Hong Kong court examines different factors, such as monthly earnings and time off
A District Court in Hong Kong recently dealt with a case involving an injured worker and his employer, addressing key aspects of employee compensation under the Employees' Compensation Ordinance.
The worker, employed as a driver, argued for a more favourable calculation of his monthly earnings and sought compensation for his injury-related absence from work.
The case raised questions about how various payments should be categorised and whether a good attendance bonus should be included in salary calculations for compensation purposes.
On 21 October 2019, the driver sprained his back while on duty. A Certificate of Review of Assessment dated 12 March 2021 determined that the worker's permanent loss of earning capacity due to the injury was 0.75%.
The employment contract, dated 1 August 2019, set out a basic salary of HK$18,500 per month, plus a good attendance bonus of HK$500. The employer's lawyer argued that this bonus shouldn't be included in the monthly salary calculations. They said it wasn't habitually given, citing the short employment period before the accident.
The worker's lawyer said that Section 11(1) of the Employees' Compensation Ordinance should apply when calculating compensation. The court agreed with this view. Section 11(1) states:
"[...] the monthly earnings of an employee at the time of the accident shall be the earnings [...] whichever calculation is more favourable to the employee."
The court used the worker's monthly earnings for September 2019, totalling HK$19,000, for compensation calculations under Section 9. The worker was 32 years old at the time of the accident. Using the applicable multiplier of 96, the compensation under Section 9 was calculated to be HK$13,680.
For Section 10 compensation, which covers time off work due to injury, the court looked at the 446 days the worker was absent.
The initial calculation came to HK$225,973.33. However, this wasn't the final amount, as the court had to consider various payments already made by the employer.
The court looked at payments made by the employer to the worker between November 2019 and November 2021. Both sides had trouble categorizing these payments clearly, so the court had to examine each transaction in detail.
One payment of HK$24,704.70 was identified as a termination payment. The employer initially made this when they planned to end the worker's employment. But when they learned he was still on sick leave, they changed their mind. This resulted in an overpayment of HK$9,994.70.
The court also looked at other payments, including monthly salaries, possible work-related expenses, and a final termination payment in November 2021. This detailed review shows how complicated employment compensation cases can be and why clear financial records are important.
The court examined payments for medical expenses under Section 10A of the Ordinance. Both sides agreed on a total of HK$7,877 in medical expenses already paid, with the claimable amount under Section 10A being HK$9,625. This led to an additional award of HK$1,748 under this section.
The court emphasised an important legal principle about keeping awards under different sections of the Ordinance separate. The judge cited a Court of Appeal decision:
"The awards under section 10 and under section 9 should be kept separate and distinct, and where [the worker] was entitled to both, they could not be set off against each other."
This meant the employer couldn't use an overpayment in periodical payments to reduce the award under Section 9.
The court awarded the worker a total compensation of HK$14,244.96. On interest payments and costs, the judge said:
"[The worker] is entitled to interest at half judgment rate from the date of the accident (ie 21 October 2019) to the date of judgment and thereafter at judgment rate until the date of payment."
