Workplace Safety and the Semco Method

Introduction

Most civilized countries oblige employers to provide a healthy and safe environment for their workers. Indeed, in Australia, the 2011s Work Health and Safety (WHS) Act states that if a risk is impossible to eliminate, it should be minimized (Dean et al., 2021). Violation of these requirements at a potentially dangerous workplace can lead to unpleasant consequences. According to Bilgrami, Cutler, and Sinha (2021), more than two million people die annually worldwide because of accidents at work, which may cost nearly 6% of a country’s gross domestic product. More than half a million employees in Australia suffered from workplace injuries in 2018 (Bilgrami, Cutler, and Sinha, 2021). The comic video about the workplace in the construction industry demonstrated several severe violations of safety precautions. In this video, workers were found not to wear helmets, not use safety barriers, and allow underaged children to work in dangerous facilities. Such violations can result in injuries or death in this place, which will inevitably have legal consequences for the employer. If these breaches in safety were to occur in Victoria, the construction company would receive significant administrative and legislative penalties.

OHS in Victoria

Like other Australian states or territories, Victoria implemented Occupational Health and Safety (OHS) to protect workers from workplace injuries and prevent deaths. Specifically, Victoria introduced “workplace manslaughter laws” into OHS Act in July 2020 (Windholz, 2020, p. 1). According to this amendment, a workplace death caused by not providing necessary safety measures will be punished by 25 years of incarceration (Windholz, 2020). In case of damage to a body corporate, the penalty is equal to $16.5 million (Windholz, 2020). Checking and ensuring that companies follow the requirements is performed by the special inspectors of a governmental agency Work Safe Victoria (Windholz, 2020). They are vested with the right to sanction firms that do not comply with the rules.

The construction company presented in the video violated OHS Act and will be liable to significant fines. Moreover, if one of the employees were fatally injured during this work, the company owners would be imprisoned for a long time. Since neither of the required precautions was followed in this video, no helmets or safety bands, such an accident had a high probability of occurring. An organization involved in such a case will be stigmatized and criticized by society for not establishing appropriate working conditions. Overall, this law obliges employers to protect their staff from workplace injuries.

In addition to OHS, the Australian government introduced a new law to give more legislative protection to workers. The 2009 Fair Work Act improved terms and standards under which employees are hired in the industrial sector (Forsyth, 2017). Failure to comply with these regulations results in financial penalties and termination of a firm’s employment obligations (Forsyth, 2017). Although the video was a comic performance, it represented the reality of illegal employment practices in Australia. Indeed, before implementing gangmaster licensing, which demands official approval of one’s operations, many immigrants worked under unsafe and unfair conditions (Forsyth, 2017). Since the right to healthy living and safe employment are fundamental human rights, the argument that shutting the construction site would lead to unemployment and possibly imprisonment is inadequate. Thus, in this situation, the inspectors possessed the right to discontinue the work of this construction company who did not employ any safety methods for protecting their workers in a potentially dangerous environment.

How to Rectify This Issue?

Accidents at a workplace are dangerous for workers’ lives and costly for organizations. According to Allison, Hon, and Xia (2019), the average compensation payment for injuries at Australian construction sites was about $14,000 per worker, while the national costs for such damages approached $3 billion. Depending on the degree of incapacitation of a worker who suffered a workplace accident, the compensation can range from $2000 to approximately $6 million (Allison, Hon, and Xia, 2019). The former payment is given for a short-term absence from work, while the latter is provided in case of complete capacity loss of (Allison, Hon, and Xia, 2019). It appears that the federal government made the price of not introducing safety measures high enough to force even gangmasters, like in this video, to follow necessary precautions and preclude workplace injuries and deaths.

Even though the breaches of workplace safety were dangerous, they still can be rectified. It should be the firm’s highest priority because it will prevent manslaughter, incarceration, financial losses, and complete company closure. Notably, the construction industry employs only about 7% of the global workforce, but it was found to be responsible for more than 40% of workplace accidents (Newaz et al., 2018). Hence, deliberate preventive practices should be introduced in these organizations. The central participants that should be involved in fixing this situation are the employers and workers. The employer needs to temporarily terminate all construction works and start occupational safety training with the company’s employees. Simultaneously, this organization needs to allocate a budget for purchasing personal protective equipment for its construction workers. Each employee will be required to attend all training sessions. They will be tested for an understanding of workplace safety regulations after lectures. Furthermore, the employer should assign each construction site a supervisor who will monitor compliance with the rules. Lastly, it is recommended that the company collaborate with Work Safe Victoria to ensure that all legislative requirements are met and reveal any unnoticed imperfections.

The training sessions should be aimed at teaching workers to evaluate personal safety state. Organizations are not recommended to hire people who lack proper knowledge and experience working in construction because it can be dangerous for employees’ lives and costly for the company. Still, if these people are recruited, they should work under the direct supervision of professionals to prevent tragic accidents and teach them the essence of construction and safety in this industry.

Collaboration between workers and supervisors is instrumental in correcting the violations of safety measures at the construction site shown in this video. A supervisor at a construction site should monitor these four dimensions because the nature of this work demands continuous control. According to Newaz et al. (2018), “the role of supervisors in shaping subordinates’ safety behavior is likely to be considerably greater than in work contexts with routine production processes” (p. 750). Furthermore, they have tremendous experience in construction; thus, supervisors need to explain to younger employees how to recognize potential workplace hazards and prevent incidents (Newaz et al., 2018). Since supervisors usually possess authority and respect among workers, they should be the primary figures in popularizing the importance of following safety rules. Overall, the dimensions that will need to be evaluated and fixed are safety rules, understanding hazards, personal risk assessment, and work competence.

Liabilities and Sanctions

It is crucial to ensure that people in organizations are held accountable for maintaining safety measures at a workplace. Since an employer is the primary receiver of profit from staff’s work, one is mainly liable for these breaches in the WHS act. In the case presented in this short video, the gangmasters who hired the construction workers will be liable for the violations of safety requirements. Since every Australian state and territory passed their own legislation related to OHS, the governments of these states are mainly responsible for workplace safety (Teicher, Holland, and Gough, 2013). It means that the state covers healthcare costs in case of an injury and hospitalization. However, Victoria has not implemented harmonized laws that provide uniform safety standards to all Australian workers (Bilgrami, Cutler, and Sinha, 2021). Still, monitoring of organizations that follow the recommended safety standards is made by the governmental agency known as Safe Work Australia (Bray et al., 2017). Safe Work Australia aims to collect, analyze, and report data about violations of WHS. In this case, employers should be liable for the breaches in the regulations.

Various parties can be prosecuted for OHS violation and manslaughter in Victoria. Individuals responsible for monitoring safety standards include employers, self-employed people, managers, designers of buildings, manufacturers, and officers (Windholz, 2020). Only people who possess the power to alter conditions at a workplace can be considered liable. In fact, most accidents result from “negligent conduct,” when those who had to provide appropriate protective wearing and training failed to do so (Windholz, 2020, p. 4). Therefore, in this video, employers can be viewed as negligent by not providing proper equipment to their workers. The legal consequences for this organization will be increased financial penalties for not ensuring employees’ safety. Furthermore, the gangmasters will have to pay these sanctions from their personal earning because the new legislation made these penalties uninsurable (Bilgrami, Cutler, and Sinha, 2021). According to Bilgrami, Cutler, and Sinha (2021), these changes were done to preclude delays in payments and make companies interested in following the rules. The outcomes of this conduct can be severe because the construction site is a potentially dangerous place where employees may be harmed if safety measures are not followed.

In summary, this comic video illustrates many breaches in legislation about workplaces safety. If this situation were to happen in Victoria, the employers would be liable to high financial penalties. If these breaches resulted in the death of one of the workers, the employers of this company would become imprisoned for an extended period. Overall, the Australian government ensured that organizations take necessary precautions to prevent workplace accidents.

The Semco Method

Many international organizations try to replace the traditional paternalistic approach in management with the new participatory model. One of the first corporations that employed the new method was the Brazilian company Semco (Slintak, 2019). Flexibility and freedom were introduced in this firm by Ricardo Semler when he inherited the business from his father in 1981 (Slintak, 2019). Ricardo was able to transform it into Brazil’s largest manufacturer of marine-processing engines (Monsalve, Niño, and Naranjo, 2017). Before Semler became Semco’s CEO, the staff was viewed as executors of leaders’ orders and children that needed coordination (Slintak, 2019). On the one hand, the old approach provides safety for the staff, but on the other hand, it withdraws independence of thinking and acting. It is hard to imagine for authoritarian leaders that employees will continue working hard if all the control is removed, but this model enables the growth and prosperity of Semco. This organization expanded from 90 workers to 3000 and increased its revenue from $4 million to $240 million within two decades (Slintak, 2019). The Semco model illustrates that giving power and responsibility to employees can lead to the company’s prosperity.

The Semco Method of Workplace Relations

Ricardo Semler wanted to transform his father’s company from a traditional paternalistic to a more employee-oriented participatory organization. The main features of this firm’s management system are “the elimination of artificial rules and regulations,” “creation of dynamic hierarchies,” sharing of wealth and information, and treating employees like adults (Slintak, 2019, p. 207). Semler allowed his workers to set their wages, schedule working hours, and choose what to wear to work (Teicher, Holland, and Gough, 2013). Semco has no surveillance and monitoring; their software is customized in a way to prevent spying on the staff’s emails (Teicher, Holland, and Gough, 2013). Moreover, the old hierarchical structure was eliminated, and authority was given to the team’s most knowledgeable and experienced members (Slintak, 2019). In fact, the company lacks any definitive structure because Semler claimed that a fixed system devoid the firm of its dynamics (Slintak, 2019). He also believed that participatory management allowed to place every employee at the center of the decision-making process, allowing them to build a robust trustful relationship with the firm (Slintak, 2019). As the organization’s history demonstrates, this method enabled the company’s success.

The company’s governance was also different than in most other firms. Struggling with poor health, Semler still wanted to increase the organization’s total revenue. Therefore, he divided Semco into small units, where both staff and directors rotated every six months (Monsalve, Niño, and Naranjo, 2017). This model not only enabled employees to find the path that they were most passionate about, but it also prevented stagnation in business. Active participation in the industry gives workers control over the outcomes, and according to Monsalve, Niño, and Naranjo (2017), workers who can “control their working conditions are happier than those who do not” (p. 69). Furthermore, more power is given to the staff by providing knowledge about Semco’s financial operations and other processes (Monsalve, Niño, and Naranjo, 2017). Overall, it appears that this company’s democratic approach, information transparency, and profit-sharing created an environment of corporate responsibility among the employees who were interested in working hard and attaining better outcomes.

Could the Semco Model Be Applied to My Organization?

Although many companies welcome the participatory management method, they still retain some control over their workers, and my organization is not an exception. Indeed, we have implemented the new surveillance and monitoring system in our firm; hence, it may be challenging to imagine introducing the Semco model in our company. However, some aspects of it can be applied in our management system to give the staff more power and control over their duties and schedule. Since the majority of my employees are young adults, they are likely to be enthusiastic about this idea to use Semler’s method of organizing work in our teams. Furthermore, eliminating unnecessary intermediate managers and creating equalized communication can raise people’s interest in striving to perform high-quality work (Slintak, 2019). Although the surveillance system has already been introduced in my firm, the company can acquire a more flexible model if it can contribute to our business’s profit.

This model can also be implemented at the level of the company’s governance. Employees will be encouraged to propose their goals and solutions to facilitate the organization’s development. It is compelling to share the business profit among the staff, as done in the Semco. Specifically, their “wealth distribution system … is formulated in a way that each quarter,” 23% of “the profit made by each autonomous business unit” is equally divided among the employees (Slintak, 2019, p. 211). Indeed, this approach creates additional motivation for the employees to perform better and raise profit because the income level directly depends on the quality of their work. Treating our staff as partners will improve cooperation between team members and make the company more successful because workers will be independent and interdependent, creating a cohesive, collaborative network.

The other two aspects of the Semco method, the lack of uniform and email privacy, can be partially implemented in our organization. First, although workers are not obliged for official attire, like suits and ties, in our company, it is still required for researchers who work in the laboratories to wear white coats and other necessary protective equipment. In fact, the staff understands the importance of these rules because these guidelines are crucial and universal among all scientists. Second, only corporate emails undergo surveillance, but all the information is secured through proper data encryption. It appears that this approach goes against Semler’s view of workplace privacy because he stated that confidentiality is a fundamental human right (Teicher, Holland, and Gough, 2013). However, in our organization, workers consented to this form of control. Furthermore, emails are not constantly monitored and are only used if specific accidents should be investigated. Providing the staff with relative freedom to dress casually outside the laboratory and relative privacy of their digital interaction within the company can help gain employees’ trust.

Reasons Why This Model Could Work in My Organization

The two main reasons why Semco’s method of workplace relations could work in our company are the workers’ desire for independence and their reluctance to admit hierarchical structure. First, young employees in our firm are aspiring individuals with the goal of making a difference in other people’s lives. Allowing them to make essential decisions about the business will not only satisfy their ambitions but also can contribute to the firm’s success. Second, when the monitoring was introduced, they seemed to become less enthusiastic about performing their duties than before because millennials prefer democratic working relations. The Semco model created a structure that eliminated bureaucracy, increased flexibility, and abolished intermediaries in management (Slintak, 2019). Even though training and mentoring will be required for new members of each unit, the pyramidal relations will be minimized. Consequently, applying Semler’s approach to organizing their work can diminish the gap between employees and leadership, approaching the flat structure of workplace relations established in the Semco corporation.

It appears that providing more freedom and flexibility in the working schedule can increase employee satisfaction. Although the staff will be allowed to create their timetables, the deadlines for completing the tasks and the number of working hours per week should remain fixed. The video recording should also be retained because our building consists of laboratories and storage rooms that contain expensive equipment and materials; therefore, video monitoring will be utilized for safety purposes. Still, private places, like restrooms and kitchens, will be left without surveillance. Moreover, to eliminate a sense of hierarchy between the staff s and leaders, all these private places will be common for employers and employees. Still, Semler’s method of governance cannot be fully implemented in our organization because the company’s leadership believes that in an industry that depends on scientific research, some mentoring, guidance, and rules are needed. There are two primary reasons why they consider some control is necessary. First, many employees of our organization are fresh graduates and hence lack appropriate practical experience. Second, biotechnology is an evolving field that demands continuous learning; thus, some surveillance will ensure every team member’s professional development.

Conclusion

In summary, the Semco method was a revolutionary approach in managing employees in an organization, allowing more freedom, transparency, participation, and sharing of information and wealth. Semler intended to create a democratic, participatory model in his organization, and this approach brought the company to the expansion of total revenue and size. He introduced flexible schedules, choice of wages, email privacy, and dividing profit among employees. Furthermore, there is no fixed structure in this firm because Semler believed it impeded the dynamic development of their business. This method can be partially applied to my organization to improve communication and cooperation between teams to facilitate the firm’s prosperity. Finally, providing more independence to workers will allow them to take more responsibility for their work because the company’s success will lead to higher income for them.

Reference List

Allison, R.W., Hon, C.K. and Xia, B. (2019) ‘Construction accidents in Australia: evaluating the true costs’, Safety Science, 120, pp. 886-896.

Bilgrami, A., Cutler, H. and Sinha, K. (2021) ‘The impact of harmonising Australia’s workplace health and safety laws on workers compensation’, Global Labor Organization, 773, pp. 1-49.

Bray, M. et al. (2017) Employment relations: theory and practice. 4th edn. Sydney: McGraw-Hill Higher Education.

Dean, J.M. et al. (2021) ‘Obligations of Australian health services as employers during COVID-19’, Australian Health Review, 45, pp. 622-626.

Forsyth, A. (2017) ‘The Victorian inquiry into labour hire and insecure work: addressing worker exploitation in complex business structures’, E-Journal of International and Comparative Labour Studies, 6(3), pp. 1-3.

Monsalve, J.N.M., Niño, Á.F.M. and Naranjo, J.D.M. (2017) ‘Replacing formal authority in the workplace with employee self-governing authority’, in Lau, E., Tan, L.M., Tan, J.H. (eds.) Selected papers from the Asia-Pacific conference on economics & finance. Singapore: Springer, pp. 63-76.

Newaz, M.T. et al. (2018) ‘Developing a safety climate factor model in construction research and practice: a systematic review identifying future directions for research’, Engineering, Construction and Architectural Management, 25(6), pp. 738-757.

Slintak, K. (2019) ‘A new concept of management’, Montenegrin Journal of Economics, 15(1), pp. 201-213.

Teicher, J., Holland, P. and Gough, R. (eds.) (2013) Australian Workplace Relations. Melbourne: Cambridge University Press.

Windholz, E. (2020) ‘Victoria’s new workplace manslaughter laws: it’s all in the messaging’, Employment Law Bulletin, 25(8), pp. 1-6.

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