Would Employer Be Liable When Its Employee’s Injuries Was Caused By the Influence of Alcohol at the Time of Accident?



The Employees Compensation Ordinance (Cap 282) (“ECO”) sets out the basis upon which the employee can claim employees compensation. Generally, the employer is liable to pay employees compensation even if the employee is negligent.  This article will discuss firstly the exception under s.5(2)(d) when the worker was at the time of accident under the influence of alcohol, and secondly the interaction between s.5(2)(d) and s.5(3) regarding “serious and wilful misconduct” on the part of the employee.

Section 5(2)(d)

S.5(2)(d) stipulates that no compensation shall be payable in respect of “any injury, not resulting in death or serious and permanent incapacity, caused by an accident which is directly attributable to the employee’s addition to drugs or his having been at the time of accident under the influence of alcohol”.

In Yuen Yuk Ying v Chan Kam Wing trading as Kam Bo Real Estate Co. CACV 126/1996, the employee drank some beer before he drove home using the van provided by his employer.   In the course of driving, he had a traffic accident and died of serious multiple injuries. There is no direct evidence as to how the accident occurred.  The manager with whom the employee drank beer said that the employee appeared sober and composed throughout.  The Court of Appeal held that the only possible inference from the facts was that the accident was caused by an error of judgment on the part of the deceased employee, an error of risk of which had been enhanced by his ingestion of alcohol at a level liable substantially to impair that judgment.   The Court considered that as the bar to compensation under s.5(2)(d) does not operate where the injury resulted in death, the widow of the deceased employee was entitled to compensation.

In Ma Shiu-wai v Chun Fai Container Transportation Company Limited DCEC 877/2002, the employee was a container lorry driver.  The lorry overturned while he was driving.  As a result, the employee sustained multiple injuries. The employee’s incapacity was assessed at 1%.  Evidence revealed the employee had consumed alcohol before he started to drive the lorry but he attributed the accident to the bumpy road. The judge was satisfied that the accident was caused because the employee had failed to react to the road condition because his judgment had been impaired by his consumption of alcoholic.  The Court held that the employer was not liable to pay employees compensation to the employee because of the provision in s.5(2)(d).

The interaction between section 5(2)(d) and section 5(3)

Regarding “serious and wilful misconduct”, s.5(3) provides, “… where it is proved that the injury to an employee is attributable to the serious and wilful misconduct of that employee, … any compensation claimed in respect of that injury shall be disallowed; except that where the injury results in death or serious incapacity, the Court on consideration of all the circumstances may award the compensation provided by this Ordinance or such part thereof as it shall think fit.”

In Yuen Yuk Ying above, the Appeal Court considered that it cannot be the intention of the legislature to require the court to treat the deceased employee’s ingestion of alcohol as serious and willful misconduct. It is because s.5(2)(d) treats the influence of alcohol on the employee as irrelevant, in the case of a fatal accident, to the right to claim compensation and therefore s.5(3) can have no application in such case.

Nevertheless, the Court went on to consider the interaction between s.5(2)(d) and s.5(3) in case its above view was wrong. The Court then cited a Scottish case where an employee’s drunken condition rendered him incapable of consulting his own safety and in consequence of which the accident happened. It was held in the Scottish case that the accident was due to the employee’s serious and willful misconduct.  After citing this case, the Appeal Court came to the conclusion that if the employee’s job is one which involves driving a motor vehicle on a highway, any degree of impairment, due to the voluntary ingestion of alcohol, which has the effect of dulling the driver’s senses, slowing his reaction time and hampering his motor skills does constitute serious and willful misconduct. The Appeal Court went on to quote and agree with a decision by a Canadian Workmen’s Compensation Act Tribunal: “when the job is driving, in our view, serious and willful conduct must be interpreted with no tolerance for impairment by drugs or alcohol…”.

If s.5(3) does apply, the Appeal Court held that the expression “in all the circumstances” should be construed widely, and the Court is entitled to take into account all the circumstances of the case as revealed by the evidence, all the circumstances peculiar to the accident and all the circumstances peculiar to the victim.

Eventually, the Appeal Court held that, whether it is right or wrong as to the interaction between s.5(2)(d) and s.5(3), it would exercise its discretion in favour of allowing the widow of the deceased employee the compensation without any deduction.


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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
Published by ONC Lawyers © 2017