Notes for Hong Kong Employer: Handling COVID-19 Claims under the Employees’ Compensation Ordinance (or Not!)

During these unprecedented times strange things can happen at the workplace. One such unusual occurrence is the filing of compensation claims by employees who may have contracted COVID-19 at the workplace. Although such occurrences are rare, Hong Kong employers should be mindful of this risk and take reasonable precautions. This note considers what a Hong Kong employer should do in such situation.

Is It Possible to Claim Compensation for COVID-19 Personal Injury under the Employees’ Compensation Ordinance (ECO)?

Yes, but the circumstances where a claim under the ECO can arise is very narrow.

Under the ECO, if there is personal injury by accident arising out of and in the course of employment or an employee suffers from an occupational disease as listed in Schedule 2, the employer will be liable to pay compensation in accordance with the ECO. COVID-19 is currently not an occupational disease. Although the Hong Kong government has considered amending the law on this, no changes have been made so far. So, for an employer to be liable to pay compensation it must be demonstrated that the employee’s contracting of COVID-19 constitutes an “injury by accident” which arose “out of and in the course of employment”. From a practical standpoint, an employee could have contracted COVID-19 anywhere and the situations where an employee may have contracted COVID-19 by accident arising out of and in the course of employment would be limited to, for example, where the employee is dealing with, or exposed to, persons with COVID-19 as part of their work, or if there was an active COVID-19 case in the workplace where the employee worked. There would need to be evidence such as surveillance data or epidemiological investigation data from the Centre for Health Protection (CHP).

What are the Financial Consequences for the Employer If an ECO Claim is Accepted?

Not much. An employer will have ECO insurance covering any liability to pay compensation under the ECO.

Even if an employee contracted COVID-19 by accident arising out of and in the course of employment, they may still not be eligible to claim for compensation under the ECO if they have not suffered any personal injury. So, if the employee was asymptomatic and there was no incapacity of a permanent nature, then they are not eligible to claim for compensation. Even where there has been personal injury, in most cases people do recover within a short period of time.

What are the Statistics for COVID-19 ECO Claims?

The Secretary for Labour and Welfare has reported that between January 2020 and April 28, 2021, the Labour Department received a total of 541 employees’ compensation cases involving employees suspected to have contracted COVID-19 arising out of and in the course of employment. Of these 541 cases, employers reported 528 cases to the Labour Department on their own initiative, while the Labour Department followed up on the remaining 13 cases after receiving notification from the employees. In the majority of the above cases, the employers were unable to confirm whether the employees had contracted COVID-19 while at work or the infections were linked to other sources.

Of the 541 cases, the employees in 115 cases withdrew or did not pursue their claims further or the Labour Department was able to confirm that the employers were not liable for compensation under the ECO. Most of the employees who withdrew or did not pursue their claims further had informed the Labour Department that they had fully recovered after taking sick leave and did not need to pursue their claims.

However, 79 cases were confirmed to be work injury cases. Of these (as at 12 May 2021) 11 had settled with the period of absence from duty ranging from zero to 40 days (and an average period of 23 days), five were withdrawn and 63 are awaiting assessment of loss of earning capacity.

What Should an Employer Do If an Employee Claims Compensation under the ECO due to COVID-19?

1. Investigate. Find out more. If it relates to a workplace then speak with the CHP and the contact tracing team. There may be other employees you need to consider.
2. Notify your ECO insurer and work with them or their loss adjusters.
3. In conjunction with the ECO insurer, determine whether to notify the Commissioner for Labour by submitting a Form 2 within 14 days. Under the ECO, an employer who fails to report an accident without reasonable excuse commits an offence and is liable to a fine of HK$50,000. While it is an “egg and chicken” situation in that there must first be an “accident” before the obligation report arises, if it is subsequently determined to be an accident, then failure to report can give rise to an offence. As such, if there is a reasonable likelihood of there being a valid claim under the ECO, the employer should consider submitting the Form 2 with the appropriate provisos. The employer does not have to admit that there was an accident arising out of and in the course of employment, and in section D of Form 2 where it asks for a “Description of accident”, the employer can explain that it does not accept that there was an accident, that it is still investigating and that the information provided is based on what the employee has submitted.