STAND. COM. REP. NO. 646

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 134
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 134 entitled: 

     "A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Repeal the provision disallowing claims for
          compensation for mental stress resulting solely from
          disciplinary action taken in good faith by the
          employer; and

     (2)  Disallow compensation for physical or mental injury
          resulting from a disciplinary action or other personnel
          action taken in good faith by the employer.

     The Department of Human Resources of the City and County of
Honolulu, the Building Industry Association of Hawaii, the
National Federation of Independent Business, the Hawaii Insurers
Council, the Hawaii Business League, the Chamber of Commerce of
Hawaii, and Liberty House testified in support of this measure.
The Hawaii State Teachers Association supported the intent of
this measure with suggested amendments.  The Department of Labor
and Industrial Relations, the Hawaii Nurses Association, the
United Public Workers, the International Brotherhood of
Electrical Workers, the Hawaii State AFL-CIO, the ILWU Local 142,
Unity House, and the State of Hawaii Organization of Police
Officers opposed this measure.

 
 
                                 STAND. COM. REP. NO. 646
                                 Page 2

 
     Upon further consideration, your Committee has amended this
measure by:

     (1)  Deleting the provision to disallow compensation for
          physical or mental injury resulting from a disciplinary
          action or other personnel action taken in good faith by
          the employer;

     (2)  Disallowing compensation for mental stress resulting
          from other personnel actions taken by the employer in
          good faith; and

     (3)  Making technical, nonsubstantive changes for purposes
          of style, clarity, and consistency.

     Your Committee finds that Act 166, Session Laws of Hawaii
1998, was enacted only seven months ago and has not yet had time
to be tested in real-life situations.  It is premature to amend
section 386-3, Hawaii Revised Statutes, without any practical
applications.  Your Committee finds that existing statutory
language is a good balance between employer and employee
concerns.  It is your Committee's intent to pass this measure to
encourage further discussion about stress-related workers'
compensation.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 134, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 134, H.D.
1, and be referred to the Committees on Consumer Protection and
Commerce and Judiciary and Hawaiian Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair