Hong Kong Legislative Council passed an amendment bill to raise the cap the penalty for serious industrial accident from HK$500,000 to HK$10m on 20 April. The law was last revised 20 years ago.
The government initially proposed a no-cap penalty, with a maximum fine matching the convicted company’s turnover. However, lawmakers from the business sector claimed the proposal “unfair” to corporations and pushed government to make a U-turn. In addition, the prosecution has been lowered from a year to nine months under the new law.
The two laws that regulate Hong Kong’s OSH have not been revised since 1994 and 1997. In Hong Kong Policy Address 2017, the Hong Kong government announced its plan to revise the law. Two years later, in 2019, the Hong Kong Labour Department proposed an amendment bill which would raise the maximum fine from HKD 300,000 to HKD 3,000,000 and increase the maximum imprisonment term from 6 months to 2 years.
Most importantly, the amendment bill proposed by the Labour Department could provoke the employers’ General Duties provisions to prosecute the duty holders, with the relevant maximum fine pitched at 10% of the convicted entities’ turnover or $6 million (whichever is the higher) and set the maximum imprisonment term at three years.
However, the initial proposal was met with strong opposition from the business sector arguing that the proposal was “unfair” to big corporations. The government thus made a U-turn and dropped this proposal and proposed to cap the maximum fine at HK$1million, and 2-year jail. The government also made a last-minute compromise to keep the prosecution period to 9 months. The original proposal was to extend the prosecution period from 6 months to a year.
Secretary for Labour and Welfare Chris Sun told the legislature on Wednesday that the average number of deadly industrial accidents in Hong Kong stood at around 20 annually over the past decade, with no sign of a downward trend. He said the penalties for violation of occupation safety law were “relatively low” when compared with other jurisdiction. It was necessary to update the law as it was last reviewed 20 years ago. He believed a maximum fine of HK$10m would boost deterrence.