Employee Compensation, a Legal Question Provided to the Engineers - Research Paper Example

?Worker’s Compensation: a legal issue faced by engineers “One has to look out for Engineers - they begin with sewing machines and end up with the atomic bomb (Pagnol)” An Engineer, like all other professionals, deals with a number of legal issues in his day-to-day work-life1. However, worker’s compensation is a rather specific legal issue which is faced mostly by Civil Engineers especially in common law countries. Worker’s Compensation is a mechanism for providing cash wage benefits and medical care to victims of work-connected injuries, and for placing the cost of these injuries ultimately on the consumer, through the medium of insurance, whose premiums are passed on in the cost of the product (Larson, 1952). In civil engineering, there are frequent cases where injuries are borne by the employees (being the workers) due to industrial accidents and other such hazards related to the construction of various projects2. Prior to worker’s compensation, an employer was held to several narrowly defined duties of care for the protection of his employees (Mitchelle, 1976). The employers seldom received their due after having borne the injuries mainly because of the unfortunate prevalence of the doctrine of contributory negligence, the fellow-servant rule and voluntary assumption of the risk in the common law countries. In order to tackle this discriminatory issue of industrial liability in case of injured employees, the concept of Workmen’s Compensation was introduced. It is now popular in many countries namely the United States of America, Brazil, Germany, India, UK etc. In the United States of America, the Workmen’s Compensation laws are created differently by various states however the fundamentals of all the acts remain the same. There are a number of characteristic properties that are common in all the laws of Workmen’s Compensation – (a) automatic entitlement of the employer to compensation in case of personal injury borne due to an industrial accident (b) Employee’s contributory negligence or employer’s freedom from the fault does not lessen the former’s rights (c) Only employees are covered and not independent contractors (d) Cash benefits, Medical expenses etc. are provided and benefits for dependents are counted in case of death of the employee (however maximum and minimum are imposed) (e) the employee or his dependents forfeit the right to personally sue the employer for the loss (f) Right to sue third persons in case of negligence on their part prevails (subject to conditions) (g) administration is in the hands of administrative commissions (h) the employer is required to secure his liability through private insurance etc. so that the liability of compensation passes to the consumer in the price of the product (Larson, 1952). Initially a few problems were recognized in the U.S. regarding the Worker’s Compensation as apparently it disregarded the Fourteenth Amendment’s prohibition against taking of property without due process of law and deprived both parties of the freedom of contract. This problem was resolved by the New York Workmen’s Compensation Act of 1916 after the famous case of New York Central Railroad Company v White3. The specific laws which deal with construction safety hazards in the U.S. are administered by governing regulatory body called Occupational Safety and Health Administration (OSHA)4. Under the Occupational Safety and Health Administration, the employers have the responsibility to provide a safe workplace to their employees. The Occupational Safety and Health Act of 1970 has defined certain responsibilities for the employers and also has defined penalties in case of violation of the duties5. In order to start a construction or even before entering a contract, an engineer has to keep in mind all the legal aspects of workmen’s compensation. Even though the Engineer may cover up his costs by ultimately shifting it to the customer in form of price of the product, he has to initially formalize the insurance for his employees. In case the engineer does not formalize the insurance, he is likely to suffer the consequences of an industrial accident because only workmen’s compensation insurance compels the employee to forfeit his right to sue the employer personally for damages. Even though the chances of an employee prevailing in a compensation claim are low (because of contributory negligence etc.), in case he prevails, the employee may face problems shifting his costs to the consumer. In order to claim compensation, there are a few tests (which distinguish such compensation from torts) and are to be kept in mind by the Engineer because those are his tools of defense. For instance, the test of liability has to be satisfied which is determined by the question whether the injury was work-connected or not? It is pertinent to note here that this test is conducted in order to estimate boundaries of the compensation and not to play the blame game. The employee’s rights will remain uninjured by his contributory negligence (clumsiness etc.) in the case of insurance by way of workmen’s compensation (Larson, 1952). It is important for an Engineer to consider the possibility of a third-party, in an action by the employee, being able to recover against him in case of his fault in the accident (occupational or industrial as the case may be). In order to understand this situation better, a brief study of the case of American District Telegraph Co. v Kittleson6 will be helpful. In this case Kittleson was an employee of Armour and Company and the American Telegraph Company had contracted with Armour to repair a signal system. One of American’s employees fell through a skylight and landed on Kittleson, injuring him severely. Kittleson accepted Workmen’s Compensation from Armour and also sued American, as he was entitled to do under the Iowa Act. The negligence alleged was that of American’s employee in failing to ascertain whether the skylight would carry his weight. American brought a third-party complaint against Armour, asserting that the injury was primarily due to Armour’s negligence in allowing the skylight to become so encrusted with dirt that it was indistinguishable from the roof around it. Armour moved to dismiss the third-party complaint on the ground that Armour’s compensation liability was exclusive (American District Telegraph Co. v. Kittleson et al., 1950). In this case, the Court of appeals held that American can hold Armour liable for the compensation that American had to pay to Armour’s employee. “In such cases, it is observed that there is a distinction between recovery over in the form of contribution and recovery over in the form of indemnity. The right of contribution is based either upon contribution-between-tortfeasor statutes or upon common law or admiralty contribution, where available and applicable. The right of indemnity is based upon an independent duty or obligation owed by the employer to the third party, either as the result of express contract or as the result of an implication raised by law” (Larson, Workmen's Compensation: Third Party Actions, 1970-1971). It has been established, so far, that the Engineer’s have to take precautionary measures regarding Workmen’s Compensation Acts. As has been pointed out by many intellects, Workmen’s Compensation Acts place upon a burden on the Engineers and other such employers for an accident which may be wholly inevitable (Wambaugh, 1911). Therefore, the Engineers face this legal issue on a large scale and that it is an unnecessary burden that they cannot escape. However, Workmen’s Compensation is not as flawless and as smooth (administratively speaking) as it may seem to a layman. The fact that workmen’s compensation is primarily a subdivision of social insurance, intended to protect a sphere of population that is subjected to substandard living environment by a typical segment of the modern society, designs quite a vague guide for the real intention of a modern and ideal workmen’s compensation program. “The realities of the task to be performed serve possibly as much more reliable guide posts towards the ultimate goal of a socially adequate and workable system. It is perhaps wise to aim high and think of workmen’s compensation primarily in terms of adequate if not full social rehabilitation of the injured worker rather than mere as a ‘compromise in the public interest’ (Riesenfeld, 1951-1952)”. It is pertinent to note here that the Engineers cannot get away from the liability by merely contending that they are wholly outside the chain of causation in cases where the accident is completely inevitable. The employer is not completely outside the chain of causation that results in the incident because he knowingly and willfully participates in creating the master-servant relationship as to such business enterprise. “A man who plans a suspension bridge or a tunnel, for example, knows that experience tables tell in advance almost as well as after the fact how many lives must be lost. Both employer and employee by entering upon an enterprise in company assent for their own business purposes to the creation of a relation which will inevitably result in accidents and will thus cast burdens upon the society” (Wambaugh, 1911). In spite of the burden borne by the Engineers of the Insurance Fund for his employees, they are better off economically because of Workmen’s Compensation Act. In cases where the accident is in fact caused due to employer’s negligence or ignorance, the compensation claims will cost him much more if Workmen’s Compensation is not in force. This is mainly due to the fact that the remedy provided to an employer under the workmen’s compensation is not a total restitution for damages but is in fact partly afforded by the statute (in case the employer is not in any way legally at fault) and partly by the employer himself which is not usually compensable in torts. However, in cases where the employer has indeed participated in the negligence or ignorance, the partial compensation that he has to pay under the statue is much lesser than other tortious claims that might be filed against him by the employee – as the employee forfeits his right to file a tortious claim against the Engineer under the workmen’s compensation act and also he never gets total restitution for damages (Mitchelle, 1976). Nevertheless, the estimation and consequent establishment of proper scales for determining the measure of damages is an important but difficult task and is often dealt with many problems. In case of compensatory damages, the intention is to put the injured (plaintiff) back to his original economic position i.e. his economic condition before the accident had happened7. However, the problem with Workmen’s Compensation is that “they are not designed to provide for full compensation of all injurious consequences of the injury expressible in monetary terms. The merely aim at an alleviation of the deterioration in the living standards of the victim and his family flowing from the injury. They are not as much predicated on the idea of need as they are on the idea of loss” (Riesenfeld, 1951-1952). In spite of the above mentioned legal issues, the Engineers are in a better position than a hypothetical situation where they might have to pay compensation to workmen even for non-occupational injuries. It is a recent study where the idea of paying compensation to workmen for even non-occupational accidents is being debated. It is important to study the case of O’Leary v. Brown-Pacific-Maxon briefly in this context. In this case, an employee had spent his afternoon at the employer’s oceanfront recreation center waiting for the company bus to take him from the area when he saw two men standing on a reef outside the boundaries of the recreation area signaling for help. The employee was forbidden by his employer from going into the area where those men were standing. Nonetheless, he went there and while trying to rescue them, he himself drowned in the water-body. The U.S. Supreme Court held that “All that is required is that the obligations or conditions of employment create the zone of special danger out of which the injury arose” and consequently ordered that the employee was covered by the relevant compensation act (O'Leary v. Brown-Pacific-Maxon, 1951). Three famous arguments that have been made for amendment of the workmen’s compensation in order to meet several developing needs of the economy properly prescribe as to how exactly a workmen’s compensation should be designed. These arguments are – “(1) There should be special occupational injury benefits related to earnings as an incentive for men to engage in hazardous employments vital to the community; (2) A man disabled during the course of his employment has been disabled while working under orders, and this constitutes a special claim in relation to non-occupational injury or sickness; (3) Only if special provision is made for the results of industrial accident and disease, irrespective of negligence, would it appear possible to limit the employer’s liability under the common law” (Beveridge, 1942). While entering into a contract, an Engineer might not foresee as many problems relating to legality of workmen’s compensation as have been pointed out in this paper, however, it is one of the basic stipulations that an Engineer (or any other professional for that matter) should keep in mind while hiring employees or assigning them hazardous projects. It is always important to prevent any industrial or occupational hazards from taking place but as and when such a situation arises it is both economically and morally preferable for both the employer and the employee to be prepared for the worst. The most economically beneficial way of tackling the cases of industrial/occupational accidents is by entering into workmen’s compensation as both the employer and the employee are better off in an equitable manner. However, industrial and occupational hazards should be avoided as much as it is possible for human kind as they already have a horrifying history8. “The safety and happiness of society are the objects at which all political institutions aim, and to which all such institutions must be sacrificed” (Madison, 2011). Bibliography American District Telegraph Co. v. Kittleson et al., 14007 (United States Court of Appeals Eight Circuit March 7, 1950). O'Leary v. Brown-Pacific-Maxon, 267 (United States Supreme Court February 26, 1951). Beveridge, W. (1942). Social Insurance and Allied Services. London: HMSO. Bradley, O. (2011, February 1). Thinkexist.com Quotations."Prudence Quotes". Retrieved March 19, 2011, from Thinkexist.com Quotations Online: http://einstein/quotations/prudence/ Larson, A. (1952). The Nature and Origins of Workmen's Compensation. Cornell Law Quarterly, 206. Larson, A. (1970-1971). Workmen's Compensation: Third Party Actions. Northwestern University Law Review, 352-353. Madison, J. (2011, February 1). Thinkexist.com Safety Quotes. Retrieved 19 March, 2011, from http://einstein/quotations/safety/ Mitchelle, C. (1976). Products Liability, Workmen's Compensation and the Industrial Accident. Duquesne Law Review, 350. Pagnol, M. (n.d.). BrainyQuote.com. Retrieved March 19, 2011, from http://www.brainyquote.com/quotes/quotes/m/marcelpagn137711.html Riesenfeld, S. A. (1951-1952). Basic Problems in the Administration of Workmen's Compensation. Minnesota Law Review, 119. Wambaugh, E. (1911). Workmen's Compensation Acts: Their Theory and Their Constitutionality. Harvard Law Review, 129-139. Read More