“My employee got Covid-19 through work.” EC Insurance and the Coronavirus

Life might be returning to normal. Restrictions around the Covid 19 Coronavirus are being lifted, people are returning to work. However, the virus is still a very real concern – both in Hong Kong and across the world. There is still a large degree of uncertainty about the impact of the Coronavirus on normal life, and on business.

With employees largely returning to work this week, the issue of whether Employees’ Compensation Insurance will protect your staff against their risk of work-related injuries while working from home is eliminated. Employees are starting to come back to the office so injuries they receive on the job will be clearly identified and covered under the company’s statutory EC insurance policy.

However, there are additional questions regarding EC moving forward; the big one being “if I contract the Covid-19 Coronavirus during the normal course of my employment am I able to receive compensation through my company’s EC insurance?”

What is Employees’ Compensation Insurance?

Under Section 40, Chapter 282 of the Hong Kong Employees’ Compensation Ordinance no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the ordinance and under common law for injuries at work in respect of all their employees irrespective of length of employment contract or working hours, their full-time or part-time, permanent job or temporary employment.

Any employer in Hong Kong who fails to abide by the Employees’ Compensation Ordinance is liable for both a fine and imprisonment. Consequently, all businesses and employers (even if you are only employing a domestic helper) in Hong Kong must hold an Employees’ Compensation Insurance policy. This must have at least HK$100 million in cover per claimable event.

Employee’s Compensation Insurance is designed to cover workers against their risk of suffering a work-related injury. For a factory worker this could be something like having a pallet of materials fall on them, while a likely risk faced by an office or retail worker is that of a slip injury where the employee has fallen over something in the office. The main focus of Employees’ Compensation Insurance is work injuries however, occupational illnesses are also able to be covered under Employees Compensation Insurance products in Hong Kong.

An occupational disease would be something like carpal tunnel syndrome in a secretary, tennis elbow in a supermarket store stacker, and Asthma or Hearing Loss in an individual working in an environment that is either extremely loud or where they are exposed to dangerous airborne particulates. There is recognition under Employee’s Compensation that a person’s workplace can cause them to become sick, in myriad different ways that may not be strictly related to physical injuries.

This is why the work from home situation was the source of much concern for both EC policyholders and EC insurance companies – any injury suffered at home could have been considered to have occurred “on the job.” But this is not the full extent of the problem posed by the Covid-19 Coronavirus and Employees’ Compensation Insurance.

What if an employee gets Covid-19 at work?

What happens if an employee develops Covid-19 at work? That is going to be a fundamental question at this time, especially in light of the fact that the local economy is starting to reopen, bars are getting back in business, and we’re allowed to have tables of 6 people at restaurants. Rather than social distancing, there is going to be far more social interaction than we’ve had over the course of the last month.

For some employees this interaction is going to be part and parcel of their normal every day job. Putting aside medical workers, who have been in the face of this disease for months now, restaurant industry workers and servers, retail employees (shop keepers and clerks), bank tellers, taxi drivers, civil servants, all of these individuals have customer facing positions and will come into contact with a large number of clients each day. Office workers will begin to have meetings and see customers again, traveling to and from those meetings on public transport and interacting with the larger population.

While Hong Kong has been extremely successful in containing the spread of the Covid-19 Coronavirus as further restrictions are lifted in relation to this pandemic, the chances of someone in the community having and spreading the disease increase – especially with Hong Kong being a major regional and international transit hub. At some point a worker is likely to develop Covid-19 and claim that they contracted the disease through the normal course of their employment.

What then? Employees’ Compensation protects against workplace accidents and illnesses. So, is Covid-19 considered an occupational disease? At this point, the novel coronavirus is not considered an occupational disease and is not specified in the Employees’ Compensation Ordinance as a covered event. This has caused a number of Hong Kong Labour unions to petition the government in an attempt to have the Covid-19 coronavirus added to the ECO as a specified condition, because there is a high degree of risk that a worker in Hong Kong will contract the disease as part of their employment and attempt to make a claim through the Employees’ Compensation framework.

However, the really important aspect of this situation is the fact that while Covid-19 is not a specified occupational risk under the ECO, neither is it specifically excluded under the ordinance. This poses a very concerning grey area in which no certain answers exist.

Covid-19 and Employees’ Compensation Claims

One of the main reasons that Hong Kong labour unions are lobbying the government to add Covid-19 to the ECO is due to the fact that there is no confirmation of the status of the disease in relation to work related transmission and contraction. This simple fact is that no one knows whether the coronavirus will be an admitted condition under an EC insurance policy.

This is concerning because it can take a long time for a worker to launch legal actions against an employer in respect to an EC claim. Based on the timeline of SARS, industry groups expect claims in relation to work related development of Covid-19 symptoms to start coming up towards the end of 2020.

However, because the current gap in the ECO while Covid-19 claims can be submitted under the ordinance and Employees’ Compensation Insurance products, there is no guarantee that the claim will be paid. With the current absence of regulations towards treating the Covid-19 Coronavirus under the Employees’ Compensation Ordinance all claims received will then be sent to court for a legal resolution.

This could take an extremely long time – up to a number of years after all appeals have been settled. Once the issue has worked its way through the court then a final decision is likely to be made on whether Covid-19 is a covered event under employees’ compensation insurance. Claims with either be honored or rejected based on the outcome of the, likely, eventual legal challenge that is currently brewing.

So, does this mean that possible work related claims in relation to the Covid-19 Coronavirus should not be submitted because they are unlikely to be upheld or will not be settled at this time? Absolutely not. Employees’ Compensation insurance claims are time sensitive and should be settled as soon as possible when discovered. Although it is important to understand that the settlement on that claim will likely not be provided until a much later date when all legal avenues challenging possible rejections of Covid-19 claims have been exhausted.

This is still an evolving situation with no firm or solid answers available due to the simple fact that no decision has been made with reference to Employees’ Compensation Insurance and the Covid 19 Coronavirus by the Hong Kong Labour department.

CCW Global is committed to bringing you all the latest information as we have it. For further clarification regarding your Employees’ Compensation Insurance obligations during the pandemic, or the impact that your working arrangements may have on your EC policy, please contact us to speak to an expert insurance broker today.