NEWS FLASH: Occupational Safety and Occupational Health Legislation (Miscellaneous Amendments) Bill 2022 Gazetted

NEWS FLASH: Occupational Safety and Occupational Health Legislation (Miscellaneous Amendments) Bill 2022 Gazetted

NEWS FLASH: Occupational Safety and Occupational Health Legislation (Miscellaneous Amendments) Bill 2022 Gazetted 2560 1660 Cocking & Co

By Ian Cocking, Partner

The Hong Kong Government published the Occupational Safety and Occupational Health Legislation (Miscellaneous Amendments) Bill 2022 (“Bill”) in the Gazette on 13 May 2022.

The Bill seeks to amend the Factories and Industrial Undertakings Ordinance (Cap. 59) (“FIUO”), the Occupational Safety and Health Ordinance (Cap. 509) (“OSHO”) and the subsidiary legislation under the FIUO and OSHO. The Bill proposes the following significant amendments:

  1. To increase the maximum penalties for offences committed by proprietors of industrial undertakings, employers or occupiers of premises (collectively, the “Responsible Persons”);
  2. To require the Court to take into account the financial information of the Responsible Persons convicted on indictment in determining the amount of fine; and
  3. To extend the time limit for prosecution for offences triable summarily.

A. Increase in Maximum Penalties and Imprisonment Terms

FIUO

FIUO imposes general duties on proprietors to ensure safety and health at work of all persons who are employed by them in an industrial undertaking.

Under the Bill, the offence could now be tried summarily (i.e. only in the Magistrates’ Courts) or on indictment (i.e. all levels of Court). It is proposed that the maximum penalty on summary conviction is raised from HK$500,000 to HK$3 million; while on conviction on indictment it is HK$10 million.

For proprietors who commit the offence wilfully and without reasonable excuse, in additional to the aforementioned fines, the imprisonment term will be 6 months on summary conviction and 2 years on conviction on indictment.

OSHO

OSHO requires employers to ensure the safety and health at work of their employees. If the employees’ workplace is located on premises that are not under the control of their employers, the occupiers of the premises must ensure the safety of the premises even if they do not directly employ that person on the premises.

Similar to the amendments to the FIUO, it is proposed that the maximum penalty for employers/ occupiers of premises on summary conviction is raised from HK$200,000 to HK$3 million; while on conviction on indictment it is HK$10 million.

For employers/ occupiers of premises who fail to comply with OSHO intentionally, knowingly or recklessly, in additional to the aforementioned fines, the imprisonment term will be 6 months on summary conviction and 2 years on conviction on indictment.

B. Financial Information of the Responsible Persons to Determine Fines

With respect to indictable offences, a significant development is, it is proposed that, the Court must now take into account the turnover of the business of the convicted Responsible Persons to determine the scale of operation and in turn, the amount of fines to be imposed.

In such circumstances, the Responsible Persons will be ordered by the Court to provide either the returns for profits tax; or documents containing turnover information that have been audited by certified public accountants.  Note that the definition of “turnover” means the revenue arising in or derived from Hong Kong from the principal business activities carried on in Hong Kong. Therefore, revenue that arises incidentally or is exceptional in nature will not be taken into account.

C. Time Limit for Prosecution

The time limit in respect of prosecution for a summary offence or an indictable offence to be tried summarily is increased from six months to one year. This is said to allow sufficient time for the Labour Department to conduct more in-depth investigations into serious cases and to provide the Courts with sufficient evidence for considering whether to impose immediate imprisonment penalty upon convicted persons.

D. Implications

It remains to be seen whether the increased penalties will have the deterrent effect intended and will lead to fewer industrial accidents. Among the many implications, the pegging of the maximum fines to business turnovers would lead to higher operational costs and an increase in insurance premiums. If enacted, the operations of all contractors will be significantly impacted.

The Government will introduce the Bill into the Legislative Council for scrutiny on 25 May 2022. If passed, the Bill would come into operation once published in the Gazette. If you would like to discuss the implications of the Bill on your business, please do not hesitate to get in touch with Ian Cocking, Dennis Wong or your usual contact.

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