Bills Committee on Occupational Deafness (Compensation) (Amendment) (No.2) Bill 1997

Provisional Legislative Council

PLC Paper No. CB(2) 736
(These minutes have been seen by the Administration)

Ref : CB2/BC/4/97

Bills Committee on Occupational Deafness (Compensation) (Amendment) (No.2) Bill 1997

Meeting on 4 November 1997 at 8:30 am in Conference Room A of the Legislative Council Building

Members present :

Dr Hon TANG Siu-tong, JP (Chairman)
Hon WONG Siu-yee
Hon LEE Kai-ming
Dr Hon LEONG Che-hung, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon CHAN Kam-lam
Hon CHAN Wing-chan

Members absent :

Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Ronald ARCULLI, JP

Public officers attending:

Ms Esther LEUNG: Principal Assistant Secretary for Education and Manpower
Mrs Jenny CHAN: Assistant Commissioner for Labour
Dr W K LO: Occupational Health Consultant
Mr K F CHEUNG: Senior Government Counsel

Deputations by invitation :

Hong Kong Occupational Deafness Association: Mr WONG Tam-kwai (Chairman)
Mr TAM Cheuk-fun
Mr TSE Ka-yue
Mr WONG Yuen
Hong Kong Workers Health Association: Miss HUE Yu-ling

Clerk in attendance:

Ms Doris CHAN: Chief Assistant Secretary (2)4

Staff in attendance :

Ms Bernice WONG: Assistant Legal Adviser 1
Mr Stanley MA: Senior Assistant Secretary (2)7

I. Meeting with deputation from the Hong Kong Occupational Deafness Association
PLC Paper No.CB(2)512(01)

The Chairman welcomed representatives of the Hong Kong Occupational Deafness Association (HKODA).

2. Mr WONG Tam-kwai of HKODA informed members that the mission of HKODA was to contribute towards reducing the number of people suffering from hearing loss due to their occupations. He said that members of HKODA had actively engaged in activities to promote the awareness of employees in this regard. He requested the Labour Department to let them participate in its on-going publicity programmes on prevention of occupational deafness. As far as the Bill was concerned, he said that HKODA was disappointed that the three multiplying factors for calculation of compensation according to the age of the claimant at the relevant date of application (Schedule 5 of the existing Ordinance) had not been repealed. He opined that giving different amounts of compensation to claimants suffering the same degree of hearing loss for reason of their age was discrimination against the age of claimants.

3. Miss HUE Yu-ling of the Hong Kong Workers Health Association (HKWHA) provided the following supplementary information for members reference -

according to doctors of HKWHA, occupational deafness could be diagnosed if pre-employment and regular medical examinations were conducted for the employees concerned;
like occupational deafness, other occupational diseases such as lead poisoning were also chronic in nature and the claimants degree of suffering also developed insidiously over a long period of time. The grant of compensation to claimants suffering from the other occupational diseases was based on the results of clinical assessment conducted by relevant medical specialists on a case-by-case basis and there was no requirement of 10-year service in the occupation concerned for compensation purpose ;
a member of the Working Group on Review of the Occupational Deafness (Compensation) Ordinance (Cap.469) (the Working Group) had proposed that all claimants of occupational deafness, regardless of their years of service and occupations, should be compensated provided that the professional assessment of medical specialists concerned supported their claims. The Working Group did not accept the proposal on the ground that the Labour Department considered it more safe to impose an administrative requirement of 10-year service than to rely on the clinical assessment of the relevant medical specialists;
the maximum compensation for persons suffering from other occupational diseases such as lead poisoning was 100% of permanent loss of earning capacity, which was in line with compensation paid to victims under the Employees Compensation Ordinance. Therefore persons suffering from total deafness due to specified noisy occupations should also be compensated by 100% of permanent loss of earning capacity; and
the Working Group had recommended the relaxation of the service requirement in four extremely noisy occupations (noise level exceeding 100 dBA) from 10 to five years. The Government should incorporate the improvement in the Bill and add more occupations to the list of specified noisy occupations.

Miss HUE also informed members that the Working Group had been meeting for one year and certain agreements to improve the Scheme were agreed. However at the last meeting on 22 January 1997 the Labour Department had presented its proposals for discussion. The new proposals were opposed by members of the Working Group. She also pointed out that the priority order for introducing the improvement proposals was not unanimously agreed and there was strong opposition from some members.

II Meeting with the Administration

The adoption of the present improvement package

4. Dr LEONG Che-hung asked the Administration to explain why some of the recommendations of the Working Group had not been incorporated in the Bill. He stressed that the results of the deliberations of the Working Group should be respected. Assistant Commissioner for Labour (ACL) explained that in recommending the improvement options, the Working Group had not considered the financial implication of each individual item. At the last meeting of the Working Group, it noted and the Labour Department stated that the Occupational Deafness Compensation Board (ODCB) would not have sufficient resources to implement in full the Working Groups recommendations and requested members of the Working Group to consider setting priorities for introducing the improvements. She acknowledged that there were members who objected to priorities setting and as a result no consensus on the issue had been reached at the meeting. After consulting the opinions of the three absent members, six of the nine members of the Working Group finally agreed to setting priorities for introducing the improvements but had not agreed on the order of priority for individual items. She added that in presenting the Labour Departments proposal to the Labour Advisory Board (LAB) for discussion, the Administration had made it clear that due to financial constraint, not all recommendations of the Working Group were included in the proposal. The Labour Department had estimated that to implement its proposal would incur an additional 0.8 percentage point on the rate of levy on employees compensation insurance premium and to retain the existing Schedule 4 under the Occupational Deafness (Compensation) (Amendment) Ordinance 1997 (99 of 1997) (the Amendment Ordinance) in its proposal would incur an additional 1.3 percentage point on the rate. Having regard to the feedback of employers, LAB agreed that improvements should be introduced progressively and had endorsed the Labour Departments proposal.

The requirement of a minimum 10-year service in noisy occupations

5. At the Chairmans request, Occupational Health Consultant who was a member of the Working Group said that the cause of sensorineural hearing loss was not limited to working in a noisy environment. Medical advice was that other causes, such as ageing and disease, might also lead to such hearing loss. Without an objective 10-year service requirement, ODCB would have to rely on the clinical assessment and judgment of medical specialists concerned to make decision on a case-by-case basis. He added that in order to obtain compensation, claimants might give false information to medical specialists during the course of medical examination and hearing test. To avoid possible abuse, ODCB considered that a 10-year service requirement could serve to establish a relationship between the claimants deafness and his/her occupation. Responding to the Chairmans further enquiry, Dr LEONG commented that while the Administration had the responsibility of ensuring the proper use of the Occupational Deafness Compensation Fund (the Fund), persons suffering from genuine occupational deafness deserved an appropriate compensation. On claimants eligibility for compensation, he stressed that the assessment and judgment of the relevant medical specialist should be respected and should not be interfered with by administrative means. As successful claimants suffering from lead poisoning might also have been exposed to other sources of lead poisoning such as their choice of food, he expressed reservation about the double standard which required claimants of occupational deafness to have a minimum of 10-year service in the noisy occupation. He also commented that even though a priority order had been set, there should also be a timetable for implementation of the recommendations.

Legislation on protection of hearing loss

6. Responding to Mr LEE Kai-mings enquiry on the decreasing number of employees suffering from occupational deafness in the future, ACL said that the Government was now working on legislative regulations to require employers to take necessary steps to provide a safe and comfortable working environment to employees. Under section 6 of the Occupational Safety and Health Ordinance (OSHO) which would come into operation in May 1998, employers would have a legal responsibility to ensure the safety and health at work of the employees. Two more sets of specific safety and health regulations under OSHO containing provisions on hearing protection were scheduled to be enacted. The Personal Protective Equipment Regulation would require employers to provide suitable hearing protective equipment and the Machinery and the Equipment Safety Regulation would require employers to have their machinery and equipment properly maintained and operating in good conditions without inducing safety and health problems to their employees. Together with other educational and publicity activities to promote the awareness of the importance of hearing preservation among employees, the Administration anticipated that the number of employees suffering from occupational deafness would be decreasing.

Financing of the Scheme

7. Responding to Dr LEONGs enquiries, Assistant Commissioner for Labour (ACL) said that the proposed 0.8 percentage point increase on the rate of levy on employees compensation insurance premium for the implementation of the improvements in the Bill was sufficient. The estimate was based on ODCBs actual experience in processing applications for compensation from July 1995 to May 1997, taking into consideration the retention of the minimum threshold of hearing loss at 40dB for compensation purpose, the addition of eight more occupations to the list of specified noisy occupations and the transitional arrangements after the commencement of clauses 1 to 20 of the Bill. With the Amendment Ordinance which was passed by the former LegCo on 30 June 1997, the Fund, without additional contribution from employees compensation insurance premium, would be depleted in three years' time. As for the full implementation of the Working Groups recommendations, the estimate was that a 2.3 percentage point increase on the rate of levy on compensation insurance premium would be required. In reply to Dr LEONGs follow-up enquiry, ACL added that a comprehensive review on the operation of the Scheme would be conducted two years after the implementation of the improvement measures

8. Mr LEE Kai-ming opined that the Government should consider the provision of interest-free loan to ODCB so that it could have sufficient funds to implement the recommendations of the Working Group in full as well as additional improvements. Mrs LEUNG LAU Yau-fun shared the view and added that the Government should take up the responsibility of compensating employees suffering from occupational deafness during the years when the concept of hearing preservation was not so well understood in our community as it was today and there was no legislation requiring employers to ensure an acceptable working environment and provide necessary hearing protective equipment. Mr LEE urged the Administration to work out a comprehensive compensation policy and reconsider the feasibility of establishing a central employees compensation board to oversee all matters relating to employees compensation. He also considered that the Administration should inform employers of the full picture that an increase of 2.3 percentage point on the rate of levy would be necessary to implement all the recommendations but a progressive approach had been adopted starting with an increase of 0.8 percentage point. Mrs LEUNG supported Mr LEEs suggestions and added that the Government should take the initiative to negotiate with employers for a practicable long-term policy on employees compensation as well as to agree on a fixed rate of financial contribution from employers.

9. As far as financial support to the Occupational Deafness Compensation Scheme (the Scheme) was concerned, PAS/E&M pointed out that the Scheme was a statutory scheme established on the basis of collective liability of all employers and was funded by a levy on the premium of employees' compensation insurance. The Government, as an employer, was also required to contribute to the Scheme in accordance with the provisions of the Occupational Deafness (Compensation) Ordinance. Whilst the Government had made an initial grant of $100 million and provided an interest-free loan of $115 million to ODCB in 1995, they were only a one-off attempt to enable the Scheme to start operation. Any need for additional funding should be addressed through an increase in levy.

10. Regarding compensation to employees suffering from noise-induced occupational deafness, PAS/E&M said the Scheme was only introduced in 1995 and any improvements should be made gradually. Based on available operational data, the Administration had thoroughly considered the financial implications of the recommendations of the Working Group, proposed an improvement package which could strike a reasonable balance between the need for improvements and the need to preserve the financial viability of the Scheme. As for the timetable for implementing the Working Group's recommendations which had not been included in the Bill, the Administration would reconsider them together with other new improvements which might become justified in the light of actual experience during the next review two years later.

11. Regarding the proposal for the establishment of a centralized agency to look after all employees' compensation matters, PAS/E&M responded that it would not be desirable to combine the several collective liability compensation schemes with the individual liability system of employees' compensation since this would lead to efficiency loss, rather than gain. Moreover, having a central system to replace the current private insurance market would not lead to an increase in efficiency, especially in view of the reducing profit margin of employees' compensation insurance in the industry. She added that the subject of whether to set up such an agency had been discussed at a sitting of the former LegCo and the Administration did not consider it appropriate to adopt the proposal.

12. In anticipation of a decreasing trend in the number of claimants and the relatively stable income of ODCB in the years to come, Mr LEE Kai-ming said that he was disappointed by the Governments incremental and conservative approach in compensating persons suffering from occupational deafness on the ground of financial constraint. Mr CHAN Kam-lam shared the view. PAS/E&M responded that the Scheme operated on a collective liability system which required all employers to contribute their share in the funding of the Scheme. She said that the Administration had no plan to make further financial injection into the Scheme at the moment.

13. Mr CHAN Kam-lam enquired whether employers in noisy occupations could be asked to contribute a higher share to the Fund. PAS/E&M said the proposal had been considered in 1995 when the scheme was being drawn up, but due to the very complicated administrative process involved in the determination of appropriate contributions for individual noisy occupations, it was finally agreed to adopt the existing method of funding the Scheme.

14. Responding to Dr LEONGs enquiry, ACL said that as at end of September 1997, ODCB had paid compensation to 474 successful claimants under the existing provisions, the success rate was about 70%. She added that the initial forecast was that around 1 000 successful applications would be processed by ODCB in accordance with the provisions in the original Ordinance. Assuming that the number of qualified claimants would decrease two years after the implementation of the Ordinance, Dr LEONG urged the Administration to re-estimate the financial implications of the Scheme in the light of administrative experience. Occupational Health Consultant supplemented that occupational deafness normally developed over a long period of exposure to noisy environment and for this reason, it was estimated that the number of successful applications would slowly decline in the decade ahead.

Compensation for total deafness

15. Responding to Mr LEE Kai-mings comments on the percentage of permanent incapacity awarded for total deafness, ACL pointed out that the objective of the Scheme was to compensate for loss of earning capacity and not hearing impairment. Unlike total deafness resulting from a work-related accident which was traumatic in nature, occupational deafness of an employee normally developed insidiously over a long period of time and the employee with noise-induced hearing loss was more likely to be able to continue working without total loss of earning capacity. She reiterated that there were other factors such as ageing and diseases contributing to an employees hearing loss and it was difficult for doctors at a hearing test centre to ascertain the causes of a claimants hearing loss. Having considered all these factors, the Working Group had concluded that the present level of 60% permanent incapacity for hearing loss at 90dB and above should be maintained.

Compensation for claimants of different age groups

16. Mr CHAN Wing-chan was concerned about the substantial difference in the "multiplying factor" for the calculation of compensation for successful claimants of different age groups, i.e. 96, 72 and 48 for claimants of age under 40, 40 to under 56, and 56 and above respectively. ACL reiterated that the objective of the Scheme was to compensate for loss of earning capacity and in this connection the amount of compensation followed the principle that the younger the claimant was, the greater the loss of earning capacity.

Minimum years of service requirement for four very noisy occupation

17. Referring to HKWHAs comments, Mr WONG Siu-yee enquired about the reason for declining the Working Groups recommendation to relax the service requirement from 10 to five years for employees working in the four very noisy occupations, i.e. noise level exceeding 100 dB(A) or peak sound pressure level of 140 dB or above. ACL replied that three of the four occupations were included under the existing Ordinance and according to statistics on the processing of applications so far, the average hearing loss of successful claimants from these occupations and from other specified occupations were respectively 66.5 and 69.8 for better ear and 68.4 and 70.6 for worse ear. PAS/E&M supplemented that statistics showed that successful claimants from these three occupations on average did not suffer a higher degree of hearing loss than other successful claimants, and more time was required to collect more data with a view to considering whether to adopt the recommendation. The Administration had therefore not incorporated in the Bill the Working Groups recommendation on this issue but would review the issue two years after the implementation of the proposals in the Bill. In reply to Mr WONGs follow up question, ACL said so far 273 of the 474 successful claimants had suffered hearing loss by way of the three very noisy occupations under items (c), (j) and (k) of Schedule 3 of the Ordinance. The remaining very noisy occupation was included under item (y) in clause 18 of the Bill.

18. Dr LEONG reiterated that imposing a minimum 10-year service requirement was not fair to claimants suffering a certain degree of hearing loss but not having a 10-year service in the noisy occupation concerned. He pointed out that some of these victims might for various reasons fail to stay in the occupation for 10 years. He supported Mr LEE Kai-mings comment that the Government should provide ODCB with sufficient funds, be it an injection or an interest-free loan, to enable ODCB to pay compensation to victims of occupational deafness with a period of employment which was less than 10 years. He opined that the Administration had hitherto been adopting an incremental approach in policy decisions and changes would only be proposed when it was considered fairly safe to implement a new policy. ACL responded that the additional levy of 0.8 percentage point on the insurance premiums of all employees compensation policies had taken into account a forecast annual 5% decrease in number of successful claimants 10 years after the implementation of the Scheme. She added that as far as the Scheme was concerned, the Administration had conducted a review and followed up issues as promised in 1995 when the Scheme was introduced.

III Clause-by-clause examination of the Bill

19. Members went through clauses in the Bill. ALA1 referred to the consequential amendments in clauses 21 and 22 and invited members attention to Legal Notices 483 and 484 of 1997 gazetted on 24 October 1997 on the same subject.

IV Committee Stage Amendments

20. Dr LEONG informed the meeting that he was considering the following Committee stage amendments (CSA) -

the downward adjustment of the service requirement from 10 to five years for the four very noisy occupations; and
the upward adjustment of the percentage of permanent incapacity awarded for total deafness from 60% to 100%.

21. PAS/E&M agreed to examine the first proposal to see if the Administration would prepare a CSA to this effect for members consideration. As regards the percentage of permanent incapacity for total deafness, she said that an upward adjustment would go contrary to the objective of the Scheme which was to provide statutory compensation for an employees loss of earning capacity under the no fault principle rather than physical impairment. It would also give rise to very severe financial implications for ODCB.

22. Members also requested and the Administration agreed to provide supplementary information in response to members concerns raised at this meeting as soon as possible.

23. The meeting ended at 10:15 am.

Provisional Legislative Council Secretariat
11 December 1997 .