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March 27, 2013

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Salon-owner fined for not having liability insurance

The owner of a hair salon in Herne Bay, Kent has appeared in court for failing to provide insurance cover to protect employees against injury or ill health in the workplace.

In August last year, an employee at Inspirations hair salon in Howe Farm Road contacted the HSE after becoming concerned the business didn’t have Employers’ Liability Compulsory Insurance (ELCI).

The Executive visited the salon and found its owner, Rajan Patel, had purchased the business three months earlier and was unable to produce a valid ELCI certificate. This meant his staff had no means of pursuing a civil claim against the business in the event they were injured at work, or contracted a work-related illness or disease, in the interim period.

HSE inspector Caroline Fullman said: “Thankfully, none of Mr Patel’s employees suffered a work-related injury or illness that warranted a claim for damages, but had they done so they would have been denied a chance to claim the compensation as recompense for whatever pain and suffering they had endured.

“That is the purpose of ELCI. It’s not a trivial optional extra, it is a compulsory requirement that is designed solely to protect employees.”

Patel appeared at Canterbury Magistrates’ Court on 26 March and pleaded guilty to breaching s1(1) of the Employers’ Liability Compulsory Insurance Act 1969, for failing to have insurance cover. He was fined £3900 and ordered to pay £3000 towards costs.

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11 years ago

Hi Phil – Thanks for your comment. The wording on that part of the article was taken direct from the HSE. I think the point being made by HSE is that an IP could take out a claim but the business owner wouldn’t have had the means to pay without the insurance.

11 years ago

An employee needs to be sure that he would not be suing a “man of straw,” hence the need for compulsory insurance. You may think a token £1 fine against a liquidated company is acceptable, but I think the risk of an employer walking away from compensating an employee with a life-changing industrial disease or injury is definitely not acceptable.

11 years ago

An employee’s claim for compensation doesn’t depend upon whether the employer has EL insurance; it’s not employees insurance, it’s employers insurance. EL insures the employer against sums he may be legally liable to pay employees as a result of injuries sustained at work. So in this instance the employer may not have been personally able to meet the cost of such liabilities but it wouldn’t affect the ability of employees to seek such compensation.

11 years ago

Spot on – glad someone else has detecetd the flaw in the article. I wonder whether the error is a fault of the HSE or of the journalist?
If the former it does worry me that the our enforcers are so lacking in understanding of the legal position and the real purpose of the law that they enforce!!!