The Ministry of Manpower recently published details of the Work Injury Compensation (Amendment) Bill 2011, which is scheduled to come into effect 1st July 2012. I summarize the main points we feel are relevant to employers in Singapore and their insurers. I also comment on best practice for insurance arrangements, given the new law.
Salient points of the Bill which will impact employers:
1. Statutory no fault limits under the Work Injury Compensation Act will be increased to SGD170,000 for death and SGD280,000 for permanent incapacity. The current limits are SGD140,000 for death and SGD180,000 for permanent incapacity. This is to account for wage inflation since the last amendment in 2008. Also, in a similar vein, the medical expenses limit will be increased to SGD30,000 (currently SGD25,000).
2. Scope of Work Injury Compensation for occupational diseases extended. Specifically, work related injuries as a result of exposure to chemical or biological agents will automatically be compensable, including new diseases. Currently, only diseases listed in the Second Schedule of the Act (e.g. noise induced deafness) would be compensable and a new deadly flu strain, would not be compensable unless included in the Schedule. Under the new bill, the employee must still prove that he was more likely than not exposed at work, and not as a result of community spread.
3. Liability of Work Related Fights reduced. If the injury is due to a fight between employees at work (Ministry of Manpower receives about 20 such cases a year), this would not be compensable if the worker was an active party to the fight.
Salient points which will impact insurers:
1. In situations where there are multiple policies involved, the employer's Work Injury Compensation insurer cannot deny liability on the basis of the existence of other insurance covering the employee.
2. An exception to this is that third parties will be allowed to pay compensation as long as they convey in writing to the Ministry of Manpower the intent to pay compensation on behalf of the employer's insurer, before the notice of assessment is issued.
Best practice to ensure compliance with the new bill:
1. Ensure that appropriate Work Injury Compensation Insurance Act Insurance is taken up, and declare the full payroll of all employees, including wages, bonuses, annual wage supplements, food and housing allowances, and overtime (but excluding travelling allowances and CPF contributions) to the insurers.
2. Use a dedicated Work Injury Compensation Insurance policy issued by a Singapore licensed insurance company. Do not use Personal Accident Insurance to cover Work Injury Compensation liability as personal accident policies do not cover occupational diseases. The New Bill's extension to new occupational diseases makes Personal Accident policies, which covers death or permanent major injury (only) due to accident totally inappropriate for covering Work Injury Compensation Liability.
The full speech on the amendment bill delivered in the Singapore Parliament on 21st November 2011 is available on the Ministry of Manpower's website.