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Laying down the law

12 November 2019

Warren Spencer explores how companies are exploiting the responsible person loophole.

I HAVE, for some time now, written about the need for a review or amendment of the Fire Safety Order, and in particular, in relation to articles 3 and 5 which deal with the definitions of “responsible person” and “persons with control” of premises.

I the combination of Articles 3 (b) (i), and (ii), together with Articles 5 (3) and (4) create confusion and the lack of clarity when establishing those against whom enforcement should be taken. Article 5 (3) imposes the same responsibilities laid out in Article 3 on those with any control over premises (the extent of their control). I cannot see why Article 3 cannot be made much simpler by replacing Article 3 (b) with the contents of Articles 5 (3) and (4).

Article 3 is hierarchical in nature. Article 3(a) states that “responsible person” means “in relation to a workplace, the employer, if the workplace is to any extent under his control;” 

If article 3 (a) is satisfied then there is no need to consider article 3(b) (i) or 3(b) (ii). So where there is an employer and the employer has control of the workplace, the employer will be the responsible person. This seems relatively straightforward and the article was effectively lifted from the Health and Safety at Work Act to ensure consistency.

However, companies are now being structured in a way which can frustrate the enforcement of article 3(a).

This is achieved by setting up a “shell company” simply to pay wages. The “shell company” is the employer, and pays the wages of the employees, but this is all it does. Significantly, it does not have control of the workplace for the purposes of article 3, so the employer company effectively evades culpability as the responsible person.

I was recently involved in a prosecution involving a hotel, where company A owned the premises, and company B was the shell company employer, who had a management contract with company C, who ran the hotel business. All three companies had a number of shared directors.

Following inspection, the hotel was found to have a number of breaches of the FSO. The premises being a workplace, fire officers made enquiries to discover the name of the employer, which was company B. Accordingly, a representative of company B was invited to attend an interview under caution. The fire service then received a letter from lawyers representing company B, which outlined that although company B was the employer, it had been set up simply to operate a bank account, which was used to pay wages, but due to a management agreement with company C, company B did not have control of the workplace and so was not the responsible person under article 3(a).

No problem, you may think, because company C could be pursued under article 3 (b) as the company with control over the premises; and you would be right, because that is what we did. A prosecution was eventually taken and charges were laid against company C in relation to article 8 (1) (b) (non-employees) as opposed to article 8 (1) (a), which places a duty to take such general fire precautions to protect the safety of employees. (Because company C did not have any employees to protect).

The charges in relation to articles 9, 11, 13, 14 and 17 also laid without any issue.

However, it was not possible to prosecute company C in relation to breaches of Articles 19 and 21 because those articles impose a duty to train and provide information to the company’s employees, and company C did not have any employees.

Hence, a legal loophole exists in relation to an employer who does not have control over the workplace, in particular, in relation to articles 19 and 21.

In addition, company C received only a nominal sum in relation to its management responsibilities. So when it came to be sentenced, the turnover and profit of the company was negligible, and so the court’s ability to fine the company was limited.

It could be argued that company B should have been prosecuted in any event, as it had a duty towards its employees, regardless of the extent of its control over the workplace. But that is not how article 3 is drafted. Company B would defend any charges on the basis that it did not have control of the workplace and so was not the responsible person.

I have now been involved the number of prosecutions where companies are dividing up fire risk management responsibilities in relation to premises, to different companies, particularly in the hotel and care home sector. Consequently, enforcement is becoming much more difficult and company fines following conviction are being reduced as a result of minimal turnover and profit.

My fear is that the poorly drafted and confusing article 3 is now not fit for purpose in establishing culpability for employers in respect of the workplace.