This article aims to discuss how the Court would determine whether an employer-employee relationship existed, in particular, when the contract entered into by the parties was not named as an employment contract, but a sub-contract describing the injured worker as an independent contractor or self-employed person.
Indicia of Employment
1. whether the worker was carrying on business on his own account or carrying on the business of the employer;
2. the degree of control exercised by the employer;
3. whether the worker provides his own equipment;
4. whether the worker hires his own helpers;
5. what degree of financial risk the worker takes;
6. what degree of responsibility for investment and management the worker has; and
7. whether and how far the worker has an opportunity of profiting from sound management in the performance of his task.
In Poon Chau Nam v Yim Siu Cheung trading as Yat Cheung Airconditioning & Electric Co. FACV 14 of 2006, Mr. Justice Ribeiro PJ opines that the modern approach to the question whether one person is another’s employee is to examine all the features of their relationship against the background of the indicia developed in the case laws with a view to deciding whether, as a matter of overall impression, the relationship is one of employment.
In Poon Chau Nam, the air-conditioning business belonged to Yim. Yim decided which jobs should be assigned to Poon and paid him to do them at the daily rate of $550, plus any overtime allowance. All the profits and losses of the business were for Yim’s account. Poon bore no financial risks and reaped no financial rewards beyond his daily-rated remuneration. Yim managed the business and hired several other workers, some of whom would sometimes work alongside Poon on a job. Poon personally did the work assigned to him. He did not hire anyone to help. Travel expenses incurred in the course of the work were borne by Yim who sometimes drove Poon to the work site in his van, particularly where heavy equipment had to be transported there. Such equipment was owned by Yim. Whenever items had to be purchased by Poon for work purposes, he was reimbursed by Yim, even where the amounts were very small. Poon was a skilled air-conditioning worker and, like the others who were undoubtedly Yim’s employees, did not require supervision or control over the manner of carrying out the work. So the control test is, in the circumstances, of little relevance. The other indicia all point clearly to an employer-employee relationship entered into for each specific engagement.
The main difference between Poon and the other workers was that his employment was of a casual nature whereas theirs was permanent and paid on a monthly basis. The Court considered sections 2(1), 11(2) and 11(7) of the ECO and has no hesitation to hold that ECO recognizes an employee whose employment is of a casual nature and who may work for more than one employer.
In regard to the fact that Poon had made his own Mandatory Provident Fund (“MPF”) arrangement as a self-employed person, Mr. Justice Ribeiro PJ held that the objective facts strongly supported the conclusion that Poon was an employee at the time of accident and the fact that he labelled himself as a self-employed person for MPF purpose did not change the picture concerning Yim’s liability under the ECO.
Contracting out of the ECO
Therefore, if the injured person should be properly regarded as an employee on the objective facts and upon application of the indicia of employment as discussed above, any agreement made by the parties describing the injured person as an independent contractor or a self-employed person will not affect the employer’s liability under ECO.
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2015