Employees’ Compensation Insurance, Covid-19 and Work from Home

The spread of the Covid-19 virus has raised many issues for employers in Hong Kong as we all try to do our bit in halting the spread of the virus in our community. Employers here have various responsibilities under a range of legislation, but we felt it would be useful to address a few basic items around Employees’ Compensation Insurance (ECI) in this note.

ECI is a statutory insurance required under the terms of the Employees’ Compensation Ordinance (Cap 282) (ECO). It is designed to cover the statutory and common law liability attaching to an employer for death or injury sustained by an employee resulting from an accident arising out of and in the course of employment. An injured employee can claim both statutory compensation (i.e. awarded under the terms of the Ordinance) and under common law where they allege that the employer has been negligent. Certain diseases have been classed as occupational diseases under the Ordinance for which employers will be held liable.

Covid-19 has not been categorised as an occupational disease under the Ordinance. There is some discussion around whether it will be, but this will take time to implement. So, at present, an employee would need to show that their infection arose out of an accident arising out of and in the course of their employment to gain compensation under the ECO. An employee can, of course, claim under the ECO but the final decision on liability would rest with the court.

Many employers are either instructing employees to work from home (WFH) or offering this as an option along with flexible working hours. ECI usually covers the employer’s place of work (with extensions for travel to and from in some cases) and so would not automatically cover work from home arrangements. However, many insurers are offering work from home extensions for a temporary period. Whether or not an additional premium is charged is a point of individual negotiation. It must be remembered that employers have no control over the working conditions of employees at home and so, in theory, their risk exposure is greater. If you are operating a work from home arrangement with your employees, you should check that your ECI policy has been suitably extended.

We would strongly recommend drafting a work from home guideline for your company. This should address issues such as a clean, tidy and safe working environment as well as maintaining properly functioning equipment (including tables and chairs). Some companies will start to adopt work from home arrangements on a more long-term basis, even when the Covid-19 threat recedes, and this can open liability for occupational disease. For clerical employees this includes repetitive strain injury (ECO Second Schedule Item A4, Cramp of the hand or forearm due to repetitive movement) even though the employer has not provided the desk, table or chair used by the employee. Provision of WFH guidelines and asking employees to acknowledge them will not eliminate the risk but will help mitigate it.

Should you have any questions on this or any other aspect of insurance related to Covid-19 please do not hesitate to contact us.