An Investigation into occupational accident compensation for construction industry in Sri Lanka : perspectives of insurers and enforcing authorities

Abstract

The construction industry is identified as one of the most vulnerable industries to occupational accidents which always lead to compensation. On the other hand, current workmen’s compensation legislation does not fulfil some of the primary requirements of the construction industry such as covering all wage scales and accounting for fluctuations in the economy. Hence, there is a need for a more suitable compensation mechanism for employees of the industry. Approaching the issue of compensation with these insights, the types of accidents in the construction industry which lead to compensation were investigated through a literature synthesis. Furthermore, the current compensation mechanisms of other jurisdictions in Asia like Singapore, Malaysia, Korea, Hong Kong, and India were also investigated to understand their nature and dynamics. Thereafter, the drawbacks of the current Sri Lankan compensation mechanism were investigated through semi-structured interviews with three authorised officers from the Department of Labour and five insurance executives. These interviews shed light on a number of drawbacks such as not considering the age of the employee who is the victim, higher range of wage limits, employer’s financial capacity and duration of the employment of the victim. The discovery of these issues led the researcher to make such recommendations as making insurance mandatory by legislation, enforcing a funding arrangement to which both parties contribute and which is governed by a central funding board and making it a requirement for a buyer of a product to have a proper compensation mechanism for workers to be in place. In a nutshell, it can be emphasised that better workmen compensation does not only mean getting maximum benefits to the employee, but also being fair to all the parties while securing the right to live and the right to work of the workers.