Apart from Public sector agencies, all employers in the UK are required by the law to insure against liability for injury or disease to their employees arising out of their employment. The employers are required to purchase Employers Liability Insurance under the terms of the Employers Liability (Compulsory Insurance) Act of 1969.
In order to succeed in a claim for compensation, an injured employee in the UK will have to establish that his employer breached its duty of care and as a result of that breach the employer suffered loss. Generally, and until the recent introduction of the Enterprise Act, which came into force in October 2013, the duties giving rise to the potential negligence were mainly statute based. In the case of accidents postdating October the common law principles of negligence will apply as Health and Safety Law (save for exceptional circumstances) will no longer give rise to a cause of action. If an employer is insolvent, the employee will have the right to claim directly against the insurer under the terms of the Third Party Rights Against Insurers Act of 1930.
In Mexico, as in other Latin American and European jurisdictions, workers’ compensation is part of the broad framework of the social security system that encompasses the financial and health security of workers. A key difference between the UK and Mexico is that in Mexico, the national social security system insures employers for job related injuries to their employees as opposed to private insurers in the UK (and the US for that matter). Whilst in Mexico, in certain and rare occasions, employers may offer additional voluntary benefits to their employees, including private health insurance, these are not mandatory. On the same token, it is rare for companies in Mexico to purchase employer’s liability insurance because this safety net is provided by the Mexican state.
The Mexican system stems from the policy objective of providing a social safety net for Mexican workers going back to the revolution of 1910. This objective has been progressively framed in the context of the Mexican Federal Constitution and the Federal Labour Law and the establishment of the Mexican Social Security Institute in 1943 (IMSS) under the legal framework of Mexico’s Social Security law.
Under the Mexican Social Security law, employers must register every worker and make mandatory payments (called “social security contributions”) that encompass disability and life insurance, retirement pensions, unemployment and old age, health and maternity insurance, occupational risk and day care amounting to somewhere to an employer contribution of 30.6 per cent to 45.1 per cent of the employee’s salary. The employee contributes, by way of retention of salary, the equivalent of 2.4 per cent of his or her salary. In exchange, the IMSS will cover all employment related claims, disability, death, pensions, etc. and will treat employees (and their registered spouses) in the nation-wide network of hospitals free of cost (article s.11 and 12 of the Social Security Law).
Michael Hennessy Associate Kennedys Latin America and Caribbean
Andrew Caplan Partner Kennedys
Alex Guillamont, Partner and director Kennedys Latin America and Caribbean