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Injuries and death occasioned by burn-out at work – is compensation available?

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A medical condition or an occupational phenomenon?

Responding to increasing worldwide concerns over deteriorating mental well-being of workers in the workplace, the World Health Organization (WHO) has recently clarified that “burn-out” (過勞) is an occupational phenomenon (職業現象)but not a “medial condition” (病況) and officially categorising it so under its 11th Revision of the International Classification of Diseases (ICD-11).

According to the WHO, “burn-out” is defined as: –

“a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions:

  • feelings of energy depletion or exhaustion;
  • increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and
  • reduced professional efficacy.

Burn-out refers specifically to phenomena in the occupational context and should not be applied to describe experiences in other areas of life.”

For Hong Kong, similar concerns have been voiced by the general public over occupational health issues over the past few years. Statistics compiled by the Labour Department shows that from the year 2013 to the end of the third quarter of the year 2018, there were a staggering number of 635 non-accidental deaths at work – how many of which were caused by wholly or partially burn-out situations, we do not know.

The statistics may shed light on the reasons for such high numbers of death: employees in Hong Kong consistently rank top in the world in terms of weekly work hours, reaching 44 hours per week between May and June 2017. Among the 3.04 million employees in Hong Kong, 25% had work hours over 51 hours per week in the said period.

In view of the recognition by the WHO of burn-out as an occupational health hazard, does this have any impact or effect on Hong Kong courts’ decision on or the extension of an employer’s duty of care towards injuries or occasioning death of its employee caused by burn-out at the workplace?

The present laws

Employees’ compensation is statutorily provided for in the Employees’ Compensation Ordinance (Cap. 282) (“ECO”). Under section 5 of ECO, an employer is liable for the employee’s injury or death resulting from accident in the course of employment subject to certain provisos, for instance, the injury is inflicted by deliberate self-injury or the accident is directly attributable to the claimant’s addiction to drugs.  

On the other hand, the Occupational Safety and Health Ordinance (Cap. 509) (“OSHO”) imposes on the employer a general duty of care towards the employees to ensure their safety and health at work and Section 6 of OSHO provides a non-exhaustive list of situations under which an employer is deemed to have failed in exercising its duty of care, including a failure to maintain the workplace or a working environment in a condition that is safe and without risks to health. Alongside with the OSHO, the Factories and Industrial Undertakings Ordinance (Cap. 59) (FIUO”) provides regulation and imposes duties on proprietors for the safety and health protection to persons employed in the industrial sector.  

Common law also recognises an employer’s duty of care towards the safety and health of its employees and it supplements the statutory laws by extending the scope of duties based on case laws.

Is “burn-out” relevant?

As mentioned, ECO covers “accident” causing injuries or deaths of employees in the course of employment. Adopting WHO’s definition of burn-out, it is hard to argue that chronic workplace stress per se constitutes an “accident” under ECO which in turn causes the burn-out symptoms as “injuries”. This is because the temporal element of an accident, which is invariably almost instantaneous (such as accidentally falling off a ladder or being hit by a falling crane during work), diametrically opposes the chronic nature of chronic workplace stress causing burn-out. It is also difficult to characterise the mental effects of burn-out, such as energy depletion and reduced professional efficacy as “injuries”.

The “injury” sustained must be one that incapacitates the claimant from earning full wages at work or results in partial incapacity of a permanent nature under section 5(2) of the ECO. In the case where the employee dies from burn-out alone, it is still difficult to argue that ECO applies as burn-out is not currently one of the occupational diseases listed in the Second Schedule of ECO which entitle a claimant to compensation if death or injury results therefrom.

Nevertheless, if the burn-out syndrome facilitates an injury or death, it is compensable. An archetypal example is a tired and overworked driver getting hit by another vehicle on the road due to his diminished attention to the road conditions caused by his depleted energy level and stamina, thereby resulting in injury such as fractured bones or head traumas or even death from the collision. That would be compensable under ECO.

Although there may still be grey areas under ECO, the provisions in OSHO and FIUO might still assist to the extent that the burn-out (which subsequently caused injury or death) is due to the failure of the employer in ensuring the safety and health at work of the employees so far as reasonably practicable.   For instance, if an employee was assigned with several shifts of work non-stop so rendering the employee did not have sufficient rest time and became physically fatigue and exhausted and lost attention, causing injury, this would be a breach of the OSHO.  An employer who fails to comply with the foregoing under section 6(1) of OSHO intentionally, knowingly or recklessly commits an offence and is liable on conviction to a fine of $200,000 and to imprisonment for 6 months.

Although it is clear that the employer and employee relationship gives rise to a duty of care on the employer under common law, currently, there is no case precedent in Hong Kong which grants the claimant damages for burn-out injuries or deaths.

Nonetheless, there have been court cases in Hong Kong in which the courts have granted damages to the claimant where he/she was injured or died from a workplace accident which might have been facilitated by burn-out.

A notable example is the case of Ting Siu Yan v Menzies Aviation (Hong Kong) Limited (HCPI 861/2005) where the employee suffered injuries from an accident while working in the course of employment at the Hong Kong International Airport as a “Ramp Service Agent” and sued his employer for damages. The employee worked in excess of two hours to complete unloading and loading part of an aircraft and shortly before he reached to the tractor to tow objects away, he tripped on a damaged expansion joint and fell heavily, striking his knees against the rear wheel axle of the tractor. In a letter to the Commissioner of Labour written by the employee, the employee contended that he had tripped over the uneven surface due to his exhaustion from overwork. Although the judge did not accept that the cause of the accident was contributable to the fatigue, the judge nonetheless ruled in favour of the employee and granted him damages.

Tips to Employers

Hong Kong employment laws are far from adequate in that they currently do not seem to cover burn-out as a cause for accident compensation. However, the new WHO’s definition and categorization of burn-out may shine an optimistic light on future court’s decisions and legislative reforms in this regard. We believe that as time goes, the Hong Kong courts would be more willing to take a liberal approach in considering burn-out leading to injuries and deaths as a cause for compensation to adapt to societal changes. 

It is therefore prudent for all employers, apart from the constant supervision to ensure the safety and health at workplace, to revisit the arrangements of work allocation and work hours for employees.

If you have any questions regarding any compliance issue in relation to the provision and maintenance of a healthy and safe work environment or on any other employment issues, please contact one of the members of the Employment Law team.

Ronald 0 – Ireland 1

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By French Practice Department

On the 11 January 2019, the Cancellation Division of the EU Intellectual Property Office decided to revoke the trademark “Big Mac” owned by McDonald’s for lack of “genuine use”. It is followed on from the application revocation by the Irish company Supermac, not surprisingly a direct competitor of Ronald McDonald and its fast food restaurant. McDonald’s has long been the owner of the famous word “Big Mac” for various products and services in classes, 28, 30 and 42 of the Nice Classification including sandwiches and restaurant services.

McDonald’s submitted little evidence including advertising and packaging (brochures, affidavit of McDonald’s representatives, print out of McDonald’s website and Wikipedia entry) but overlooked to provide third-party evidence and it seems their brochure did not provide enough information. Oh dear. As the authorities pointed out, it would have been nice and even necessary to provide in Wikipedia and affidavits “other pieces of concrete evidence”. The EUIPO suggested that there was insufficient evidence put forward – now whether this was just bad preparation or the reality is that it was not used sufficiently remains to be seen.

Two points to be noted. First of all, no matter how notorious your trademark is, when it comes to proof you have to prove its genuine use. In this case, McDonald’s certainly undervalued the importance of the evidence. Such evidence could not establish the place, time and extent of the trademarks for foods and services registered and the evidence lacked independence in the event of a dispute. Therefore, don’t forget to obtain independent evidence, whose value cannot be challenged on the suspicion of any personal interest. Secondly, let this be a lesson to brand owners who sometimes, if not always, overreach in terms of classes of goods and services for which they register their mark. Here, for example, McDonald’s couldn’t prove the use of Big Mac trademark for the services that were registered, such as restaurant services. Get it right.  See a lawyer.  See OLN!

Google Fined the Amount of Its Petty Cash Account.

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By French Practice Department

In January 2019 the French Government – never slow to see an opportunity to levy fines, taxes and other impositions, levied a fine of €50 million through its French data protection authority on Google for violating the EU General Data Protection Regulation in France.  This is the first French sanction against US tech giants for violation of the GDPR guidelines.

GDPR came into force on 25 May 2018 and regulates the European Union’s data protection and overhauls the European Union’s data protection.  It establishes a uniform framework for data protection across the EU and regulates the way businesses process and manage personal data in order for citizens to recover control over the use of their personal data.

GDPR applies any business that processes personal data whether automated or manual, whether directly or on behalf of other parties and which is based in the EU or any foreign company which is offering goods and services to individuals within the EU.  In short, GDPR applies to almost any country and company whose business is somehow linked to Europe.

What is personal data?  Just about any piece of information that relates to an identified or identifiable individual:  Name, address, location, income, banking information, health, religion, sexual orientation, race, political belief or Trade Union membership.

There is rarely action of a company in its everyday business activities that don’t include some data processing, collecting email address, consulting a database, sending promotional emails, posting pictures of people on social media etc.  Now, of course, GDPR mandates that data collection be fair and transparent and for a specified and legitimate purpose based on the following grounds;

1. The consent of the concerned individual, 2. contractual obligation between the company and the individual, 3. provision to protect the vital interests of the individual and 4. to carry out a task that is in the public interest.

One of the major challenges to this regulation is to obtain the proper consent of each individual in order to collect and use such personal data.  It should be freely given, specifically informed and without any ambiguity and by an affirmative act such as ticking a box or signing a form.

The French data regulator has fined Google for not being transparent about its policies, for failing to provide information retention provisions in some cases and for failing to obtain proper consent from users for personalized ads.

Of course, Google could have had it much worse – the maximum penalty under the GDPR is 4% of global revenue which in Google’s case is more than US$4 billion.  Still, it shows that the EU authorities are starting to bite down.  Compliance with GDPR is going to be one of the EU challenges for the following years, pushing EU and international companies dealing with the EU to comply with such regulations.  Don’t hand over well-earned money by way of fines to France or any other EU country because you are in breach of GDPR.  Do it right.  Get a lawyer.  Get OLN.

Napoleon must be turning in his grave.

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by French Practice Department

No matter what side of the channel whether North of South of France, Napoleon is generally regarded as having had a rather full and accomplished life. One of his less violent accomplishments was a Napoleonic code which is 1804 passed with a view to give written and accessible law to all citizens and was a major step in replacing the previous patchwork of feudal laws.  At last, one could consult a book about the law which applied to everyone, there was a certain implicitly introduced. Now, of course, the French legal system has morphed into one of the more complex and sometimes quite unpalatable and unfathomable system of laws, decrees, ancillary legislation, rules and procedures. Nowhere is that more obvious than in employment law. Figuring out what is precisely the status of a contracting party appears to be more and more tricky and more and more difficult. Both sides of the Channel, Uber drivers who regarded themselves as independent contractors suddenly found themselves as being employees with of course all the benefits that go with such. In November 2018 a case “Take Eat Easy” court ruled that delivery drivers of Take it Easy, were found to have been in an employment relationship.

Even more recently, in January Uber drivers, no doubt attracted by the basket of benefits to be had as a French employee went to the Paris Court of Appeal. The issue of the case was to decide whether an Uber driver was an employee and therefore protected and with the benefits of French employment law of a freelancer, surprise surprise, following the Take it Easy case law the Paris Court of Appealed that the driver was an employee of Uber.

Now to be registered as an Uber driver the claimant had to obtain a professional driver’s card and register as a freelancer to the French Professional Authorities. After having performed more than 2000 trips for Uber, the drivers Uber account was permanently disabled at the request of Uber management for reasons which are not important here. According to the claimant, however, he was actually an employee of Uber and as such couldn’t be fired from the company this way.

For somebody to be considered an employee under French law, it has to be shown that 1. he was financially compensated, 2. that there was a job to perform, that 3. he was in a subordinate employment relationship, i.e., he took orders from his employer. In the past, the burden of proof to demonstrate the professional subordination was upon the claimant. This has been turned around by showing more than the lack of independence of the driver. Lack of independence is much easier to bring as the driver appears to be subordinated to the Uber app platform, and is therefore considered an employee.

In the decision, the Court pointed out that the driver is forced to register with the French Professional Authorities to become an Uber driver. Besides that, when performing a trip that the Uber platform prohibits Uber drivers to accept, non-Uber passengers, or to directly contact Uber passengers at the end of the trip or to keep any of their details. According to the Court, this, therefore, deprives the drivers of the opportunity to establish contacts and thus develop any personal clientele. In addition, the Court notes that the price is set by Uber without any consultation of the driver. Surprisingly the fact that the driver was able to choose days and hours of work does not in itself exclude a subordinate relationship. 

So is this an isolated case or will it lead to cascading?  Can it lead to tens of thousands of French Uber drivers suddenly finding they are Uber employees with all the benefits such involves?  Are we going to see Uber suddenly finding itself with 20,000 employees?

France has started discussions with online platforms, parliament and trade unions to define a new legal universe adapted to the user’s digital platforms. However, pending this new regulation, it is up to anybody wishing to enter into a commercial relationship with self-employed persons to be extra careful in the contract drafting and performance at the risk of being an employment agreement. Hire smartly, legally.  See a lawyer. Get OLN.

Napoleon as an employer’s armies had a much simpler termination provision.

OLN Ranked in ALB’s 2019 IP Rankings

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Asian Legal Business (ALB) has released Intellectual Property Rankings 2019 and we are delighted to announce that OLN has been ranked across all categories in China and Hong Kong.

OLN is ranked at Tier 2 for Copyright and Trademarks, and Tier 3 for Patents  in Hong Kong, and continue to hold its ranking at Tier 3 for both categories in China.

Our Intellectual Property team provides practical advice and solutions with our understanding of the latest regulations and practices, the frequent updates of local government policies and branding positions in Chinese-speaking market.

Congratulations again to the OLN Intellectual Property team for getting ranked.

Vera Sung

Angel Luo

Evelyne Yeung

Marine Vanhoucke

Michael Chan 

About ALB and the IP Rankings

Thomson Reuters’s Asian Legal Business magazine provides current analysis and information on law-related issues throughout the Asia region. ALB drew information from firm submissions, interviews, editorial resources and market suggestions to identify and rank the top firms for Intellectual Property in Asia. The rankings were based on the firm’s visibility and profile in the region, the volume, complexity and size of work undertaken, key personnel hires and growth of the practice group, key clients and new client wins, and its presence across Asia and in individual jurisdictions.

Hong Kong Court recognising Japanese insolvency proceedings for the first time in history in Re Kaoru Takamatsu [2019] HKCFI 802, [2019] HKEC 906

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It is well-settled law in Hong Kong that foreign insolvency proceedings are recognised in Hong Kong provided certain criteria are met. Accordingly, the Hong Kong court is empowered to grant the foreign trustee in bankruptcy or liquidator the powers to administer the company’s affairs in Hong Kong ordinarily vested in such an officeholder under that foreign insolvency regime. The recent Court of First Instance case in Re Kaoru Takamatsu [2019] HKCFI 802, [2019] HKEC 906 was the first case in Hong Kong’s history of a Japanese trustee in bankruptcy applying to the Hong Kong court to seek recognition of the Japanese insolvency proceedings and assistance. In line with the Hong Kong court’s practical approach towards many cross-border insolvency issues, Mr. Justice Harris granted the applicant the rights and powers of a Japanese trustee in bankruptcy ordinarily vested in them in Japan vis-à-vis the company’s assets and affairs in Hong Kong.

Background 
The Japanese company Japan Life Co, Ltd (the “Company”) was ordered to be wound up on 1 March 2018 by the District Court of Tokyo, Twentieth Civil Division (the “Tokyo Court”) and Mr Takamatsu Kaoru was appointed Trustee in bankruptcy by the same court on the same day. Mr Takamatsu, being the applicant (the “Applicant”), applied to the Hong Kong Court of First Instance to seek recognition of the Japanese insolvency proceedings and the relevant powers to obtain access to the Company’s bank account records held by two banks in Hong Kong. The application was made by way of written application through the applicant’s Hong Kong solicitors, supported by a letter of request from the Tokyo Court and an affirmation of a Japanese lawyer explaining the Japanese Bankruptcy Code. 

Legal Principles
In the Judgement, the judge made it clear that the Hong Kong court will recognise the foreign insolvency proceedings if the foreign insolvency proceedings are (i) collective insolvency proceedings; and (ii) the foreign insolvency proceedings are opened in the country of incorporation of the company in question. The judge has defined collective insolvency proceedings as “a process of collective enforcement of debts for the benefit of the general body of creditors” in his judgement for another recent court case.

If the above are satisfied, the judge confirmed that standard recognition and assistance by the Hong Kong court will be rendered to the liquidator appointed in a jurisdiction with similar insolvency regimes to Hong Kong, granting substantially similar powers to those the liquidator is empowered in that jurisdiction on the papers.

Decision of the Judge
In his decision, the judge found that although Japan adopts a civil law system, on the evidence, the Company was in collective insolvency proceedings in its place of incorporation. The judge also found that the rights and powers of a trustee in bankruptcy appointed in Japan (by reference to the Japan’s Bankruptcy Act), which extend to inspecting books and documents relating to the bankrupt’s estate, are similar to those of a trustee appointed in Hong Kong. The judge therefore held that it is consistent with established legal principles to grant the Applicant general powers to administer the Company’s affairs, including its assets and seeking documents and information located in Hong Kong.


Conclusion
This particular case serves as the archetypal example where courts in Hong Kong respects and recognises the status of Japanese laws in the area of insolvency and bankruptcy. It undoubtedly serves as a favourable precedent for Japanese liquidators and trustees in bankruptcy facing similar circumstances and needing assistance from the Hong Kong Court. Such decision is a welcoming one. 

OLN provides a full range of legal services catered to our Japanese clients. If you have any questions regarding the above or on any insolvency issues, please contact one of the members of our Japanese Desk.