New levels of compensation under the Employees' Compensation Ordinance

The Employees’ Compensation Ordinance (Ordinance) sets out the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases under the Ordinance.

The Ordinance applies to all full-time or part-time employees who are employed under contracts of service or apprenticeship. It also applies to employees under Hong Kong employments but are injured while working outside Hong Kong.

Occupational diseases

An employee suffering incapacity arising from occupational diseases is entitled to receive the same compensation as that payable to an employee injured in an accident arising out of and in the course of employment if the disease is one due to the nature of any occupation in which he was employed at any time within the prescribed period immediately preceding the incapacity caused. The prescribed occupation diseases are set out in Second Schedule of the Ordinance (e.g. inflammation, bursitis, tuberculosis).

Notification of accidents

 An employee should notify the employer orally or in writing when he sustains a work injury or it is confirmed he has contracted an occupational disease specified by the Ordinance as soon as possible. Failure to do so may affect and delay the claim of employee’s compensation.

Irrespective of whether the accident gives rise to any liability to pay compensation, an employer must notify the Commissioner for Labour of any accident or prescribed occupational diseases within the following time periods:

Settlement of claims

Depending on the nature of the case, a claim for employees' compensation can be settled by (1) direct payment, (2) determination of compensation by agreement according to the Ordinance, (3) settlement by medical certificate, or (4) settlement by the Court.

Compulsory insurance

An employer must take out a valid insurance policy to cover his liabilities both under the Ordinance and at common law for the work injuries of its employees. The minimum amount of insurance cover per event should not be less than HK$100 million for employers with not more than 200 employees and not less than HK$200 million for employers with more than 200 employees. An employer who fails to comply with the Ordinance to secure an insurance cover is liable to prosecution and, upon conviction, to a maximum fine of HK$100,000 and imprisonment for two years.

New levels of compensation

On 15 March 2023, the Legislative Council of Hong Kong passed a resolution to increase the amounts of the nine compensation items below under the Ordinance with effect from 13 April 2023.

How should an employer handle a doubtful employees’ compensation case?

Employers should carefully handle suspicious and doubtful employee’s compensation cases. If the employer is in doubt about the cause of an employee’s injury or sick leave, he may conduct preliminary investigation as soon as practicable by interviewing the injured employee to obtain details of the accident, inquiring of the witnesses about the circumstances, assessing the possibility of the work environment leading to the accident, and requesting the attending registered medical practitioner, registered Chinese medicine practitioner or registered dentist of the injured employee to provide a medical report for reference.

On the other hand, the employer can contact the insurer for appropriate follow-up action, such as arranging a medical examination to be conducted by a registered medical practitioner, registered Chinese medicine practitioner or registered dentist named by the employer for the injured employee.

If the employer is still in doubt about the work injury case, it may pass its views and the relevant information to the Labour Department. The Labour Department has an occupational clinic and may give its views to both parties on the likelihood of the case being a work injury from the medical point of view and according to the provisions of the Ordinance.

However, the Labour Department is not in a position to make adjudication on any dispute over compensation. If the employer and the employee do not reach any settlement even with the assistance of the Labour Department, the case will have to be determined by the Court.

On encountering a suspected fraudulent case, an employer should consider forwarding the evidence collected and other relevant information to the Police for action.