Read the full judgment text of FACV 000014/2006 on BabelCite. This FACV judgment was delivered on 13 March 2007 before Chief Justice Li, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Mortimer NPJ and Lord Scott of Foscote NPJ.
Employees' Compensation Ordinance (Cap 282) – definition of 'employee' – casual workers – contract of service versus contract for services – absence of mutual obligation to provide and accept work – 'umbrella' or 'global' contracts versus specific engagements – effect of worker's self-employed Mandatory Provident Fund arrangements – concurrent contracts of service with more than one employer. The appellant, a skilled air-conditioning worker, was engaged by the respondent air-conditioning contractor on a 'casual as required basis' from November 2000 and paid a daily wage. On 18 September 2002, while welding an air-conditioner part at Causeway Bay Plaza I, a welding rod shattered and injured his left eye, causing 30% loss of vision and a 45% loss of earning capacity. The District Court and the Court of Appeal held that, despite the accident occurring in the course of a specific engagement, no contract of employment existed because there was no mutual obligation on the respondent to offer work or on the appellant to accept it, and because the appellant had chosen to make his own Mandatory Provident Fund arrangements as a self-employed person. Held, allowing the appeal: the absence of a mutual obligation to supply and take up work, while fatal to the existence of an 'umbrella' or 'global' contract of employment, is irrelevant to whether each specific engagement under a casual working arrangement constitutes a contract of employment. The proper test is the multi-factorial approach derived from Lee Ting Sang v Chung Chi-Keung, Ready Mixed Concrete, Market Investigations and Hall v Lorimer, asking whether the worker is performing services as a person in business on his own account. The Employees' Compensation Ordinance itself contemplates casual workers employed for the purposes of the employer's trade or business (s 2(1) proviso (b)) and contains express mechanisms (ss 11(2) and 11(7)) for computing earnings where the employment is of a casual nature or involves concurrent contracts of service with multiple employers, demonstrating that a mutual obligation is not a precondition to coverage. The Court of Appeal's reliance on Cheng Yuen v The Royal Hong Kong Golf Club was misplaced: both the majority and the dissent in that case accepted that a contract of employment could arise on each specific engagement notwithstanding the absence of any umbrella obligation. Applying the indicia of employment to the undisputed facts – the respondent's ownership of the business, equipment and profits, the appellant's lack of financial risk or investment, his integration into the respondent's organisation, his daily wage, his lack of helpers and his lack of opportunity for profit – the only reasonable conclusion was that the appellant was an employee of the respondent at the time of the accident. The appellant's self-employed MPF labelling, although a relevant factor, could not displace the objective reality of the relationship; parties cannot contract out of the statutory protection conferred by the ECO, and s 31(1) renders void any agreement purporting to relinquish such rights. Working for more than one employer on a casual basis was not a bar, being expressly contemplated by s 11(7) of the ECO. The appeal was allowed, the decisions below set aside, judgment entered for the appellant, and the claim remitted to the District Court for assessment of quantum. Costs were ordered nisi in favour of the appellant, with his own costs to be taxed in accordance with the Legal Aid Ordinance.
Legal issues: Whether absence of mutual obligation to provide/accept work precludes a contract of employment under the ECO · Whether the ECO's casual-employment provisions support an employee finding · Whether Cheng Yuen v The Royal Hong Kong Golf Club supports the view that absence of mutual obligation precludes a contract of employment · Whether the appellant's self-employed MPF arrangement negates employee status under the ECO · Whether working for more than one employer on a casual basis affects employee status · Whether the appellant was an employee of the respondent at the time of the accident
Outcome: Appeal allowed; the decisions of the District Court and the Court of Appeal were set aside; judgment entered for the appellant; the claim was remitted to the District Court for assessment of the quantum of compensation.
Cited by 11 cases · Cites 2 cases