I have repeatedly called for a no-fault penalty for fatality and loss of employability due to industrial or occupational accidents. In my China Daily June 24 article, I called for a fine of HK$1 million ($128,000) for each victim of such serious accidents. The amount should be paid immediately to the family of the victim. If this requirement becomes law, many tragedies could be avoided, and with the fine paid to the families of the victims, relatives will have immediate relief to alleviate any financial difficulties. Employers could be subject to additional fines based on the gravity of proven negligence.

Last year, the employer of a worker who died from a fall in an accident in 2022 was fined merely HK$90,000, to be paid in seven and a half years in monthly installments of HK$1,000. The reason for this was the employer’s limited financial resources. If my proposed law had been in place, the fine would have been paid following a claim to the insurance company. Employers of workers should be required to buy insurance. Under the forces of the market, premiums would be based on the assessed risks and the track record of the employers. To reduce premiums, employers would do whatever they can to maintain a clean no-claims record.

It was recently announced that Aggressive Construction Co, which has a very poor safety record and was fined lightly due to three serious accidents leading to five fatalities, will be removed from the registered list of contractors eligible to bid for government construction works, on June 20. If the proposed law had been in place, the employer would not have taken chances, thus sparing the lives of at least some workers, and most probably would have avoided being delisted from the government’s eligible contractors list.  

A recent direct investigation operation report from the Office of the Ombudsman revealed that “competent persons” required to sign off on high-risk operations, such as bamboo scaffold construction, had done so without making proper inspections.

Why would professionals, who are qualified to carry out these inspections, do such a thing? Isn’t it obvious that the strong probability of not having to pay a fine, plus the likelihood of a minimal fine in the event of an accident, is behind this “take-a-chance” culture?

In my article last year, I pointed out that despite the stricter Occupational Safety and Occupational Health Legislation (Miscellaneous Amendments) Ordinance 2023 being passed, providing for a top-end fine of HK$10 million and maximum two-year prison term for “extremely serious occupational safety and health contraventions”, the court nevertheless fined two company owners just HK$50,000 for safety breaches that led to an employees’ death during an industrial accident.

Upon inquiries by legislators about why the Hong Kong Special Administrative Region government didn’t appeal the sentence, Chris Sun Yuk-han, secretary for labor and welfare, said that after consulting the secretary of justice, it was concluded that the court did not make any mistakes regarding legal principles. There was no need to appeal the case.

I understand that the profit margins of many construction contractors are extremely low because of intense competition for a limited number of projects. Because of the small profit margins and the prevalence of subcontracting, the last subcontractor may face an impossible bottom line. I recall that the Hong Kong Construction Industry Employees General Union reported that over 2,000 Hong Kong construction workers and subcontractors had seen delayed wages and project fees in the first 11 months of 2024, involving a total of HK$300 million, a figure unseen in over four decades. The pressure to complete jobs on time to avoid fines for delays has certainly aggravated the industrial safety problem.  

Even though this is the case, my proposal to introduce a no-fault HK$1 million fine for fatalities and injuries that lead to unemployability will not pose any difficulty for construction companies, since all contract bidders will factor the cost of insurance into their bids. This means that the cost of the insurance will be absorbed by the government.

One common practice in the construction industry is the prevalence of subcontracting and sub-subcontracting. This practice means that workers on the front line have become extremely vulnerable. With multiple subcontractors, very little money is left for the workers on the ground, while the original contractor is increasingly detached from front-line employees. That being the case, it is important that vicarious liability holds. The first contractor must be held liable regardless of the subcontracting. As long as the subcontractors are all acting on behalf of the contractor in the first instance to get the job done, it is incumbent on the contractor to ensure that all subcontracted works be implemented with due regard to industrial safety. The responsibility for industrial safety and for paying workers must not be subcontracted away.

The author is a former director of the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University, and an adjunct professor at the Education University of Hong Kong.

The views do not necessarily reflect those of China Daily.