CHAN SAU YING and Others v. YUK LUNG SAUNA operated by STEADIKOON CO. LTD.

Labour Tribunal Appeal No. 82 of 1994

HEADNOTE

Whether a workman was, or was not, employed under a contract of service is a question of fact which an Appellate Court could only interfere if there was no evidence to support that finding.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APPEAL NO. 82 OF 1994

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J U D G M E N T

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1. The Appellant operated a massage establishment in the name of Yuk Lung Sauna. On its closing down, a group of 25 masseuses claimed and were awarded statutory holiday pay and severance pay. To those awards the Appellant now appealed on the ground that "the learned Presiding Officer erred in law in finding that the Claimants were at the material times, "employees" of the Defendant (Appellant). I have dismissed the appeal and I now set out my reasons in full.

2. The attack on the finding of the learned Presiding Officer was at para. 4 of his Reasons for Decision which is as follows :-

"Having investigated the case and considered all the evidence I came to the conclusion that the Claimants were employees of the Appellants and not self-employed. The 'employment agreement' stated clearly that the application was for employment, either regular or temporary. The Appellants evidence in cross-examination stated that the Claimants were not temporary workers so they must be regular workers. The employment contract also stipulated other matters such as holidays, annual leave and so on which made it impossible for any other interpretation than as an employment contract. There was no provision for self-employment. On the other hand, the Appellants have declared income tax for the Claimants as 'employers'. I have, therefore, no doubt that there was an employer/employee relationship between the Claimants and the Appellants."

3. Mr. Hui of Counsel for the Appellant submitted that the learned Presiding Officer did not spell out what test and what law he applied when coming to the conclusion that the claimants were employees. Further he erred in accepting that the application form which the masseuses filled in with employment regulations printed at the back as employment agreements and that the regulations were terms of employment and he had attached undue weight to this factor when coming to his conclusion.

4. He also contended that the learned Presiding Officer had not taken the following factors into consideration :-

(1) the Claimants had complete freedom to choose their shifts;

(2) the Claimants were at liberty to attend work at anytime within the shift and that they could go off duty at any time;

(3) they did not have any basic income and their earnings depended on the number of customers they served;

(4) they were at liberty to take leaves if and when they wanted; and

(5) they were not obliged to work if they did not want to work.

5. It is trite law that whether a person is an independent contractor (self-employed) or an employee is a question of fact to be determined by the Presiding Officer. Halsbury, 4th ed., vol. 16, para. 500 states :-

"The approach of the Courts, particularly the Court of Appeal, has been to construe the expression 'a point of law' narrowly, and not to allow Appellants to dress up points of fact as points of law".

The Appellate Court can only interfere if there was no evidence to support his finding. In Lee Tin-Sing v. Chung Chi-Keung & another [1990] 1 HKLR 764 at 768 per Lord Griffiths,

"But where, ......, the relationship has to be determined by an investigation and evaluation of the factual circumstances in which the work is performed, it must now be taken to be firmly established that the question of whether or not the work was performed in the capacity of an employee or as an independent contractor is to be regarded by an appellate court as a question of fact to be determined by the trial court".

At p. 769 he went on and said,

"it was held in a series of decisions in the Court of Appeal and in the House of Lords under the English Workmen's Compensation Acts that a finding by a County Court judge that a workman was, or was not, employed under a contract of service was a question of fact with which an appellate court could only interfere if there was no evidence to support his finding."

6. There is no one single conclusive test for the distinction between a contract of service and contract for service. In Montreal v. Montreal Locomotive Works [1947] 1 DLR 161, it was suggested that a fourfold test would be more appropriate, i.e.

(1) control,

(2) ownership of the tools,

(3) chance of profit, and

(4) risk of loss.

These tests are of course appropriate tests but again these are not conclusive tests but these are constructive and useful guidelines.

7. Mr. Tsang of counsel for some of the Claimants (Respondents) submitted that there was ample evidence before the Tribunal in which he could come to the conclusion on balance that they were employees.

8. From the evidence adduced :-

(1) There was sufficient control by the Appellant over the Claimants' work in that,

(i) The Claimants had to work on the Appellant's promises.

(ii) The Appellant had power to assign which customers the Claimants were to serve.

(iii) The Claimants had to wear uniform.

(iv) They had to elect either to work on the day or night shift.

(v) They had to inform the manager when they leave.

(vi) They had to apply for leave.

(vii) They had to pay a deposit for their uniform and locker.

(viii) They had to remain on the Appellant's premises even if there were no work.

(2) The Appellant had provided the tools for the Claimants' work in that,

(i) The Appellant provided massage oil.

(ii) The Appellant provided the beds, bed sheets and towels and uniforms.

(3) The Claimants did not have any financial risks in their work and that the Appellant had filed tax returns for all the Claimants and the Claimants had to pay salary taxes.

9. I agree entirely with his submission.

10. It was unfortunate that the Presiding Officer had found that the application forms together with the employment regulations were "employment agreements" as there was no such evidence to support this finding. The 1st Claimant gave evidence and said she completed a form stating her personal particulars but no agreement was signed. The 2nd Claimant said there was no detail on the back of the card she signed. The 3rd Claimant on behalf of the rest said "when we signed we were not sure if the terms were at the back." She also said in re-examination that, "the terms were posted in the rest room. It was not explained to us." From the evidence, it was therefore doubtful whether the application forms could be construed as employment agreements.

11. Be that as it may, what we are concerned is whether on the totality of the evidence, the Presiding Officer could have come to the conclusion that the Claimants were employees. In my judgment, the reasons given by the Presiding Officer were not the precise reasons, he could and should have given better reasons but there is overwhelming evidence before him which enabled him to come to the conclusion that the claimants were employees.

12. The appeal is therefore dismissed with costs. The Respondents' own costs to be taxed in accordance with Legal Aid Regulations.