Family-run recycling firm loses appeal over injured worker's job status
Hong Kong's Court of Appeal upheld a HK$161,233 injury payout against two related firms on 4 August 2026, Justice Anthony Chan ruled.
The judgment arose after an employee said he was jointly employed by two related businesses, a partnership and a limited company, whose ownership overlapped within one family, and that he was injured while working for both.
According to the employee, he had worked as a labourer for the two businesses since 19 August 2018 at a daily wage of HK$600, working across two workshops in the Kwu Tung area of Sheung Shui in the New Territories. On 26 December 2018, his right foot was rolled over by the wheel of a forklift truck at one of the workshops, an accident he said happened in the course of his work for both employers.
The employers denied any employment relationship existed at the time of the accident. After a five-day trial in the District Court, where the employee and a co-worker gave evidence against four witnesses called by the employers, including the woman who ran the partnership and was also sole director of the limited company, her husband, who served as the company secretary, her brother-in-law, the sole shareholder, and the forklift driver, the trial judge found for the employee. In a judgment dated 28 December 2023, he was awarded compensation and medical expenses of HK$161,233 under the Employees' Compensation Ordinance, plus interest and 90 percent of costs.
The employers appealed on seven grounds, challenging the reliability of a time card used as evidence, the trial judge's application of the burden of proof, the finding that the limited company had not become dormant, the amount already paid in compensation, and the cause and location of the accident.
The Court of Appeal said it could only overturn factual findings that amounted to palpable error, and rejected every ground. On the time card, it noted that a co-worker's witness statement said she was able to "recognize the handwritten words on the Time Card as her own hand-writing." She also recalled adding a note to the card marking the date of the accident, to help calculate the wages owed to the employee.
On the dormancy argument, the court found the company's financial statements only covered the period up to March 2017, well before the accident, and that the company had continued paying a salary to its shareholder and had never filed a notice of cessation of business.
On the inconsistent medical records, which variously described the injury as caused by a forklift or by falling metal goods, the appeal court accepted the trial judge's finding that it was the company secretary, not the employee, who gave hospital staff the alternative account.
The Court of Appeal also endorsed the trial judge's statement of principle that serious allegations had to be proved by "cogent evidence commensurate with the gravity of the allegations." The appeal was dismissed, with costs awarded against the employers.
In dismissing the appeal, the Court of Appeal found no error in the trial judge's findings on the employment relationship, the cause of the accident, or the company's operating status, and ordered the employers to bear the costs of the appeal.
