CHEUNG CHO KEUNG v. HUNG KAI CHUN t/a BEN HUNG DECORATION ENG

DCEC 1021/2015

[2018] HKDC 1069

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1021 OF 2015

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JDGEMENT

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Introduction

1.  This is an application for employees’ compensation taken out by the applicant against the respondent pursuant to the Employees’ Compensation Ordinance (Cap 282) (the “Ordinance”).

2.  The applicant was born in Hong Kong and was 47 at the date of the accident.  He met the respondent in or about 1996.  He worked for the respondent as a casual carpenter from time to time.  Each job lasted from a few days to a few months.  On each occasion, the respondent would ask the applicant if he could help on a particular job.  The applicant would go if he was available.  If he was doing work for someone else, however, he would tell the respondent that he could not make it.

3.  When the applicant worked for the respondent, the respondent or his son would give instruction to him as to what to do.  The applicant would regularly report to them.  He was paid at a daily rate.  If he worked overtime, he would get additional payments.  If he needed to take leave, he would notify the respondent and asked for permission.

4.  The respondent provided most of the major equipment.  The applicant would bring along his own small tools.  If the job needed to purchase materials, he would ask the respondent.  If the respondent was not free to purchase them, he would do so on his behalf and the respondent would reimburse him afterwards.

5.  On or about 5 December 2014, the respondent asked the applicant to renovate a flat at Tseung Kwan O.  The job lasted from 5 December 2014 to the morning of 10 December 2014.  In the afternoon of 10 December 2014, the respondent asked the applicant to carry out renovation works at an office building at Sheung Wan (the “Site”).  The applicant’s working time was from 9:00 am to 6 pm. He was paid at $1,050 per day.

6.  On 12 December 2014, the applicant was using a pneumatic gun that the respondent provided to strengthen a wooden light trough at the Site.  He was working from the 3^rd step of the ladder (also provided by the respondent).  A nail rebounded against the wood and hit him in his right eye.  The respondent was not at the Site but his son was there.  He called the police and the ambulance.  The applicant was taken to Queen Mary Hospital.

7.  The applicant underwent various operations and medical care for his right eye.  Eventually, he lost the vision of his right eye, which can now only detect brightness and darkness.  He resumed some part time work since July 2015 and is now making about $10,000 per month.

8.  According to the certificate of assessment (the “Certificate”) issued by the Employees’ Compensation (Ordinary Assessment) Board dated 13 November 2015:-

(1)   The period of absence from duty necessary as a result of the injury is from 12 December 2014 to 15 July 2015 (ie around 7.2 months);

(2)   The loss of earning capacity permanently caused by the injury is 50%.

Liability

9.  The respondent disputes that the applicant was his employee.

10.  The applicable legal principles are not in dispute.  As held by Ribeiro PJ in Poon Chau Nam v Yim Siu Cheung 10 HKCFAR 156:-

(1)   The modern approach to the question whether a person was an employee was to examine all the features of their relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment.  This involved a nuanced and not a mechanical approach: painting a picture from the accumulation of detail.  The indicia included the degree of control exercised by the “employer”; whether the person performing the services provided his own equipment; whether he hired his own helpers; what degree of financial risk he took; what degree of responsibility for investment and management he had; and whether and how far he had an opportunity of profiting from sound management in the performance of his task (see paragraphs 9 – 18);

(2)   Contracts of employment might arise on two different levels in the context of casual workers: (a) an umbrella or global contract, that is an over-arching and continuous agreement between the parties, encompassing a series of specific engagements within its span; and (b) a contract in relation to a specific engagement.  The absence of a mutual obligation to supply and take up work was fatal to the existence of (a), but irrelevant to the existence of a contract of employment arising out of (b).  There could be a contract of employment based on a specific engagement, regardless of the absence of any global contract (see paragraphs 23, 34-45);

(3)   The Ordinance covered most class of persons in casual employment.  The effect of the proviso in s 2(1) was to include within the definition of “employee” casual employment under a contract of service, provided such casual employment was for the purposes of the employer’s trade or business.  Under the Ordinance, a mutual obligation to supply and take up work did not have to exist before a worker qualified as an employee.  There were clearly provisions designed to operate where there was no mutual obligation, specifically s.11(2) and 11(7) (see paragraphs 26-33);

(4)   It was in the nature of a casual employment that the worker may take up work wherever it can be found, with one or more employers.  Such a pattern of work had never been treated as a bar to a claim under the Ordinance (see paragraph 61).

11.  In the present case, there are many indicia showing that the applicant was the respondent’s employee.  In particular:-

(1)   The respondent decided what jobs, if any, should be assigned to the applicant;

(2)   The renovation business belonged to the respondent and all profits and losses were for the respondent;

(3)   The applicant bore no financial risk and reaped no financial rewards beyond his daily wages;

(4)   The applicant did not hire anyone to help him;

(5)   He was reimbursed for items purchased for work purposes; and

(6)   The respondent provided the major equipment.

12.  In fact, the respondent had previously filed Form 2 acknowledging that he was an employer of the applicant.  He also pleaded guilty to having no employees’ compensation insurance.  Under cross examination, he further admitted that he regarded the applicant as his employee and had tried to arrange employees’ insurance for the applicant before he started the relevant work in this case.

13.  The points raised by the respondent appear to be that: (1) there was no mutual obligation between the parties to supply and take up work; and (2) the applicant had other employers before the accident.  As pointed out in Poon Chau Nam, these factors are either irrelevant and in any event do not prevent the applicant from being an employee of the respondent.

14.  I therefore find that the applicant was an employee of the respondent at the time of the accident and the respondent is liable to the applicant under the Ordinance.

Quantum

15.  The key question is how the court should calculate the applicant’s monthly earnings at the time of the accident.  According to the applicant’s employment record, during the 12 months before the accident, he was only employed by the respondent from 5 to 12 December 2014.

16.  Section 11 of the Ordinance provides that:-

“(1) Subject to this section, for the purpose of this Ordinance the monthly earnings of an employee at the time of the accident shall be the earnings:-

(a) for the month immediately preceding the date of the accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was being remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

whichever calculation is more favourable to the employee.

…

(2) Where by reason of the shortness of the time during which an employee has been in the employment of his employer or of the casual nature of the employment, or of the terms of the employment, it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.

…

(6) For the purpose of subsections (1) and (2), employment by the same employer shall be taken to mean employment by the same employer in the same grade in which the employee was employed at the time of the accident, uninterrupted by absence from work due to illness or any other unavoidable cause.”

17.  The Court of Appeal considered the application of section 11(1) and (2) of the Ordinance in the context of an applicant who had been employed for less than 1 month prior to the accident in 黎祥礦 訴 盧景森[2008] 3 HKLRD 643 and 柯永明 訴 何炳池[2008] 4 HKLRD 337.

18.  In黎祥礦, the accident took place on the applicant’s first day of employment working as a casual worker on a construction site.  Yeung JA considered section 11(1)(a) applicable, Cheung JA considered section 11(2) applicable, and Yam J considered section 11(1)(b) applicable.

19.  In柯永明, Chung J (with whom Yeung JA agreed) held that, for an applicant who was employed for less than 1 month, the monthly earnings to be adopted for the purpose of the Ordinance could be calculated under section 11(1)(b) by referring to the actual earnings received by the applicant during that period, provided that it was practicable to calculate the monthly income from the actual earnings.

20.  In the present case, the applicant had worked for about 6.5 days prior to the accident.  The daily rate of applicant then is not in dispute, namely $1,050.  The applicant has also produced a schedule of earnings from 1 November 2013 to 12 December 2014, which shows that he on average worked 23.15 days per month.  Accordingly, I consider that it would be appropriate to adopt $1,050 x 23.15 = $24,307.50 as the applicant’s monthly earnings under section 11(1)(b) or alternatively section 11(2) of the Ordinance.

Section 9 compensation

21.  I find that the applicant’s monthly income at the time of the Accident was $24,307.50.  As this sum is higher than the limit specified in the Sixth Schedule (as at the date of the accident), namely $23,580, I shall adopt $23,580 instead.  There is no dispute on the percentage for permanent loss of earning capacity, which is stated in the Certificate to be 50%.  As such, the assessment is $23,580 x 72 x 50% = $848,880.

Section 10 compensation

22.  The applicant was granted sick leave in the Certificate for the period from 12 December 2014 to 15 July 2015 (ie about 7.2 months).  There is again no dispute on that.  As such, the assessment is $24,307.50 x 7.2 x 4/5 = $140,011.20.

Section 10A compensation

23.  The applicant claims $5,240 as medical expenses.  There is again no issue on this.  Accordingly, I make an award of $5,240 under this head.

Summary

24.  The total amount of compensation awarded is as follows:-

Section 9	$848,880.00
Section 10	$140,011.20
Section10A	$5,240.00
	$994,131.20
Less the amount already paid	($170,000.00)
	$824,131.20

25.  I therefore grant judgment for the applicant against the respondent in the sum of $824,131.20 together with interest thereon at half judgment rate from the date of the accident to the date of judgment and thereafter at judgment rate until payment.

26.  There is no reason why costs should not follow event.  Accordingly, I grant a costs order nisi that the costs of the application be paid by the respondent to the applicant to be taxed if not agreed.  There shall be a certificate for counsel.  The applicant’s own costs be taxed in accordance with the Legal Aid Regulations.  The order nisi shall become absolute unless an application for variation is made within 14 days from the date of delivery of this judgment.

27.  I thank counsel for his assistance.