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Under the Employees' Compensation Ordinance, it is an offence for an employer to fail to obtain the minimum insurance cover for his liabilities at law.
On summary conviction, he may be required to pay a fine of $25,000 and be imprisoned for one year. It is therefore in a company or a contractor's own interest to secure sufficient insurance cover in order to comply with the law and for their own protection.
Mrs Cheng said that if a principal contractor had taken out a blanket insurance policy covering his liabilities and those of his sub-contractors, he and his sub- contractors would be regarded as having complied with the compulsory insurance requirements of the Employees' Compensation Ordinance.
"Similarly, if a group of companies have taken out a blanket insurance policy covering their liabilities to their employees, all those in the group insured shall be regarded as having complied with such requirements," she explained.
"Should an employee's claim exceed the insurance cover, he should receive the outstanding balance from his employer as the employer is primarily responsible for the payment of compensation," Mrs Cheng added.
The Amendment Ordinance therefore further provides that where a blanket insurance policy has been taken out by a group of companies and where the amount of insurance cover has been exhausted, the subsidiary company concerned shall be liable for any outstanding claim in respect of any injury to an employee.
"If the employee is unable to recover payment of compensation from the subsidiary company concerned, the holding company insured under the same insurance policy shall be liable to pay the amount to the employee," Mrs Cheng added.
Enquiries on the Amendment Ordinance can be made to the Labour Department hotline 2717 1771.
End/Tuesday, August 1, 1995
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