11 indicia used to determine rider was independent contractor
Web platform workers such as Uber drivers and food delivery “riders” are part of a new and developing group in Hong Kong, which has greatly expanded during and following the COVID-19 pandemic.
The District Court case of Gurung, Sanjayaman v. Deliveroo Hong Kong Limited [2024] HKDC 1932 is one of the more relevant cases in recent years which shed some light on the issue of whether these platform workers are regarded as employees or independent contractors.
The applicant, a Deliveroo rider, applied under the Employees’ Compensation Ordinance (ECO) for compensation following a traffic accident during one of his deliveries.
The respondent, Deliveroo Hong Kong, applied to strike out the rider’s application on the ground that, among other things, the application was frivolous and vexatious since it was plain and obvious that the rider was not an employee of Deliveroo, as required pursuant to s. 5 of the ECO, but was a self-employed contractor.
The case authorities on the status of workers over the years in Hong Kong developed a list of 11 indicia to determine, as a matter of overall impression, whether there is an employment relationship. The 11 indicia are as follows (see Court of Final Appeal decision in Poon Chau Nam v. Yim Siu Cheung (2007) 10 HKCFAR 156 as summarised in Lee Wai Kei Wicky v. World Family Limited HCLA 35/2015 Judgment dated 3 October 2017):
The court made the following assessment in relation to the 11 indicia in the rider’s case.
Indicia 1 - level of control: The rider was free to accept or reject orders offered to him and he was not forced to achieve a specified number of deliveries to be completed over a set period.
Any basic tracking functions on the platform for the benefit of Deliveroo can be sufficiently explained by commercial realities and the need for business efficacy found even in non-employment relationships.
Indicia 2 - provision of equipment: It was significant for the court that the rider provided and used his own motorcycle and mobile phone. The provision of “Rider’s App” being only an app, however, was insignificant.
Indicia 3 and 8 - work arrangements: The rider was expressly entitled to delegate the delivery tasks to third parties and engage in other businesses including those with Deliveroo’s competitors. Whether the rider actually did so is immaterial to the determination.
Indicia 4 and 5 - financial risks: The rider arranges and maintains his own motorcycle and pays the expenses relating to it (e.g. price of petrol). He alone would bear the risk of committing any traffic offences. Accordingly, he retained ownership of any financial risk and profit.
Indicia 6 - investment / management responsibility: The rider made management and investment decisions over his own work which determined his productivity and, therefore, his income. He had a choice whether to accept orders and manage the time of his work taking into account the costs of providing and using his own equipment.
Indicia 7 - integral part of business: The rider was not engaged on an ongoing basis and had no management obligations. Even if Deliveroo encouraged the use of Deliveroo’s branded equipment, the rider was not required to do so.
Indicia 9 - agreement of parties: The parties expressly agreed that the relationship was one of supply of services. Nothing in the agreement between the parties referred to having an employment relationship.
Indicia 10 - tax and insurance: Deliveroo did not make any MPF contributions or tax filings on behalf of the Rider. Deliveroo only purchased a voluntary insurance policy not compelled by law.
Indicia 11 - industry standard: No usual structure or industry standard can be discerned at the time of this decision. The court did not put any weight on the Labour Tribunal’s ruling in Zeek’s case (where it was held that gig workers on the digital platform were employees) as there was no published written decision (see the report from the media) and, in any case, the facts were distinguishable.
Ultimately, the court concluded that there was no employment relationship for the purpose of the ECO compensation application and Deliveroo successfully struck out the rider’s claim.
In this case, the court expressly acknowledged that the status of platform workers is a developing area of employment law in Hong Kong where there is no established industry standard or usual structure for reference. Hence, each case involving the status of platform workers will likely turn on its specific facts and circumstances.
Companies are reminded to structure their relationship with employees or workers appropriately so as to minimise the risk of any dispute (similar to Gurung and Zeek case above) having regard to the relevant indicia, and in such a way that all relevant aspects are consistent with the relevant structure.
Employers should also have in mind the precise nature of the relationship with their workers and the potential pitfalls in the use of “contract workers” and “agency arrangements” in using workers in “gig” and/or zero hours arrangements. There are authorities where even under such arrangements implied contracts of employment may exist between the workers and “end user.”
Russell Bennett is Head of the Employment Practice at Tanner DeWitt in Hong Kong. Mark Chiu is a Consultant in the Employment Practice at Tanner DeWitt in Hong Kong.
