luwis vidanalage jba-13-0197

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

1

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

2


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

3


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

4


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

5


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.

6


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

7


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

8


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.

9


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.

10


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.

11


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/[email protected]/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

http://www.actu.org.au/Images/Dynamic/attachments/7683/ACTU%20workplace%20bullying%20submission-July%202012.pdf

http://www.actu.org.au/Images/Dynamic/attachments/7683/ACTU%20workplace%20bullying%20submission-July%202012.pdf

http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6324.0Main%20Features32009-10?opendocument

http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6324.0Main%20Features32009-10?opendocument

http://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/Services/Risk%20services/Corporate%20responsibility/OHS_article_Andi_Csontos.pdf



http://actrav.itcilo.org/actrav-english/telearn/osh/intro/inmain.htm

http://www.dol.govt.nz/publications/research/good-sense/good-sense_05.asp#fig2

http://www.dol.govt.nz/publications/research/good-sense/good-sense_05.asp#fig2

http://ohsonline.com/articles/2012/02/09/walmart-hit-with-365000-fine-for-repeat-hazards.aspx

http://ohsonline.com/articles/2012/02/09/walmart-hit-with-365000-fine-for-repeat-hazards.aspx

http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/677/Key_Work_Health_and_Safety_Statistics_Australia_2012.pdf


12


10. Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia

.p4.Retrieved February 10,2013,from



11. Safe Work Australia.(2012). Key Work Health and Safety Statistics,Australia

.p9.Retrieved February 10,2013,from



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


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





http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/660/Cost%20of%20Work-related%20injury%20and%20disease.pdf

http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/660/Cost%20of%20Work-related%20injury%20and%20disease.pdf

http://health.vic.gov.au/ohs/forum0909/harmonisation.pdf

luwis vidanalage jba-13-0197

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higher standards

australian retail workplaces

retail industrywork

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economic terms

economic outcomes

cost minimisation

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