It’s a fact that workplace incidents can have catastrophic impacts on both workers and employers. The ramifications of such events can be physical, emotional, reputational, and financial, leaving deep scars that may never fully heal.
In Canada, the Association of Workers’ Compensation Boards of Canada (AWCBC) reported that the average cost of a lost-time claim in 2020 was $119,353. However, that is just the tip of the iceberg. The figure includes the costs of wage replacement benefits, healthcare costs, disability benefits, administrative expenses, legal fees, and costs for other support services. But the true cost of a workplace incident extends well beyond just financial consequences. Medical bills and workers’ compensation claims are easy to quantify, other consequences less so.
For employees, a workplace incident can lead to physical and emotional trauma, causing long-term stress and loss of productivity. Employers on the other hand can lose valuable employees, experience a decline in morale, and see a decrease in profits. The aftermath of such an event can linger for years.
Below, we take a look at some of the ways in which a workplace incident can impact a company – financially or otherwise.
Medical costs and workers’ compensation claims
When an employee is injured on the job, medical costs can quickly stack up. These costs can include everything from hospital bills and doctor visits to prescription medications, physical therapy, and rehabilitation – followed by compensation for the subsequent time lost at work.
The workers’ compensation system in Canada is funded by premiums paid by employers. These premiums pay for the costs associated with work-related injuries and diseases, including healthcare, wage loss, rehabilitation, and administration.
Until the frequency of workplace incidents is significantly reduced, these premiums are most certainly going to continue to rise.
According to AWBC, in 2021, there were a total of 277,217 accepted claims for lost time due to work-related injury or disease in Canada – an increase of 23,820 from the previous year. It’s also important to note that this number only includes accepted claims and does not account for all the work-related injuries or illnesses that occurred that year.
Workers and employers often don’t expect incidents to occur. That’s why it’s crucial employers provide appropriate training and have procedures in place to minimize the chance of incidents occurring and to respond effectively if they do occur.
Employers might not be directly responsible for covering medical costs and time lost at work, but workplace incidents ultimately lead to higher premiums for everyone.
Reputational damage
Workplace incidents can also damage a company’s reputation, particularly if the incident is publicized. Negative media coverage can make it difficult to attract and retain new customers and workers and can also draw attention and criticism to other aspects of the business. This can also be damaging to attracting investment – with investors increasingly considering sustainability when choosing where to invest their money.
Legal liabilities
Employers have a legal responsibility to provide a safe working environment for their employees. If an incident occurs due to negligence on the part of the employer, they may be liable for damages and face legal consequences. If the consequent investigation finds the company to be in violation of workplace health and safety regulations, then hefty fines can be expected.
Emotional toll
It can be difficult to quantify the emotional consequences of a workplace incident, but the psychological impact can be incredibly damaging.
Workplace incidents can take a significant emotional toll on employees who may go on to experience trauma, anxiety, or depression because of the incident. It could impact their ability to work effectively and may even result in long-term mental health issues. The psychological impacts can also extend beyond the worker. Incidents can have a ripple effect and other people indirectly involved or related to an incident can also go on to experience stress, anxiety, or depression and may in fact become disengaged at work or need time off to cope.
It’s important to remember that it’s not just physical injuries that keep people from work. Workplace incidents can lead to absenteeism and lost productivity from both physical and psychological trauma – and this ultimately impacts a company’s bottom line.
Every year on April 28th, Canada observes the Day of Mourning to remember and honour workers who have lost their lives, been injured, or suffered illnesses due to workplace-related incidents. We encourage you to read people’s stories.
Preventing workplace incidents
It’s important to remember that the true cost of a workplace incident is not just financial. It’s a complex mix of physical, emotional, legal and reputational damage that can impact the lives of all those involved for months or even years to come. As such, it’s crucial for companies to take proactive measures to prevent such incidents and protect their employees’ well-being.
One of the best ways to prevent workplace incidents is to ensure workers receive adequate training to carry out their jobs safely.
In fact, OHS legislation requires employers to take reasonable steps to ensure the health and safety of their workers. This includes identifying all work/task-related hazards in the workplace, assessing their risk level, and implementing control methods to mitigate or eliminate the hazards. One of the most common control methods is appropriate training in OHS fundamentals related to the workplace. This includes subsequent supervision and on-the-job training to ensure that workers are aware of the potential hazards in their workplace and are equipped with the knowledge and skills to work competently and safely. Training may include courses such as working at heights, ground disturbance, WHMIS, and other industry specific courses – the type and frequency of training required will depend on the nature of the work and the risks associated with it.
And don’t forget, even when taking all appropriate precautions, employers must still have a procedure in place to respond to workplace incidents should they occur. This plan should include a process for reporting incidents, incident response and management, incident investigation, and corrective action implementation to prevent recurrence. Corrective actions should include providing medical care, and addressing the emotional needs of employees.
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