MR. W. G. STEPHENSON (INDUSTRIAL ACCIDENT) (Hansard, 20 February 1979)

§ Sir Timothy Kitson (Richmond, Yorks)

I am grateful for the opportunity of raising on the Adjournment the problem of compensation for industrial accidents overseas, specifically in the case of Mr. W. G. Stephenson. Seldom have I come across a constituency case that is so unfair and unjust. Mr. Stephenson suffered an accident while working overseas. He is employed by Sunter Brothers Ltd. of Northallerton, a firm of heavy haulage contractors that moves heavy loads, often enormous pieces of machinery. Much of the work is moving these loads overseas for the British export market.

Mr. Stephenson was delivering to Saudi Arabia part of a £7½ million order in October 1976. In addition to the value of the order, there was a charge of about £800,000 for the cost of transportation. When the accident occurred, he was lifting some heavy timbers that were supporting the load and he injured his back.

Following Mr. Stephenson's return from Saudi Arabia, the accident was entered into Sunter's accident book on 18 October 1976. Mr. Stephenson reported sick to his doctor. Although he saw him for his back complaint on several occasions, he was not laid off work until 22 May 1978. Previously he had suffered no back problems. I have spoken to Mr. Stephenson's GP. He has confirmed that the damage to Mr. Stephenson's back was due to the accident overseas.

Mr. Stephenson is one of those people who would continue to struggle on and work if he possible could. Although he had a good deal of pain and trouble, he continued to work, not wishing to leave his job.

While delivering the load to Saudi Arabia, Mr. Stephenson was paying his insurance contributions. He and his other workmates were not aware that if anything untoward happened on this job they had no insurance cover.

After he was laid off work, Mr. Stephenson was told that, because of the date on 388 which he was laid off, which was in excess of 26 weeks after the date of the accident, and also because the accident was in Saudi Arabia, there was doubt as to whether he would be entitled to disablement benefit. The company was under the impression that long-term benefits were still unaffected.

Mr. Stephenson then decided to take the matter to a tribunal. He was supported by his union representative. The tribunal, although sympathetic, turned down his claim for industrial injuries benefits. As a direct result of a question from the union representative, it was stated that any possible claim for disablement benefit would not be allowed. The decision of the tribunal was subsequently upheld on appeal. Mr. Stephenson's counsel was advised that although he could appeal further to the national insurance commissioner, he would not—because of the tribunal's decision—be able to claim any compensation.

This has created difficulties not only for Mr. Stephenson but also for the firm that employs him. When it wants to send further exports to countries which do not have reciprocal agreements, the men in the company may well ask what their position is. Although a firm can cover for death or total disablement in the form of a large sum, it cannot cover for partial disablement. This may well mean that a man loses his job completely or is downgraded in his work. This situation is not only unfair but is totally unacceptable. A firm can insure for death or total disablement benefits for its employee while he is working overseas. It can insure for the difference between sickness and industrial injury, but it has great difficulty in insuring against partial disablement.

If Mr. Stephenson had been able to claim a disability pension, it would have been reviewed from time to time—probably from year to year—and it would not have been taxed or means-tested. As his counsel advised him, if industrial injuries benefits are not allowed, he is unable to claim any disability benefit. Mr. Stephenson's dependants would have been better off if he had died or suffered total disablement because of the accident.

Before the accident Mr. Stephenson's average earnings were £101.58p a week. For the 15 weeks that he was sick his earnings would have been about £1,523. 389 The sickness benefit that he received over the period totalled £420. The insurance payments received through the company amounted to £180. In effect, this means that in this period he lost £923. Mr. Stephenson, who is likely to be in a corset for some time has returned to work. It will have to be seen whether he is able to do the work that he did before the accident occurred. It may be difficult at this stage to get a fair and equitable deal for Mr. Stephenson.

After I approached the Department of Health and Social Security, the Minister wrote to me on 19 December as follows: It has always been a fundamental provision of the industrial injuries scheme that its benefits are not payable where the accident happens outside Great Britain. Special exemption is, however, made to cover people such as mariners and airmen and the restriction may also be lifted where the accident happens in a country within the European Economic Community or one with which we have reciprocal agreements covering this point. This general restriction of cover to accidents occurring in Great Britain has applied because of the difficulties which could be expected to arise in the generality of cases in obtaining evidence about accidents abroad, in deciding whether accidents arose out of and in the course of employment and in the control of claims for persons who are abroad. A further reason for the restriction is that the scheme is designed to operate within the framework of legislation and conditions obtaining in Great Britain, that is to say, where high standards of safety and industrial practice prevail. Indeed, what Mr. Stephenson was doing in Saudi Arabia is the sort of job that he has done in so many different parts of the United Kingdom.

The Minister's letter went on to say: It has always been considered that the most sensible way to extend the scope is by way of reciprocal agreements where developments in particular countries are such as to make such agreements practicable. Indeed, apart from the countries within the EEC, reciprocal agreements giving cover for industrial injuries are in force with sixteen countries. Employers are strongly advised to make their own arrangements to provide insurance cover against sickness, disablement and medical treatment for their employees sent to work abroad, particularly where they are sent to a country with which we do not have a reciprocal agreement and where medical and hospital treatment is not State provided. There is, as you know, no reciprocal agreement with Saudi Arabia. A more general extension outside these agreements to cover all industrial accidents abroad raises very considerable practical and administrative difficulties relating to establish 390 ment of title and control of claims, especially in countries where there is no State or central scheme in existence. While I would not rule out the possibility of some further limited extension of cover for accidents abroad if these difficulties could be overcome, such an extension would have to be considered against a background of other competing claims for improvements in the social security field generally and the industrial injuries provisions in particular. I accept what the Minister wrote to me in that letter, but I think that he should consider whether it is right and equitable to have a system under which, had Mr. Stephenson returned to his firm in Northallerton and claimed to have caused the injury to his back as he jumped from the cab of the lorry in which he had taken a very important export load to Saudi Arabia, that would have entitled him to all the benefits which have now been disallowed.

Surely a system as crazy as that, which can encourage a man to cheat in order to get his proper entitlement, cannot be a system that should continue to operate. Because of the honesty of this particular individual, he will lose substantially in the long term. As his employer said to me only last Saturday morning, "It could not have happened to a nicer man."

I think that the Minister should look at the whole position again to see whether something can be done to help this man.

§ The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins)

I thank the hon. Member for Richmond, Yorks (Sir T. Kitson) for raising this question on the Adjournment. He has courteously and fairly outlined the issues. I am aware of the pressures that exist to extend cover for industrial accidents abroad where the employee is sent in furtherance of his employer's export contracts, and I shall do my best to deal with the issues that he has raised.

Accidents occurring abroad were originally excluded by statute, because it was recognised that there would be great difficulty in arranging adequate investigation and control of claims, especially in respect of accidents occurring in the more remote and less industrially advanced parts of the world. It has always been considered that the wisest course was to extend cover to accidents occurring in a particular country only where it would 391 be possible to obtain the full co-operation of the country in the investigation and control of claims in respect of accidents happening there. Extension has, therefore, been achieved only gradually, as and when it has been possible to enter into reciprocal agreements with additional countries from which such co-operation could be obtained. This is a continuing process, and my Department actively acknowledges its importance. But opportunities for further extensions via reciprocal agreements are limited because, in practice, such agreements can be made only with Governments of countries which operate employment injury compensation schemes that are State-controlled, as is our own industrial injuries scheme.

This approach also recognises the fact that most employers can and do take steps to arrange commercial insurance cover for their employees who are sent abroad to work, and such cover can be more comprehensive than that available under the industrial injuries scheme. For example, it may include facilities for hospital and medical treatment where these are not provided as a matter of course in the country in question. The publicity leaflet issued by my Department draws attention to this matter.

However, I have noted the hon. Gentleman's remarks about the difficulty of obtaining commercial insurance against such a contingency and I shall consider whether there is any further advice that my Department can offer. I hope that will be helpful.

I can summarise the present legal position by saying that there are four categories of circumstances in which industrial injuries cover is provided under our social security scheme for accidents happening outside Great Britain. The cases covered are, first, where the injured person is a mariner or airman; secondly, where a person was injured during his employment on the continental shelf; thirdly, where he is sent to work temporarily in a country with which there are reciprocal agreements whereby the accident abroad is treated as having occurred in Great Britain—there are at present 16 such agreements; and, fourthly, where the accident happened in an EEC country. This, then, is the general law on the subject.

I now turn to the case to which the hon. Gentleman has drawn attention, and 392 about which he recently wrote to my right hon. Friend. The hon. Gentleman's constituent met with an accident in Jeddah, Saudi Arabia. He was employed in Saudi Arabia by a British firm of haulage contractors, and the accident arose during his employment there. Subject to satisfaction of the normal conditions for entitlement, Mr. Stephenson could have qualified for benefit under the industrial injuries scheme of this country only if the accident had taken place in one of the countries with which we have an appropriate agreement. Unfortunately for Mr. Stephenson, Saudi Arabia is not such a country, and the adjudicating authorities which decide claims for benefit had no alternative but to disallow his claim.

I should explain that Saudi Arabia is a country that does not have a State scheme of social security comparable to ours and so, at present, it is not possible to enter into a reciprocal agreement with that country.

The statutory exclusion from industrial injuries benefits, in some instances, of accidents occurring abroad has, from time to time, been criticised on a number of grounds. In particular, it is argued that the exclusion causes hardship to those injured—a point that the hon. Gentleman forcefully made—and at the same time discourages the development of exports.

My right hon. Friend and I take these objections very seriously and are anxious that all practicable steps should be taken to overcome them. It would be a happy solution if we could provide industrial injuries cover for all work accidents that happened to British subjects sent abroad, irrespective of the country in which the accidents happened. Unfortunately, we may not yet have reached the stage at which universal coverage would seem practicable.

There are several factors that militate against a general extension of cover, under present conditions. It would seem wrong, in principle, for this country to accept responsibility for accidents happening in countries where the factory legislation, the general level of the measures applied by the better employers, the road safety regulations and so on were less effective than they were in this country. It would also be more difficult to obtain information about the details of accidents abroad, and the adjudicating 393 authorities would frequently have less than adequate evidence on which to base their decisions on such matters.

It is also arguable that when a person has gone abroad temporarily in connection with his employment, it may be more difficult in some circumstances to draw a clear line of demarcation between his hours of employment and the rest of his time. There are other problems. If cover were given in all cases where Britons suffered industrial accidents when sent overseas, there could be difficulties arising from double compensation, if the injured person also qualified for compensation under the law of the country where the accident happened. In general, there would also be difficulties relating to the time limits for claiming benefits.

I am aware of the fact that some of these arguments may seem not to carry very much weight. Why, for example, should an injured employee suffer loss of benefit and possible hardship when he has been sent by his employer to work in a country whose safety regulations are such that he may be more likely to have a work accident there than if he had stayed in this country? The position is not made any more acceptable by the fact that the class 1 earnings-related contribution payable during the first 52 weeks of temporary absence abroad is the normal full-rate contribution. I understand that it would not be possible to make the minor adjustment necessary to exclude the industrial injuries element of the contribution for such periods without undue administrative complications. I am, however, impressed by the broader arguments advanced by the hon. Gentleman and I am sure that it is right that these should be taken fully into account.

The hon. Member has brought the attention of the House to a particular case involving an accident in a particular country, but in doing so, as I am sure he is well aware, he has raised a general point of some importance. There may not be many people driving lorries to the 394 Middle East and other countries where we have no reciprocal agreement; nevertheless, the hon. Gentleman has raised a point of principle.

The House will already be aware that following the report of the Royal Commission on civil liability and compensation for personal injury—the Pearson report—my Department is urgently reviewing the provisions of the industrial injuries scheme. The matters under review include the possibility of increasing the extent to which the scheme applies to overseas accidents. It is possible, although I can obviously say no more at this stage, that such an extension may emerge from the review, though, bearing in mind the severe limitations on public expenditure, it would have to be considered against other competing claims in the social security field generally and in the industrial injuries provisions in particular.

I have carefully noted what the hon. Gentleman has said, and the views that he has so clearly and, if I may say so, so opportunely expressed will be taken fully into account by my Department. I feel sure, however, that the House will agree that it would be right to await the outcome of the current review of the industrial injuries scheme, when all hon. Members will have an opportunity to express their views on the various matters that will need to be decided. I cannot say how long that will be, but I certainly take note of the hon. Gentleman's concern, which I am sure is echoed by other hon. Members who have constituents who either suffer similar sorts of accidents in similar circumstances or feel strongly about the general principle involved.

Having said that, I hope that the hon. Gentleman will leave the matter with the Government for the time being, pending the outcome of the review that I have mentioned.