Navigating the global liability defence agenda
Hybrid working and the potential rise in employee compensation claims
Almost all of us have experienced the joys and pains of working from home in the last two years but to say that the COVID-19 pandemic has brought unprecedented change to the way we work is an understatement. This is especially so in Hong Kong where many workers have been required to work for extended periods in compact apartments, often shared with several family members, in high-density apartment blocks.
While some companies had adopted flexible working before 2020, it was not common practice until the pandemic arrived on Hong Kong’s doorstep. Almost overnight, the city became one of the first to experiment with large-scale WFH when much of its white collar workforce was sent home. With few formal WFH policies or guidelines in place, specific arrangements were left mostly to the discretion of direct managers or department heads.
Once the pandemic was largely under control in the city many employers continued to allow at least partial WFH, but now that hybrid working is here to stay employers are clearly facing new challenges, potential risks and liabilities for employees’ compensation (EC) and negligence claims. We expect to see an increase in EC claims arising out of WFH accidents in future, given the unique challenges posed by Hong Kong home environments.
The Hong Kong Courts have yet to consider EC and/or common law negligence for WFH injuries so it is unclear what approach it will adopt, although they may look to judgments in other common law jurisdictions including the United Kingdom and Australia for perspective.
It is anticipated that, as long as both limbs of section 5(1) of the Employees’ Compensation Ordinance (Cap. 282) (ECO) are satisfied — namely that an employee is able to show personal injury by accident arising out of and in the course of employment — the accident will be deemed to stem from the employment (in the absence of evidence to the contrary) and the employer will be liable for EC. The same temporal and causal tests, i.e. whether or not the work done was incidental to and in connection with employment, will still apply in determining whether an accident occurred or has arisen out of the course of employment in a WFH situation. The outcome will depend on the facts of each case, and will be a question of fact and degree.
The Hong Kong Courts may also adopt a similar approach as Australian Courts and/or Tribunals have in past and recent decisions, which may mean for example finding EC liability where an employee:
- Falls down while going down stairs to obtain cough medication (Hargreaves v Telstra Corporation Limited).
- Loses their balance and falls on a staircase on the way to the front door of the home on express instructions by employer, given past burglary at the home (see Hargreaves above).
- Slips and falls when exiting the shower to take a call on a work mobile (Ziebarth v Simon Blackwood (Workers’ Compensation Regulatory).
- Is fatally attacked by a mentally ill co-habitee (Workers Compensation Nominal Insurer v Hill).
On the other hand, the Hong Kong Courts may not be as prepared to find employers liable where an employee:
- Trips and sustains injury on a mid-morning run when WFH, given they were outside of their home (i.e. their place of work) and the injury did not happen during a temporary absence taken during an ordinary recess of their employment, such as a lunch break (Demasi v Comcare (Compensation)).
- Trips over their dog whilst reaching for their cup to make coffee when WFH (as the Court in Florida, USA did in Sedgwick CMS v Valcourt Williams). It is unclear whether it will be agreed that such an accident did not arise out of employment.
Overall, an employer is more likely to be liable where there is sufficient nexus between the accident and the employment, although what actually constitutes sufficient nexus in each case is debatable. Employers and their insurers alike will certainly be keeping a keen eye on any test cases which may be on the horizon.