Coronavirus Disease 2019 (COVID-19) – implications for EC and liability insurers
1. Can employees claim EC if they contract COVID-19?
At this moment, COVID-19 is not a listed Occupational Disease under the Employee’s Compensation Ordinance (ECO), and therefore, an employee would only be entitled to compensation if they contracted it by accident arising out of and in the course of employment. That means the employee would have to prove the infection resulted from a sudden and unforeseeable event that occurred during the course of work and was incidental to their employment.
For some types of employees where the source of infection can be clearly identified, it may not be difficult to prove they contracted the virus by accident during their course of work. Infections contracted outside the work place unconnected with their employment would not be compensable under the ECO. Once COVID-19 is added as an Occupational Disease under the ECO, as SARS was in 2004, certain types of employees, mainly healthcare and laboratory workers would no longer need to prove they contracted the virus by accident.
2. Would employers be liable for failing to implement alternative work arrangements such as work from home (WFH)?
An employer has duties under common law and the Occupational Safety and Health Ordinance (OSHO) to ensure the safety and health of all their employees, so far as reasonably practicable. What is reasonable depends on the factual circumstances of each case as different employers and work duties may well have different standards.
An employer will be required to weigh, on one hand, the magnitude of the risk, the likelihood of the happening of the infection and the possible seriousness of the consequences if an infection did happen, and, on the other hand, the difficulty and expense and any other disadvantage of taking the precaution.
Whilst there are only around 62 confirmed cases of COVID-19 infection in Hong Kong (as of 19 February 2020), given that the World Health Organisation has already declared the outbreak a Public Health Emergency of International Concern and the Hong Kong Government has appealed to employers to adopt flexible arrangements at work, COVID-19 is clearly a foreseeable risk that employers should guard against. As such, they would be liable if they fail to take reasonable measures to minimise the risk of their employees contracting the disease.
WFH is a measure advocated by the Government and many large organisations who have the technical and financial means to adopt such arrangements. Similarly, introducing a rota system to reduce physical attendance at the workplace may also lower the risk of infection. However, not all employers are able to adopt such measures as they may lack the resources or manpower to implement such changes. Other more basic kinds of measures they could take include the following:
- Reminding and giving specific instructions on the importance of personal hygiene.
- Providing hand sanitisers, surgical masks and other types of protective equipment (see Q4 below).
- Requesting employees to report and stay at home in the event of flu symptoms or they have come into a contact with a person diagnosed with COVID-19.
- Varying work hours to avoid commuting during the rush hour.
- Reducing face to face physical meetings and non-essential travel.
3. Can employees claim compensation if injured while WFH?
Yes, because the home is now the workplace and if the employee was asked or permitted to WFH, any injury they suffered during this time may well give rise to claims under the ECO and at common law.
For EC, the test is no different from any other usual work injury. The employee must prove the injury was caused by accident arising out of and in the course of employment. Where there may be difficulties with WFH, is the exact location and timing of the accident. Issues may arise as to which areas of the home should be considered the workplace. Is it the whole premises or just the room from which the employee is working? How about if the employee suffers an injury in the bathroom while taking a rest break or while making lunch in the kitchen?
Each case will turn on its own facts but generally, if the employee suffers an injury by accident while working or doing something incidental to their employment whilst at home, they would be entitled to compensation under the ECO.
For common law claims, employers would not have control or oversight of the employee’s home and it would seem inequitable to impose liability on an employer for failing to ensure that that person’s home was safe and free from risk of injury. While we would not expect the court to impose the same standard of care over the home as in the actual workplace, that does not mean the employer has no duty of care whatsoever.
To minimise the likelihood of injury claims, employers should take some measures to set the work boundary at home. For example:
- Establish a WFH policy which sets out the necessary requirements before an employee is permitted to WFH
- Ask employees to designate a work area which is quiet and without disruption
- Ask employees to confirm that they have suitable seating, desks or other equipment needed to WFH
- Ask employees not to perform acts unrelated to work, such as cooking or shopping
- Maintain contact with employees while WFH
- Ask employees to sign a declaration form to confirm that they have complied with the WFH policy and that their homes are safe for the purpose of working
Employers should also notify their EC insurers of any change in the workplace in case their policies contain any restrictions on place of employment.
4. Are employers liable for failing to provide masks or other protective equipment?
An employer’s non-delegable duty of care to their employees clearly extend to provision of safety and protective equipment. Failure to provide such aids exposes an employer to liability under OSHO as well as in negligence. Again, one must consider what is reasonable in the circumstances of each particular case.
We all know that there has been a severe shortage of surgical masks, sanitisers and other protective aids during this outbreak and there are many employers who are just not able to obtain such equipment. Arguably, they should not be held liable if they can show that they had reasonably attempted to obtain and provide these items but was physically unable to do so. On the other hand, if the risk of infection was high, the employer may need to consider whether the task is capable of being performed safely in the absence of such protective equipment. For example, some private clinics have reportedly ceased services due to shortage of protective equipment for their doctors and other workers.
The types of equipment required will also vary depending on the job nature of the employee. Frontline healthcare workers at higher risk of infection will clearly require stronger protective clothing and equipment whereas office based workers may only need minimal protective aids, if any.
5. Can visitors claim damages against occupier for failing to keep the premises free of the virus?
Under the Occupiers Liability Ordinance (OLO), an occupier owes the duty to take reasonable care to ensure the safety of its visitors using the premises. As such, if an occupier fails to sterilise its premises after a person known to have been infected with COVID-19 visited those premises, it may well have breached its duties under the OLO.
Again, how far the occupier’s duties extend depends on the specific circumstances of the case. If a retail outlet within a mall knows that one of their employees had been infected with the virus, that shop may well need to undergo sanitation but that duty may not extend to the entire mall. What if a kitchen worker was known to have contracted the virus, how long would the restaurant be expected to close for to ensure that co-workers were completely free of the virus before resuming work? One would expect 14 days would be reasonable to ensure that none of the other employees were infected before re-opening. But if the restaurant was able to partially open with staff who had not been in contact with the infected person, and had undergone deep cleaning, it may be arguable that 7 days or less is sufficient as the risk of infection from contaminated surfaces should have greatly dissipated by then.
6. Can insurers decline policy liability if employer/occupier fails to take “reasonable precautions”?
Most policies impose an obligation to insureds to take all reasonable precautions to prevent accidents and disease, and to comply with statutory requirements. Such obligation is usually a condition precedent to indemnity under the policy. However, it is not a condition which can be used easily by insurers to deny policy liability. Insurers must generally show that the insured has been reckless in failing to take reasonable precautions i.e. knowing the consequences of their actions but proceeding with it regardless.
It has been held that “reasonable” does not mean reasonable as between the employer and the employee. Rather, it means reasonable as between the insurer and the insured having regard to the commercial purpose of the policy, i.e. to indemnify the insured against liability for negligence.
Accordingly, it is not sufficient for an insurer to decline policy by suggesting the insured has failed to take any particular precaution to avoid the contraction of COVID-19. The insurer must show more, that is the insured knew that their act or omission would cause someone to contract the disease but proceeded with it anyway.
As the coronavirus outbreak is still evolving, no one knows for sure how long it will last, or how many people will be affected in Hong Kong. However, it is undoubtedly clear that there will be claims and significant impact on insurers across many lines of business.
Click here for the Hong Kong Personal Injury Brief February 2020 Edition.