Wu Suen Pong v. Kwok Wing Man t/a Ching Ching Transportation Co
Read the full judgment text of DCEC 2075/2013 on BabelCite. This District Court judgment was delivered on 22 June 2015.
1. This is the trial of an application by Wu Suen Pong (the “Applicant”) for employees’ compensation pursuant to the provisions of sections 9, 10 and 10A of the Employees’ Compensation Ordinance, Cap.282 (“ECO”). The Applicant was a driver/delivery worker by occupation. On 13 July 2013, he sustained an injury at work. At the time he was the driver of a 5.5 tonnes goods vehicle KT 729 (the “Lorry”). Kwok Wing Man (“Kwok”) trading as Ching Ching Transportation Co (the “Respondent”) was the reg
Cited by 1 case · Cites 5 cases
|
DCEC 2075/2013 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION EMPLOYEES’ COMPENSATION CASE NO 2075 OF 2013 ------------------------------------- IN THE MATTER OF AN APPLICATION BETWEEN
-------------------------------------
-------------------- JUDGMENT -------------------- Introduction 1.This is the trial of an application by Wu Suen Pong (the “Applicant”) for employees’ compensation pursuant to the provisions of sections 9, 10 and 10A of the Employees’ Compensation Ordinance, Cap.282 (“ECO”). The Applicant was a driver/delivery worker by occupation. On 13 July 2013, he sustained an injury at work. At the time he was the driver of a 5.5 tonnes goods vehicle KT 729 (the “Lorry”). Kwok Wing Man (“Kwok”) trading as Ching Ching Transportation Co (the “Respondent”) was the registered owner of the Lorry at the material time. She denies that she was the Applicant’s employer. Kwok says that she had sub-contracted the delivery work to one Lam Ka Po (“Lam”) and the Applicant was Lam’s employee or independent contractor at the time of the accident. The Applicant’s case is that he was the Respondent’s employee and was paid $550.00 a day. During the time he was employed he received all work instructions directly from the Respondent and the Lorry and the pallet truck were provided by the Respondent. Who was employer of the Applicant? 2.The issue in this application is whether the Applicant was the Respondent’s employee or was the Applicant Lam’s direct employee (or independent contractor) and Lam was the Respondent’s sub-contractor. Their respective cases are set out in their witness statements and they both gave oral evidence. Applicant’s statement and evidence 3.According to the Applicant in around 2012 he and his friend Lam did casual work for different employers in the transportation industry. In the year prior to the accident he had worked as a driver for the Respondent on a casual basis making deliveries to different destinations. He was paid $550.00 a day and was paid through Lam. 4.On a day in April 2013 the Respondent told the Applicant that for reasons unknown drivers employed by her husband left their employment one after another so she was very short of manpower. The Respondent asked the Applicant if he was willing to work for her on a regular basis (長工形式). As the Applicant had been working together with Lam all along, he asked the Respondent to ask Lam. Afterwards Lam responded and asked the Applicant to work for the Respondent. At the time the Applicant was told that he had to work 6 days a week and daily wage would remain at $550.00 per day. The Respondent would also supply the lorry and pallet truck to the Applicant to carry out the work. The Applicant would follow the Respondent’s directions and deliver goods from a godown in Lai Chi Kok to various “Yoshinoya” (吉野家) shops. Thereafter he would go to Kwun Wah Mirror Group Building in Shatin to upload some goods onto the Lorry. He could park the car in the Respondent’s premises or drove it to park it nearer his home. The next morning the same routine was followed. No written agreement was signed between the Applicant and the Respondent. The Respondent did not buy MPF for the Applicant and the Applicant did not ask for it, though from previous work experience he was aware of the need to do so. 5.The Applicant had possession of the Lorry but he had to follow the Respondent’s directions as to where to go to fill up the Lorry with diesel. Other expenses including parking, tunnel fees were also the Respondent’s responsibility. However, if he got penalty for illegal parking due to his own negligence, he would pay for it himself. The Applicant kept all receipts and claimed reimbursement from the Respondent. 6.As regards his salary, it was $550.00 per day and he worked 26 days a month so it came to $14,300.00. He was paid at half monthly intervals. According to the Applicant since he was paid through Lam previously when he worked on a casual basis, this arrangement was maintained during the 3 months he worked for the Respondent. 7.On the day of the accident the Applicant delivered goods from Lai Chi Kok to a Yoshinoya shop. At about 5 pm he arrived at the 3rd floor of Kwun Wah Mirror Group Building in Shatin. A pallet truck was provided with the Lorry but on the day in question there were too many deliveries and a colleague had taken the pallet truck away from the Lorry. The Applicant had to use a pallet truck from the warehouse and in the process of pulling the pallet truck, his left foot was hit by the pallet truck and injured. He went to Prince of Wales Hospital in Shatin for treatment. After the accident the Respondent did not pay the Applicant the 4/5 statutory sick leave pay. Around 21 July 2013 the Respondent arranged to meet the Applicant in Yuen Long and gave him a sum of around $10,000.00 as some kind of compensation for this accident. 8.In viva voce evidence the Applicant said that he was entitled to overtime pay after 5 pm at the rate of $70 per hour. There was on average 8 to 10 hours of overtime each month. He was adamant that it was Kwok who decided and gave instructions on overtime work. Also, for any deviation from the daily routine, he got direct instructions from Kwok. Kwok Wing Man’s statement and evidence 9.Kwok is the proprietor of the Respondent. In about June, July 2008 the Respondent obtained a contract with HFG Procurement Limited (“HFG”) to deliver food stuff to the Yoshinoya shops. 10.In the beginning when the Respondent delivered for HFG the Respondent had its own drivers and workers. Later due to increased demand for manpower in the logistics business it became difficult to hire full-time staff. At the end of 2012 or early 2013 she started to co-operate with Lam as Lam had been in the transportation business and was well connected and could hire drivers and workers more easily. The Respondent would provide the vehicles, fuel and pay tunnel toll and parking charges. The Respondent also provided pallet trucks. If required the Respondent would also provide plastic wraps. Lam would provide the manpower and hire his own driver and workers. Lam was paid a service fee of $1,100.00 per day and if HFG required more manpower the she would negotiate with Lam and it was later agreed that each extra worker was fixed at $550.00 per day. She claims that when she started to co-operate with Lam she did not hire drivers or workers for the HFG contract works. Drivers and workers hired by her and her husband carried out other transportation work. During her co-operation with Lam she did not take an interest in who Lam hired nor did she know how much Lam paid the drivers or their terms of service. All this was left to Lam and Lam need not seek her permission. 11.She claims that the Applicant was not hired by the Respondent but was hired directly by Lam. She did not interview the Applicant for the job nor discuss the terms of employment with the Applicant. She further claims that she had never seen the Applicant before Lam hired him. It was only subsequently that she was aware that a worker known as ah Pong was the Applicant. After the Applicant was injured on 13 July 2013 Lam told Kwok that the Applicant was injured and was in financial difficulties as he could not work. She states that she gave him a few thousand dollars. 12.In viva voce evidence the Respondent said that Lam was responsible for paying the overtime payments. When asked by the court she stated that the workers’ hours were between 8 am and 5 pm and they were entitled to overtime payment for working after 5 pm. Lam was responsible for recording the overtime and he would present the record to her and she would then pay the workers through Lam. 13.Belatedly, Kwok claimed for the first time under cross-examination that the monthly service fee with Lam was a fixed sum of $35,000 or $36,000 for each vehicle. This apparently is not entirely consistent with what she said in her statement. She claimed she was only able to recall the night before she came to court. Counsel for the Applicant Mr Lim suggests that this was a recent fabrication to support her case that Lam was a sub-contractor. Who was the Applicant’s employer, Lam or the Respondent? 14.Both counsel referred me to the leading case on this question: Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951. It was pointed out there that the 8 criteria for determining the question of service of contract were as follows:-
15.Mr Lim argues that the Applicant was an employee of the Respondent because Lam himself was also an employee. Lam’s position was more like a foreman in the Respondent rather than an independent contractor. He draws the court’s attention to the following points:-
In those circumstances it cannot be said that Lam was carrying out business on his own account as he could only use the Respondent’s Lorry to carry out deliveries under the HFG contract and must follow the routine dictated by the contract which was entered into by the Respondent. 16.Insofar as hiring workers was concerned the question is whether Lam was hiring workers on his own account or was he hiring workers on behalf of the Respondent to carry out the HFG contract. Whilst the basic fee was fixed at $1,100 per day if extra manpower was required, the Respondent would pay Lam $550.00 a day for each extra worker. Further the Respondent was responsible for overtime payment. Mr Lim submits that under this arrangement Lam was NOT hiring workers on his own account but was doing this on behalf of the Respondent. Lam was no more than a foreman/agent of the Respondent, given the task of hiring workers for the Respondent. It may well be that he had more connections than the Respondent and can hire drivers more easily but that does not make Lam an independent contractor. Lam, and the Applicant for that matter, had to follow the daily routine and make the deliveries according to the Respondent’s instructions. Mr Lim submits that both Lam and the Applicant were the Respondent’s employees. 17.In Cheung Tuen Piu v China Talent Engineering Limited DCEC no 841 of 2010 the applicant, a painting worker, claimed employees’ compensation from the respondent. It was not disputed that previously the respondent had employed workers as a daily wage worker prior to 2007. In 2007 the respondent engaged the applicant to paint newly installed water pipes at Kwai Ching House and Kwai Ming House, Kwai Fong Estate. Each of those building comprised 38 stories and the price was agreed between the applicant and the respondent at $500 per storey. The respondent supplied the paint and ladder but the applicant supplied the paint brushes. Apart from the applicant himself the applicant also asked his brother to work as a painter for this project. Deputy Judge Grace Chan held at paragraphs 80 and 81 of the judgment,
18.I agree with the analysis of Mr Lim. The arrangement between the Respondent and Lam in the present case was no different to Cheung Tuen Piu’s case. In view of the matters referred to, I have little hesitation in holding that Lam was an employee and so was the Applicant. 19.It may not be entirely satisfactory for me to come to this view without hearing the evidence of Lam. Mr Mak for the Respondent criticizes the Applicant for not calling Lam for fear that Lam’s evidence would be against his case. I find this criticism rather frivolous. The Respondent was in fact in a much better position to call Lam as it could certainly exert more influence on Lam’s economic welfare than the Applicant. If any adverse influence is to be drawn from the absence of Lam, it would be more against the Respondent than the Applicant. Section 24 of the ECO 20.At the beginning of the hearing I drew counsel’s attention to section 24 of the ECO. Section 24(1) provides that:-
21.If section 24 applies then it does not matter whether the Applicant was employed by Lam or the Respondent, because even if the Applicant was employed by Lam, the Respondent would be liable as the principal contractor under section 24. Mr. Lim submits that as the evidence clearly showed that the Respondent and NOT Lam was the employer, it is not necessary for the court to go onto consider whether the Respondent might be liable as principal contractor under section 24 of the ECO. Whilst I agree with Mr Lim, I shall for completeness state my views on this issue. 22.Mr Mak for the Respondent argues that section 24 is not applicable firstly because there is a possibility that even the Applicant himself was an independent contractor (of Lam). I think this is a very weak argument. Applying the Poon Chau Nam test to the Applicant, he was clearly an employee, either of Lam or of the Respondent. Mr Mak then went on to argue that section 24 is not applicable because the formalities required under section 24(6) were not complied with. Section 24(6) provides that:-
23.At his closing submission Mr Mak drew me to the attention that the issue of the effect of failure to comply with section 24(6) has been dealt with in 3 previous District Court cases. As the jurisprudence now stands, there is a divergence of views which the upper court does not yet have the opportunity to reconcile. The position is summarized in the The Annotated Ordinances of Hong Kong (2012 Reissue), Employees Compensation Ordinance(Cap 282) at §24.14 [#7]:-
24.For my part, I believe the approach in the Yu Wing Suncase is to be preferred. The ECO itself is silent on the effect of a failure to follow the formalities of section 24. However, bearing in mind the purposive approach to statutory interpretation set out in section 19 of Interpretation and General Clauses Ordinance (Cap 1), the ECO being primarily enacted to ensure that injured employees would get compensation for injuries sustained in the course of employment, I have no doubt that it should not be interpreted strictly against the employee. This is especially so in circumstances like the present case where the principal contractor knew clearly who the alleged sub-contractor was and all the particulars of the alleged accident and the injuries. I see no prejudice at all to the alleged principal that could be said to be caused by the failure to comply with section 24(6). Quantum 25.The following matters have to be determined, namely:-
Earnings 26.The Applicant’s case was that he was paid $550 per day and worked 26 days per month. Delivery work had to be done daily. The Applicant took 4 days off per month. As the Respondent claims that it did not employ the Applicant and had no idea how much Lam paid the Applicant, she is in no position to challenge the Applicant’s earnings. Mr Lim submits and I agree that on balance he has proved that he worked 26 days a month. He also earned overtime of $630 per month. Therefore his monthly income was $14,300 ($550 x 26) + $630 overtime= $14,930. This is the figure I would adopt. 27.The Applicant was aged 27 at time of accident. Percentage of Loss of Earning Capacity 28.The Applicant was awarded 2% Loss of Earning Capacity by the Employees’ Compensation (Ordinary Assessment) Board on 28 May 2014. There was no appeal against this. Sick leave 29.Sick leave was granted from 13 July 2013 to 10 January 2014, a total of 182 days. Medical expenses 30.Medical expenses came to $340.00. Compensation 31.Compensation is as follow:-
Conclusion 32.I hold that the Applicant was an employee of the Respondent at the time of the accident. Even if I am wrong on this, the Respondent is liable under section 24 of ECO. 33.I order compensation in the sum of HK$101,665.86 be paid by the Respondent. Interest shall accrue at half judgment rate from the commencement of this Application until judgment and thereafter at judgment rate. I also award costs of this Application to the Applicant to be taxed if not agreed and the Applicant’s own costs be taxed in accordance with Legal Aid Regulations. 34.I initially asked the parties to submit statement of costs for assessment. However, bearing in mind there is a possibility that the Applicant might need to resort to the Employees Compensation Assistance Fund, which would only pay taxed costs (as per section 23 of the Employees Compensation Assistance Ordinance, Cap 365), I should better leave the assessment of costs to the taxing master. 35.Yet I note from the statement of costs submitted by the Applicant that, probably because of the seniority of Mr Lim, the amount of costs claimed is several times the amount of the compensation. Whilst the court was ably assisted by Mr Lim, I do not understand why counsel of such seniority was assigned by the Director of Legal Aid for this relatively straightforward matter. If the amount of costs was significantly taxed off, it may eat deeply into the amount of compensation to the Applicant. On the other hand, a generous taxation in favour of the Applicant may not seem entirely fair to the Respondent. 36.In my view, this case just barely passes the threshold for awarding certificate for counsel, and I so award. I could only hope that all parties (including counsel, solicitors and the Director of Legal Aid) could work out a sensible solution to resolve the issue of costs.
Mr Patrick Lim, instructed by V Hau & Chow, assigned by the Director of Legal Aid, for the applicant Mr Newton Mak, instructed by Kong & Chang, for the respondent | ||||||||||||||||||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case