The Employees' Compensation Ordinance (ECO) is an important piece of labour legislation in that it is the main mechanism for the compensation of work-related injury and disease in Hong Kong. Compensation is a matter of entitlement. A claim does not require court action, and so the system is faster and more efficient than ordinary court claims under the common law. However, is it efficient enough?
The question is particularly pertinent in the wake of Sars, which has spawned a dramatic increase of compensation claims from victims and their families. For most victims, a claim under the ordinance is the only viable avenue for compensation, given the difficulties imposed by the common law for an action claiming negligence against doctors and hospitals.
Court action by most Sars victims is likely to flounder in the murky waters of the common law of negligence, which does not require best practice by doctors and hospitals but only a standard of 'reasonable care'.
Currently, an injured worker or one who acquires an occupational disease is required to make an ECO claim against the employer. Any payment made is covered by an insurance policy. The employer does not pay out of his own pocket because the ordinance requires all employers to take out an insurance policy in respect of all workers. Workers are not required to contribute.
This system saves an employer from the potentially catastrophic consequences of having to pay compensation to a seriously injured or diseased worker, or his family in the event of his death. It also ensures for the worker a sure source of compensation, especially when the employer is in financial difficulty.
On close examination, one can see that permissible compensation is limited by financial ceilings imposed in the ordinance. Typically, a payment is less than half or even one-quarter of the amount that would be awarded by a law court in assessing the same injury. One of the major beneficiaries of the current system is the private insurance industry, which imposes few curbs on how much profit can be made.