Reference no: EM132236512

CASE STUDY:

ABC Manufacturing Company employs 300 workers at its main plant in the Northern Ontario. One of its major product lines is compressors for air conditioners. All compressors are tested when they come off the assembly line. Two years ago William Carlson was 28 years old, a high school graduate, and had been employed in the compressor division for five years. His job was to test each compressor using a standard procedure. Each inspector goes through an extensive training program where proper procedures for testing compressors are explained and demonstrated. In addition, inspectors are required to follow the detailed procedures for testing each unit specified in the company manual. No deviations from those procedures are permitted by a company policy.

Two years ago as Carlson was testing a compressor when it exploded and he was killed on the spot. The ABC Manufacturing Company expressed sympathy to the family but also indicated that the company had provided proper training, proper clothing, proper warnings, and proper procedures. It reiterated its commitment to employee safety and implied that the cause of the explosion was probably due to improper employee testing procedures, which were neither known nor approved by the company.

Carlson's family hired an attorney on a contingency basis to pursue a lawsuit against the ABC Manufacturing Company. Recently, the case was heard in the court. During court testimony it was revealed that most of the inspectors, including Carlson, had developed various "shortcuts" to reduce the time required to test each compressor. Some continued to use the shortcuts, even after the accident. The plaintiff's lawyer argued that it was not clear that Carlson had violated procedures, but if he did, the company had an obligation to know about the deviations and take steps to bring inspectors back to the proper testing procedures. In addition, he argued the company was responsible for providing training, periodically reinforcing proper procedures, and monitoring practices to assure conformity to proper procedures. The jury then retired to consider a verdict and, if the company was found guilty of safety violations, to assess appropriate penalties.

ABC Manufacturing then brought in an attorney from corporate headquarters to defend the company. Thomas King had a law degree from Queen's University School of Law and had been practicing law for 27 years, and 12 of those years he had been counselor for ABC Manufacturing with an excellent track record of defending the company in areas of safety and health. King had focused his law practice in the area of health and safety and was always up-to-date with information regarding data and trends in this field. For example, he knew the following:

• There are approximately 4.3 million injuries per year among private sector firms.
• Each year the cost of occupational injuries and illnesses total more than $165 billion.
• In any year approximately 80 million working days are lost because of the job injuries
• In the most recent 6,480 employees died from work accidents

King knew that Ontario legislature passed the Occupational Health and Safety Act in 1990 to ensure the safety and health of workers by settling and enforcing standards; providing training, outreach and education; establishing partnerships; and encouraging continual improvements in workplace safety and health. The most recent fatality numbers were only about one-third of the number of workers deaths reported in the late 1980s. Consequently, most observers believed the Act has been effective in reducing workplace injuries.

King was also aware that a supervisor in another company's construction site was charged with criminal negligence because he had failed to take "reasonable steps to prevent bodily harm" that had caused a worker's death on his watch. Five years ago the supervisor pleaded guilty to eight counts of failing to ensure compliance under the Act and received a $50,000 fine. Subsequently, the same company was charged with criminal negligence for causing another death related to failure to correctly package cement blocks on pallets. The company subsequently pleaded guilty and paid another fine of $110,000 dollars. King knew he needed to prove to the jury that ABC Manufacturing had done everything they could to develop safety policies, communicate these policies to all employees, and train new and current employees periodically regarding safety procedures.

Question: What are some of the major issues facing the firm and what are some recommendations for resolving these issues?