Foodpanda delivery workers’ 2-day strike

On 13 and 14 November 2021, about 300 unhappy Foodpanda delivery workers went on strike. After two rounds of talks that lasted more than 14 hours, Foodpanda Hong Kong and the delivery workers reached a deal on pay on 18 November 2021 and the strike was ended.[1]

According to South China Morning Post, the strike was sparked by the recent drop in fees per order for on-foot deliverers and motorbike riders from HK$28 to HK$22 and from HK$50 to HK$40 respectively.[2]

The strike has highlighted employment law issues surrounding the gig economy, a sector booming not just in Hong Kong but globally.

Gig economy and gig workers

Gig economy is an on-demand, peer or platform economy where businesses can hire workers or freelancers to take up on-demand jobs or “gigs” through digital platforms. The term “gig” is borrowed from artists, musicians or comedians who get paid for their appearances or performances commonly known as gigs. People who work in the gig economy are commonly referred to as “gig workers”.

Gig workers may enjoy a greater flexibility as to when and where to work. They are paid for the gig jobs that they do, and may not have a regular income.

Are gig workers “independent contractors” or “employees”?

In Hong Kong, an individual may perform work either as an “independent contractor” or an “employee”. Whether an individual is an independent contractor or an employee has a significant impact on his or her entitlements to statutory benefits and duties imposed on the employer. This undoubtedly has a bearing on the financial planning, risk management and business variability of the employers.

Classification of “independent contractor” vs “employee”

There is no hard and fast rule on how to distinguish an “employee” from an “independent contractor”. In the landmark case of Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951, Hong Kong’s highest court ruled that the modern approach of the question of whether one person was another’s employee is to examine all the features of their relationship against the background of the indicia developed in the case law with a view to deciding whether, as a matter of overall impression, the relationship was one of employment.

In essence, a myriad of non-exhaustive factors and indicia of employment will likely be taken into account by the courts to determine whether there is an employment relationship between the parties, including:

1.     the degree of control over procedures, working time and method exercised by the employer;

2.  who provided the equipment for performing the services;

3.     who is responsible for insurance and tax;

4.     whether the individual may hire additional helpers for performing the services;

5.     the degree of financial risk taken by the parties;

6.     the degree of responsibility for investment and management of the parties; and

7.     whether and how far the individual had an opportunity of profiting from sound management in the performance of his or her tasks.

Overview of the statutory entitlements for “employees”

Currently, only employees will be entitled to the basic protection under the Employment Ordinance (Cap. 57). In particular, employees who are employed under a continuous contract (i.e. employed continuously by the same employer for 4 weeks or more with at least 18 hours worked in each week), are entitled to employment benefits such as paid annual leave, statutory holiday pay, sickness allowance, severance payment or long service payment. Further, only employees will be entitled to other statutory protection such as the minimum wage under the Minimum Wage Ordinance (Cap. 608) and compensation arising from work injuries under the Employee’s Compensation Ordinance (Cap. 282).

Are gig workers “independent contractors” or “employees”?

It is uncertain whether food delivery gig workers are “independent contractors” or “employees” of their food delivery platforms.

On the one hand, food delivery platforms may have little or no control over the working hours and delivery methods of their delivery gig workers. These gig workers have their own motorbikes for delivery. They may (in theory) choose which delivery platforms they want to work for, which orders to pick up and so on. These factors suggest gig workers are independent contractors.

On the other hand, these gig workers are required to wear uniforms with the logo of the relevant delivery platforms in the course of the delivery. It has been suggested the apps where gig workers received their job orders are driven by algorithms that monitor and put control over them. These factors suggest the gig workers are employees.

Gig workers are probably in a class of their own; somewhere between “independent contractors” and “employees”

Perhaps gig workers are neither “independent contractors” nor “employees”. In reality, gig workers are more akin to independent contractors. That said, they are not “independent contractors” in the more traditional sense; although they are self-employed, they provide their services as part of a profession or business undertaking carried on by someone else.

Indeed the writer thinks that any exercise to try to classify whether a gig worker is an “independent contractor” or an “employee” may not be helpful and can create injustice for gig workers and other stakeholders concerned if the courts were to rule one way or another.

Way forward

There have been calls for the Hong Kong Government to address the labour law issues surrounding gig economy. Indeed, the gig economy is booming and growing at a very fast pace together with technology.

If the Government wants to protect gig workers, particularly, those who are in a subordinate, dependent and vulnerable position, changes should be performed by the legislature (and not the courts). Gig workers may be self-employed, however, they are not “independent contractors” in the traditional sense; although they provide services as part of a profession or business undertaking carried on by someone else, they are not “employees”. The Government could perhaps consider reviewing the current employment legislation framework and create an “intermediate class” for gig workers and set out what protections and benefits they are entitled to. For example, in the United Kingdom, there is an intermediate class called “workers”, who tend to have some characteristics of both of “independent contractors” and “employees”, are entitled to minimum wages, paid leave and other legal protection. As an international city, Hong Kong will, sooner or later, need to review its legislations as gig economy continues to boom.