SZE WING YAM v. CHINA STATE CONSTRUCTION ENGINEERING CORPORATION AND OTHERS

DCEC571/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES COMPENSATION CASE NO. 571 OF 2003

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R U L I N G

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1. This is an application for periodical payments. The history of the matter can be stated shortly. The applicant was injured on 28 August 2001. He was employed as a steel-binder by the 3rd respondent. In the early stages of the litigation, it was not immediately clear who his immediate employer was. His case, as first pleaded, alleged that the 1st respondent was the principal contractor at the building site where all of this happened, and that is not in dispute.

2. There was also the allegation that the 2nd respondent was the employer but it has subsequently emerged that the 2nd respondent had sub-contracted this work to the 3rd respondents who were the applicant's direct employer. It does not matter for the purposes of today precisely how the injury came about, but what I can indicate is that as a result of it, the applicant received sick leave for a little over two years, expiring on 4 September this year. He has in fact been in receipt of periodical payments totalling $448,000 but beyond that, the 3rd respondents now decline to go.

3. It is suggested that when one looks at the circumstances of this matter that there is a very real risk that he may have already been overpaid by them, and if that is ultimately shown to be the case, then the 3rd respondents may well have suffered an injustice in that any prospects of them getting back the overpaid amount are, for all intents and purposes, non-existent. So I am required to consider this matter with some care.

4. There is no doubt that the applicant was paid $1,200 a day for his work as a steel-binder. The history of his employment appears from his affirmation and what is clear is that he is a person who has over the years kept in fairly regular employment although, in common with many people who work in the building industry, those employments were not of particularly long duration with the same employer, and this in fact is what has happened here because he was only working for these particular respondents for three days at the time that he sustained his injuries.

5. He has put in a lot of evidence in his affirmation, showing his employment history and particularly his Mutual Provident Fund records which, he says, in fact are incomplete because many employers do not make the contributions that they ought to, with the result that the MPF record in fact understates the periods during which he was actually employed and in receipt of his wages which were usually paid in cash. So that is a difficulty that one has.

6. The other difficulty is one which concerns section 11 of the Employees' Compensation Ordinance. This is the section which provides for the various methods of calculating an employee's earnings, and I am going to be required to set out two subsections in particular. The first is subsection (1) which is as follows:

"Subject to this section, for the purposes 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 rate 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 is more favourable to the employee."

7. And then subsection (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."

8. And then I think reference should also be made to subsection (6):

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

9. In this matter, Mr Chan who appears for the applicant submits that the proper approach is to apply subsection (1)(a) and that I should take the period to be for the month immediately preceding the date of the accident. That would in fact come to 21 days because that is as shown in the MPF record and in those circumstances, that would produce a total of $483,840 which should be payable over the two-year period and where a credit would then need to be given for what he has already received which is $448,000. On top of that, there is a claim for medical expenses which is admitted and that would mean an additional sum of $2,698 would have to be paid, producing a total of $38,538.

10. In fact, and I should mention this for the sake of completeness, the applicant's primary contention is that I should award him an amount which reflects earnings over a period of 25 days a month, but I can indicate now that the evidence is simply not there to justify an award on that basis. That sort of amount comes entirely from the applicant's own affirmation. It is not impressively confirmed by any other evidence save for the fact that it does appear in the form 2 that was as originally filled in by the respondents but, as Miss Sin rightly points out, once they discovered the correct position, the number of days was reduced down to a period which is considerably lower than that.

11. So really the only viable way of dealing with this matter, if I were to hold in favour of the applicant, would be to take 21 days or possibly slightly less than that, 20 days, which is the basis of calculation which had hitherto been employed by the respondents and that is how they had come to pay him the sum of $448,000 to date. But be that as it may, Miss Sin for the respondents says that the proper way of dealing with this is to apply the basis provided for in subsection (2) of section 11.

12. This is a case where the applicant had been employed for a very short period of time, as I say, three days. It was employment of a casual nature because that is clear from the evidence of the respondents who say that they already had workmen doing this work but in August it had got particularly busy and so they required some extra labour, and that is how the applicant came to be employed by them.

13. When one does the calculations according to subsection (2), it is clear that, so says Miss Sin, the figure would be far less days than the 21 days contended for, and if that is right, then this would be a case of very substantial overpayment and therefore I should not make matters worse by adding a further amount to that.

14. The way it is put is that where there is a genuine dispute of this sort, this can only be resolved at the trial which cannot be all that far off. Directions have been given for the exchange of witness statements. There has been a joint medical examination on 13 November, and one would hope that the case will be brought back before the court in the next few weeks for a trial date to be appointed, and it is then a question of perhaps, at the outside, waiting for a further six months before the trial of the action. So that is how this matter lies for a decision by me.

15. Having heard the parties' submissions, it seems to me that section 11(1)(a) cannot apply because it proceeds on the basis that the applicant had been working for the same employer for a period of time and had in fact been fully employed by that employer for the whole of the preceding month before the accident. So 11(a) cannot work.

16. The more likely candidate, as it were, would be section 11(1)(b) where one can compute the earnings in such a way as to give the rate per month at which the employee was being remunerated during the previous 12 months, if he had not been employed for long by the same employer or for any lesser period during which he had been employed by the same employer, whichever calculation is more favourable to the employee. [See section 11(1)(b)].

17. But again there seems to be a difficulty over this. On the one hand, the employee was only working as a casual worker on this occasion for three days but it is also right to say that his working history is one which does demonstrate that he is someone who has been regularly employed over a long period of time. Sub-section (2), whilst at first attractively put forward by Miss Sin, does include the words that it is "impracticable to compute the rate of remuneration for such an employee" at the date of the accident.

18. I do not think that subsection (2) can possibly apply in these circumstances. This is a man who has a full employment history and he should not now be prejudiced by virtue of the fact that on this occasion he happened to be injured during the course of brief casual employment with these Respondents, and I think Mr Chan is right when he draws attention to this particular argument in paragraph 5 of his supplemental submission.

19. I take the view that the most assistance that I get is from section 11(1)(b). I treat this as a case of someone who quite clearly has a history of full employment. On this occasion, he was employed for three days. We have got the agreed daily rate of remuneration which is $1,200 a day, and it is really a question of deciding what is the average daily strike rate, how many days a month has he been employed for overall, and it seems to me therefore that the safe course, looking at the evidence as a whole, is to say that he has been employed on average for about 20 days a month which is the figure that the respondents themselves had applied.

20. In such circumstances, Mr Chan has done the arithmetic for me, that would produce a sum of $12,800 to which I will also add the medical expenses of $2,698. So these two separate amounts will now need to be paid by the respondents.