Work-injury settlements, 'no further claims' and cash: when they bind and when they do not

Signing "no further claims" and taking cash is not the end of a work-injury claim: s.31(1) of the Employees' Compensation Ordinance (Cap. 282) voids an agreement only in so far as it "purports to remove or reduce" liability to pay statutory compensation (subject to s.31(2)), and District Court decisions apply a floor — below the least the Ordinance would give you, the agreement is void; above it, it can stand. What does close for good once a window shuts is different: a Labour Department Form 5 is final once it has not been objected to in time (usually 14 days from issue, extendable by the Commissioner) and not cancelled or appealed within 6 months (which the court may extend); a settlement with the Employees Compensation Assistance Fund Board is a binding contract; and suing a third party (a driver, an occupier) without first notifying the employer in writing, and recovering damages in those proceedings at or above the compensation, means no compensation is payable. An employer who keeps paying sick-leave money has not thereby settled the claim: [2026] HKDC 1465 did not treat such payments as a settlement, and the 24-month limit to apply still ran.

Quick reference

Section 31(1): "void" does not mean the whole paper is void — the section switches off only the "remove or reduce" part, and District Court decisions apply a floor test

Section 31(1)'s "null and void" carries two limits, both in the text: it is "subject to subsection (2)", and it operates only "in so far as it purports to remove or reduce the liability of any person to pay compensation under the provisions of this Ordinance". A settlement is not wiped out by being signed; what is wiped out is the part that gives you less than the Ordinance requires. (The narrow s.31(2)–(3) exception is set out below, under "Three kinds of agreement the Ordinance deals with specifically".)

District Court decisions read this as a floor: a settlement below the minimum you would recover under the Ordinance on any view is void; one above it can stand, even if it is less than a full hearing might have produced. The District Court in [2021] HKDC 1177 (¶15) quoted an earlier decision's summary of a 1990 District Court ruling: "s (31)(1) does not disable the parties from coming to a settlement whereby the employee obtains compensation in an amount in excess of the minimum, but conceivably less than he or she might obtain after a full hearing."

Two District Court cases from 2021 show the line in operation:

• [2021] HKDC 1177 — a chef on $19,000 a month cut his palm and, four months later, signed a Chinese agreement reciting $59,980 already paid (sick-leave pay and medical expenses) and providing that neither side would pursue the other. The court first computed the least he could recover on any view: even at the lowest expert figure of 1.5%, s.9 $13,680 plus s.10 $57,253 came to $70,933, more than $59,980. At ¶31: "The potential minimum compensation in this case is thus $13,680 + $57,253 = $70,933, which is above the settlement sum of $59,980 provided under the Settlement Agreement. The Settlement Agreement is consequently null and void under section 31(1) of the ECO." The court assessed at 4%, deducted the $59,980 received, and ordered the employer to pay a further $74,793; the employer did not appear, but the Employees Compensation Assistance Fund Board, joined as a respondent and represented, contested the claim and relied on the settlement, so this is not a default figure.
• [2021] HKDC 1272 (judgment in Chinese; this site's rendering) — a daily-paid demolition worker cut his fingers on a grinder; a month later the boss paid $100,000 and had him sign a paper, written by someone else, to the effect that he would claim nothing further from the boss in any form or for any reason (the paper's wording is quoted in the applicant's counsel's submissions at ¶52). The court held the agreement of no effect on two grounds: the boss admitted he could not read, and there was no evidence he understood or explained the paper (¶53–54, applying a reported decision, [2015] 2 HKLRD 201, and a District Court decision, DCPI 1963/2012); and, at ¶55, the sum was also below the minimum compensation computed on the undisputed facts, so the agreement was void under s.31(1) applying an earlier District Court decision (DCEC 322/1988). The $100,000 did not have to be repaid; it was deducted, leaving $131,644.47 against the employer and the principal contractor jointly and severally (¶56; the principal contractor was absent from the hearing, and the employer appeared in person and contested).

In both cases the court treated the agreement as void but credited the money already paid.

Taken together (s.31(1) and the two cases): having taken the money and signed is not the end of the claim; it raises two questions — was the figure below the statutory floor, and did anyone explain the paper? Both cases turned on the floor; the second added the no-explanation ground. Conversely, an agreement above the floor that both sides understood is not made void by the section. (Section 31(1) is about employees' compensation; a settlement of common-law damages is a separate question — see private settlement reneged .)

Three kinds of agreement the Ordinance deals with specifically — others are measured under s.31(1)

Section 16CA(1) applies only to an accident "that results in temporary incapacity, whether total or partial, for a period exceeding 3 days but not exceeding 7 days", and only "as to the compensation payable by him under section 10(1)". Past 7 days it does not apply, and even within it the agreement covers only s.10(1) compensation — not compensation for permanent incapacity or medical expenses. Even then, s.16CB(1) lets the Commissioner, "on the application of either party", cancel the agreement on three grounds — the sum "was or is not in accordance with the provisions of this Ordinance"; "ignorance of, or … a mistake as to, the true nature or extent of the injury"; or "fraud, undue influence, misrepresentation or other improper means as would, in law, be sufficient ground for avoiding it" — within 6 months of the agreement "or within such further time as the Commissioner in the circumstances of any particular case thinks fit" (s.16CB(2)). The insurer has a vote too — s.43(2)(a): no sum is payable by the insurer "unless, in the case of compensation agreed upon between the employer and an employee under section 16CA, such insurer has consented to pay the sum agreed upon"; that removes the insurer's statutory obligation only, not the employer's. (Section 43(2)(a) is not a separate kind of agreement; it is the insurer's condition on a s.16CA agreement.) The second kind is s.8(1)(b): care-and-attention compensation "payable pursuant to an agreement entered into by the employer with the injured employee and approved by the Commissioner under this section"; it binds no party until the Commissioner approves it in writing (s.8(7)). The third is s.31(2)–(3): where the Commissioner is satisfied that old age or a serious physical defect or infirmity makes a person specially liable to meet with an accident, or to be injured if one happens, the Commissioner may authorise that person and the employer, in connection with the contract of employment, to agree in writing to reduce or give up compensation for any accident caused or contributed to by that condition; the agreement is ineffective unless the Commissioner certifies it fair and reasonable. It is an agreement made in connection with the contract of employment with the Commissioner's authorisation, not an ordinary settlement after an accident.

In short: apart from these three kinds, the Ordinance gives no privately signed settlement agreement special status. A "full and final settlement" with the employer or insurer that falls outside them remains subject to s.31(1), and District Court decisions measure it against the floor above. No provision makes such an agreement final once signed. (A separate matter: where an order of the Court gives effect to an agreement come to by the parties, s.23(3) provides that no appeal lies; this article does not deal with settlements embodied in a court order.)

The Labour Department's certificate is different: a Form 5 not objected to, cancelled or appealed in time is final

Unlike an agreement you sign yourself, the Commissioner's Certificate of Compensation Assessment (Form 5) under s.16A(2) carries statutory finality. Section 16A(3): a written objection by employer or employee must be made "within 14 days after … the date of issue of the certificate", "or within such further time as the Commissioner, in the circumstances of any particular case, thinks fit". Section 16A(9): "Subject to section 18, the employer shall pay to the employee within a period of 21 days" the balance after deducting s.10 payments already made (and any sum ordered deducted under s.13(3)). After the 14 days (or any longer time the Commissioner allows), two routes remain, each of 6 months. Section 16B: the court may cancel the certificate on proof of one of three grounds — the sum "not in accordance with the provisions of this Ordinance"; "ignorance of, or … a mistake as to, the true nature or the extent of the injury"; or "false or misleading information" — on an application "within 6 months of the date of issue … or within such further time as the Court … thinks fit". Section 18(2): "No appeal shall lie after the expiry of 6 months from … the date of issue of the relevant certificate", "Provided that the Court may, if it thinks fit, extend the time".

The Court of Appeal in [2023] HKCA 963 ¶65: "Quite clearly, the intention is that unless the assessment by the Commissioner is objected to or appealed within time, the certificate he issued in a Form 5 is final and may not be challenged or re-opened in subsequent proceedings. As the plaintiff has not invoked properly or at all the cancellation or appeal jurisdiction regarding the assessment in the 1st Form 5, he is bound by it …". A delivery rider hit by a car had let his Form 5 go unobjected; suing the driver, he could not reopen it — applying s.25(1), the court capped the first Form 5 compensation at the damages assessed and ordered $247,791 to be deducted, leaving net damages of nil (¶73–74).

[2023] HKDC 508 likewise adopted the Commissioner's figures (¶5: "neither [the applicant] nor [the employer] had lodged any objection or any appeal against either certificate. … In the circumstances, I see no reason not to adopt that assessment." [square brackets added in place of party names]). That was an undefended case: the employer never appeared (¶2), and the $152,265.99 awarded (after deducting $115,650 the employer had paid) was assessed in its absence, adopting the unchallenged certificate figures plus $4,995 medical expenses (¶8).

Settling with the Board: the Court of Final Appeal calls it a binding contract

Where the employer had no insurance, has vanished or has been wound up, the Board may join your case. The Court of Final Appeal in [2019] HKCFA 48 ¶70: "A settlement agreement between the Board and the plaintiff is a binding contract. Its terms are not subject to change and its binding quality not vitiated by any subsequent judgment obtained as between two different parties, the employee and the employer." The worker there settled his potential claim under the Employees Compensation Assistance Ordinance (Cap. 365) with the Board for $1.42 million at the start of the common-law trial; the trial then produced net damages of $1,428,547, marginally more than the settlement (¶8). The Court held that the settlement amount is contractually binding on both sides and not affected by the level of any later judgment against the employer (¶71). The Board had been joined as a party and was represented. The Court noted that Cap. 365 does not expressly deal with settling claims based on damages actions: s.28 expressly authorises settlement only of claims based on s.16 (unpaid employees' compensation), and "It is section 29 that provides a legal basis for settlement" (¶48–49, ¶56–57). For employees'-compensation claims, the Board may, under Cap. 365 s.28, "on such terms as it sees fit, offer to pay from the Fund … an amount in satisfaction of such entitlement" (s.28(1)), and "If a person accepts an offer made under subsection (1) and receives payment accordingly, that person shall not have the right to make an application under section 16 in respect of the claim to which the offer relates" (s.28(3)).

Claiming against a third party — a driver, an occupier — without written notice to the employer can reduce or wipe out compensation

A work injury that is also a road accident or a fall may open two routes: compensation from the employer, damages from the third party. Section 25(2): an employee "shall, before instituting proceedings for damages under subsection (1), in writing notify the employer of his intention to do so and shall likewise notify the employer if he decides to abandon such proceedings or to relinquish or settle his claim for damages". Section 25(3): where an employee who failed to notify the employer of his intention to institute proceedings, or failed to furnish the particulars the employer required, recovers damages against the third party in any such proceedings, then "where the amount of damages recovered is equal to or greater than the amount of compensation which would, but for this subsection, be payable, no compensation shall be payable"; where the damages are less, only the difference is payable. The consequence is tied to the notice of intended proceedings and the particulars; the section attaches no separate consequence to a missing settlement notice alone, and none of the cases cited decides whether money received in a settlement reached without proceedings counts as damages recovered "in any such proceedings". Section 25(4) allows an order for repayment of compensation already paid.

The record in [2022] HKDC 284: an airport security officer hurt by a broken chair at a congee shop during her lunch break claimed compensation from the employer and sued the restaurant, settling with it for $500,000 without notifying the employer of her intention to settle, as s.25(2) requires (¶7); she then discontinued the compensation claim, and the only fight left was costs, which went against her because she could not show she was bound to win on whether the accident was one "arising out of and in the course of the employment" (¶13, ¶42). That is a costs ruling on discontinuance, not a trial finding. The reverse case is [2023] HKDC 715: the worker settled his compensation claim for $338,000, and the court later assessed his damages against the incorporated owners at only $247,515. At ¶2: "since P has settled the related EC proceedings with D1 and received compensation in the sum of HK$338,000.00, his claim against D2 is dismissed" — nothing was left against the occupier. At ¶30: "The purpose of s 25(1)(a) is to avoid an employee getting more than the damages he could get under the common law while s 25(1)(b) is to ensure that the employer get to recover what he was obliged to pay under ECO from the tortfeasor."

A platform's 'voluntary' insurance payout: rider held not an employee, and his later claim struck out

[2024] HKDC 1932 is a strike-out ruling: a food-delivery motorcycle rider had already collected the $100,000 maximum under the platform's voluntary rider insurance, then applied for employees' compensation. The court first held it plain and obvious that he was not an employee (he could reject orders, go offline, choose routes and send a substitute), which alone justified striking out; it added at ¶76: "I agree with the Respondent in this respect, and am of the view that the Applicant is estopped by convention. The pursuit of the claim is to vex the Respondent into making further compensation notwithstanding that the Applicant has already received payment under the Voluntary Policy." The application was contested (the platform by counsel, the rider in person).

The boss paying sick-leave money was not a settlement — the 24-month clock kept running

[2026] HKDC 1465: a jewellery-shop salesperson knocked her shoulder; the employer filed Form 2, paid periodical payments from December 2022 to August 2024 (over $230,000 in all), and a Labour Department letter recorded his admission of liability; a Labour Department letter of 26 June 2025 recorded that he did not admit liability. Nothing in the judgment treats those payments as a settlement (the judgment dealt only with the s.14(4) delay) — she needed leave to apply ten months late, which the represented employer opposed. Leave was granted (¶48, ¶50); one of the reasons, at ¶37: "The Labour Department's first 2 letters dated 29 December 2023 and 25 October 2024 make no mention of the 24-month limitation period in commencing court action. The only evidence showing that A had been advised of and should have knowledge of the time-bar matter is found in the Labour Department's letter dated 26 June 2025, not earlier." The evidence the court weighed in finding a reasonable excuse (¶36, ¶39) included her mental condition and her belief, induced by the employer's continuous payments and admission of liability, that a court action was unnecessary. The four s.14(4) "reasonable excuse" factors and the other granted and refused cases are in employees' compensation .

Frequently asked questions

Related topics

• Employees' compensation — the full text of s.31, s.16CA, the five limbs of s.43(2), the 24-month limit and "reasonable excuse"
• Private settlement reneged — the effect of a settlement of common-law damages
• Cases: work-injury compensation
• Traffic accident claims
• Slip and fall and public liability

Sources

Every statutory provision quoted is taken from the version in force below.

• Employees' Compensation Ordinance (Cap. 282), ss.8, 14, 16A, 16B, 16CA, 16CB, 18, 23, 25, 31, 43; version in force 14 May 2026 — https://www.elegislation.gov.hk/hk/cap282
• Employees Compensation Assistance Ordinance (Cap. 365), ss.28, 29; version in force 14 May 2021 — https://www.elegislation.gov.hk/hk/cap365

Judgments quoted

• [2021] HKDC 1177 (¶15, ¶31) — https://www.hklii.hk/en/cases/hkdc/2021/1177
• [2021] HKDC 1272 (judgment in Chinese, ¶47, ¶52–56; the English rendering is this site's own) — https://www.hklii.hk/tc/cases/hkdc/2021/1272
• [2019] HKCFA 48 (¶8, ¶48–49, ¶56–57, ¶70–71) — https://www.hklii.hk/en/cases/hkcfa/2019/48
• [2023] HKCA 963 (¶65, ¶73–74) — https://www.hklii.hk/en/cases/hkca/2023/963
• [2023] HKDC 508 (¶2, ¶5, ¶8; employer absent) — https://www.hklii.hk/en/cases/hkdc/2023/508
• [2022] HKDC 284 (¶7, ¶13, ¶42, ¶44; costs ruling on discontinuance) — https://www.hklii.hk/en/cases/hkdc/2022/284
• [2023] HKDC 715 (¶2, ¶30) — https://www.hklii.hk/en/cases/hkdc/2023/715
• [2024] HKDC 1932 (¶73, ¶76) — https://www.hklii.hk/en/cases/hkdc/2024/1932
• [2026] HKDC 1465 (¶3, ¶19, ¶28, ¶31, ¶37, ¶48, ¶50) — https://www.hklii.hk/en/cases/hkdc/2026/1465

About these case summaries: the summaries above were prepared by this site based on our own reading and understanding of the judgments. They are not legal advice, have no legal effect, and must not be cited as authority. Cases are identified by neutral citation only, with no party names given. Outcomes turn on the totality of each case's circumstances; everything cited here is what the cited case actually decided, never a prediction for any other case. Passages from Chinese-language judgments are given in this site's own English rendering or in the Judiciary's published English translation, marked as such.

Matters this article does not address

• This article does not state whether the Commissioner has ever authorised an agreement under s.31(2), nor how the "floor" is computed in any particular case; each floor depends on the facts of the case, such as wages, age, sick-leave days and the expert assessments.
• This article does not state whether employees' compensation legal costs fall within the proviso to s.25(1)(b); the District Court is divided ([2020] HKDC 292 against [2023] HKDC 715) and neither is stated here as settled law.
• This article does not state whether [2024] HKDC 1932 was appealed or with what result.
• This article does not address the effect of a settlement of common-law damages (see the private-settlement guide), nor any prospect of success.