WorkSafe Victoria (under Section 21) fined an abattoir $95,000 recently following a forklift accident involving two people on the business's premises.
A worker and the abattoir's director were involved in the accident. The worker sustained two broken ribs. The director escaped injury.
WorkSafe executive director Julie Nielsen told the media that the extreme danger forklifts posed when used without proper safety measures in place was well known.
In the case of the abattoir, the worker could have avoided receiving debilitating injuries had the abattoir an appropriate traffic management plan in place. A plan that included physical separation of forklifts and people.
The $95,000 fine is substantial for a business. While insurance may have covered the legal cost, compensation and rehabilitation of the injured workers, this accident will have serious implications for the workplace. Importantly, the indirect or associated cost not covered by insurance can be four to 10 times greater
The indirect costs include: down time, loss of production, accident investigation, time managing the worker compensation case, project delays, overtime payments, training and retraining costs; legal fees and damages for negligence to mention a few. This expense affects the viability and profitability of the business.
If we use the iceberg theory to estimate cost, and the abattoir as an example, with the fine of $95,000, the cost of workers compensation the direct cost totals $100,000-plus. If this amounts to 20 per cent of the cost of the workplace accident, and the iceberg theory indicates that the indirect cost is 80 per cent, this gives us a total of more than $400,000. This would be the approximate indirect cost to the abattoir after the accident.
Given this knowledge about the indirect cost or associated cost being four to 10 times greater than the direct cost, does it not make sense to manage the risk in the workplace to prevent incidents or accidents from occurring?
For the abattoir, that would mean updating its traffic management plan and erecting exclusion zones or barriers to separate pedestrians from forklifts.
The cost of implementing these preventive measures and training their workers would be well below the indirect cost and reduce further risk of injury.