Injury & Compensation

Employer's liability to provide a safe workplace

By Camus Wong, Solicitor, Litigation Department, Woo Kwan Lee & Lo

Article exclusively contributed by Woo Kwan Lee & Lo

Cecilia is a souvenir designer employed by ABC Ltd. As part of her job she is required to pay regular visits to the company's workshop and to the factories of various subcontractors in order to monitor production. During those visits she noticed that certain workplace arrangements appeared unsafe and were a potential cause of danger to herself and the other people working there.

In view of this, she raised her concerns and asked her employer and the subcontractors to take reasonable steps to ensure safety and health for all employees on their premises. As far as she could tell, no action was taken.

Subsequently, when her assistant, Andy, was injured during a visit to ABC's workshop, it turned out that the company had also failed to take out compulsory employees' compensation insurance. Cecilia decided it was time to take further advice. She contacted the Labour Department to get a clearer understanding of the relevant legislation and to know whether an offence had been committed.

She was told that it is the common law duty of an employer to each of his employees to take reasonable care in ensuring the place of work is safe. This duty cannot be delegated. Apart from that, statutory duties and regulations to the same effect have been imposed upon employers by legislation.

For example, the Factories and Industrial Undertakings Ordinance ("FIUO") of 1955 would require ABC Ltd to provide and maintain a safe and healthy working environment. This ordinance applies to such "industrial undertakings" as factories, construction sites, cargo and container handling areas, catering establishments and repair workshops.

Besides that, Sections 6, 7 and 8 of the Occupational Safety and Health Ordinance (OSHO), which came into effect in 1998, impose statutory duties in relation to any workplace under the employer's control. The OSHO also covers non-industrial workplaces, such as educational institutions, shopping arcades, laboratories and government departments. An exception is made for domestic premises where the only employees are domestic servants.

If an employee has to work on premises which are not under the employer's direct control, like the subcontractors' factories, the OSHO requires that the occupier must then ensure that those premises are safe and without risks to health.

The Commissioner for Labour can issue codes of practice to provide practical guidance for employers, employees and occupiers of workplaces. These codes will include standards, rules, specifications or provisions relating to occupational safety and health, which are approved by the Commissioner.

When she asked about Andy's situation, Cecilia was told that, under the Employees' Compensation Ordinance (ECO), an employer must take out compulsory insurance against his liability for any injury caused by accident to an employee in the course of employment. Generally speaking, such insurance should cover three main areas of potential liability for which the employer might have to pay: statutory compensation under the ECO, common law damages, and breach of statutory duties under the FIUO and OSHO.

In Cecilia's case, occupiers or subcontractors were not required to take out compulsory insurance under the ECO because there was no employment relationship, even when she was sent to work on their premises. However, they should have observed the relevant statutory requirements under the OSHO and their common law duty of care towards their lawful visitors. They should also have considered taking out public liability insurance to cover legal liabilities towards members of the general public on their premises.

At Cecilia's request, the Labour Department contacted ABC Ltd and explained the need to adopt the recommended codes of practice without delay and to educate employees about them. They also confirmed that, in failing to take out compulsory employees' compensation insurance, an offence had been committed. Therefore, the employer was liable on conviction upon indictment to a maximum fine of HK$100,000 and two years' imprisonment, and on summary conviction was liable to the same maximum fine but one year's imprisonment.

Q&A on employer's liability for workplace safety and health
Q1 Is it an offence for an employer or subcontractor to refuse to take reasonable steps to ensure safety and health at work?
A1 Yes. Under the OSHO, the employer or subcontractor is liable on conviction to a fine of HK$200,000. If the offence is committed intentionally, knowingly or recklessly, they are liable on conviction to a fine of HK$200,000 and imprisonment for six months.

Q2 If, after repeated requests and demands, some employees still refuse to follow the company's code of practice for safety and health in the workplace, are they committing an offence?
A2 Yes. According to the OSHO, each such employee is liable on conviction to a fine of a maximum of HK$10,000. If they have acted intentionally, knowingly or recklessly, the penalty could be a maximum fine of HK$50,000 and imprisonment for six months.

Q3 If ABC Ltd was in financial difficulties and ceased business, would it be possible for Andy to receive any employees' compensation for his injury?
A3 Andy should proceed with his employees' compensation claim in the usual way and aim to obtain judgment against ABC Ltd. If he has taken enforcement proceedings against the company but cannot recover any compensation, he can apply for payment from the Employees' Compensation Assistance Fund Board.

Taken from Career Times 24 June 2005

(Last review date: 23 August 2013)

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Disclaimer: The opinions expressed in this article are those of the contributor

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