Adequacy of Increased Workplace Injuries Compensation Amounts to Incentivise Businesses to Prioritise Investments into Safety Pracitces

Mr Yip Hon Weng asked the Minister for Manpower (a) whether the increased maximum compensation for workplace injuries by 2025 is high enough to incentivise businesses to significantly prioritise investments in safety practices and injury prevention efforts, rather than viewing accidents as an acceptable financial risk with lower costs; and (b) what monitoring and evaluation mechanisms are in place to assess the impact of the increased compensation on workplace safety outcomes and employer behaviour.

The intent of raising the compensation limits under the Work Injury Compensation (WIC) Act is to keep pace with wage growth and rising healthcare costs, rather than to incentivise employers more to prioritise investments in safety measures.

To incentivise employers to prioritise workplace safety, employers' past WIC insurance claims data and safety records have been made available to WIC insurers since 2021. This facilitates insurers to differentiate insurance premiums, so employers with better safety records can enjoy lower premiums. The Ministry of Manpower (MOM) has observed that insurers are indeed differentiating premiums accordingly, where companies with poorer safety records are paying higher WIC insurance premiums.

Apart from cost considerations, it is important for top management to prioritise investments in safety practices and injury prevention efforts for better workplace safety and health (WSH) outcomes. To align business interests with WSH outcomes, chief executives or board of directors of companies in higher-risk industries will be required to attend the Top Executive WSH Programme to enhance their WSH capabilities from 1 March 2024. Enhancements to the WSH requirements in public sector construction and construction-related projects, which will take effect for tenders called on and after 1 April 2024, will also align incentives among developers, main contractors and sub-contractors to collectively improve safety practices. These enhancements include a WSH Bonus Scheme for public sector projects with project sum at or above $50 million to incentivise strong safety performance and culture throughout the construction phase.