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Dealing with the hidden dangers of compensation claims following workplace injuries

Published on Saturday, 02 Apr 2016

The Background

Using mediation to address employee compensation claims can save time and litigation costs, and help employer and employee reach a mutually satisfactory financial agreement.

Mediation may also serve a wider purpose: it helps to preserve relationships and provide a platform for clearing up misunderstandings in a confidential setting in which parties are on equal footing.

The following illustration is based on a real case, and is a classic example of how the employer-employee relationship can deteriorate after a workplace injury. It also demonstrates the value of mediation in addressing such disputes.

The Case

Ah Keung had been working for Ah Fat’s company, Fat Kee, as a casual general labourer for more than 15 years. When Ah Keung injured his back at work, he lodged a claim in line with the Employees’ Compensation Ordinance, and pursued common law action.

Fat Kee’s legal representatives admitted liability for both claims at an early stage in the legal proceedings. The parties then sought a mediator to help them discuss the amount to be paid in damages.

When the mediator conducted separate pre-mediation sessions with the parties, however, each focused on the deterioration of the employer-employee relationship after the accident, rather than their financial concerns.

Ah Keung treasured his working relationship with Ah Fat, and treated him as his friend rather than a boss. But he expressed disappointment and anger at Ah Fat, as he had visited him only once after the accident.

During that visit, it seemed to Ah Keung that Ah Fat was more concerned about how his injuries would affect the company’s insurance premiums. Ah Fat bombarded Ah Keung with a lot of questions about how the accident had occurred. Ah Fat then stopped paying him periodical payments while he was on sick leave.

Two months before the mediation was held, Ah Keung received a box of mooncakes from Ah Fat. Ah Keung suspected that this was Ah Fat’s attempt to influence the legal proceedings. As such, he returned the box of mooncakes to Ah Fat and mentioned this incident in his witness statement.

Ah Fat also expressed frustration during the pre-mediation session, as he felt he had treated Ah Keung as his brother rather than his colleague. However, because the business was not doing well at the time of the accident, he admitted some initial concerns about how the accident would affect the company’s insurance premiums.

To make matters worse, the solicitors arranged by Fat Kee’s insurance company told him that there was evidence that Ah Keung’s injuries were pre-existing in nature. If so, further periodical payments to Ah Keung might complicate the compensation claim and common law action. Ah Fat felt he had no alternative but to stop the payments, but because he still treasured the relationship, he sent Ah Keung a box of mooncakes before the Mid-Autumn Festival.

The mediator then called a joint session with both parties and their legal representatives. Ah Fat burst into tears in his opening statement and apologised to Ah Keung, expressing his frustration at being unable to show his care for Ah Keung, or keep updated on his medical situation. Ah Keung was surprised at Ah Fat’s reaction, and also vented his anger about the process.

The mediator then suggested the parties conduct a joint session without legal representatives, so as to clarify misunderstandings and express their frustrations at ease. All parties agreed.

By reframing the situation, the mediator converted a hostile atmosphere into a friendly one. The session served as an effective foundation for the parties to reach a monetary settlement. This happened in the following session, in which the mediator employed the traditional methods used for compensation claims and helped to negotiate an agreed amount of damages to be paid.

The Observations

After a workplace injury, unnecessary conflict can arise when employer and employee are not able to communicate and discuss their expectations.

While mediation can never replace sufficient legal advice, a lack of communication after a workplace accident can affect the proceedings.


This article appeared in the Classified Post print edition as The hidden dangers of compensation claims.

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