% % of turnover 19 companies fined 1% - 0.1% of turnover 5 companies fined 30% - 1% of turnover Thus: 39 of the 44 companies (89%) fined less than 100th (1%) of turnover Median fine was 700th (0.14%) of turnover Most were subsidiaries of wealthier parent companies.

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update there needs to be a much more consistent link between criteria that reflect the company’s wealth and the level of fine imposed manslaughter is one of the most serious criminal offences SAP’s view that 10% of turnover should be the highest possible sentence is because under the Financial Services Authority, the highest administrative fine that can be imposed is 10% of the global turnover of the organisation percentages for manslaughter should be in a range from 20% of turnover any fine imposed upon a company convicted of corporate manslaughter should at the very least remove any gross profits made by that company for the year

Institute of Employment Rights Quality of Working Life 24th June 2008 Corporate Manslaughter: an update the actual effects of the law are not known these remain a political issue – so pressure must continue…