On Hang Chu v. Chan Ngun

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Employees' Compensation Case No. 646 of 2000

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Judgment

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1. The applicant injured his hand while laying a marble slab in a flat ("Flat B"). He alleged that he was an employee of the respondent and is bringing the present action for employees' compensation. The respondent does not dispute quantum. She contends that she was not the employer at the time of the accident and that, if she was the employer, the applicant was an independent contractor.

2. The respondent had some beneficial interest in and had the use of a flat ("flat A") on the same floor of flat B. It was not in dispute that she employed a foreman, RW3 at daily rate of $1,100, to oversee the decoration and renovation work of flat A. The applicant was recruited by RW3 on behalf of the respondent at a daily wage to do plastering work. The respondent contended that the work in flat A had been completed when RW2 offered the applicant and RW4 a job of laying the marble slabs in flat B. She was adamant that she had nothing to do with the decoration work in flat B and that the contractual relationship with the applicant had ended at the time of injury. Further in the alternative it was argued that the applicant was an independent contractor and not an employee.

3. On the other hand the applicant denied that he was asked by RW2 to lay the marble slabs in flat B. In fact he said he started working inside flat B in the morning on the day of the injury. He understood that the respondent was the employer who engaged him to do the work in flat A and flat B.

4. The applicant was recruited by the foreman of the respondent. The applicant, like many other skilled workers in the construction industry, was paid a daily wage. His case cannot be distinguished from those leading cases in which it was held that the construction worker was an employee. He was skilled in his trade and would not have needed any supervision or control or guidance in exercising his skill or in the manner of execution of his work assigned to him. This point was overstressed by Ms Lai, counsel for the respondent, in her argument. The applicant must have worked under the general supervision of the applicant's foreman. He would turn up at the working place at the appointed time each day he worked and was then assigned jobs by the foreman from time to time as the decoration project progressed. The applicant had also to work in cooperation with other plastering workers when necessary, like what he had done at the time of accident.

5. There were occasions that the applicant took days off to work for others. He conceded that he did not care much about the applicant's prior approval. However he told the foreman who apparently had no objection. Ms Lai relied on this attitude of the applicant to argue that there was no employer-employee relationship. In my judgment the applicant's attitude was not uncommon among casual workers. It was frank on his part to admit that he would have gone to work for others as he did whether or not the respondent approved it. In the particular circumstances of this case, this attitude of the applicant should be looked at in the context of the causal nature of the job and method of recruitment for workers in the construction industry. The attitude of The applicant was a causal worker and was often recruited by persons like the foreman of the respondent. He must have known that it was necessary to foster a good relationship with the persons who were likely to recruit him in future. Therefore it was not surprising that he would take orders more readily from the foreman than from the respondent. Quite naturally he would seek the approval for taking a day off from the foreman rather than from the respondent. The fact he might have gone to work for others on these occasions even if the respondent refused him permission tended to show two things. Firstly he had better jobs elsewhere. Secondly that he was a independent contractor. The likelihood of the former is much greater. Whether he regarded himself an independent contractor or employee would be irrelevant when he decided to take days off to do other jobs. Just the same he would not have been able to return to work for the respondent if the latter did not want him back. The attitude of the applicant in regard taking leave from the respondent is not of mush assistance to Ms Lai's argument.

6. Without any disrespect to Ms Lai, I do not think it necessary to deal with her other points specifically in details. Taking into account all circumstances of the case, I find that that the applicant was the employee of the respondent within the meaning the Employees' Compensation Ordinance.

7. The crux of the defence is that the respondent is not the employer or the contracting party at the time of the accident. The respondent gave evidence herself and called three witnesses. RW2, Mr. Cheng claimed that he was residing in flat B and that he was a tenant and that he undertook the renovation work in flat B at his own expenses. To explain why he could afford the luxury of a large split level flat on his meagre income he explained that he only occupied the upper level and there was a co-tenant on the lower floor. And, to explain why he should spent money on the renovating the lower floor, he said he had the use of the living /dinning room. Yet this is not supported by the incomplete documentary rental documents. The rental receipts produced did not even had the amount of rent put in. As to why he should undertake the renovation without consulting the landlord or the co-tenant on the lower floor he could not offer any satisfactory explanation. I do not believe his evidence.

8. The respondent used flat B as her business address. She was one of the shareholder of the registered owner of flat B. The other shareholder had a close relationship with her and was a business partner of hers in a construction business. I do not believe that she had nothing to do with the renovation work in flat B.

9. The respondent claimed she had nothing to do with the decoration work in flat B except that she was asked to pay the wages. She admitted in her declaration to the labour department that she recruited the applicant on behalf of Mr. Cheng to do the job. Yet she specifically denied she had recruited the applicant. I do not believe her. I find she deliberately hid the true part she played in the decoration work in flat B.

10. I find the applicant a truthful witness. He gave his answers readily. He frankly admitted that the purpose of going to seek medical treatment was for claiming compensation rather than for good health. He made no attempt to prevaricate when he was queried about this apparent illogical reason. He gave the same answer spontaneously when he was again about the reason of seeking medical treatment. The injury the applicant was relatively minor and it is understandable that the only purpose if not the primary purpose was to get sick leave certificates for compensation. There are other areas in which an applicant seeking compensation tends to exaggerate but the applicant in this case did not. Notably the applicant could have easily exaggerated his evidence concerning the identity of the employer but he did not. Nothing the applicant said could have conclusively pointed to the respondent as the employer. Whether or not the respondent was the employer depended very much on the admissions by the respondent and circumstantial evidence of the case. I accept the evidence of the applicant. Whenever his version of event differed from that given by the respondent witnesses I prefer his version.

11. The respondent admitted the applicant was recruited on her behalf. As I have found the applicant was her employee. I believe the applicant had already commenced work on flat B the early in the day and while he was on the payroll of the respondent. From what the applicant said I draw the conclusion that it was the Respondent who undertook the decoration work on both flats. I rejected the contention and evidence of the respondent and her witnesses that the applicant had finished his contract relating to flat A before commencing work on flat B.

12. The way the applicant sustained injury is not traumatic. However it is something out of the ordinary. I find it was an accident within the meaning of the Employees' Compensation Ordinance.

13. The remaining issue is whether the applicant is entitled to compensation for the accident. It is not disputed that the applicant was casual worker. Ms Lai raised a point which were not fully argued by counsels, namely that S2(1)(b) exclusion applied to the applicant. The question is whether the respondent employed the applicant for the purpose of the employer's trade or business. If she did she would be liable. The fact that she was in the construction business is not relevant. If she was decorating her own home like any householder, she would not be liable. Similarly if she was decorating her office like any small shop owner who chooses to undertake to do a small decoration job by employing a causal worker, she would not be liable. The fact that flat B was the registered office of her business and therefore arguably the decoration itself was for the purpose of trade would not make the respondent liable. It is because the employment itself of the applicant must be for the purpose of the trade and business of the applicant and not the decoration itself. The real question is whether she was decorating her flat B for gain. If she did she must have employed the applicant for the purpose of trade. The fact that the respondent is a registered Grade A building contractor is not conclusive.

14. The respondent denied she had any substantial beneficial interest in flat B. There is nothing to suggest that she would decorate flat B for no charges. The conclusion I draw is that she decorated flat B for gain and she did that for the purpose of her trade and business and is therefore liable.

15. In the premises I award the agreed sum of $47,962 with interest at half judgment rate from date of accident to date of judgment and thereafter at full judgment rate. There be order nisi for costs in favour of the applicant with certificate for counsel to be taxed if not agreed and legal aid taxation for applicant's own costs