Updated: Nov 10, 2020
I couldn't think of any other CEO that cared more for their team and acted accordingly. Yet, here I was sitting in a court room - accused of putting the health and safety of my staff at risk and facing serious penalties. How the ***** did I get here?!
Before I established a management consulting firm, I spent my entire career in the corporate sector. During my tenure as Managing Director of Citizen Watches, I received a phone call you hope to never receive. I was attending a Company conference in the USA when I was given the message to call my CFO in Australia immediately. I rang him and was told there had been an industrial accident in our Sydney office and a staff member was seriously injured. Little did I know that I was about to lose 3 valuable members of my team, face a potential blow to the company morale I had spent years trying to build and then find myself in court being prosecuted for breaching the Occupational Health and Safety Act. It was a nightmare situation I never imaged I would ever face and one that could have been avoided.
The incident occurred in the after-sales service department and involved a buffing machine used to prepare watch case backs for engraving. A female member of the support staff had approached the technician operating the machine intending to ask him a question. But contrary to Company policy and established work practice she failed to restrain her hair with one of the caps we provided. As she lent forward to engage him in conversation, the static electricity lifted her hair and it was caught by the machine. Within seconds, a large section of hair was ripped from her head along with part of her scalp.
The words ‘devastating’ and ‘horrific’ don’t even come close and within days of the accident we were being investigated by Work Cover. I returned to find the lead investigator had set up an office in the boardroom. The blood-spattered equipment could not be removed and remained where it was as a constant reminder and the walls of the boardroom were covered with photographs taken on the day. She was with us on an off for almost a month and interviewed every employee from the service department as well as the entire management team – one after another.
Now, I thought I understood the Occupational Health and Safety Act and believed we had it covered:
We had an active OH&S Committee drawn from across the Company that held regular meetings with documented minutes.
We had purchased a professional OH&S package and made line managers responsible for delivering the structured training program.
We had a written policy that required the restraint of long hair in the service department as well as strict rules on who could operate this equipment and the distance limits that applied when it was in use.
According to her manager, the woman injured had attended formal training concerning this machine and had received a copy of the Company policy; something she denied. But, without a method of recording who had been trained and when this took place there was no proof of either and in legal terms this amounted to 'hear-say'. Unable to produce acceptable evidence to refute her claim there was no way to avoid a guilty verdict.
My personal appearance in Court, a letter expressing genuine remorse and specific undertakings of future measures (including building construction) made to the Court saved us from a highly possible 6 figure penalty. Although it didn’t save us from a guilty verdict, we were fortunate to be issued with a fine of $20,000 (the smallest amount possible under the Act at the time) and a warning. The Company now has a blotted copy book and should there be a future incident, then the penalties are likely to be significantly greater.
But, the real cost to the business was far more than the $20,000 fine and in fact a conservative estimate puts the cost close to and possibly more than $1 Million.
The disruption and effect on morale added 2 weeks to the turnaround time for repairs.
This was compounded by the loss of 3 valuable long-term members of the after-sales service team with over 40 years’ experience between them.
In addition to the injured woman, neither the technician nor the first responder ever returned to work due to the trauma they experienced.
As well as the fine there were significant legal costs, a civil claim for damages and a massive increase in our insurance premiums.
Then on top of this were the design and construction cost to make good on the promises made to the Court.
It’s only after a serious accident that the board of directors for most companies discover their legal obligations under the Occupational Health and Safety Act and the consequences. Since starting my own management consulting firm, I have shared this story with every client. By doing so I hope to prevent others from making the same mistakes.