This course is designed to help companies integrate safety into their entire management system. The information in this manual is based on current (2014) legislation in the provinces of Saskatchewan.
Your organization’s safety manual and program need not follow the format and order used in this presentation & manual.
However, it is important to note that MSA’s published standard reflects the MINIMUM legal requirements and ACCEPTED management requirements for a safety management system.
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Although we have provided sample documents, sample programs, etc. this manual is NOT a safety manual. You will need to develop a safety manual and safety system for your firm. Employing the samples included in this manual is acceptable as long as your firm’s senior management fully understands, approves, and, commits to the items included in the samples.
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The information in these presentations covers the full expanse of a Safety Management System. There are 21 individual elements that are included. More in-depth training on a number of the more involved elements is available from MSA.
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Loss Management System
Almost any firm can make a profit when things are going well. However, only those that have reached the point where they can manage their organization’s future response to market forces will survive “tough times”. Firms that are continuously profitable, especially during economic or market downturns, are invariably those that are well managed. International experts readily agree that managers of organizations must target loss control as opposed to increasing profits.
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Every organization, no matter their size, has multiple management systems. We manage inventory of supplies and product, we manage accounts receivable and payable, we manage our human resources, we manage security of product and place to name just a few. The major difference between small and large firms is the complexity and level of integration of the management systems.
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Internationally accepted management system standards have been developed for every conceivable aspect of lives. Basic accounting principles are the same no matter whether the account in question is your personal bank account or the financial system for a large organization. The same can be said for inventory, security, and yes safety.
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The accepted standards for safety follow the principles of the Workplace Responsibility System (WRS). The WRS legislation and standards tell us that every workplace can develop their own unique solution to a particular problem. Thus, how you address a problem isn’t the issue. The issue is that you must address the problem or risk sufficiently to reduce the risk to an acceptable level.
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An age old axiom of management is that … if you cannot measure it, you cannot manage it. Or if you want to manage something – you measure it, establish your starting point and then set clearly definable goals. Managing safety is designed to enable you to do all of that and more.
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Frequently Asked Questions
New and existing firms often have a number of questions regarding safety management systems and safety programs in general. All of the questions must be answered before owners and managers will really buy into safety.
“Which firms must have a safety management system and why?”
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There is specific legislation in all provinces that requires organizations to have a health and safety program. The reason is due to the risks associated with conducting certain types of operations.
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Failure to establish and implement a safety program can have serious consequences. In a “worst case scenario” the Provincial Government’s personnel can force you to close your doors until you have developed and implemented a safety program. During the period that you are forced to close you must still pay your staff their regular wages.
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Normally however, the officers will give you a “compliance undertaking” or a “notice of contravention” with a time limit for you to get the problem addressed.
“How intense and in depth must the safety program be?”
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A perfect safety program would be so good that your accidents and injuries drop to zero. There are few “perfect” safety programs. However, your safety program and management system must be able to prove “due diligence”. A firm that has been duly diligent has considered every foreseeable risk associated with the tasks the workers perform and has done everything reasonably practical to guard the workers against injury from those risks.
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“Foreseeable” means able to be understood by persons with industry knowledge. Reasonably practicable means reasonable (i.e. spending the time and money won’t bankrupt the firm) and practical (actually does an adequate and acceptable job of reducing the risk) given current technology and resources.
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“What’s the difference between a safety program and a safety management system?”
A safety program is comprised of the individual elements such as orientations, training, safety rules, safe work practices, and your accountability procedures. A safety management system is how you actively manage safety and integrate safety into every aspect of the organization’s activities every day.
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“Can we skip some portions of the safety program?”
Legislation in the various provinces is quite specific about what must be included in your safety program. Generally, if a person has been, or could be injured doing a task …. there needs to be something in your safety program that has targeted reducing the risk to an acceptable level.
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“Can we skip some portions of the safety management system?”
The standards set for safety management systems have been set for a reason. If you are meeting each portion of the standards, you quite likely are continuously reducing the number of incidents, accidents and injuries in your workplace. Missing any single portion of the system puts your organization back at risk.
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How much is this going to cost?”
Investment in safety is the same as any other investment … there has to be a payback and in a reasonable length of time.
Determining an exact dollar figure for safety investment is difficult. A comparison can be made to advertising. New products and new initiatives require more significant funding.
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Established products require much less. If your safety program is new or requires significant improvement, a larger investment will be required. However, almost all of the investment will be in the form of time and training as opposed to capital expenditures.
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“So how much can it save me?”
Every accident, whether there was an injury or not, has a cost that must be paid. There are both human costs (pain and suffering) and financial costs involved with every injury. Additionally there can be ruined product or supplies, broken and/or damaged equipment, damaged premises; lost production time … the list is quite long. Safety management is all about reducing those losses.
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Multiple studies in Western Canadian and beyond have proven that the unidentified costs are at least 3 to 5 times as much as the insurance payouts. The accepted formula to be used for estimating total financial loss due to injuries, incidents and accidents is:
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Total $ paid out by WCB for your organization
Total $ paid out by other insures for your organization
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This figure is an estimate of the MINIMUM amount that your organization can save through better attention to safety. Every organization will be different and will have to assess the potential savings for themselves. The point to remember is that the “5 times figure” comes directly from profits. Often referred to as “just a cost of doing business” it is actually the cost of managing your organization poorly.
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Corporate planners should assess their WCB compensation payouts and multiply them by 3 to 5 times when budgeting for an effective safety management system. The organization will most likely begin to get “pay back” through reduced non-insured losses within six months. Most organizations that have developed a viable safety management system have indicated significantly reduced losses of all types and reduced insurance premiums within 3 years.
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“Are there other potential savings?”
Insurers such as the WCB use an “experience rating” to set the rates for industries and the individual firms within an industry.
Safer organizations pay a lower premium than those firms that have a high rate of injury. Often referred to as “discounts” or “rebates”, these lower rates are really a reward for being safer than average. Depending on the size of your organization the rewards or savings can be well into six digits.
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“What happens if we aren’t one of those “safer” organizations?”
Certain organizations within our industry pay an even higher rate due to the fact that their rate of injury and costs of injury are higher than the average within our industry. It isn’t uncommon for organizations in our sector to have annual WCB premium that are $100,000.00 over the rate that same firm would pay if they just had an “average” safety record.
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Those higher rates directly affect your organization’s profits and ability to compete. Consider for a moment the potential for your firm to be paying one of the highest WCB rates within our industry and for your competitor to be paying one of the lowest. The difference can easily be 7% of your total payroll. Providing a competitor with a 7% advantage on labour costs alone through mismanagement of your safety program certainly isn’t a good thing!
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“Is there any one single item critical to success?”
Please remember that provincial laws and the standards that they refer to are the minimum standards for your safety management system. Just meeting those laws and standards may save your from prosecution but they will only make your organization minimally safe. However, the number one factor affecting a safety management system’s success is the level of commitment provided by the organization’s owners and upper management.
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“Okay, so we do this …. How long before we start reaping some rewards?”
“Rewards” come in many shapes and sizes. Some, such as employee morale, better public relations, and, more access to a better labor pool are quite difficult to quantify. They have much to do with where your organization is located, and, the state of those items at the beginning of the process. Others are easier to identify, catalogue and mark with milestones.
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The real financial rewards begin the moment your safety system stops one incident or accident prior to the event actually taking place.
It may take up to three years to lower your organization’s WCB premiums. The “experience rating” model used by the WCB compares the annual premiums your organization pays to the payouts made on behalf of your organization (wage replacement, medical costs, etc.). They perform this same comparison for all of our industry.
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The WCB uses averages from the last three years so that you are not penalized for one bad year. If your average is higher than the industry average your WCB premium rate goes up. If you are lower, they will go down. A good ball park figure to use is that if your costs are lower than 50% of the premiums your organization paid, your rate next year will be lower than the current year.
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Below are links to videos you may find useful. If the links are not working please contact MSA at firstname.lastname@example.org.
Thank you for taking the introduction lesson for Safety Managment System Online. To continue, proceed to Safety Managment System Online Registration.
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