Post on 30-Jul-2015
JBA-13-0197
COVER PAGE- to be removed for judging
Topic 7– Choose Your Own Topic – What Issue Affects You
The relationship between OHS interventions and cost minimisation in the retail
industry
Work safety, though applied widely in Australia, has not reached the level of Scandinavian
and European Occupational Health and Safety (OHS) standards. For all organisations the
application of OHS can be costly and often bureaucratic in its processes. Whether
implemented in a controlled or an uncontrolled manner there are no guarantees that the
application of OH&S practices will be successful in significantly in reducing workplace
accidents or, that they will be constantly applied and acted upon by all workers. To be
properly measured the benefits of comprehensive OHS policy and standards need to be
measured in both human and economic terms. It is important to analyse the relationship
between rules and application to find continues improvement in OHS standards.
Q. What are the economic outcomes of OHS interventions? Does Australian retail industry
needs an improvement of OHS rules and standards? What can the retail industry do to
ensure higher standards and to implement these standards consistently across Australian
retail workplaces?
Entrant Number: JBA-13-0197 Name: Luwis Anthony Vidanalage Address: 2/13 Kionga Street, Clayton VIC 3168 Ph: 0433532951 Word Count:1788
Employed by: Big W-Fountain Gate
Location: 352 Princes Highway, Fountain Gate VIC 3805
Length of time employed in the industry: 5 years
In submitting this entry to the Joe Berry Award I confirm that the work submitted is my own work and that all references
have been appropriately identified and are available for public use. By typing my name below I am aware that I am
effectively signing this declaration.
Signature: Luwis Anthony Vidanalage
Word Count: 1789
Joe Berry Australian Retail Industry Executive Award 2013
JBA-13-0197
TITLE PAGE- to remain with entry for judging purposes
Topic 7– Choose Your Own Topic – What Issue Affects You
The relationship between OHS interventions and cost minimisation in the retail
industry
Work safety, though applied widely in Australia, has not reached the level of Scandinavian
and European Occupational Health and Safety (OHS) standards. For all organisations the
application of OHS can be costly and often bureaucratic in its processes. Whether
implemented in a controlled or an uncontrolled manner there are no guarantees that the
application of OH&S practices will be successful in significantly in reducing workplace
accidents or, that they will be constantly applied and acted upon by all workers. To be
properly measured the benefits of comprehensive OHS policy and standards need to be
measured in both human and economic terms. It is important to analyse the relationship
between rules and application to find continues improvement in OHS standards.
Q. What are the economic outcomes of OHS interventions? Does Australian retail industry
needs an improvement of OHS rules and standards? What can the retail industry do to
ensure higher standards and to implement these standards consistently across Australian
retail workplaces?
Entrant Number: JBA-13-0197
Word Count: 1789
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Contents Executive summery ........................................................................................................................................... 2
Introduction ....................................................................................................................................................... 3
A Comparison of the Scandinavian and Australian OHS Models ...................................................................... 4
Economic Outcomes of Effective OHS Interventions ........................................................................................ 5
Effectiveness of Currently Imposed OHS Rules ................................................................................................. 7
Improving Standards and Consistency of Effective OHS Practices .................................................................... 9
Conclusion ....................................................................................................................................................... 10
Reference......................................................................................................................................................... 11
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Executive summery
Over the past 25 years, the concept of Occupational Health and Safety (OHS) has become
common in Australia. A range of OHS Standards, Guidelines and Audits have been
developed1in the retail industry and many have been adopted by workplaces. Despite
good OHS legislation and comprehensive guidelines being produced, overall Australian
workplace safety records lag behind several Scandinavian and European countries.
This essay focuses on three major areas. Firstly, it examines the OHS standards in the
Australian Retail Industry and ensures that these are thoroughly understood, given the
critical importance that they deserve and comprehensively implemented and monitored.
Secondly, it elaborates on the association between current OHS standards, their
implementation and economic outcomes for the Australian Retail Industry. Every business
strives to maximise profits and minimise costs. One neglected area of cost minimisation is
the reduction of illness, injury and psychological problems such as bullying in the retail
workplace. Effective OHS practices are essential to ensure a happy, healthy and
financially successful retail industry. Finally this essay proposes some suggestions to
integrate OHS practices into the core of every level of management in the retail industry in
Australia. In most cases this will require a cultural shift amongst Australian retailers to
ensure that OHS becomes an integral and proactive part of daily work practices.
This topic was derived through discussions with both management and employees at my
work place. The content and findings of this essay has been strengthened drawing from
past research on OHS in general and OHS in retail industry in particular.
1 Robson. et al.2007,p 329-353
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Introduction
Over the past 25 years, there has been an increasing interest in the concept of
Occupational Health and Safety (OHS) in Australia. The growing importance of OHS issue
was clearly indicated in April 2012 when “Safe work Australia” released its report on OHS
performance. The report stated that work related injury and illness have cost Australia
$60.6 billion in the 2008-09 financial year2. It further elaborated that this was equivalent to
4.8 per cent of Australia’s Gross Domestic Product (GDP), a significant increase from
2000-01, when OHS costs were at $34 billion3.Compared to recent data from the world’s
best performing countries in terms of work related injury fatalities, Australia’s record is far
below that of the Scandinavian and other European countries4.
Despite comprehensive OHS guidelines and Standards in place for the Australian retail
industry national statistics released in December 2010 by the Australian Bureau of
Statistics revealed, that the retail trade industry workers experienced 60 injuries or illness
per 1000 workers5 and 8 deaths per 100,000 workers6. This result was very alarming as it
showed the seriousness and pervasiveness of work related injuries and illnesses in the
Australian Retail Industry.
This essay compares OHS management in Scandinavia and Australia, with especial
reference to Norway and examination of associated economic outcomes of OHS
standards in Australia and the actual effectiveness of those standards which are currently
in place. These preliminary parts provide a path to discover the current implementation of
OHS standards in the Australian retail industry and ways in which those standards can be
further improved. Finally this essay recommends ways to maintain those higher standards
and to discuss how to ensure the consistency of effective OHS practices in the Australian
retail industry.
2 Safe Work Australia.(2012). Key Work Health and Safety Statistics Booklet Australia 2012.p.4 3 Business Community Intelligence Issue 16. Avoiding Health and Safety Risks.p.30 4 Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia .p.4 5 Australian Bureau of Statistics.(2010). Work-Related Injuries, Australia, 2009-10 6 Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia .p.9
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
A Comparison of the Scandinavian and Australian OHS Models
The graph7 below shows the work-related fatality rate in the best performing countries.
Australia is outperformed by all countries except New Zealand. The research by Saksvik &
Michael8 concentrated on the Norwegian model of OHS that represents Scandinavian
countries in general. Particularly salient is the history and existence of strong, centralized
unions and high union memberships. In Australia, union memberships are declining.
Secondly, in the Scandinavian countries there is a close connection between the unions
and the governing authorities. Finally, there is also a strong tradition of negotiation, where
Scandinavians are willing to talk about issues until they are solved. However, these
features are not an integral part of the Australian business culture.
7 Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia.p.4 8 Saksvik & Michael.2003,p33-59
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Economic Outcomes of Effective OHS Interventions
The main economic advantages of effective OHS practices are: increased productivity and
cost minimisation. Work-related injuries, physical and psychological illness9 such as
anxiety and depression as a result of workplace bullying and deaths impose costs on
employers, workers and the community10. These costs can be direct and indirect.
Reduced insurance and workers’ compensation premiums, reduced litigation and sick pay
costs, lower injury and illness costs, reduced product damage and improved productivity
rates are the employer’s direct benefits of effective OHS practices11. Indirect benefits to
the employer are: improved job satisfaction/moral, enhanced corporate image, reduced
absenteeism and staff turnover.
The Following diagram12 illustrates how a company can increase productivity and reduce
costs by setting an effective OHS system in place.
In addition to the direct and indirect benefits of OHS interventions, appropriate and
continuous implementation of OHS standards will help to save money on fines for
9 ACTU.(2012).Australian council of trade unions (ACTU) submission to the house standing committee on education &
employment inquiry into workplace bullying.p.5. 10 Safe Work Australia.(2012).The cost of work-related injury and illness for Australian employers, workers and the
community;2008-09.p.9 11 Ministry of Business Innovation & Employment. How Health and Safety Makes Good Business Sense - A Summary of
Research Findings. 12 Ministry of Business Innovation & Employment. How Health and Safety Makes Good Business Sense - A Summary of
Research Findings.
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
violations of safety legislation13. The following table 14 shows how much a company can
save by correctly implementing OHS rules and regulations in Australian workplaces.
Work-related accidents and diseases can have many serious direct and indirect effects on
the lives of workers and their families. The pain and suffering of injury/illness, loss of
income, possible loss of job and health-care costs are the direct costs of an injury/illness
for workers15. One of the major indirect costs is human suffering by workers’ families and it
cannot be reimbursed with money16.
In addition, preventable accidents in the workplace and resultant suffering have an
enormous impact on the remaining workers, who also become anxious and concerned
about their own safety-a situation that compromises their ability to approach their jobs in a
positive and confident way. The possible results of this include poor attitude to customers,
reactive mindset to bosses and a demotivated attitude to their work.
13OHS Occupational Health and safety. Wal-Mart Hit with $365,000 Fine for Repeat Hazards.
14 Worksafe.Harmonisation of OHS Laws 15 International Labour Organization. Your health and safety at work INTRODUCTION TO OCCUPATIONAL HEALTH
AND SAFETY 16 International Labour Organization. Your health and safety at work INTRODUCTION TO OCCUPATIONAL HEALTH
AND SAFETY
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Effectiveness of Currently Imposed OHS Rules
The figures17 of the below table reveal a progressive increase in costs for employers,
thereby directly impacting their bottom line. By far, the most striking figures relate to the
evidence suggesting little or no OHS policy implementation in Australian workplaces. A
rise from 44% in 2000-01, to 74% in 2008-09 is unsustainable and underlines the very real
costs to workers and their families. Obviously there is an endemic problem regarding
implementation of well-considered and comprehensive OHS rules and regulations. If the
current OHS rules were effectively implemented the economic costs of work-related
incidents should have shown a downward trend.
With reference to the table18 below, we can see that out of a total of 611,300 workplace
incidents 440,700 were recorded as injuries. These figures, again, suggest that poor or
non-existent implementation of OHS Standards and rules seem, directly responsible for
otherwise preventable accidents.
17 Safe Work Australia.(2012).The cost of work-related injury and illness for Australian employers, workers and the
community;2008-09.p.5
18 Safe Work Australia.(2012).The cost of work-related injury and illness for Australian employers, workers and the
community;2008-09.p.23
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Closer examination of the OHS Standards Rules and Guidelines which currently exists in
Australia reveals several fundamental flaws that may contribute to Australia’s poor health
and safety records. Briefly, the lack of uniformity of OHS standards and rules across states
makes analysis of various injury and illness statistics unreliable. A lack of employee
participation in OHS practices means that the “experts” are not consulted about the reality
of workplace hazards. Finally, the makeup of the Australian workforce is changing rapidly
to include marginal, small business and subcontracting workers. For example in the retail
industry, there has been dramatic expansion of subcontracting and agency hiring such as
trolley collection and seasonal recruitment. At the top management: monitoring and
influence on adaptation of OHS practices are missing.
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Improving Standards and Consistency of Effective OHS Practices
Employee involvement in workplace safety decision making is critical. The Participatory
approach to improve safety should be carried out with union involvement. Discounted
union fees can be offered to the junior workforce to encourage membership. The
promotion of good health and safety practices among younger workers, especially those
employed casually during busy times like Xmas, should include a period prior to the rush,
where they are thoroughly trained in safe practices.
OHS rules need to be harmonized and centralized at the national level. A bottom-up model
for OHS would ensure, all parties have an equal voice in making relevant and effective
rules that will, when implemented, actually relate to the existing problems. OHS
representatives have the potential to be extremely effective in identifying existing
problems, serving prohibition or improvement notices, and thereby reducing accidents at
work.
Suggestions about the need for new and innovative approaches; to changes in the work
place safety culture, imply that the existing measures have not been successful in dealing
with the situation. Studies in the retail industry should be carried out to identify correlations
between incidents and factors. It is worth examining whether the currently applied
standard safety measures are correctly implemented.
Often, stores are unique in their features and structures. So practical safety solutions
should be specific to each store and must comply with National standards. Also effective
work safe practices need to be monitored, rectified and maintained consistently under the
regular inspection by Workplace Safety Officers.
The retail industry needs to research and develop new working methods and product
packaging to improve the physical demands upon workers. As a suggestion, businesses
can introduce a method whereby all heavy, bulky items are moved via specific machinery
that eliminates the need for workers to risk back injuries and other strains to the body. A
thorough recording and analysis of each incidents of injury offers the ideal blue print for
improvements to be put in place to prevent the repetition of similar injuries.
Finally, even though world has moved to ‘just in time’ system three decades back, some
retailers still sending excessive stock. Therefore changing the system of sending
excessive stock to each store to facilitate the warehouse operations and storage, will ease
the stress upon workers at store level; thereby help to decrease the risk of workplace
accidents.
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Conclusion
In conclusion, Scandinavian and European countries are performing far better than
Australia, in converting OHS practices into economic advantages. Little attention, if any,
has been paid to the relationship between OHS practices and in cost minimisation in the
Australian Retail Industry. Currently, the imposed rules are fragmented across states and
rules are inconsistence. Employee participation is vital in creating safety culture, but very
rare in Australia. Emerging number of marginal workers and subcontracting need regular
monitoring and the top managements need to influence them to adapt into OHS climate
and legislation should cover for those workers more actively.
Current OHS standards of Australian retail industry can be improved through various
means. Considering the Scandinavian and European OHS models, Australia needs
participatory approach with unions and managements. Junior workers must encourage to
join unions. The legal system needs to be harmonized at a national level. Innovative ideas
on safety culture at workplaces, new packaging models, new working methods and
practically involving effective inventory systems needs to be identified and applied as
suitably. A happy healthy and safe workforce will then be motivated, in turn; will increase
the business’s profits.
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
Reference
1. ACTU.(2012).Australian council of trade unions (ACTU) submission to the house
standing committee on education & employment inquiry into workplace
bullying.p.5.Retrieved February 25,2013,from
http://www.actu.org.au/Images/Dynamic/attachments/7683/ACTU%20workplace%2
0bullying%20submission-July%202012.pdf
2. Australian Bureau of Statistics.(2010). Work-Related Injuries, Australia, 2009-10.
Retrieved February 05,2013, form
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6324.0Main%20Features
32009-10?opendocument
3. Business Community Intelligence Issue 16. Avoiding Health and Safety
Risks.p30.Retrived February 10,2013,from http://www.deloitte.com/assets/Dcom-
Australia/Local%20Assets/Documents/Services/Risk%20services/Corporate%20res
ponsibility/OHS_article_Andi_Csontos.pdf
4. International Labour Organization. Your health and safety at work INTRODUCTION
TO OCCUPATIONAL HEALTH AND SAFETY Retrieved February 15, 2013,from
http://actrav.itcilo.org/actrav-english/telearn/osh/intro/inmain.htm
5. Ministry of Business Innovation & Employment. How Health and Safety Makes
Good Business Sense - A Summary of Research Findings. Retrieved February
10,2013,from http://www.dol.govt.nz/publications/research/good-sense/good-
sense_05.asp#fig2
6. OHS Occupational Health and safety. Wal-Mart Hit with $365,000 Fine for Repeat
Hazards.Retrieved February 04, 2013, from
http://ohsonline.com/articles/2012/02/09/walmart-hit-with-365000-fine-for-repeat-
hazards.aspx
7. Quinlan, M.(1995). Achieving efficiency and accountability in occupational health
and safety(102),p8-11
8. Robson L.S. et al.(2007).The effectiveness of occupational health and safety
management system interventions: A systematic review. Safety Science 45(2007)
,p329-353
9. Safe Work Australia.(2012). Key Work Health and Safety Statistics Booklet
Australia 2012.p4.Retrieved February 10, 2013, from
http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/677/
Key_Work_Health_and_Safety_Statistics_Australia_2012.pdf
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JBA-13-0197 Topic: The relationship between OHS interventions and cost minimisation in the retail industry.
10. Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia
.p4.Retrieved February 10,2013,from
http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/677/
Key_Work_Health_and_Safety_Statistics_Australia_2012.pdf
11. Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia
.p9.Retrieved February 10,2013,from
http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/677/
Key_Work_Health_and_Safety_Statistics_Australia_2012.pdf
12. Safe Work Australia.(2012).The cost of work-related injury and illness for Australian
employers, workers and the community;2008-09.p.9.Retrived February
06,2013,from
http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/660/
Cost%20of%20Work-related%20injury%20and%20disease.pdf
13. Saksvik, O.,& Michael, Q.(2003).Regulating systematic occupational health and
safety management: comparing the Norwegian and Australian
experience.ProQuest,58(1),33-59
14. Worksafe.Harmonisation of OHS Laws. Retrieved February 15, 2013,from
http://health.vic.gov.au/ohs/forum0909/harmonisation.pdf