This OG replaces OC 1/8 - Employers' liability (compulsory insurance) act 1969 (ELCI). The document instructs staff on how to determine the appropriate enforcement action to achieve compliance with the provisions of the Employers' liability (compulsory insurance) act 1969 (ELCI).
Since 1975, HSE has been the enforcement body for the Employers Liability (Compulsory Insurance) Act 1969 (ELCI) as a result of an agency agreement between HSC and the Department of Employment (now the Department for Work and Pensions (DWP)).
All HSE operational Band 2, 3, and 4 inspectors should be warranted to enforce ELCI, and should routinely ask for sight of ELCI certificates during inspection visits (NB. ‘Routinely’ does not necessarily mean ‘all’). Visiting Officers (VOs) and Working Time Officers (WTOs) who have undertaken ELCI training may also be warranted to take an active role in ELCI enforcement.
At present, it is not possible for LAs to enforce ELCI as they do not have the necessary powers. ELCI is not a relevant statutory provision (RSP), and is enforced via the agency agreement between DWP and HSC. Therefore, FOD will continue to deal with all LA referrals.
Where an authorised inspector intends to visit LA-inspected premises for the sole purpose of investigating complaints of non-insurance, s/he should first notify the LA - unless the LA referred the complaint.
The Employers' Liability (Compulsory Insurance) Act 1969 (ELCI) obliges employers to insure against their liability for personal injury to their employees. The relevant regulations are the Employers' Liability (Compulsory Insurance) Regulations 1998, SI 1998 No 2573 (the 1998 Regulations), the Employers’ Liability (Compulsory Insurance) (Amendment) Regulations 2004, SI 2004 No. 2882 (the 2004 Amendment Regulations), and the Employers’ Liability (Compulsory Insurance)(Amendment) Regulations 2008, SI 2008 No. 1765 (the 2008 Amendment Regulations).
Insurance is not required for:
Where a complaint is received it should be acknowledged and the following action taken unless there are specific directorate procedures, e.g. FOD Complaints Handling System quality procedure.
Where an office receives a complaint, or any other enquiry which cannot be dealt with by the issue of leaflets HSE 39/HSE 40, the enquirer or complainant should be given a brief acknowledgement (including the name and official address of the officer to whom the matter has been referred) and full particulars should be forwarded as soon as possible to the inspector. Appendix 4 gives guidance on the types of complaint that may be received and the appropriate response.
It is essential that letters of inquiry or notices should be sent as soon as possible after receipt of a complaint and that each step in an investigation, i.e. letter of inquiry, notice to send certificates, notice of visit, and visit should be followed up on a strict timetable. This is because all offences are summary, and thus become time-barred after 6 months from the date of the offence (note: not 6 months after the date on which the alleged offence comes to the knowledge of the enforcing authority). The timescale is particularly important if a complaint alleges that an accident has already occurred, and it appears that prosecution for an offence on the day of the accident may be justified.
Where the employer is a corporation and the offence has been committed with the consent, connivance or neglect of any director, manager, secretary or other officer, that person may also be proceeded against under s.5 and is liable on conviction to a level 4 fine.
Proceedings under s.5 against directors, etc. either in place of the company or in addition to the company should be considered when:
If a director is prosecuted under ELCI Act s.5, it appears to be discretionary whether the corporation is also prosecuted. However, it will probably be safer to prosecute the corporation as well as the director. In either case there must be evidence to substantiate an offence by the corporation. There is no provision for liability of director or manager for an s.4 offence.
Failure to insure, or to maintain insurance, could have serious consequences, i.e. a civil claim brought by an injured employee might not be satisfied. When considering enforcement action under ELCI, inspectors should follow the principles and expectations of the HSC’s Enforcement Policy Statement. When considering prosecution, inspectors must comply with the evidential tests described in the CPS Code for Crown Prosecutors, i.e. proof of employment in a business and lack of ELCI cover, as well as the relevant public interest tests.
As ELCI is not a relevant statutory provision, enforcement notices cannot be used to effect change. However, the process of the EMM can still be used to ensure that all the relevant considerations are made. When an initial enforcement expectation of an improvement notice is indicated through application of the Compliance and Administrative Arrangements table (Table 5.2), inspectors should apply the local factors found in the relevant flow chart and accompanying table. The following strategic factors will also be relevant:
Other strategic factors may be relevant, depending on the circumstances of each individual dutyholder. In many instances, clear evidence of employment and non-insurance (Appendix 5) will result in prosecution.
ELCI legislation is written in such a way that whilst inspectors have the right to ask to see a certificate during inspection, before taking enforcement action they should always demand its production by means of a notice, if necessary omitting the first enquiry letter (see Appendices 2, 2A, 3 and 3A). If a current certificate is physically displayed, or is made available in electronic form (see paragraph 11 above), or the employer shows one, no further action is necessary. If not, a formal written request should be made as soon as possible.
Where the only offence that could be proved is failure to display a certificate, employers would not, as a rule, be prosecuted unless they appear to have been intentionally uncooperative and obstructive. Employers who have been cooperative should be sent a letter reminding them of the obligations to keep the certificate on display.
In some instances we may consider it appropriate to prosecute for non-insurance on the day on which a particular accident happened. But, the delay in receiving notification of that accident means there is limited time in which to bring the case to court, because of the six month time limit for laying informations about a summary only offence (note: a month in statute is a calendar month unless stated otherwise [Interpretation Act 1978]. In situations such as these, it is acceptable to bypass the first letter of enquiry and issue a ‘Notice to Produce straight away.
The ELCI Act makes no reference to powers to institute proceedings or to prosecute. HSE Legal Adviser has advised that any person may therefore bring proceedings. In England and Wales, any prosecution under the Act should be conducted either by the inspector whose name appears on the information, or by a solicitor instructed to act on behalf of that inspector. In Scotland, proceedings will be brought by the Procurator Fiscal.
Where failure to insure is discovered at the same time as an offence under the relevant statutory provisions is being considered for prosecution, it is desirable that all charges should be prosecuted together.
Employers who experience difficulty in renewing their ELCI insurance cover, without which they are unable to employ persons, are advised to contact the Association of British Insurers (ABI) on 020 7600 3333 or the British Insurance Brokers’ Association on 0870 950 1790.
It must be remembered that ELCI offences are not triable either way and are, therefore, time-barred 6 months after the date of the offence. For offences under s. 4(2)(b) of the Act and 1998 Regulations reg. 6 (as amended by the 2008 Amendment Regulations), inspectors should bear in mind that where there has been a breach, the date of offence is the date on which the person failed to produce the certificate upon request, and there is then a period of 6 months from this date to lay the informations.
Acknowledge complaint; send letter (Appendix 2) and if no response, serve notice (Appendices 3 and 3A) on employer requiring certificate, or copy, to be sent.
Acknowledge complaint, advising employee that successful prosecution of employer will not assist him/her in obtaining compensation. If accident more than 6 months ago, advise employee that offence on date of accident is statute-barred. Serve notice on employer for certificate to be sent.
Advise complainant that employers' liability insurance does not give automatic right to compensation and that they should consult a solicitor, if they have not done so already. Ask whether they have seen a certificate of insurance in employer's premises. If not, serve notice on employer.
ELCI Act places no duty on insurers. Complaint should, however, be referred to Insurance Directorate, Financial Services Authority.
Advise solicitor that HSE does not keep records of employers' insurance and there is no duty for employers to make any return to HSE. Also, suggest that the client be asked whether they have seen a certificate of insurance displayed at the premises and can remember the name of the insurer. If the solicitor answers that the client has not seen the certificate, treat as complaint of non-insurance and serve notice on employer. If employer sends certificate in response to notice, inform the solicitor who had originally raised the complaint.
Advise complainant that, if the accident was more than 6 months ago, any offence regarding insurance is statute-barred. Also advise that, if HSE is able to prove present contravention, a successful prosecution will not help the complainant with the civil claim. Notice to send certificate should also be served on employer.
If firm ceased trading more than 6 months ago, there is no action that HSE can take and complainant should be advised accordingly. If employer was trading within past 6 months, investigation may be carried out with a view to proceeding against individual directors, if appropriate.
Previously, Regulation 4 of the 1998 Regulations required employers to keep copies of out of date certificates for 40 years. Under the 2008 Amendment Regulations, this legal requirement has been removed (2008 Amendment Regulations, reg. 2(2)). However, employers will be advised, as far as is possible, to keep a complete record of their employers’ liability insurance in case of claims from former or current employees who may have been exposed to the cause of their illness decades earlier. HSE has never enforced this aspect of ELCI, but in the past we have been able to ask employers for, or demand via a notice, previous copies of certificates. The change in legislation means that although we will no longer be able to demand via a notice a copy of an out of date certificate, we believe there is no reason why we cannot ask an employer about one if appropriate.
Since 1 October 2008, this requirement to display has changed and employers have flexibility in how they display their current ELCI certificate (2008 Amendment Regulations reg. 2(3)). If the employer chooses not to display physically at each place of work but to go for the electronic option, then each employee to whom it relates should have “reasonable access” to the certificate in its electronic form.
Where an employer chooses to display electronically rather than physically, Inspectors will not have a visible display that can be checked easily at a glance.
At inspections and investigations, Inspectors should continue to look for a displayed certificate and, in its absence, should ask about it on arrival, and to minimise the time spent and diversion from planned work, should request that it be made available before the end of the visit, or sent subsequently by post. Where there is no display, Inspectors should advise the employer of the need to display or make available electronically, but should not engage in detailed discussions about what constitutes ‘reasonable access’ for the electronic option.
It is important to record on COIN specific ELCI outputs, i.e. ELCI prosecutions and ELCI Notices to Produce served (as DWP require statistical returns). General ELCI contacts and enquiries need not be recorded on COIN – other than where they are dealt with as a complaint; and where failure to produce a certificate when asked results in an investigation (usually by a Complaints Officer or VO).
Since the first Regulations made under ELCI (the Employers' Liability (Compulsory Insurance) General Regulations 1971, SI 1971 No 1117) came into force, the Act has been qualified many times by Exemption and Amendment Regulations. In 1995 a comprehensive review of the Act and related legislation was carried out. This resulted in the 1998 Regulations, which, with the exception of certain provisions relating to offshore installations, consolidated all the existing ELCI Regulations and came into force on 1 January 1999.
A further review of ELCI announced by DWP in December 2002, produced the 2004 Amendment Regulations which came into force on 28 February 2005. A DWP consultation in September 2007 on proposed regulatory changes to Regulations 4 and 5 of the ELCI Regulations 1998 has resulted in the 2008 Amendment Regulations which came into force on 1 October 2008.
ELCI is applied offshore by reg.21 of the Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995 (SI 1995 No. 738). This also changes some of the wording in the Act for use offshore.
Appendix 1 contains a table of duties, powers, offences and penalties. The Act is contained in Redgrave’s Health and Safety. The 1998 Regulations are on the HMSO Website.
Queries on policy or interpretation of ELCI that cannot be resolved within the office or with the help of local sources of expertise (i.e. previous ELCI inspectors) should be referred to your Directorate HQ.
Revised guidance for HSE staff involved with ELCI is included. For training purposes, an ELCI presentation is available via the Legal & Enforcement home page (see also Employer's liability compulsory insurance (ELCI)).
The ELCI Notice to Produce is available as a Word Template.
For VOs, ELCI training should be undertaken as supervised training in the local office.
Legal and Enforcement Team