SAFETY OF EMPLOYEES AND DUTY

OF CARE

N.K.K. Mudalige
Lecturer
LLB (Hons)
Attorney at Law
PQHRM
 Work Related Injuries
• Work-related injury and illness are common,
and yet never completely avoidable.
• Such events can lead to death of workers with
consequent implications for their dependents,
or result in injury or disability that may be
temporary or permanent.
• Ultimately, society will have to bear the social
and economic costs associated, regardless of
the formal arrangements that are in place.
 Is it enough to have a compensation
scheme
• Although appropriate policies and interventions
can do much to reduce and prevent their
occurrence, work-related injury and illness are
unavoidable aspects of industry, agriculture and
the other productive activities that the country
needs to maintain to improve its living standards.
• Employment injury schemes are a vital element
of any country’s social safety net, and they can
function in a variety of different ways, not
necessarily through insurance mechanisms.
 International Standards
• ILO (International Labour Organization)
• Workmen's Compensation (Accidents)
Convention, 1925 (No. 17)
• Employment Injury Benefits Convention, 1964
(No 121).
• Social Security (Minimum Standards)
Convention, 1952 (No. 102)
• Employment Injury Benefits Convention, 1964
(No. 121).
 Sri Lanka
• The safety of Employees will be governed in the
following manner

1. In Statutory Law: By The Workmen’s Compensation

Ordinance No 19 of 1934

• In Common Law: by the Law of Delict or by the Law of

Contract
 Workmen’s Compensation Ord.
• Other than the rights workers have under the
common law, the formal arrangements for EI
compensation in Sri Lanka is worked out on the
basis of employer liability, which makes
employers liable for the costs of compensation.
• All formal sector employees, both public and
private, are covered by the Workmen’s
Compensation Ordinance (WCO) of 1934. This is
an employer liability system.
 Law of Delict/Contract – The Common
Law
• Any injured employee has the inherent right to sue his employer under common
law. To do this, the worker must file a case in a district court;
• This case will be for personal injury caused by the employer rather than a
workplace injury. To be successful, the worker will have to prove negligence and
liability by the employer, who in turn can defend a claim on the grounds of
culpability by the worker in the injury.
• Under common law there are a multitude of statutes that can come in to play to
determine the ultimate course of any settlement.
• The value of any settlement will be based on a number of factors. These include
previous cases that have similar backgrounds and other factors such as
negligence of the employer, the employers’ assets and financial capacity, etc.
• It is impossible to say whether an employee
will necessarily receive a larger compensation
if he sues the employer over opting to be
settled under the WCO described below.
Nevertheless, this option of redress will be
expensive and carries significant risks for the
worker of obtaining no compensation. No
statistics are readily available on how many
workers make use of this approach and how
many are successful.
 Workmen’s Compensation Ordinance

• Provides for the payment of Compensation to a workman

who sustains personal injuries in the course of employment

• Workmen’s Compensation Ordinance was amended by

- Act No 15 of 1990
- Act No 10 of 2005
• The Workmen’s Compensation Ordinance (WCO) of 1934 is
the first and only legislation passed in Sri Lanka to deal
specifically with employment injury.
• The WCO was influenced and modeled on British
Columbia’s Workmen’s Compensation Act of 1920 which
established a similar system in that Canadian province
(Chaklader 1998).
• Prior to its introduction, injured workers (or their
dependent survivors) could in theory obtain compensation
by suing their employers in the courts. But such action
would have required time and money, and also was not
guaranteed to deliver redress.
• Probably most affected workers would not have in fact
made use of such an option, given the difficulties.
• The WCO provided workers with an easier and more
automatic mechanism for obtaining compensation, but this
was in return for giving up any rights to sue the employer in
the courts.
 APPLICABILITY
• Applies to all Employees
Who is a workman?
“workman” means any person who has entered into or works under a
contract with an employer for the purposes of his trade or business in any
capacity, whether the contract is expressed or implied, oral or in writing,
and whether it is a contract of service or of apprenticeship or a contract
personally to execute any work or labour and whether the remuneration
payable there under is calculated by time, or by work done or otherwise,
and whether such contract was made before or after the coming into
force of this definition.
Exclusions:
1. A Member of the Armed Forces other than a person employed in a
civilian capacity
2. A member of the police force
 POSITION OF INDEPENDENT CONTRACTOR
• An Independent Contractor is not entitled to compensation under the Act,

• But according to Sec. 22 an independent contractor is entitled to be

compensated if,

1. The contract between Principal and Contractor is in the course of or for

the purpose of the principal’s trade or business
2. The contract shall have as its object the execution by or under the
contractor of the whole or any part of any work which is ordinarily part of
the trade or business of the principal
3. The accident must have occurred on or in or about the premises in which
principal has undertaken or usually undertakes as the case may be to
execute the work
• It is estimated that only 35% of the labour force
would in reality receive the benefits prescribed
by the WCO; specifically 2.9 million employees in
both public and private formal sector
employment.
• Those excluded from coverage include self
employed persons, family workers and employers
in both formal and informal sectors and
employees in the informal sector.
• Together they constitute of 5.2 million individuals
accounting for 65% of the labour force
(Department of Census and Statistics 2012).
 LIABILITY TO PAY COMPENSATION

• Section 3
If personal injury is caused to a
workman by accident arising out of and
in the course of his employment, his
employer shall be liable to pay
compensation.
 The employer is not liable
(a) in respect of any injury which does not result in the total or partial
disablement of the workman for a period exceeding seven days ;
(b) in respect of any injury, not resulting in death, caused by an
accident which is directly attributable to—
(i) the workman having been at the time thereof under the influence of
drink or drugs, or
(ii) (ii) the wilful disobedience of the workman to an order expressly
given, or to a rule expressly framed, for the purpose of securing the
safety of workmen, or
(iii) the wilful removal or disregard by the workman of any safety guard
or other device which he knew to have been provided for the
purpose of securing the safety of workmen.
 OCCUPATIONAL DESEASES
• Section 4 (1)
If a workman –
(a) contracts an occupational disease described in the first column of
Part A of Schedule III whilst he is employed in any process
described in the corresponding entry in the second column of that
Part, or
(b) contracts an occupational disease described in the first column of
Part B of the aforesaid Schedule whilst he is in the service of an
employer in whose service he has been employed for a continuous
period of not less than six months in any process described in the
corresponding entry in the second column of that Part,
the contracting of the disease shall be deemed to be an injury by accident
and unless the employer proves the contrary, the accident shall be
deemed to have arisen out of and in the course of the employment
Part B
 WAITING PERIOD

• Employer shall be liable in respect of any injury which results in the total
or partial disablement of the workman for a period exceeding three days
 TOTAL DISABLEMENT

• “Total disablement” means such disablement, whether of a temporary or

permanent nature, as incapacitates a workman for all work which he was
capable of performing at the time of the accident resulting in such
disablement:

Provided that permanent total disablement shall be deemed to result

from any combination of injuries specified in Schedule I where the
aggregate percentage of the loss of earning capacity, as specified in that
Schedule against those injuries, amounts to one hundred per centum
 COMPENSATION
• Section 6 (1)
Subject to the provisions of this Ordinance, the amount of compensation
shall be as follows, namely:-

(A) Where death results from the injury and the deceased was
a workman in receipt of monthly wages falling within limits shown
in the first column of Schedule IV – the amount shown against such
limits in the second column thereof:

(B) Where permanent total disablement results from the injury,

and the disabled work man was in receipt of monthly wages falling
within limits shown in the first column of Schedule IV - the amount
shown against such limits in the third column thereof;
 Implementation of the Act
• The implementation of the WCO is vested in the hands of the
Commissioner of Workmen’s Compensation, who enjoys the
powers of a civil court in this regard.
• It is the Commissioner’s responsibility to receive claims for
compensation, conduct inquiries into accepted applications,
settle disputed claims, and to collect compensatory payments
from employers and dispense them to the claimants.
• The Ordinance makes it mandatory that all compensation made
in respect of a fatal accident be channeled through the
commissioner.
• However, compensation for non-fatal accidents may be paid
directly to the injured employee with notice, through a
memorandum to the commissioner that such has been done.
• The Ordinance obligates all employers to inform the
Commissioner of any fatal and non-fatal accidents that
occur to his employees within seven days of such an
incident.
• However, this does not happen in practice and the
Commissioner has not established any procedures for
submitting such information, so there is considerable
under-reporting of work-related injuries and diseases
in Sri Lanka.
• The Ministry of Health estimates that 15% of all
admissions in 2011 to the National Hospital of Sri
Lanka in Colombo were due to work-related accidents,
but relevant statistics are not collected as part of the
routine information system.
• It is presumed that the prevalence of occupational
diseases could be higher, but they are rarely recorded
as ―work related diseases
• The current system of employment injury benefits is
purely employer liability based.
• There is no mandatory insurance clause in the WCO
that requires employers to be insured against
employee injury risks.
• An employer may opt to insure his liability in this
regard at his own discretion. Insurance companies
offer workmen’s compensation insurance policies to
cover workmen’s compensation liabilities.
• Further, personal accident insurance policies are
available for employers to cover their liability to
compensate any person who is injured at the business’
premises, which will include his employees as well.
 Hong Kong
• Hong Kong has a similar legislative history to Sri Lanka in the
field of EI schemes, having legislated a workmen’s’
compensation ordinance in 1953. However, it has extended this
by mandating employers to purchase a private insurance policy,
and regulating the standards that a qualifying policy must meet.
• The Employees’ Compensation Ordinance (ECO), Chapter 282
defines the rights of employees with regard to incidents of
injury, disease and death occurring during the course of
employment as well as the obligations of the employers to
provide compensation for such incidents (Employees'
Compensation Ordinance, Chapter 282 1953).
• The ordinance covers all full and part time workers who are
employed under contractual service.
• It excludes casual workers (though not domestic workers), out
workers and family workers. Work related commuting injuries
that result in loss of earning capacity are grounds for
compensation.
• Under this Act, insurance is mandatory for employers only to
cover permanent incapacity and fatal cases, whereas for providing
compensation for temporary incapacity the employer may decide
to insure his liability at his own discretion.
• Table lists out the benefits that injured employees are entitled to
receive under the ECO.
The Act provides statutory minimums that the employer must consider
when purchasing an insurance policy. For an employer with less than
200 employees, his insurance policy must provide coverage for at
least Hong Kong Dollars (HKD)100 million an event and for an
employer with more than 200 employees, at least HKD 200 million per
event. Insurers are not pre-defined and the premiums are not price
regulated.
 Gap
• All stakeholders are in agreement about the desirability of revising the
current legislative framework in Sri Lanka to ensure better compliance
with the applicable ILO conventions.
• The current Workmen’s Compensation Ordinance (WCO) in Sri Lanka fails
to meet the requirements of the ILO Convention C121 in several key
aspects, specifically:
(i) The wage replacement rate for temporary disability is set at 50%
compared with the convention standard of 60%.
(ii)(ii) Lump sums are prescribed for several benefits (permanent and
survivor), when the convention requires the use of periodic payments.
(iii)Benefits are not inflation-adjusted, as required by the convention.
(iv)Too low a ceiling set on all benefits.
 Question
Evaluate the Workmen’s
Compensation Law in Sri Lanka while
comparing it with another
jurisdiction and ILO Standards on the
same.
Thank You