Look at whole picture to determine employment relationship, says Hong Kong court
A District Court in Hong Kong recently dealt with a case involving a truck driver seeking compensation for a workplace injury.
The driver claimed he was an employee entitled to benefits under the Employees' Compensation Ordinance, while the logistics company argued he was an independent contractor.
The driver's main arguments centred on the degree of control the company had over his work, the provision of tools and equipment, and the nature of his payment arrangements.
Worker’s accident and claim
On 29 January 2021, the truck driver was injured while unloading goods at Hong Kong International Airport. His left foot became trapped in a conveyor belt that was suddenly turned on without warning.
This accident resulted in the driver being granted sick leave from 29 January to 12 July 2021.
Following the incident, the driver sought compensation under the Employees' Compensation Ordinance (ECO).
He argued that he was an employee of the logistics company at the time of the accident.
Employee or contractor?
The main point of contention was whether the driver was an employee or an independent contractor. The logistics company said the driver had chosen to be a self-employed contractor. They pointed to two signed documents: a "Contract" and a "Declaration" that supposedly established this arrangement.
Latest News
However, the driver argued that he had been employed by the company since October 2020. He said he started as a casual worker before moving to a monthly wage arrangement in November 2020. The driver claimed he was never given the option to be self-employed or work as an independent contractor.
The court looked at both the contract terms and the actual working arrangements to determine the nature of the relationship. Several factors were considered:
The contract required the driver to work at least 9 hours a day, from Monday to Sunday, including public holidays. The logistics company provided the vehicle and covered associated costs like fuel and parking fees.
The contract included terms typically found in employment relationships, such as uniform requirements and conduct expectations. There was no evidence that the driver bore any financial risk or had the potential for increased profits through his own management. The driver received regular payments twice a month, rather than on a per-job basis.
The court found these factors pointed more towards an employment relationship than that of an independent contractor.
Company’s control over alleged contractor
The logistics company tried to explain some of the contract terms to downplay their control over the driver.
For example, they said the driver didn't have fixed working hours, despite the contract requiring at least 9 hours of work per day. The company also claimed that drivers could use company vehicles for outside work, subject to a profit-sharing arrangement.
However, the court rejected these explanations. The judge said:
"[The employer's] allegations are wholly incredible... There is not a shred of evidence to show that [the worker] (or any driver) had to pay any rent for the use of [the employer's] vehicles. There is also nothing in the Contract or Declaration that mentions any profit sharing scheme if the drivers used [the employer's] vehicles."
Not an independent contractor
After considering all the evidence, the court ruled in favour of the driver. The judge said:
"Having considered all the relevant indicia of this case as well as the parties' respective evidence, I am of the view that, as a matter of overall impression, the relationship between [the worker] and [the employer] is one of employment and the Declaration is to be wholly disregarded."
The judge further said:
"[The worker] is therefore entitled to claim compensation against [the employer] under the ECO."
This statement emphasises that the substance of the working relationship took precedence over formal labels or agreements.
The court awarded the driver compensation under the ECO, totalling $208,803.10. This included compensation for loss of earning capacity, period of sick leave, and medical expenses.
The court reminded employers that simply labelling workers as independent contractors is not enough to avoid employment obligations.
The decision also illustrates the various factors courts consider in these cases, including control, integration into the organisation, financial arrangements, and the practical realities of the working relationship.
As the judge said:
"The object of the exercise is to paint a picture from the accumulation of detail, and the overall effect can only be appreciated by standing back from the detailed picture, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole."