Tuesday, April 3, 2012

Changes to Work Injury Compensation Act

Changes to Work Injury Compensation Act

Effective 1 June 2012

1. The Parliament has passed the amendments to the Work Injury Compensation Act (WICA). The changes are made based on two key principles:

  • Striking a fair balance between compensation for injured employees and the obligations placed on employers / insurers
  • Ensuring that the WICA framework remains expeditious and employees are able to receive compensation promptly
2. The changes will take effect on 1 June 2012. The key changes are as follows:

a) Updating Compensation limits
As part of MOM’s regular review of WICA compensation, the limits will be increased to account for the change in nominal median wages and healthcare costs since the limits were last set in 2008.

Existing Limit
New Limit
Total Permanent Incapacity*
Medical Expenses
Up to $25,000 or 1 year from date of accident, whichever is reached first
Up to $30,000 or 1 year from date of accident, whichever is reached first

* This excludes the additional 25% compensation that is paid to workers with total permanent incapacity to offset the cost of care for the injured worker.

b) Disallowing compensation for work-related fights
The rationale for the amendment is that while work disputes may arise from time to time, employees should not resort to fights to resolve them, and employers should not have to bear the cost of injury.

As such, employers will generally not be liable under WICA to compensate workers who are injured in work-related fights, except in certain scenarios such as when the worker was a victim and did not participate in the fight, or when he was injured while exercising private defence, or instructed to break up the fight, safeguard life/property or maintain law and order.

c) Expanding scope of compensable diseases

Currently, diseases are compensable only when they are listed in the Second Schedule, for example noise-induced deafness, or as a result of a specific accident at work. With the change, diseases contracted due to work-related exposure to chemical or biological agents will be compensable. The Second Schedule will also be refined to include a new occupational disease (exposure to excessive heat), remove SARS and Avian Influenza and broaden scope of some of the existing occupational diseases.

d) Disallowing work-related exclusion clauses

Work-related exclusion clauses, except pertaining to asbestos, will be prohibited for the purpose of WIC insurance. With these changes, insurers will be liable to make payment of the compensation even if work-related exclusions exist in the policy. Insurers will continue to be able to seek contractual recovery from the employer if such recovery is allowed in the insurance policy.

e) Clarifying the liability of employer’s insurer to pay when there are multiple insurance policies

Certain industries have the practice of having multiple parties provide insurance coverage for workers. When there is an accident, the various insurers may dispute liability and compensation to the injured worker is unduly delayed. With the change, where there are multiple work injury compensation insurance policies, the employer’s insurance policy will first be used to satisfy a claim. MOM will allow third parties to pay compensation as long as they convey in writing to MOM their intent to pay compensation on behalf of the employer’s insurer, before the notice of assessment is issued.

f) Clarifying the timeframe for filing a claim if one wishes to claim under WICA after having filed a common law claim earlier

Injured employees have up to one year from the date of the accident to decide whether they wish to file a claim under WICA. Claimants who filed a common law claim but subsequently wish to file a claim under WICA have to do so within one year of accident. If the claim was made after this one year timeframe, it will not be admitted under WICA.

3. Please refer to Frequently Asked Questions (FAQ) for more details of the changes.

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