Yeung Tin Sum v. Wong See Ting t/a Butterfly Valley Co

DCEC 1077/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO.1077 OF 2006

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BETWEEN

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Coram  :  Deputy District Judge S. T. Poon in Court

Date  of Hearing  :  16^th April 2007

Date of Handing Down of Judgment  : 18^th April 2007

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J U D G M E N T

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Introduction 

1.The Applicant is an aluminium-window technician.  He fell from a ladder while at work and sprained his back.  Under the Certificate of Assessment (Form 7), he was assessed at suffering from 0.5% permanent loss of earning capacity and granted 24 days sick leave. 

2.There is no appeal of the assessment from either party.

3.At the start of this trial, parties indicated that they had in fact agreed on quantum in this case.  The amount is HK$12,042.71.

4.As it turned out, the sole real issue in this case is whether there was an employment relationship between the parties on the date of the injury.  On this the Respondent said that the Applicant was an independent contractor rather than her employee.

The Law

5.There can be little dispute that the leading case on the issue of whether there exists an employment relationship within the meaning of the Employees’ Compensation Ordinance Cap.282 (“the Ordinance”) is Poon Chau Nam v Yim Siu Cheung, FACV No.14 of 2006.  Where Mr. Justice Ribeiro, after referring to Section 2(1) of the Ordinance, had this to say at paragraph 28 of his judgment:

“The effect…is to include within the definition of “employee” for ECO purposes, a person working under a contract of service even if his employment is of a casual nature, provided that such casual employment is for the purposes of the employer’s trade or business.”

6.The lack of mutual obligations on the parties to provide and accept further works or services does not render a contract of service to become a contract for service.  It would be of better relevance in determining whether there exists a continuous employment.

7.Parties’ own apprehensions as to the nature of their relationship are relevant but not a very significant factor.  The fundamental test to be applied is this:

“Is the person who has engaged himself to perform these services performing them as a person in business on his own account?  If the answer to that question is ‘Yes’, then the contract is a contract for services.  If the answer is’No’, then the contract is a contract of service.  No exhaustive list has been complied and perhaps no exhaustive list can be complied of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases.  The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and the facts which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.” Market Investigations v Minister of Social Security [1969] 2 QB 173 pp184-185 per Cooke J.

8.This test had been approved and applied by the Privy Council in Lee Tin-sang v Chung Chi-keung [1990] 1 HKLR 764 and adopted by the Court of Final Appeal in Poon Chau Nam.  It is in my view representing the present position of the law that this court should follow. 

Evidence

9.The Applicant and the Respondent gave evidence. It appeared to me that neither of them gave completely honest evidence to the court.

10.The Applicant said that he had been working for one Mr. Lee before he worked for the Respondent.  Mr. Lee received a project from the Respondent in 2004 in which he was involved and worked for 1 day.  In 2005, he saw an advertisement in newspaper employing technicians and he went for an interview.  He only realised at the interview that it was the Respondent who placed the said advertisement.  He then negotiated for his salary with the Respondent and it was agreed that he was employed as a permanent worker with a daily wage of HK$350. 

11.According to the Applicant, he needed to attend to the shop of the Respondent every weekday for work to be assigned by her.  However, if there was no work to be done the Respondent would inform him by phone the previous day so that he did not have to go to the Respondent’s shop next day.  Normally he was not required to report to work on public holidays but if there were jobs, the Respondent would call him to see if he will take them up.

12.Tools were mainly provided by the Respondent.  His salary will be paid twice every month on the 15^th and 30^th  day.   He did not sign on the ledger of the Respondent to acknowledge receipts of the “project fees” as alleged.  Nor did he sign on the receipts of “project fees” in July that had been exhibited by the Respondent.  He had reported to the police for the Respondent’s forgery of his signatures.

13.I do not believe that the Applicant’s signatures were forged.  I have looked at the original of the relevant ledger book.  It is a complete book with all sorts of entries including the daily family expenses of the Respondent.  There were also entries of drawings from others and signed by them.  It is simply a piece of evidence too complicated to forge in a case of this scale.  In respect of the receipts, if the Respondent were to forge them, they would have been dated earlier than July to make the Respondent’s case more convincing.

14.I am of the view that the relevant signatures on the ledger and receipts were in fact signed by the Applicant.  According to the ledger, the Applicant started to sign on it to acknowledge receipts prior to January 2005, it follows that the Applicant must have started working regularly for the Respondent earlier than that.

15.However, it does not necessarily mean that all the evidence of the Applicant has to be rejected.  In relation to whether an accident had actually happened, I accept the evidence of the Applicant.  The Respondent admitted that she was informed of the accident in the afternoon on the same date of the alleged accident.  There is also medical evidence to prove that the Applicant had suffered actual injury.  Last but not least, the Applicant said that his co-worker Mr. Yeung witnessed the incident and came forward to him to look at him.  Although Mr. Yeung denied having witnessed the accident, he said he could not remember whether he had gone to look at the Applicant after the incident.  If there was no such thing happened at all, the answer would have been a definite “no” rather than “not remember”.

16.I also accept that there was indeed an interview held between the parties sometime in late 2004, as admitted by Miss Chan who testified for the Respondent.  It is worth noting that the Respondent admitted in cross-examination that the interview had actually happened but it was not mentioned anywhere in her witness statement or evidence-in-chief. Instead, the Respondent only said that the Applicant was introduced to work for her by Mr. Lee. There was also no description given from her evidence as to what was said in the interview.

17.However, I am unable to accept that the parties had agreed to a daily wage of HK$350 to be paid on the two definite dates.  It is evident from the ledger that the Applicant was paid irregularly with different amounts not necessarily a multiplier of HK$350.  I find that the remuneration of the Applicant was agreed each time the Respondent assigned work to him.

18.It is interesting to note that the Respondent would frequently advance payment to her workers before they perform their work.  It would be against commercial sense to allow such arrangements if the Respondent merely viewed the workers as independent contractors.

Discussion

19.On the basis of the above evidence, I conclude that the intention of parties was to engage the Applicant regularly as a casual worker.  I appreciate the fact that no MPF had been contributed to the Applicant by the Respondent but this factor becomes immaterial in the light of the other evidence.  However, as mentioned in paragraph 7 above, the intention of parties does not in itself determine the issue.

20.The Applicant receives instructions from the Respondent as to when and where to perform the work.  The Respondent provides major equipment and materials.  The Respondent is the one to negotiate with customers and the Applicant takes no part in it.  According to Mr. Yeung, the Respondent would still pay him his wages even if she receives nothing from the customer.  Mr. Yeung and the Applicant face no financial risk. 

21.On the date of the injury, two different workers were assigned by the respondent to perform a single job.  It is for the Respondent to decide how many workers to be deployed for a particular project.

22.There is no business registration taken out by the Applicant.  He employed no staff and maintained no significant equipment except perhaps simple tools such as screwdrivers and gloves.

23.The only material factor to suggest that the Applicant was carrying on his own business is that he accepted the jobs on project basis.  However, this arrangement is not uncommon in the construction field and on balancing the abovementioned factors, I am of the view that the relationship between the Applicant and Respondent was a contract of service.  The Applicant was an employee of the Respondent within the meaning of the Ordinance.

24.Similar to the situation in Poon Chau Nam, “it is the nature of casual employment that the worker may take up work wherever it can be found, with one or more employers” (at paragraph 61).  Working for more than one employer at the same time does not make the Applicant’s status as an employee questionable.

Quantum

25.Quantum is agreed to be HK$12,042.71.

Conclusion

26.In the premises, I order that the Respondent do pay the Applicant the sum of HK$12,042.71 and interest thereon at half judgment rate from the date of Application until judgment and thereafter at judgment rate until payment. 

27.Costs should follow the event, I make an order nisi that costs of this action be to the Applicant to be taxed if not agreed.  This order nisi shall become absolute after 14 days upon handing down of this judgment.

28.The Applicant’s own costs be taxed in accordance with Legal Aid Regulations.

Ms. Tsang Wan Yi of Messrs Marie Tsang, Dustin Chan & Co. for the Applicant.

Mr. Seorge Chu instructed by Messrs Michael Pang & Co. for the Respondent.