Risk Monetisation: A Service or a Disservice to Effective Risk Management Practices in the Workplace?

In risk management, risk monetisation is a process by which the loss associated with a particular risk can be estimated in monetary terms. In the context of industrial relations, the term may also be used when employers or governments adopt policies whereby workers are paid a premium to compensate for hazardous work. Although some theories suggest that such compensation would lead to safer workplaces, as employers would invest in occupational health and safety to avoid the additional labour costs, other studies have shown this to be false.

In Brazil, occupational risk is monetised through various forms of hazard pay received by workers, and the rate of occupational accidents and diseases remains high. Moreover, although the value of most types of hazard pay is not high, it is an important source of income for many low-paid workers. It may therefore discourage workers and workers' organisations from demanding safer workplaces, as with reduced risks would come reduced wages.

To assess whether such discouragement occurs, quantitative empirical research is being used to determine whether workers' organisations in Brazil have engaged in collective bargaining and collective action aimed at reducing workplace hazards or, conversely, whether their actions are focused on obtaining hazard pay for workers.

By identifying the behaviour of workers' organisations, this research attempts to determine whether the existing risk monetisation policies in Brazil present a disservice to the improvement of occupational safety and health.