What is a Workers’ Compensation Scheme?

What is a Workers’ Compensation Scheme?

What does it cover, who does it protect and when is it used?

By Marcia Smith

Workers’ compensation is an insurance scheme that provides financial and medical support for employees injured at work, in return for their agreement not to sue the employer for negligence. In most jurisdictions in which such a system operates, it’s illegal to fire employees in direct response to a workers’ compensation claim.

Workers’ compensation schemes do not exist in the UK. Instead, employees may sue companies for negligence or failure of a statutory duty of care, and employers must take out liability insurance to cover such claims. Similarly, it would be unlawful for a company to fire an employee in response to their filing of a compensation claim.