Liabilities of Directors

The Safety, Health and Welfare at Work Act, 2005 sets out the duties on employers and their employees for safety and health. The 2005 Act puts duties of care on employers to manage and conduct their undertakings so as to be safe for employees. In turn, the 2005 Act requires that employees work in a safe and responsible manner. They must co-operate with their employer in order to comply with the law. The Authority’s Guide to the 2005 Act spells out these responsibilities in detail.

The definition of employer as set out in the 2005 Act includes not only the person who has a contract of employment with an employee but also includes a person under whose control and direction an employee works. In many instances a Director may be both the employer and an employee of the undertaking. The legal interpretation of a ‘person’ also covers the entity within which the work is carried out.

What the 2005 Act says

Specific attention is drawn to the provisions of Section 80 of the 2005 Act relating to the liability of Directors and Officers of Undertakings, as follows:

“80.       (1) Where an offence under any of the relevant statutory provisions has been committed by an undertaking and the doing of the acts that constituted the offence has been authorised, or consented to by, or is attributable to connivance or neglect on the part of, a person, being a director,manager or other similar officer of the undertaking, or a person who purports to act in any such capacity, that person as well as the undertaking shall be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.

(2) Where a person is proceeded against as aforesaid for such an offence and it is proved that, at the material time, he or she was a director of the undertaking concerned or a person employed by it whose duties included making decisions that, to a significant extent, could have affected the management of the undertaking, or a person who purported to act in any such capacity, it shall be presumed, until the contrary is proved, that the doing of the acts by the undertaking which constituted the commission by it of the offence concerned under any of the relevant statutory provisions was authorised, consented to or attributable to connivance or neglect on the part of that person.

(3) Where the affairs of a body corporate are managed by its members, subsections (1) and (2) shall apply in relation to the acts or defaults of a member in connection with his or her functions of management as if he or she were a director of the body corporate.”

Benefits of proactive health and safety management

The 2005 Act puts the responsibilities for safety and health directly on those in charge in workplaces, and Directors and managers who control the work being done have to take on this responsibility. Apart from the law, effective safety and health management will help to:

• Maximise the well-being and productivity of employees
• Prevent accidents and ill-health among workers
• Improve the undertaking’s reputation among customers, suppliers and the wider community
• Avoid lost time and damaging effects on turnover and productivity
• Encourage better relationships with contractors and service providers
• Contribute to the overall performance of the business.

Roles and responsibilities of Directors

The liabilities of Directors and Officers of Undertakings under the 2005 Act are dependent on the role that both the board and senior management team play in the business. Boards of Directors are responsible for good corporate governance and perform this task by setting corporate objectives and targets and take strategic decisions on all business issues including safety and health management.

The regular day to day management control and direction the undertaking takes is set by the Chief Executive / Managing Director (MD) and his/her management team. For smaller undertakings these two groupings may be one and the same i.e. the MD may well own the undertaking, sit on the board and run the undertaking on a day-to-day basis as well.

The MD and the senior management team must follow the broad strategic directions on safety and health management set by their board. This team must determine how the management of workplace safety and health should happen at the workplace interface and are responsible for ensuring that good practices are followed.

All Directors and Officers of Undertakings who authorise or direct any work activities must understand their legal responsibilities and their role in governing safety and health for their business, upholding core values and setting good safety and health standards.

The most senior management in the organisation must ensure all Directors on its board have a clear understanding of the key safety and health issues for their business and are continually appraised of the risks likely to arise. Whatever role Directors play in the running of their undertakings, they must have, or ensure the availability to the undertaking of, the knowledge and basic health and safety competence that their role requires.

Prosecutions of Directors

Directors may be prosecuted under the 2005 Act for failing to manage safety and health in their undertaking. The Authority has taken some prosecutions against Directors under the 2005 Act. Section 80 of the 2005 Act provides that a Director, manager or other similar Officer of the Undertaking may be deemed to be guilty of the same offence as the undertaking if the doing of the acts that constituted the offence has been authorised, or consented to by, or is attributable to connivance or neglect on the part of the Director.

In such instances, for example, ignoring a safety and health issue could constitute neglect. Section 80 (2) goes further and states that if a person is proceeded against under that Section then it is presumed, until the contrary is proved, that the breach or neglect was authorised by them. It is for the Director or manager to show that they did all that could be reasonably expected of them under the 2005 Act and that they were not negligent.