Financial Liabilities of Employer towards Employee When an Occupational Accident Occurs December 21, 2017 Labor & Employment Conditions for an accident to be deemed an “occupational accident” Pursuant to the provisions of the 2015 Law on Occupational Safety and Hygiene, an accident will be considered an “occupational accident” if it satisfies the following 03 conditions: (1) The victim of such accident is: (a) An employee working under a labor contract; probation contract; traineeship, or apprenticeship; (b) An official, public servant, public employee, or employee working in the People’s Armed Forces; (c) An employee working for an employer without a labor contract; and (d) A Vietnamese employee working abroad under a labor contract or a foreign employee working in Vietnam. (2) The accident causes impairment to any part or function of the body or results in death: The percentage of work capacity impairment due to injuries, illnesses, disabilities and occupational diseases is determined pursuant to the principles provided in Joint Circular No.28/2013/TTLT-BYT-BLDTBXH dated September 27, 2013 of the Ministry of Labor, Invalids and Social Affairs (which was amended and supplemented by Circular No.15/2016/TT-BYT and Joint Circular No.21/2014/TTLT-BYT-BLDTBXH). An employee who suffers from an accident shall be given a medical examination to determine the percentage of work capacity impairment. A specific percentage is presented in a written conclusion by the Board of medical examiners. (3) The accident occurs during the working process, associated with the performance of the job or labor duty: This is the most important condition in determining whether an accident is an occupational accident. An accident which occurs in one of the following cases is considered as satisfying this condition: (a) At the workplace and during working hours, including time periods used for performing daily living activities at the workplace or during working hours, which are permitted by the labor law and internal regulations of the manufacturing or business facility. This includes time taken during breaks, having mid-shift meals and benefit-in-kind foods, maintaining menstrual hygiene, taking showers, breastfeeding, and/or going to the restroom/toilet. (b) Outside the workplace or outside of working hours while performing jobs as requested by the employer or any person authorized in writing by the employer to directly manage the employee; (c) Commuting from the residence to the workplace or from the workplace back to the residence within a reasonable timeframe and route. At the time of this report, there have not been any provisions guiding the definition of “within a reasonable timeframe and route”. However, referring to a number of expired provisions, “within a reasonable timeframe and route” can be interpreted as follows: (i) Decree No.152/2006/ND-CP (expired on January 01, 2016): • “Reasonable timeframe” is the necessary period of time to (i) arrive at the workplace before working hours start or to (ii) return after the working hours end. • “Reasonable route” is the route taken regularly to commute from a permanent or temporary residence to the workplace, and vice versa. (ii) Circular No.03/2007/TT-BLDTBXH (expired on February 15, 2016): The accident occurs on the route of commute from residence to workplace within the daily time and route which the employee regularly commutes from residence to workplace, and vice versa. Under the above provisions, the determination of whether an accident truly occurs “within a reasonable timeframe and route” shall very much depend on the judgment of the occupation accident investigators. The two cases below illustrate how this determination is made: • Case 1: Mr. A, on his way from the office to his home, discovered that he had left his key at the office. As he returned to the office to collect it, he had an accident. Mr. A’s accident occurred outside of the workplace and outside of working hours, on a route that Mr. A regularly uses to commute from the workplace to his residence. However, the reason Mr. A returned to the office was that he forgot his key, which was unexpected, so the time that Mr. A returned to the office cannot be counted as a “reasonable time”. Therefore, Mr. A’s case is not an occupational accident because such accident did not occur “within a reasonable timeframe and route”. • Case 2: Ms. B, when working hours ended, went to pick up her child at school before going home and was in an accident on the way from her office to the school. The question is whether the route and time Ms. B took to travel from office to her child’s school can be considered reasonable? Utilizing the key terms of “regularly” and “necessary” in previous provisions, if picking up her child is Ms. B’s daily task after work and the time for waiting to pick up her child also lasts as usual, Ms. B’s accident can be considered as having occurred “within a reasonable time period and route”. However, if picking up the child is unexpected (e.g. regularly, it is Ms. B’s husband who picks up her child, but due to another obligation, Ms. B goes to pick up her child on that particular day), then Ms. B’s case does not satisfy the key terms of “regularly” and “necessary” (and therefore, it is not considered an occupational accident). Conditions for determining whether an employee is entitled to financial regimes paid by the employer upon the occurrence of an occupational accident In order to qualify for the financial regimes paid by the employer when an occupational accident happens, the employee must satisfy the following 03 conditions: (1) The accident is determined to be an “occupational accident” as analyzed in Item 1 above. (2) The employee suffers from a reduction in work capacity of 5% or more due to an occupational accident. (3) The employee does not fall into one of the following categories: (a) The accident occurs due to conflict between the employee (the victim) and the person who caused the accident, which does not relate to the performance of the job or labor duty; (b) The accident occurs because the employee purposely destroys his/her own health; or (c) The accident occurs due to the use of drugs or other addictive substances which violate the provisions of the law. Financial compensation that the employer shall pay to the employee when an occupational accident occurs 3.1. Financial compensation that the employer shall pay to the employee when an occupational accident occurs The employer shall pay the following sums to the employee when he/she suffers an occupational accident or his/her relative suffers an occupational accident: (1) Medical expenses for first aid and emergency services until treatment stabilizes the employee’s injury from the occupational accident, as follows: (a) All medical expenses for employees who do not participate in medical insurance or co-payment expenses and expenses not covered by medical insurance for employees who participate in medical insurance. (b) The examination fee to determine the reduction of work capacity for cases in which it is concluded that work capacity has been reduced by less than 5% (in case the employer introduces the employee to examination at the Board of medical examiners). (2) The salary during the time the employee has to take leave throughout the time of treatment and recovery of his/her work capacity. (3) Compensation or allowance sums. In the event that the employer previously purchased accident insurance for the victim of an occupational accident from an insurance company, the victim of occupational accident shall be entitled to the sums of compensation and allowance according to the contract signed with the insurance company. If the sum of money paid to the victim of an occupational accident by the insurance company is lower than the statutory amount of compensation/allowance, the employer shall pay the deficit so that the total sum of money received by the victim of an occupational accident or his/her relatives shall be at least equal to the statutory amount of compensation or allowance. (4) The sum of money equivalent to the insurance regime of occupational accident and disease paid by the Occupational Accident and Disease Insurance Fund (under the Social Insurance Fund), if the employer does not pay occupational accident and disease insurance for the employee who is subject to compulsory social insurance in accordance with the law of social insurance. 3.2. Distinguishing the compensation liability from the allowance liability of the employer when an occupational accident occurs When an occupational accident happens, depending on each case, the employer shall pay a sum of compensation or allowance for the employee based on the employee’s own fault in causing such occupational accident. (1) Compensation Compensation shall be paid if the occupational accident was not due to the employee’s fault or was partially due to the employee’s fault. The compensation amount shall be based on the percentage of work capacity impairment, specifically: Percentage of work capacity impairment The lowest amount of compensation 1 From 0% to under 5% No compensation 2 From 5% to 10% 1.5 times the monthly salary 3 From 11% to 80% 1.5 times the monthly salary for the first 10% plus 0.4 times the monthly salary for each additional 1% counted from the 11th % 4 From 81% and above or the employee dies 30 times the monthly salary Notes: • Should the occupational accident occur while the employee is performing duties or complying with the employer’s regulations/orders outside the scope of the agency, enterprise, organization, or cooperative, if the accident is due to the fault of another or the person causing accident cannot be identified, the employer still is obligated to compensate the employee for the above amounts. • Should the accident occur on his/her way from the residence to the working place or from the working place to the residence by a reasonable route and timeframe, should it be another person’s fault in causing the accident or the person causing accident cannot be identified, the employer shall only pay allowance to the employee. (2) Allowance Allowance shall be paid in the event that the occurrence of the occupational accident is fully due to the fault of the employee. The lowest allowance amount shall be equal to 40% of the compensation amount stated above. – Written by LE & TRAN | Vietnam’s Premier Business Litigation Firm This insight is quoted from the Vietnam Labor Law Review (December 2017 – January 2018), you can download and read the full file of Vietnam Labor Law Review (December 2017 – January 2018) here.