Chan Suet Hung v. Lanfield Marble Co Ltd and Another
Read the full judgment text of DCEC 790/2002 on BabelCite. This District Court judgment was delivered on 4 December 2003.
1. This is an application for employees compensation under Sections 9, 10 & 10A of the Ordinance. The Applicant appeals under s. 18 of the Employees' Compensation Ordinance against the review of assessment of the Ordinary Assessment Board made on 21.5.2003 assessing the loss of earning capacity permanently caused by the injury to be 4% to the Applicant. The Applicant claims against the 1st Respondent as employer and the sub-contractor of the 2nd Respondent under s. 5; and severally against the 2
Cited by 2 cases · Cites 6 cases
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DCEC000790/2002 DCEC790/2002 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES' COMPENSATION CASE NO. 790 OF 2002 __________ IN THE MATTER OF AN APPLICATION BETWEEN
__________ Coram: H.H. Judge C.B. Chan in Court Dates of Trial: 17 and 18 November 2003 Date of Handing Down of Judgment: 4 December 2003 _____________________ J U D G M E N T _____________________ 1.This is an application for employees compensation under Sections 9, 10 & 10A of the Ordinance. The Applicant appeals under s. 18 of the Employees' Compensation Ordinance against the review of assessment of the Ordinary Assessment Board made on 21.5.2003 assessing the loss of earning capacity permanently caused by the injury to be 4% to the Applicant. The Applicant claims against the 1st Respondent as employer and the sub-contractor of the 2nd Respondent under s. 5; and severally against the 2nd Respondent as principal contractor. 2.The only issue that has to be decided in this trial is whether the Applicant was an employee of the 1st Respondent or a sub-contractor to the 1st Respondent at the time of the accident. 3.The parties have agreed the quantum of compensation as follows :
4.There is no dispute that :
The Applicant's Evidence 5.The Applicant gave evidence and adduced his witness statement at pages 1-9 of Section B of the Trial Bundle (BDB) and supplemental witness statement at pages 11 to 19 of BDB into evidence as part of his examination in chief. He corrected a typing error at page 12 of his supplemental witness statement in two places. The total number of man-days of himself was corrected to 63 and the total no. of man-days of himself and all the other workers was corrected to 257.5. After this he confirmed the truth of the two witness statements. 6.The Applicant stated that from April 2001 to the date of the accident on the 19th December 2001, he worked for the 1st Respondent. He was a casual employee. He worked as a gang leader (“管工”) during this period, as he was asked by Mr. Kwok of the 1st Respondent to recruit co-workers to work together with him in marble installation work on various sites. On the Sai Kung site, he regarded Mok Wah Kun ("Mok") as another gang leader as well. 7.He began to work for the 1st Respondent since April 2001. He understands that Mr. Kwok Chun Chung ("Mr. Kwok") was the boss of the 1st Respondent. It was Mr. Kwok who employed him. He has known Mr. Kwok for about 10 years. He had not signed any contract of employment with Mr. Kwok. 8.In April 2000, he was employed by Mr. Kwok to carry out marble installation work in a hotel near Hung Hom KCR station. He was paid $20 per square feet of marble installed. The work was completed in late April 2001. After that, Mr. Kwok employed him to work on a site at Bowen Road, Hong Kong Island for another 2 months until June 2001. He was paid $22 per square feet of marble installed this time. 9.In July 2001, Mr. Kwok employed him to work in Cheung Chau for a month, and he was paid $26 per square feet of marble installed. This time he received a higher rate of payment because he had to stay overnight in Cheung Chau. 10.In late July 2001, he was employed by Mr. Kwok to do marble installation work in a hotel near Hung Hom KCR Station. The principal contractor was the 2nd Respondent. Initially the agreement was that the Applicant would be paid by measurement of the area of work done. Then from August he was paid on a daily basis with overtime allowance as the work had to be completed in a short period of time. He was initially paid $650 per day, but later his daily wage was reduced to $630 per day by Mr. Kwok. His working hours were from 9:00 a.m. to 6:00 p.m. If he worked overtime, he worked till 8:00 p.m., 10:00 p.m. or even 12:00 midnight. Overtime allowance was paid on the basis of every 2 hours at the rate of half-day wages. If the overtime work was done after midnight, the overtime allowance was paid on the basis of every 2 hours at the rate of one full-day wages. He was required to work on Sundays and he worked 30 days per month. His average income per month was about $18,900 ($630 x 30 days) during August to September 2001. 11.After the work in the hotel near Hung Hom KCR Station was completed in late September 2001, Mr Kwok employed him to do marble installation work on a site at House No. 31, Bella Vista, Clear Water Bay, Sai Kung (hereinafter referred to as the "Sai Kung site"). Mr. Kwok told him that the work had to be completed within 3 months. He was again paid on a daily basis, and the daily wage was $660. He worked on this site from October to December 2001 until the accident. 12.During April to December 2001 when he worked with Mr. Kwok, he was asked by him to recruit on behalf of the 1st Respondent other workers to work with him on the construction sites. They were paid either by areas of marble installed or on a daily basis, the same way as he was paid. Mr. Kwok paid the wages of him and his co-workers by cheque to him twice a month, on either the 7th or 8th, and on the 23rd day of each month. He then paid his co-workers their wages by cash from the lump sum given by Mr. Kwok. 13.He understands the term “判工費”in the marble installation trade to refer to wages paid by the area of marble installed. “代工費”refers to wages paid according to the number of man-days a worker has worked. 14.When he met the accident on the Sai Kung site, he was paid on a daily rate, not by areas of marble installed. 15.Initially, whilst working at the Sai Kung site Mr. Kwok told him to bring one worker to wait for Mr. Kam (the supervisor of the 2nd Respondent) near Silver Theatre in Kwun Tong. Mr. Kam took them to the place of work in Sai Kung, and gave work instructions to them. He went there with Mok. 16.After working for about 2 days, Mr. Kwok asked him to bring one more worker to the site. He took Lau Fuk Cheung to the site. About 2-3 days thereafter, Mr. Kwok told him to bring one more worker as all the marble slabs were delivered to the site. He asked Hon Wong Bun to come to work on the site. In about November 2001, Mr. Kwok told him that the work progress had to speed up. Mr. Kwok told him to bring one more worker to the site. He asked Fung Hei Sing to come to the site. In total, he brought 4 workers to the site for the 1st Respondent. The number of co-workers actually working on the site at one time was determined by Mr. Kwok. 17.Each marble worker on the Sai Kung site brought along his own hand tools such as hammers, trowels etc. Mok and him as gang leaders each brought with them an electric drill and an electric marble cutter. They were used by their co-workers as well. An electric marble cutter only costs about six hundred dollars. 18.The 2nd Respondent provided polishers on the site for the polishing workers to carry out polishing work after the marble slabs had been installed by them. He and other marble installation co-workers did not use polishers to carry out their work. 19.He kept a record of attendance of his co-workers, but Mr. Kwok did not ask him to give the record to him. Mr. Kam of the 2nd Respondent kept records of attendance of workers on the Sai Kung site everyday. 20.Whilst he was working for this site, Mr. Kwok asked him to carry out odd jobs in marble installation at Lu Plaza in Kwun Tong and Cheung Kong Center at Central in October and November 2001, respectively. He was paid $630 per day for these jobs in the urban area. He recalled he worked in Cheung Kong Center on Sundays. They were not allowed to work on Sundays on the Sai Kung site. 21.The Applicant set out hereunder a breakdown of the man-days and wages received by himself various marble installation co-workers of his working for the Sai Kung site for the period from 3.10.2001 to 31.12.2001 from the 1st Respondent :
22.He was injured on 19.12.2001, and hence he worked less man-days in total at the Sai Kung site than Mok. 23.Each of his co-workers had signed on a record stating the wages they received from the 1st Respondent for their work on the Sai Kung site. This is at page 20 of BDB. 24.A breakdown of the man-days corresponding to the amounts paid by the cheques of the 1st Respondent is set out below:
+$(17,820 + 180) + $630 = $18,630 25.The Applicant explained that the amounts of the cheques dated 20.10.2001 and 20.11.2001 received by him included his wage of 1 day's work at Lu Plaza in the sum of $630 and $1,260 being 2 days' work at Cheung Kong Center. The Applicant also said that the cheque dated 20.10.2001 included a sum of $180 given by the 1st Respondent for the workmen to have tea. 26.The 1st installment paid to him is calculated at $660 x 27 man-days + $180 (refreshment expenses) + $630 (Lu Plaza) = $18,630. 27.In respect of the last cheque of $30,000 which covered the period from 1 January to 16 January 2002, when the Sai Kung project completed, he did not work on the site because of his injury and resultant sick leave. He transferred the whole sum of $30,000 received from Mr. Kwok to Mok through the Bank of China (Hong Kong) Ltd. on 4th February 2002 (see page 11 of BD-D). Mok then distributed the money to other co-workers. He did not make any profit out of it. He said that it was untrue that such sum of $30,000 was given to him by Mr. Kwok on compassionate ground. 28.Mr. Kam of the 2nd Respondent who checked the progress of work everyday assessed whether the work of the Applicant and his co-workers was acceptable. Mr. Kam would ask them to remove and re-install some marble slabs if he found the work unsatisfactory. The owner also required them through Mr. Kam to change some of the marble slabs because she did not like their colours. They suffered no loss in redoing the work because they were paid by the number of man-days they had worked. 29.The Applicant stated that it is untrue for Mr. Kwok to say in his statement that there were no half-day wages （半工）. 30.Half-day wages meant working from 9:00 a.m. to 12:00 p.m. noon or 1:00 p.m. to 6:00 p.m. They were paid half day wages if Mr. Kwok instructed them to work half day only. 31.In relation to the wage receipts which were attached to the witness statement of Mr. Kwok, at pages 34 to 42 of BDB, the Applicant said that the expression "判頭 " and "判工費" was not present on the receipts dated 20.10.2001, 5.11.2001, 20.11.2001, 5.1.2002 and 20.1.2002 when he signed them. He only saw these 7 receipts with the added expressions of "判頭" and "判工費" after this Application was filed. Evidence of Kwok Chun Chung 32． He is one of the proprietors of the 1st Respondent. He stated that the 1st Respondent's contracts mainly relate to the installation of marble slabs. The 1st Respondent obtained contracts from principal contractors. From the inception of the 1st Respondent, apart from the employment of one staff that helped him oversee the progress of work in the various sites, the 1st Respondent did not employ staff. 33． When he received the contract from the 2nd Respondent at Pik To Garden, in Sai Kung, he contacted the Applicant. He told him that the contract consisted of between 6,000 sq. ft. to 7,000 sq. ft. The price was $26 per sq. ft. The contract was to commence in October and is projected to last 3 months. He asked whether the Applicant would take it on. The Applicant agreed to do so. The 1st Respondent therefore subcontracted this contract to the Applicant. The total price of the contract would be based on the measurement of the completed work. 34． The 1st Respondent would pay the Applicant twice a month on the 5th and 20th day of each month. The payment on the 5th is dependent on completed work between 16th to 30th day of the former month. Payment on the 20th is based on the completed work between 1st to 15th day of the month. 35． The particulars of contract sums paid to the Applicant in respect of this contract is as follows:-
36． The total area of completed work was 6,811 sq. ft. The contract sum should be $177,086.00. However because the Applicant suffered from the accident, he gave the Applicant a sum of $30,000 gratuitously out of compassion. That was not part of the contract sum. 37． The Applicant brought workers on the site. They were not employed by the 1st Respondent but employed by the Applicant. The Applicant brought the tools required for his work. These included cutter, electric drill, polisher, hammer etc. In relation to the number of workers on site, it was a matter for the Applicant and was not decided by him. He did not receive the record of workers from the Applicant. 38． He stated that in small jobs, he had employed the Applicant at a daily rate of $630. That was at Cheung Kong Center and Lu Plaza. However, in the contract at Sai Kung site, he had subcontracted this to the Applicant. 39． He further stated that the term "判工費" is in fact the subcontract fee based on the area of the work done. It was not wages. 40． At the Sai Kung site, he had requested the Applicant to add workers as he was concerned about the progress of work. However, the numbers of workers were not that stipulated by him. 41． He stated that the evidence of the Applicant stating that he did not require to use a polisher is not correct. 42． In measuring the area of work completed, he usually did not make such measurement by hand. He usually looked at the completed work by reference to the plan and made measurement by reference to the plan. 43． He denied that the payment made on the 20th November 2001 included tea money in the sum of $180. 44． Apart from the contract in the Commercial Building at KCR in Hung Hom, all other contracts were subcontracted to the Applicant. 45． He admitted that he had added the words " 判頭" or "判工費 " to the receipts. But he could not remember which receipts. Evidence of Kam Kwong Kuen 46.He is the foreman of the 2nd Respondent. He gave evidence that his work as foreman at the Sai Kung site included overseeing workmen, overseeing the installation of marble, the progress of work, its quality, measurement, liaison with the client, measuring the area and drawing up plans. He stated that he drove the Applicant and Mok on the 3rd October 2001 to the Sai Kung site. He explained by the use of a plan, the sequence of work on the site. Thereafter, they would enquire from him questions about the work. Where the work is not commensurate with the requirement of his client he would point that out so that it could be rectified. 47.He would be in contact with the Applicant more than the other workmen. The Applicant brought the cutter and drill and other implements. The Applicant did not give him the attendance record of the number of workmen on site. In relation to the amount paid by the 2nd Respondent to the 1st Respondent, he would make measurement of the work done twice a month for the 2nd Respondent to make payment to the 1st Respondent. Issue of Employee or Sub-contractor 48.The Respondents' Counsel submitted that all the circumstances surrounding how the Applicant came to work for the 1st Respondent and the actual working relationship between them are relevant. Not a single factor is determinative. Although he agreed that an employee could be paid on a daily wage or by piece basis, he submitted that the method of payment of the Applicant by the 1st Respondent was relevant to the issue of employment. 49.Through cross-examination of the Applicant, he sought to show that the Applicant's evidence that he was paid on a daily basis whilst working at the Sai Kung site was not truthful. He sought to show that the installment payments made by the 1st Respondent to the Applicant did not tally with the number of man-days work undertaken at the daily wage of $660 as stated by the Applicant. He stated that only in the Applicant's 2nd witness statement did he seek to explain the discrepancy in the calculation of the amount of wages for the man days paid on the 20 October 2001 and that made on 20 Nov. 2001. Despite such explanations, the amounts were not precise sums. He submitted that the 1st Respondent's explanation of how these sums were calculated by means of measurement of the area of work was to be preferred. However, the calculation by the 1st Respondent of the installments due and paid to the Applicant by measurement of work done were not exact either. The 1st Respondent stated that these sums were rounded off. In the same way, the Applicant stated that installments paid by the 1st Respondent calculated by reference to the number of man-days were sums rounded off by the 1st Respondent. 50.The total payment made to the Applicant in respect of the Sai Kung site was $200,000.00. The actual area of work done by measurement was 6,811 sq. ft. At $26 per sq. ft. the amount of payment due to the Applicant would have been $177,086.00 only. The 1st Respondent explained that the last payment of $30,000.00 to the Applicant was a gratuitous payment made out of compassion to the Applicant because he suffered the accident. However, evidence at page 11 of BD-D shows that the Applicant transferred this sum to Mok bank account on the 2nd April 2002 for Mok to use this sum to pay the co-workers' salary. The Applicant did not retain any part of this sum for himself. Were this sum a gratuitous payment to the Applicant, surely the Applicant would have retained this. 51.I prefer the Applicant's evidence that the method of calculation of pay to him and his workers for the work at the Sai Kung site was by reference to daily wage at $660 per day. In fact I prefer the evidence of the Applicant where it differed that of Mr. Kwok. 52.It is clear that the method of payment of wages should not play too great a part in the determination of the issue of whether the Applicant is an employee or a subcontractor. In fact it is not determinative of the issue as will be shown hereunder. 53.The fundamental test for deciding whether a worker is an employee or a sub-contractor is that found in the statement of Cook J. in Market Investigations v Minister of Social Security [1969] 2 QB 173, at pages 184G-5B endorsed and applied in Lee Ting-sang v Chung Chi-keung [1990] 1 HKLR 764, PC p.766G-767B. The test is,
54.The Applicant's Counsel helpfully referred to:-
55.I agree with the Applicant's Counsel's submission that the following factors are not determinative of the issue:-
Financial Risk 56.I agree with the Applicant's Counsel that there was no evidence of the Applicant venturing into business on his own account as an independent contractor with all its attendant risk. 57.It would seem that there is no risk of the Applicant making a loss. Whether he was being paid by means of measurement of the area of work or paid by means of a daily wage, there was no venture capital and no other financial risk incurred by him. There was no evidence of his having priced the job which is normally a feature of the business approach of a sub-contractor. 58.He undertook no degree of responsibility for investment and management. He had no opportunity of profiting from sound management in the performance of his tasks, including completing them more quickly than others might. The Applicant's transfer of the whole of the last payment for the work done by co-workers in 1-16 January 2002 ($30,000) to Mok indicated that he did not profit from recruitment of co-workers, namely earning money even when he did not work. 59.Chitty on Contract Vol II pages 530 to 536 paragraphs 35.08 to 35.23 sets out 10 factors which should be considered in determining whether there was an employer employee relationship. I shall refer to them hereunder. Control and Superintendence 60.The Applicant and his co-workers worked under the direction of Mr. Kam of the 2nd Respondent. Further, Mr. Kwok also asked the Applicant to increase the number of workers whenever he felt that progress was slow. He did so in relation to the Sai Kung site at least 2 to 3 times. Mr. Kam gave work instructions to the Applicant and his co-workers, to tell them the sequence of work. He assessed their work and informed them when their work was not commensurate with the client's requirements and the Applicant and his workmen would rectify the work. It would seem that the Applicant and his workmen were placed temporarily under Mr. Kam of the 2nd Respondent. Chitty on Contract para. 39-014 state,
61.It would seem that this was the case with the Applicant being placed under the control of Mr. Kam. The "organization" test. 62.The tasks performed by the Applicant and his co-workers, although as casual workers, were part of the main business of the 1st Respondent, namely the installation of marble slabs for the principal contractor (see 1st Respondent's invoices to 2nd Respondent at pages 30 to 36 of BD-D. The Applicant was not performing the tasks in business on his own account with risks of loss. Power of appointment and dismissal 63.The Applicant was selected and appointed by Mr. Kwok of the 1st Respondent as the foreman or gang leader for marble installation work on various sites from April to December 2001. Mr. Kwok admitted that he only dealt with the Applicant and not other co-workers for the various projects. 64.The fact that the Applicant as the leader of a gang of casual workers could hire and fire members of the gang is not determinative of the fact that he was a sub-contractor under ECO. In Wong Sai-yee v Kong Kwan [1987] 1 HKLR 367, CA, 369G-H it is stated, "True it is that he had wide powers of engaging and dismissing workers, but so do senior officials in companies who are clearly employees. The reality of the situation appears to be that, as the leader of a gang, he was a foreman and that he and the workers were all employed by the respondent". Payment of wages 65.As stated earlier the authorities show that payment of wages either by man-days or by area of marble installed was both indicative of a contract of employment. The Applicant was not paid by a lump sum for completion of a job namely pricing of the job. If this were so it may point to the situation of an independent contractor. But this was not the case here. Supply of equipment and ownership of assets 66.The Applicant and his co-workers brought minor tools and equipment to work under their trade practice. The workers brought their own hammers, trowels, levelers, whilst the Applicant and Mok Wah Kun as gang leaders brought a portable marble cutter and an electric driller (three equipments each costs several hundred dollars). The 2nd Respondent provided marble slabs and other construction materials such as cement, sand, copper wires and marble glue on the site. 67.The Applicant did not provide or own any major equipment (such as hire-purchase of a lorry as mentioned under this factor in p.3 of Fok Kau v Wong Cheung-hon [2001] DCEC 851/1999. Bringing minor tools (price up to several hundred dollars) to work is not determinative of the Applicant being a sub-contractor. As has been seen earlier gangers and craftsmen in the Hong Kong construction industry have the practice of bringing their own minor tools to work. Fixing of times and places of work 68.The Applicant worked from 9:00 a.m. to 6:00 p.m. on the Sai Kung site from Monday to Saturday from 3rd October 2001 - 19th December 2001. The 1st Respondent directed him to do odd jobs at other urban sites such as Cheung Kong Center at a different rate ($630 per man-day). Personal performance and the extent of the obligation to work 69.The Applicant personally performed marble installation work for the 1st Respondent from April to December 2001. He worked exclusively for the 1st Respondent during this period. 70.After the Applicant suffered the accident, during the period of his sick leave, whilst others worked, he did not get paid during the time of his incapacity from work. Without personal performance, he did not get paid. 71.In view of the aforesaid, appraisal of the Applicant's evidence and the relevant law I find that the Applicant was an employee of the 1st Respondent. He was a ganger, the leader of a gang of sub-contractors. He was also a foreman to his co-workers. 72.I therefore find that the Applicant is entitled to the amount of compensation that has been quantified and agreed aforesaid. 73.I give judgment for the Applicant in the sum of $257,702.40 with interest at half judgment rate from the date of accident on 19th December 2001 to the date of judgment and thereafter at judgment rate until payment. I give an order nisi for costs of the application to the Applicant to be taxed if not agreed with Certificate for Counsel. Applicant's own costs to be taxed in accordance with Legal Aid Regulations.
Representation: Mr. Wallace Cheung instructed by Legal Aid Department for the Applicant. Mr. Simon Leung instructed by M/s Hastings & Co for the Respondent. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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