Role of Employees Compensation Assistance Fund Board in Employment-related Injury Claims

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1 Personal & Work Injury Claims April 2011 Role of Employees Compensation Assistance Fund Board in Employment-related Injury Claims An employee is entitled to seek compensation from his employer if he is injured in an accident arising out of and in the course of his employment. All employers are required under the Employees Compensation Ordinance, Cap. 282 to take out insurance to cover employees claim for compensation. What protection does the employee have if the employer fails to take out insurance and has no money to pay the compensation, or if the employees compensation insurer is insolvent? This article aims to provide a brief outline of the involvement of the Employees Compensation Assistance Fund Board ( the Board ) in those circumstances. The Employees Compensation Assistance Fund ( the Fund ) is established under the Employees Compensation Assistance Ordinance, Cap. 365 ( the Ordinance ) to provide for the protection of the entitlement of employees and others to compensation for employment-related injury and the making of relief payment to eligible persons in relation to damages for employment-related injury. The Board was set up to manage the Fund. Application for payment of unpaid employees compensation from the Fund Under s.16 of the Ordinance, a person who is unable to recover from an employer payment of an amount of employees compensation for which the employer is liable may apply for payment of that amount from the Fund together with costs and interest. An employer is not to be regarded as liable for the payment of an amount of compensation unless- the amount is payable- (i) pursuant to a judgment or order of a court or tribunal in Hong Kong; (ii) by virtue of section 16A(9) of the Employees Compensation Ordinance (Cap 282) following an assessment of compensation by the Commissioner for Labour under that section; or P. 1

2 (iii) pursuant to a Certificate of Compensation Assessment for Fatal Case or Review Certificate of Compensation Assessment for Fatal Case issued under the Employees Compensation Ordinance (Cap 282); in the case of an amount of medical expenses, a certificate has been issued by the Commissioner for Labour under section 10B(1) or (2) of the Employees Compensation Ordinance (Cap 282) in respect of that amount; (c) in the case of a claim by the Director of Health for the cost of supplying and fitting a prosthesis or surgical appliance for which the employer is liable under section 36B of the Employees Compensation Ordinance (Cap 282); (d) in the case of reimbursement of the expenses of the funeral of the deceased employee and expenses of the medical attendance on the deceased employee, a Certificate for Funeral and Medical Attendance Expenses or Review Certificate for Funeral and Medical Attendance Expenses has been issued under the Employees Compensation Ordinance (Cap 282). Moreover, a person is not to be regarded as being unable to recover from an employer payment of an amount of employees compensation for which the employer is liable under s.16 of the Ordinance, unless the person has taken such proceedings to recover payment of the amount as are reasonable in the circumstances against the employer, and where applicable, the principal contractor and the insurer concerned. Application for payment of unpaid common law damages from the Fund Under s.20a of the Ordinance, an eligible person who is unable to recover from an employer payment of an amount of damages for which the employer is liable may apply for a relief payment of that amount from the Fund. As regards a relief payment, eligible person is defined by the Ordinance to mean:- where the employment-related injury concerned is non-fatal, (i) the injured employee; or (ii) in the case of the death of the injured employee whether before or after damages have been awarded:- P. 2

3 (A) (B) (C) any surviving spouse or cohabitee of the injured employee; any surviving child of the injured employee, whether by blood or an adoption, who was under the age of 21 years at the time of the death of the injured employee; if there is no surviving spouse or cohabitee, and no surviving child, any surviving parent of the injured employee; where the employment-related injury concerned is fatal, a person who has any of the following relationship in respect of the deceased employee, whether by blood or an adoption:- (i) a spouse or cohabitee; (ii) a child; (iii) a parent or grandparent; or (iv) a grandson, granddaughter, stepfather, stepmother, stepson, stepdaughter, son-inlaw, daughter-in-law, brother, sister, half-brother, half-sister, father-in-law, motherin-law, brother-in-law, sister-in-law, and child of a brother or sister of the whole blood. An employer is not to be regarded as liable for the payment of an amount of damages unless the amount is payable pursuant to a judgment or order of a court in Hong Kong. Similar to the situation for employees compensation, an eligible person is not to be regarded as being unable to recover from an employer payment of an amount of damages for which the employer is liable unless the eligible person has taken such proceedings to recover payment of the amount as are reasonable in the circumstances against the employer, and where applicable, the insurer concerned. For the purpose of determining the amount of a relief payment, the Board shall deduct the related employees compensation having been paid or payable and the amount of those damages already been paid by the employer. The interest payable on any amount of damages and costs arising from proceedings in respect of any damages or employees compensation claim shall also not be included in a relief payment. P. 3

4 Notice of Proceedings to the Board It is important to note that if a person fails to serve a written notice of proceedings in a prescribed form on the Board and, where applicable, the insurer concerned within 30 days after commencement of the proceedings for employees compensation and for damages, he shall not be entitled to any payment under the Ordinance. Suing the Board as if it were the employer Under s.25 of the Ordinance, a person may issue proceedings for a claim of employees compensation against the Board as if it were the employer, if he can satisfy the court that:- the employer- (i) cannot be identified or, if identified, cannot be found; (ii) is insolvent; (iii) is dead or in the case of a company, has been dissolved, wound up or struck off the register; or (iv) for any reason, cannot be served with proceedings; and no policy of insurance is known to be in force in relation to the employee. The Board applying to join as party to proceedings Under s.25a of the Ordinance, if proceedings have been initiated to claim employees compensation or damages, the Board may apply to the court to be joined as a party to the proceedings in the following circumstances:- where no policy of insurance is known to be in force at the time of the accident to which the proceedings relate, for taking over the defence as if it were the employer in the proceedings if - (i) the employer cannot be identified or, if identified, cannot be found; (ii) the employer is insolvent; (iii) the employer is dead or has been dissolved, wound up or struck off the register; P. 4

5 (c) (iv) the employer, for any reason, cannot be served with the notice of proceedings; or (v) at any time when the employer fails to attend the hearing, leaving the claim uncontested; where no policy of insurance is known to be in force at the time of the accident to which the proceedings relate and the employer is present at the proceedings,; where the insurer concerned is insolvent. For enquiries: Please contact members of our Personal & Work Injury Claims Practice Group Francis Chan Partner, Co-Head of Personal Injury Practice Group +(852) Ray Lee Partner, Co-Head of Personal Injury Practice Group +(852) Contacts: Tel : Fax : /F-15/F, The Bank of East Asia Building, 10 Des Voeux Road Central, Hong Kong IMPORTANT: The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors. Published by ONC Lawyers 2011 P. 5