Employees’ Compensation

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Employer's liability in relation to injured worker

An employer required all his workers to sign a form stating that once the worker is discovered to be engaging in other gainful employment during his/her sick leave period due to injury from work, the employer would not be liable for his/her compensation for the period he/she worked. The worker must also fully refund to the employer all payments he/she had already received. The employer's liability under the Employees' Compensation Ordinance (ECO) in relation to the accident would be fully discharged.

Did the employer have the right to require the worker to sign such a form and would the agreement be considered valid?

The intention behind the form has violated the Employees' Compensation Ordinance. According to the ECO, Chapter 282, Section 10 - Compensation in case of temporary incapacity:

(1) "Where temporary incapacity whether total or partial results from the injury, the compensation shall be periodical payments ... Such periodical payments shall be, or shall be at the rate proportionate to, a monthly payment of four-fifths of the difference between the monthly earnings which the employee was earning at the time of the accident and the monthly earnings which he is earning, or is capable of earning, in some suitable employment or business during the period of temporary incapacity after the accident..."

In other words, if the injured worker cannot work at all during the sick leave period, the employer needs to pay four-fifths of the worker's earnings at the time of the accident.

Even if the employer discovered that a worker had been engaging in other gainful employment during his/her sick leave period, the employer will still be liable for employees' compensation, provided the worker still suffered a loss of earnings according to the above ECO provision. 

Pre-accident daily wage $500
Daily wage from the other employment $400
Difference $100
Employer's liability in Employee Compensation 4/5 of ($500-$400) $80

Therefore, the employer cannot require the worker to sign such a form and the agreement mentioned in the above case is not valid. Any term which purports to extinguish or reduce any right, benefit or protection conferred upon an employee by the Ordinance has no legal effect.

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