Butterworths Hong Kong Employees’ Compensation Handbook

EMPLOYEES’ COMPENSATION ORDINANCE

(CAP 282)

Introduction

The Employees’ Compensation Ordinance (Cap 282) establishes the statutory framework for the provision of compensation to employees who are injured in the course of their employment. The Ordinance is assuming more and more importance with the general increase in the number of workmen injury cases and with increased awareness of and concern over employees’ rights.

The Ordinance is based on the Workmen’s Compensation (East & West Africa) Model Ordinance 1762/4/35, with certain new provisions introduced to cater for local needs and circumstances. Although not explicitly stated, the Workmen’s Compensation Act 1925 was probably also referred to in enacting the Ordinance.

The Ordinance was originally entitled Workmen’s Compensation Ordinance. In 1980, the legislature decided that the Ordinance should apply to all employees irrespective of their earnings levels: see the Workmen’s Compensation (Amendment) Ordinance 1980 (44 of 1980). With the removal of the limitation on earnings levels, the words ‘workman’ and ‘workmen’ whenever they occurred in the Ordinance and regulations were replaced by the words ‘employee’ and ‘employees’ respectively. Corresponding amendments were also made to grammatical variations and cognate expressions.

The essential provisions of the Ordinance are as follows:

except in specified circumstances, an employer is liable to pay compensation in respect of personal injury or death of his employee resulting from an accident arising out of and in the course of the employment (s 5)
there exists a comprehensive settlement mechanism in respect of fatal injury cases under which compensation, interim payment, funeral and medical attendance expenses are recoverable by eligible member of the deceased employee’s family (s 6A to s 6H)
where death results from the accident, the amount of compensation now ranges from HK$303,000 to HK$1,764,000 and the exact amount payable is determined by reference to the deceased employee’s age and the degree of dependency of his dependant(s) (s 6)
where permanent incapacity results from the injury, the amount of compensation will fall within the range of HK$344,000 and HK$2,016,000 and the exact amount payable would depend on a number of factors, the most important of which being the injured employee’s age, the nature (partial or total) of the incapacity, and (if the incapacity is partial) the degree of loss of earning capacity caused by the injury (ss 7, 9)
in addition, an injured employee is also entitled to periodical payments during the period of temporary incapacity, medical expenses, cost of surgical appliance and compensation for constant care and attention, in accordance with the provisions of the relevant sections (ss 8, 10, 10A, 36B)
there are prescribed procedures for assessment of the extent of the employee’s injury (s 16):
for agreement between the employer and employee as to compensation (s 16CA)
for cancellation of such agreement (s 16CB)
for lodging a formal application to the Court for compensation (ss 14, 18A)
where the injured employee is employed by a sub-contractor, liability to pay compensation is extended to the principal contractor (s 24)
the employee, employer and principal contractor are allowed to claim compensation or indemnity (as the case may be) against any third party who is legally liable to pay the compensation (ss 24(2), 25)
an employer is required to take out a policy of insurance covering his full liability for any injury to any of his employees by accident arising out of and in the course of his employment (s 40), the insurer’s rights and liabilities are governed by ss 42-44
the Ordinance also provides for compensation to an employee who contracts an occupational disease due to the nature of his employment (ss 32-36)
the employee’s right to compensation under the Ordinance does not affect any other remedies which he may have against the employer (such as common law claim for negligence) (s 26).

It is true that certain provisions of the Ordinance are not free from problems (for example, there is no mechanism for protection of interest of minors upon payment of compensation assessed under a Certificate of Compensation Assessment for Fatal Cases pursuant to s 6B). However, the Ordinance has in general served to provide a practical and effective framework for injured employees seeking compensation from their employers.

It should be noted that, in the United Kingdom, employees’ compensation is not payable in respect of any employment occurring on or after 5 July 1948, although where the right to compensation arose in respect of employment before that date compensation continues to be payable by the employer. Readers are referred in this connection to the various Workmen’s Compensation Acts as well as to the Butterworths’ Workmen’s Compensation Cases Vol I-XLI, an extremely useful series of cases on the interpretation of the provisions of the various Acts.

The first major amendment to this Ordinance was made by the Workmen’s Compensation (Amendment) Ordinance 1980 (44 of 1980). Amendments pursuant to this and subsequent Ordinances are noted in the annotations below.

It is convenient to mention here, in pursuance of s 16 of the Employees’ Compensation Assistance Ordinance (Cap 365), a person who is unable to recover from an employer payment of an amount of compensation or damages for which the employer is liable may apply for payment of that amount from the Employees’ Compensation Assistance Fund. In this connection, the person seeking payment must show that he is unable to recover from the employer, and he is not to be so regarded unless the person has taken such proceedings to recover an award of employees’ compensation as are reasonable in the circumstances against the employer, the principal contractor and the insurer: see Chen Xiu Mei for herself and for and on behalf of other members of the family of Liang Yi Kai, deceased v Li Siu Wo & Anor [2008] 2 HKLRD 211. A new s 25B of the Employees’ Compensation Assistance Ordinance (Cap 365) came into effect on 1 July 2002. Under this section, a notice of proceedings in the prescribed form is required to be served on the Employees’ Compensation Assistance Fund Board and if applicable, also on the insurer concerned not later than 30 days after the date on which the Writ or Application is filed with the court. Separate notices are required in respect of a claim for compensation and a claim for damages.

It is further provided under s 25B(6) that a person who fails to comply with the said notice requirement within the prescribed time shall not be entitled to any payment under the Employees’ Compensation Assistance Ordinance (Cap 365).

The statutory requirements of s 25B do not require there being any likelihood of a claim against the Fund before serving notice of proceedings. Accordingly, it would be prudent to serve notice of proceedings to the Board and the insurer in every E.C. case and common law action involving employment related injury within 30 days after the commencement of proceedings, even if a claim against the Fund is considered to be unlikely in the first place.

EMPLOYEES’ COMPENSATION ORDINANCE

(CAP 282)

Introduction

CHAPTER 282

EMPLOYEES’ COMPENSATION ORDINANCE