Hong Kong to reform workplace health and safety regime

The bill was published with a view to increasing the penalties for occupational safety and health offences and increasing the protections available to workers.

Known as the Occupational Safety and Occupational Health Legislation (Miscellaneous Amendments) Bill 2022 (the bill), it seeks to amend the Factories and Industrial Undertakings Ordinance (Cap. 59) and the Occupational Safety and Health Ordinance (Cap. 509), and their subsidiary legislation.

The bill follows the release of a consultation paper by the Labour Department in 2020.

The proposed reforms now include increasing the penalties at premises and industrial undertakings; extending the time limits for prosecution, making offences triable by indictment; and, notably, requiring the court to take into account the turnover of the responsible entities when determining the amount of a fine.

The main proposals in the bill include:

• Making offences under general duty provisions for employers, proprietors and occupiers triable as indictable offences, meaning serious offences can be tried at higher levels of courts such as District Court or High Court as opposed to the Magistrates’ Courts under the current regime.
• Courts to consider turnover of convicted entities when determining levels of fines.
• As to fines, the Labour Department currently has three levels of seriousness in determining the severity of an offence (26-page / 1.57MB PDF): "very serious," "serious" and "minor". On conviction, the maximum fine under the general liability provisions for employers prosecuted summarily in the Magistrates' Court is increased from HK$500,000 to HK$3 million, while the maximum fine in the District Court or High Court for trials on indictment will be HK$10 million.
• Maximum fines for other summary offences and maximum fine for employer-related offences could be up to HK$400,000; and
• Extending the time limit for prosecution for offences triable summarily from six months to one year to allow sufficient time for investigations and to provide courts with sufficient evidence. There is no time limit for prosecution for indictable offences.

The bill makes a number of references to the colloquial term “safety management system”. This term defined in Cap. 59AF of the Safety Management System Regulation with a narrow scope of application, but it is used interchangeably when describing the changes made that would affect mostly the general duties provisions, which is of a much wider scope of application. While it is unclear why the Hong Kong SAR administration has chosen to adopt this colloquial terminology, this may be indicative the administration’s intention to amend the Cap. 59AF Regulation in the near future, for wider application.

The proposals are a huge increase in risk exposure for construction contractors. The proposal to consider the turnover of convicted entities when determining the fine, meaning pegged to contractors’ turnover, was particularly contested in the 2020 proposal, and is expected to cause some uproar in the industry again. The overarching focus and aim of the Hong Kong SAR administration appears to be increasing deterrence, but without ramping up monitoring the responsibilities of employers and workers in accidents and safety breaches.

The Labour and Welfare Bureau has decided to remove the “10% peg of the convicted entities’ turnover or HK$6 million, whichever is higher” originally proposed in its 2020 proposal, which was one of the industry’s main concerns at the time. Section 39A of the current bill now requires the court to order the convicted person to give information on the turnover of its business and to take into account the same when imposing a fine that is sufficiently deterrent. No guidelines have been given as to how the court should exercise this discretion and as to what could constitute a sufficient deterrence.

Reform to Hong Kong SAR’s occupational health and safety regime is long overdue. There has been no substantial update to our occupational health and safety laws since Cap. 59 and Cap. 509 were first promulgated. Even after the comprehensive review by the Construction Industry Review Committee, which recommended improvement measures to uplift quality, safety and performance in 2000, which is also known as the “Tang Report”, there was no follow-up.

Co-written by Bernice Shang of Pinsent Masons.