Feature insight - compliance
Ignorantia juris non excusat – Excuse me!?
Lisa Gillespie, HR services director at Moorepay, reveals the extent and costs of non-compliance and offers her solution
T his month’s featured topic of which even the smallest businesses face nowadays. None of us enjoy being criticised and it is much worse if you didn’t realise you were doing something wrong; but ignorance of the law – which is the translation of the Latin above – excuses no-one. I then thought about the recent high- profile organisations fined for breaches and how the cost of non-compliance can be absolutely eye-watering. Here are a few of the biggest to have hit the media in recent times: ● Argos was fined £1.5 million on top of an additional £2.4 million it had to pay out to current and ex-employees for breaching national minimum wage requirements. ● Tesco also fell afoul of minimum wage law and had to set aside £9.7 million to rectify their breach. ● The John Lewis Partnership had to shell- out a massive £36 million for pay-outs to their workers affected by John Lewis’s non- compliance over wages. But it isn’t just businesses that can face a hefty bill when they act unlawfully. The government now must find an estimated £32 million to repay employment tribunal fees which the UK’s Supreme Court decided on 26 July 2017 were unlawful. I’m not even half-way through this article and already that’s £100 million finding its way back into workers’ pockets. 2017 has been a bonanza year for some. Counting other costs Non-compliance isn’t just about the cost. There are other effects and consequences that can lead to serious psychological injuries, physical harm and fatalities. The statistics for 2015/16 published by the Health and Safety Executive in the last twelve months make for some sobering reading: ● 1.3 million working people suffering from compliance got me thinking about the overall compliance burden
a work-related illness ● 2,542 mesothelioma deaths due to past asbestos exposures (2015) ● 137 workers killed at work (2016/17) ● 72,702 other injuries to employees reported under ‘RIDDOR’ (the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995) ● 621,000 injuries occurred at work according to the Labour Force Survey ● 30.4 million working days lost due to work-related illness and workplace injury ● £14.1 billion estimated cost of injuries and ill health from current working conditions (2014/15). ...shared objective between workers and management And those statistics don’t represent the families of those killed or injured who will also be undoubtedly affected for years to come. Whilst the number of fatalities at work has declined substantially in the last three decades, the main causes listed below tend to remain constant and, more importantly, avoidable: ● struck by a moving vehicle ● falling from height ● struck by a moving object ● trapped by something falling/collapsing. More need for compliance I’ve covered compliance with statutory rights for workers and health and safety breaches, but organisations also must comply with data protection law – and the government has recently announced its plans to align UK domestic law with the impending General Data Protection Regulation due in May 2018. Again, the types of data breach/ incident remain consistent across sectors: ● data posted/faxed to incorrect recipient to embed those requirements...
● data not redacted ● loss or theft of paperwork ● data sent by email to the wrong recipient. There has been an increase of 18% in reported incidents (http://bit.ly/1Y6acnJ) to the Information Commissioner’s Office in just one quarter; and next year organisations will become even more exposed. One National Health Service (NHS) Trust has been subject to enforcement action this year due to repeated failures in both data management and human error in its processing of sensitive data. Why regulatory frameworks exist With so much regulation involved, failure to comply is common; and the above demonstrates that even the most well- resourced and mature organisations can make mistakes. Payroll systems, errors on shift work calculations and ignorance amongst staff have all appeared as reasons for non-compliance. Regulatory frameworks exist to increase compliance and you ignore them at your peril. It is also worth remembering that every single breach has the potential to be a whistleblowing issue in the workplace if it is ignored. In 2015/16, the NHS had sixty whistleblowing complaints about Foundation Trusts. In a five-year review document (http://bit.ly/2whKCnG) published by whistleblowing charity, Public Concern at Work, it was revealed that calls relating to the retail, financial and health sectors have doubled. It is likely that a high percentage is due to better knowledge within the labour force of what employers ought to be doing. Training employees to the standards needed to meet to compliance and making it a shared objective between workers and management to embed those requirements into every aspect is, I think, the key to cracking the problem of how to both monitor and adhere to compliance. n
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Issue 35 | November 2017
| Professional in Payroll, Pensions and Reward |
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