Brexit: what next for health, safety and your business?
The UK has voted to leave the EU. A period of uncertainty has commenced but nothing has changed legally. The UK’s position within the EU will remain the same until Article 50 is triggered and the ‘extraction process’ begins.
The extraction process will no doubt bring about change. Susan Dearden, Gowling WLG, looks at how might this impact on Health and Safety and your business.
Health and safety core legislation
The core legislation, is the Health and Safety at Work Act 1974 (the HSWA). While technically post-dating entry to the EU in 1973, the HSWA was the amalgamation of a mass of legislation and regulations that had previously existed but only generally applied to high risk industry sectors – mining, railways, factories, agriculture and nuclear, for example.
Withdrawal from the EU will have no impact on this core legislation.
EU withdrawal may impact on our secondary legislation – the regulations introduced since the HSWA as a direct consequence of EU directives. These started with the ‘six pack’ introduced in January 1992 – the first versions of the Management of Health and Safety at Work Regulations, Manual Handling Regulations, Display Screen Equipment Regulations, Workplace (Health, Safety and Welfare) Regulations, Provision and Use of Equipment at Work Regulations and Personal Protective Equipment Regulations (collectively the Regulations).
The UK has a very good track record when it comes to implementing EU directives as required. There is a perception that other EU counties may have been less diligent in doing so and that they do not prosecute breaches with the same degree of zeal or savagery of penalty. We have a reputation for having particularly stringent health and safety requirements, taking advantage of the wide and necessarily subjective interpretation of the meaning of “reasonable practicability” and in some cases imposing strict liability for breach (for example, under the Provision and Use of Work Equipment Regulations).
Within the UK, health and safety is sometimes regarded as onerous and burdensome and on occasion even a reason not to do things. The regulatory maze can be daunting and off-putting to inward investors looking to establish a business in the UK. On the other hand, we are rightly recognised as at least European leaders in health and safety, with the lowest rates per head of the working population of serious workplace accidents and fatalities.
Prosecution and enforcement
Prosecution is a domestic, not an EU, issue and as such prosecution policies are unlikely to be impacted by Brexit. Under the Sentencing Guideline (in force since 1 February 2016) (the Guideline) we have seen health and safety fines rise to reflect business turnover, with fines of up to £10 million under contemplation for businesses with an annual turnover up to £50million. The Guideline increases to a band of up to £20,000,000 if the charge is corporate manslaughter.
This level of penalty, though, is a reflection of domestic policy only and is therefore unlikely to change as a result of Brexit.
If Brexit allows a re-examination of the regulations which enforce EU directives however, those regulations and others, might be reviewed. However, the regulations are effective and established and we do not consider that change will be a Government priority. Further, the income generated from the higher fines now imposed for breaches might be too valuable for there to be much parliamentary impetus behind changing the status quo in this area.
Article 50 and Brexit
Once Article 50 has been invoked to begin the mechanism for exit, the UK would leave the EU within two years, unless that time is extended by agreement between the member states while negotiations continue. Those negotiations will need to cover fixing the terms of the UK’s exit (including all transition arrangements) and fixing our future arrangements with the EU.
It is likely that arrangements for the UK’s future relationship with the EU (including new trading agreements) will need to be contained within a separately negotiated agreement. Establishing new trading agreements with the EU countries and the rest of the world will be a lengthy process.
Given that the regulations which enforce the EU directives will be able to be reviewed post Brexit, there may be an opportunity for a new consolidated HSWA. It would certainly be an opportunity to consolidate all of the regulations that remain in force, many of which repeat common principles.
Before the referendum, the Government had already embarked on a programme of reducing red tape and limiting regulation. Arguably, we now have an opportunity to be bolder, to reduce some of the regulations on which we rely and to merge others – to make the identification of compliance needs a more straightforward exercise. However, given the good that has been achieved through the implementation of the regulations, and given the income generating from sentencing breaches of them, it is unlikely that reform will get rid of their import altogether.
In short, this is an opportunity for consolidation, but for anyone who hoped a Brexit vote might rid them of some of the more onerous health and safety and compliance obligations, they are likely to be disappointed.
After Brexit, if we are to continue trading with the remaining EU states, our products will need to continue to meet EU health and safety standards.
We will no longer have any right to engage in debate about EU changes – we will have lost that seat at the negotiating table. To date, we have been able to use our excellent track record on health and safety to influence the content and pace of changes deemed necessary by the EU.
Those exporting products from the UK to the EU will need to accommodate EU safety standards, whether or not they are required in our domestic legislation. That may well have cost consequences for production – as well as some logistical difficulties if different versions of the same product are sold here.
Products imported from Europe will conversely need to meet our national standards as they evolve and consolidate too. If our standards evolve more strictly than those applicable in the EU (in keeping with our track record in this area), this may impact on the desire or ability of EU businesses to import their goods here, especially if the goods will need to be adapted to meet our different standards. This, of course, will not just impact consumer goods, but the very machinery on which many of our industries depend, and which are often imported from or through or supported in their maintenance and spare parts by, other EU member states.
Food for thought
While Brexit will no doubt have some impact on our health and safety laws going forwards, nothing will change in the short term.
How different will our laws be post Brexit? More streamlined and easier to follow? Perhaps. More relaxed? Unlikely. Watch this space…
Susan Dearden is a partner at Gowling WLG.