Employer denies employment relationship in compensation dispute

Hong Kong court examines nature of relationship at time of accident

Employer denies employment relationship in compensation dispute

A Hong Kong District Court recently dealt with a case involving a worker's compensation claim under the Employees' Compensation Ordinance (Cap. 282). The worker sought compensation from the employer for an accident that occurred on February 28, 2020.

The main dispute in the case revolved around whether the worker was an employee of the employer at the time of the accident.

The worker, who was employed as a lorry driver, claimed that he began working for the employer in August 2018 without signing an employment contract.

The terms of the verbal contract included a monthly salary of HK$22,000 plus overtime, working hours from 9 am to 7 pm, and a 6-day work week with Sundays off.

Background of the case

According to records, the accident arose out of and in the course of the employment when he and a co-worker were loading carton boxes that were stacked on wooden pallets into a lorry.

Some heavy carton boxes fell from the top and hit his feet. As a result, he suffered 0.5% loss of earning capacity permanently.

The worker produced a "work certificate" dated August 6, 2018, signed by the employer, which stated that the worker was a staff member of the company and had begun working as a casual morning shift large vehicle driver since July 2018, with a daily salary of HK$800 and a monthly salary of HK$20,800.

The employer's wife, who attended to the administration of the business, testified that the worker initially worked for a month but was terminated after discovering that he was on sick leave from a previous job.

However, the worker was re-engaged a few months later under what the employer claimed to be a sub-contractor arrangement.

Was he an employee?

After considering the evidence, the court found that:

  1. The worker was indeed engaged by the employer since July 2018, as reflected in the work certificate.
  2. The employer had initially terminated the worker's service between early August and early October 2018.
  3. The employer had a high degree of control over the worker, providing instructions on driving, loading, and unloading goods.
  4. The worker did not provide his own equipment, hire helpers, or have the opportunity to profit from sound management in his tasks.
  5. The worker was paid a fixed sum per month, which gradually increased over the years, akin to an employee's salary.

Based on these factors, the court concluded that the relationship between the parties at the time of the accident was one of employment.

Court awards compensation

The District Court found that the worker was an employee of the employer at the time of the accident and was entitled to compensation under the Employees' Compensation Ordinance.

The court's decision was based on a careful examination of the evidence and the application of relevant legal principles in determining the existence of an employment relationship.

Consequently, the court awarded the worker compensation under various sections of the Ordinance:

  1. Section 9 (permanent partial incapacity): HK$10,990.80
  2. Section 10 (temporary incapacity): HK$59,640
  3. Section 10A (payment of medical expenses): HK$1,000

The total compensation awarded to the worker amounted to HK$71,630.80, along with interest and costs to be paid by the employer.

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