The numbers of occupational fatalities in Hong Kong have remained at a high level in recent years. A significant view of the general community is that one of the principal reasons for this level of fatalities is that the penalties for occupational safety and health offences are too lenient and do not reflect the seriousness of the offences.
Accordingly, in 2017, the Chief Executive of Hong Kong pledged to raise the penalties of occupational safety and health offences in order to achieve a greater deterrent effect and to enhance protection for workers. As a result, in 2018, the Labour Department submitted broad directions to the Legislative Council ("LegCo") to raise the penalties of occupational safety and health offences, and in 2019, the Labour Department submitted preliminary amendment proposals to the LegCo and invited members' views on the proposals.
The current legislation and statutory provisions regulating occupational safety and health are principally: (i) Factories and Industrial Undertakings Ordinance (Cap. 59) ("FIUO"); and (ii) Occupational Safety and Health Ordinance (Cap. 509) ("OSHO") and their relevant respective subsidiary regulations.
The maximum fines for breaches of general duties to ensure safety and health of employees under FIUO and OSHO are currently set at HK$500,000 and HK$200,000 respectively. In addition, FIUO and OSHO also give the Court power to impose imprisonment sentences for individuals, such as company owners and immediate supervisors of the injured worker, up to a maximum period of 12 months for certain offences, but in reality, the Courts have very rarely exercised this power.
1. To increase the maximum fines and maximum imprisonment terms
When compared with the penalties of the occupational safety and health regimes in other advanced countries, the maximum fines and imprisonment terms far exceed those of Hong Kong.
For example, the maximum fine in Canada is approximately HK$9 million after conversion at current rates, and there is no upper fine limit in the United Kingdom. In respect of imprisonment, the maximum imprisonment term in New Zealand is five years, while the maximum terms in the United Kingdom and Singapore are both two years.
In view of the above, the Labour Department proposes:
- for summary offences (which can only be tried in the Magistrates' Courts) involving a breach of general duties, increasing the maximum fines to HK$3 million and increasing the maximum imprisonment terms to 2 years;
- for extremely serious cases involving a breach of general duties, the Labour Department may prosecute the case as an indictable offence (which can be tried in all levels of courts), and to seek a maximum fine "pegged to the turnover of the convicted entities and pitched at 10% of the turnover or HK$6 million, whichever is the greater", with an increased maximum term of imprisonment "pitched at three years"; and
- for all other offences, imposing an across-the-board three-fold increase in current maximum fines, whilst making no changes to the maximum terms of imprisonment (if any).
2. To extend the time-bar for issuing summonses
In addition to its proposals to increase the maximum penalties, the Labour Department has also proposed an extension of the time-bar for issuing summonses for contravention of occupational health and safety offences.
The current time-bar for issuing summonses is 6 months. The Labour Department proposes to extend the time-bar to 12 months, as it seeks additional time to conduct more in-depth investigations into the cases for the purpose of providing the courts with more evidence for considering whether to impose a penalty of immediate imprisonment upon convicted defendants.
Impact on Contractors and Employers
Contractors, employers and others in the construction industry are, in respect of extremely serious offences, generally concerned about the proposed pegging of the maximum fines in relation to a company's turnover. This may create difficulty and uncertainty in calculating operational costs and risks, and may seriously affect the operation of small and medium enterprises.
Also, and in respect of the proposed extension of the Labour Department's investigation period, contractors and employers may face prolonged disruption to their daily operations as the Labour Department may from time to time invite staff members of a company under investigation to provide information and give statements to the Labour Department within the investigation period.
Amendment Bill Awaits
The Labour Department aims to introduce a bill in the 2020-2021 legislative session to amend the legislation to increase penalties. Our team will write further on this topic when more details are available.
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