MUHAMMAD DOST v. HONG KONG YING CHEUNG TRADING (RECYCLING) LTD

DCEC 234/2015

[2019] HKDC 375

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 234 OF 2015

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JUDGMENT

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1.  This is an illegal worker’s application for employees’ compensation. The injury sustained by the applicant was not in serious dispute. The main battlefield, as in most applications of this kind, is on the identity of the employer. In this case, the parties also argued the entitlement of an illegal worker applicant to section 10 compensation. These two main issues are considered below.

SECTION 2(2)

2.  I shall first determine if discretion shall be exercised in favour of the applicant under section 2(2) of the Employees’ Compensation Ordinance (“ECO”).

3.  The applicant was an asylum seeker and was not allowed to work in Hong Kong, nonetheless, the works he had done at the time of the accident were lawful works. 

4.  In Yu Nongxian v Ng Ka Wing [2007] 4 HKC 551 and Chen Xiu Mei v Li Siu Wo [2007] 5 HKC 516, the Court of Appeal has held that there were public policy reasons in favour of permitting an illegal worker doing lawful work under a contract to recover employees’ compensation.  The employer would still be personally responsible for the compensation irrespective of whether insurance coverage had been provided to the illegal worker.  See also: Chan Cheuk-ting v Analogue Engineering Co Ltd [1986] HKLR 935.

5.  Since then, discretion under section 2(2) of the ECO has often been exercised in favour of illegal workers doing lawful works in Hong Kong like the applicant.  This case is not an exception.  

6.  Having regard to all the circumstances of this case, I considered it proper to deal with this claim as if the applicant had at the time of the accident been a person working under a valid contract of service.

IDENTITY OF THE APPLICANT’S EMPLOYER

7.  The question on the identity of the applicant’s employer is far from clear.  There was no documentary evidence clearly pointed to one way or the other.  This is probably a feature common to applications lodged by illegal workers.  

8.  Both parties relied on the oral testimony of their respective witnesses.  The main witness for the applicant was the applicant himself.  The main and only witness for the respondent was its director, Mr Chan Tse Chun (“Mr Chan”).  Both the applicant and Mr Chan were vigorously cross-examined.

9.  The applicant has two other witnesses. Mr Brar Haravtar Singh who accompanied the applicant to the Labour Department and helped him to fill in the Notification of Accident.  He also accompanied the applicant to attend some of the medical consultations and meetings with lawyers. The other one is Mr Singh Jagroop, who accompanied the applicant to take the photos of the place where the applicant had worked.

10.  The following are the factors considered by this court in assessing the credibility of a witness’s testimony:-

(1)     the importance of contemporaneous written documents;

(2)     the inherent plausibility or implausibility of an event having happened, or the apparent logic of the events;

(3)     the extent to which the oral testimony of a witness was supported or contradicted by the other undisputed or indisputable evidence (documentary or otherwise);

(4)     the internal consistency or inconsistency of the witness’s evidence;

(5)     the demeanour of the witnesses, with the caution against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses.

[Hui Cheung Fai v Daiwa Development Ltd HCA 1734/20009, unreported, 8 April 2014, Lee Fu Wing v Yan Po Ting Paul [2009] 5 HKLRD 513 at §53]

The applicant’s case

11.  The applicant is an asylum seeker who arrived in Hong Kong in 2009.  He received education up to primary 2.  He ran his family farm in Pakistan for 20 years.  He is illiterate even in his own language, Pashto.  He does not speak or understand Cantonese at all.   He knows limited English alphabet but he does not speak or read English.  He was allowed to stay in Hong Kong on recognizance pending verification of his claims for asylum.

12.  The applicant’s case is that the government subsidies were inadequate to maintain himself and his young son in Pakistan.  To meet the ends, he was introduced by his friend in about May 2013 to a Chinese man called “Chang Ko” (a transliteration) for work.  Chang Ko offered him a job to work on a night shift in a warehouse for a recycling business, with a salary of HK$500 per day.  He started the work that night.  His main task was to clear the tank and collect all the recyclable and waste plastic materials from the tank. There were other workers, the applicant has mentioned one from Mainland China.

13.  When the applicant was working on or about 10 July 2013, his right foot was injured by a protruding tip of the prong of a large digging fork which pierced through his right foot and shoe (“the Accident”). Chang Ko asked him to return home for rest.  The applicant applied some antiseptic and other medications bought from pharmacy store.  Chang Ko asked him not to tell anyone about the Accident to avoid any trouble.

14.  The applicant had not sought medical help until his pain became unbearable.  He attended public hospital for treatment on 18 July 2013 and had subsequently received various treatments and surgery.

15.  The applicant admitted that he did not know the name of his employer.  Although he knew how to get to the warehouse where he worked, he could not tell the exact address.

16.  In the afternoon of 20 November 2013, the applicant, with the assistance of his friend, Singh Jagroop, went back to the applicant’s workplace.  They found a company name plate (“Name Plate”) posted in front of the entrance of the warehouse (“Warehouse”).  The Name Plate shows a Chinese and English name: “Hong Kong Ying Cheung Trading Recycling Ltd 香港英昌貿易（環保）有限公司”, which is the name of the respondent. 

17.  They also found a road plate (“Road Plate”) posted near a meter box of the Warehouse, showing the words “DD 125 Lot 1955 Ping Ha Road”.  There were fences erected and enclosed the whole Warehouse. They could not get in.  They took some photos showing the places where the applicant used to walk past when he went to work from the bus station to the entrance of the Warehouse.  They then left.

18.  The applicant testified that according to his memory, the Name Plate had been posted near the entrance of the Warehouse since he started working there.

19.  The applicant therefore believed that the Name Plate showed the name of his employer and the address on the Road Plate is the address of the Warehouse.  The applicant commenced this action against the respondent.

20.  The applicant adduced extracts of the respondent’s website containing photos of a factory with the same facilities of those installed in the place where he had worked, such as shredding machines, the tank and the storeroom with bags filled with small pieces of plastic material for recycling purpose.  The initial “YC” were sprayed outside the bags.  The applicant said that during his employment, he has seen other workers at the Warehouse spraying the characters “YC” on the surface of some linen bags which were used to pack recyclable plastic materials.  He came to know in the course of this application that “YC” was the initial of the respondent’s name “Ying Cheung”.

The respondent’s case

21.  The respondent denied that it was the applicant’s employer and contended that it had not employed any worker before June 2014.

22.  According to Mr Chan, the respondent was set up in 2010, initially dealing with paper recycling, then moved to the trading of plastic recycling business. The respondent used to occupy Lots 1922RP (part), 1923, 1926, 1941 SB RP, 1942 SB RP and 1943 (“Old Land”) for storage of waste materials.

23.  The announcement of Green Fence Operation by the Mainland Chinese authorities in early 2013 had significant impact on the respondent’s business because under the Operation, imported plastic materials have to be cleaned and not mixed. Mr Chan said that this created much problem in the trading business. The respondent started to consider setting up a waste plastic repossessing plant by the end of 2013.

24.  In August 2013, the respondent started to discuss with the owners the lease of Lots 1922RP (other part), 1921, 1905 RP and 1903 (“New Land 1”) and Lots 1953, 1954 and 1955 RP (“New Land 2”).  At that time, New Land 2 were occupied by the other tenants.  The respondent could only take over the New Land (both New Land 1 and New Land 2) on 1 March 2014 after the lease was entered into at the end of February 2014.

25.  The respondent said that its warehouse was situated in New Land 1 but not in New Land 2 as the applicant suggested.  Machines were equipped in its warehouse since March 2014, which was after the Accident.

26.  The respondent admitted that the Name Plate was put up prior to the commencement of the New Land lease for the purpose of applying for a GAQSIQ licence from the authority in Mainland China which was needed for its export business.  The respondent’s case is that the Name Plate was put in the entrance of the Warehouse in about August or September 2013, and remained to be there at least until March 2014.  The respondent had not provided any documents to support the timing. According to Mr Chan, the Name Plate was put there to “pretend” that he has the respondent company in that location[1], and a photo of the Name Plate was taken for the purpose of informing the issuer of the licence that the respondent has a “venue” in that location[2].  

27.  In short, the respondent’s case is that the respondent was not the applicant’s employer, it did not have any business operation in the Warehouse at the time of the Accident, and the Warehouse was not located in the lot number(s) suggested by the applicant.

Analysis of Evidence

28.  There is no serious dispute on the poor language ability and illiteracy of the applicant, which affected his expression and accounts of events.  Although his witness statements contained statements of translation, the translations were not done by lawyers.  There was no evidence on the language used in the translation nor the language ability and standard of the translator.  These are not satisfactory.  Nonetheless, these cast doubt on the quality of the translations of the witness statements made to the applicant.

29.  I noticed that on many occasions during the applicant’s oral testimony at trial, the court interpreter[3] had to repeat or further explain the questions to the applicant.  When the applicant understood the questions, he gave his answers directly and clearly.  

30.  I found that the applicant is a credible witness and I accepted his evidence in court. 

31.  Mr Chan is well educated.  He seemed to have a good grasp of English.  He was the person in charge of the respondent’s business.  Mr Chan was evasive and had avoided answering questions directly when cross-examined.  He gave different versions of event at different stages.  Mr Chan was very careful in distancing the respondent from having any business operation in the Warehouse at the time of or prior to the Accident.

32.  Mr Chan’s evidence regarding the hanging of the Name Plate outside the Warehouse was unconvincing and not credible.  The respondent chose not to hang the Name Plate on the Old Land, a land that the respondent was in possession, but took the long and winded route to ask the owner of the New Land for permission to hang the Name Plate on part of the New Land which was still occupied by the other tenants at that time.  This act defied common sense especially according to Mr Chan, there was no specific requirement on the land on which the Name Plate should be hung.  The reason offered by Mr Chan for not using the Old Land was that there was no office in the Old Land.  The question then arose was how could Mr Chan be sure that there was an office in the New Land when it was occupied by the other tenants.

33.  In addition to hanging the Name Plate at New Land 2, the respondent also named the New Land[4] as its business address for business registration purposes in September 2013.

34.  Viewing these together, the inference that could be drawn was that the respondent had a business operation at the Warehouse much earlier than the date suggested by Mr Chan. The respondent hung the Name Plate and named the New Land as its business address as proof of its business operation there. 

35.  Mr Chan’s assertion that the respondent only commenced its waste plastic processing business in March 2014 was also contradicted by the contents of the respondent’s website and the time when it was posted on the internet. 

36.  Mr Chan first testified that the respondent’s website was made in or after 2014.  The photos posted on the website were taken by him.  The other works relating to the website were done by a staff.  When he was shown with evidence at cross-examination, he admitted that the website was posted in early December 2013, but not 2014. 

37.  The respondent’s website posted in early December 2013 contained statements that the respondent had a factory, owned machines and a system that clean and break up plastic wastes for recycling purposes, and had a track record of handling about 1500 to 2000 tonnes of waste plastic processing every month.  These statements on the webpage directly contradicted Mr Chan’s evidence that the waste processing business was only commenced in March 2014.  Mr Chan sought to explain it by saying that the statements in the webpage were exaggeration for the purposes of attracting customers.  Mr Chan seemed to suggest that the “exaggeration” was done knowingly.   

38.  Mr Chan’s readiness to give untrue information in order to achieve his purposes in the business operation was shown on a few occasions during the cross examination.  To keep in line with the respondent’s case, Mr Chan openly admitted in court that he had made or caused to make false representations on the existence of business operation on the New Land to the Mainland and Hong Kong authorities for the purpose of obtaining the GAQSIQ licence.  He “exaggerated” the respondent’s track record in order to attract customers.  All these shed light on Mr Chan’s overall credibility, or the lack of it.

39.  Mr Chan said that the only persons handled the business of the respondent at the time were his sister and himself.  His sister was only responsible for overseeing the finance or payment matters.  On cross examination, Mr Chan admitted that the only email address stated on the respondent’s webpage was not his or his sister’s.  It was an email address of 洪佳盛 (“Mr Hung”), Mr Chan’s brother in law.  Mr Hung was also named as the respondent’s representative in the machineries order forms placed by the respondent.  Mr Hung was presented as the respondent’s representative on some external functions published on the newspapers. 

40.  I turn to the respondent’s criticism on the applicant’s evidence. The respondent contended that according to the applicant’s witness statements, he sustained injuries at the warehouse in Lau Fau Shan, the respondent had no warehouse in Lau Fau Shan, therefore, the respondent was not the employer or owner of the warehouse where the applicant got injured.  I rejected this contention.  First, I noted that the respondent itself had reported an address in Lau Fau Shan[5] as its business address for business registration purposes.  Second, the applicant had adamantly testified at court that his place of work was in Ha Tsuen, and pointed out that it is in the same area where the respondent’s Warehouse was located.   

41.  The respondent submitted that the layout of the workplace and the process of works described by the applicant were different from those of the respondent.  There was no independent evidence on the accuracy of the layouts and processes described by the applicant or the respondent.  Both the applicant and the respondent relied on their own oral testimony and their own drawings.  I do not find this comparison helpful to the assessment of credibility of the witnesses or the determination of the identity of the employer.

42.  The respondent contended that the applicant’s employer was not the respondent because the employer’s telephone number reported in the Notification of Accident belonged to a Mr Wong of Chuen Kee Environmental Resources Recycle Limited (“Chuen Kee”).  Chuen Kee was incorporated after the Accident on 25 November 2013.  The waste materials collected by it were metal and paper, not plastic.   Chuen Kee could not be the employer as it was not even incorporated at the time of the Accident.  The applicant testified that the telephone number written on the Notification of Accident was not given by him.

43.  The respondent attacked the applicant’s credibility by pointing out the different descriptions of his injury in the different medical records.  The applicant explained in court that he had difficulties in communicating with the medical doctors.  The consultation time on each occasion was brief.  He often felt frustrated by the difficulties in communicating with the medical officers.  Although he had his friend’s assistance in interpretation at times, the problem in communication still existed.  I accepted the applicant’s explanation.  There is no reason for him to give wrong information on his own injury to his treating doctors.

44.  Having carefully considered all the evidence, I found that the respondent was the employer of the applicant at the time of the Accident.

QUANTUM

45.  The respondent is liable to pay the applicant employee’s compensation under the ECO.

Medical Report of Dr Wong See Hoi

46.  The applicant adduced one expert medical report prepared by Dr Wong See Hoi (“Dr Wong”) dated 26 February 2016.  There was no expert medical report adduced jointly with or singly by the respondent.

47.  Dr Wong opined that the Accident caused the Injury.  The applicant suffered puncture injury to his right ankle, causing Acinetobacter and Mycobacterium bacterium infection associated with osteomyelitis.

48.  Dr Wong assessed a loss of earning capacity of 5-6%, and recommended sick leave for a period of one and a half year.

Form 7

49.  On 3 April 2019, a certificate of assessment (Form 7) (“the Certificate”) was issued by the Employees’ Compensation (Ordinary Assessment) Board (“the Board”) pursuant to section 16F of ECO.

50.  The Board assessed that the applicant had suffered from right heel abscess resulting in right leg scar, stiffness, weakness and pain, the permanent loss of earning capacity was 5% and the period of necessary absence from duty as a result of the injury was 7 days[6].

Applicant’s Monthly Income

51.  I accept the applicant’s evidence that immediately before the Accident, he earned a daily wage of HK$500.   

52.  This figure of HK$500 was not disputed by the respondent.  The respondent asserted that the applicant’s earning should be HK$5,000 per month because it had only employed temporary workers at the Warehouse, with an average of 10 days works per month.

53.  In the Amended Application, the applicant claimed that he worked 30 days per month.  No supporting evidence was provided.  However, it was recorded in Dr Wong’s report that the applicant worked 6 days a week.  The applicant did not challenge this record in Dr Wong’s report.

54.  I accepted the statement in Dr Wong’s report and found that on average, the applicant worked 26 days a month.  Therefore, his monthly earning is HK$13,000.

Permanent Loss of Earning Capacity

55.  I found that the applicant’s permanent loss of earning capacity is 5%.

Duration of Temporary Incapacity

56.  Section 10(2) of the ECO provides as follows:-

“10(2) For the purposes of this section a period of absence from duty certified to be necessary by a registered medical practitioner, ….. an Ordinary Assessment Board or a Special Assessment Board shall be deemed to be a period of total temporary incapacity irrespective of the outcome of the injury.”

57.  In Siu Fu Yau v Wong Po Kee Ltd, DCEC 654/2003, unreported, 5 October 2006, Deputy District Judge Anthony Chow had reviewed in detail various decisions on the interpretation of section 10(2), and held that bearing in mind the object of the ECO is to provide a no-fault scheme aimed at providing quick financial relief to employees with certainty, in the absence of fraud, either by the certifying doctor or the employee, the presumption under section 10(2) is irrebuttable.   

58.  Dr Wong recommended a period of 18 months sick leave.  There is no allegation of fraud involved.  Pursuant to section 10(2), his certification is not rebuttable.

59.  I shall also mention that the Board assessed a sick leave period of 7 days[7], coincided with those dates on which sick leave certificates were granted to the applicant by the public hospital.  This assessment of 7 days was plainly at odds with the voluminous medical evidence in which it was shown that the applicant clearly had medical consultations and treatments on an extensive period far more than 7 days. The medical record showed that the applicant attended hospital for treatment on 18 July 2013, there were intermittent consultations and treatments, the wound was finally healed on 7 November 2014, with follow up treatments in 2015 and 2016.

60.  I have not lost sight of the decision of Ng Ming Cheong v Mass Transit Railway Corp [1997] 3 HKC 413 in which it was held that in the absence of appeal against the Board’s assessment, the court ought not to have entertained any expert evidence at the trial.  The present case is different from the situation in Ng Ming Cheong.  The Certificate was issued after the hearing of trial and there was glaring problem on the period assessed.  

61.  I found that the period of the applicant’s temporary incapacity is 18 months.

Section 9 compensation

62.  The applicant was 39 years old at the time of the Accident, the multiplier under section 7(1) of ECO is 96.

63.  The compensation payable under section 9 is HK$13,000 x 96 x 5% = HK$62,400.

Section 10 compensation

64.  Section 10 of the ECO deals with compensation in case of temporary incapacity. Section 10(1) reads:-

    “10(1)    Where temporary incapacity whether total or partial results from the injury, the compensation shall be the periodical payments hereinafter mentioned, or a lump sum calculated accordingly, having regard to the probable duration, and probable changes in the degree, of the incapacity. Such periodical payment shall be, or shall be at the rate proportionate to, a monthly payment of four-fifths of the difference between the monthly earnings which the employee was earning at the time of the accident and the monthly earnings which he is earning, or is capable of earning, in some suitable employment or business during the period of the temporary incapacity after the accident.” (emphasis added)

65.  The applicant contended that he shall be entitled to section 10 compensation notwithstanding that he was not legally employable in Hong Kong.  The respondent argued otherwise.

66.  I shall start with the case Abu Bakkr Shiddik v MM & Co Auto Parts, Dismantling and General (a firm) DCEC 903/2009, unreported, 12 January 2012 where HH Judge Leung held that an applicant who was allowed to stay in Hong Kong on recognizance pending verification of his CAT[8] claim was not allowed to work in Hong Kong and could not be said to be capable of earning income from suitable employment or business during the period of temporary incapacity.  Therefore, the premises for awarding section 10(1) compensation was lacking.

67.  The relevant paragraphs in the judgment of the Shiddik case are as follows :-

“59. Section 10(1) makes clear that compensation is awarded on the basis that the employee would at least have been capable of earning in some suitable employment or business but for the temporary incapacity after the accident. If the person is not lawfully employable, he could not be said to be capable of earning income from any suitable employment or business during the period of temporary incapacity. That was the situation of Shiddik when he was detained first by the police and then by the Immigration Department after the accident.

60. Did Shiddik’s situation change upon his release on recognizance in October 2007? …..

…..

62. In my judgment, for the present purpose, what one should ask is not whether there was any restriction in the recognizance against taking employment; but rather whether Shiddik was permitted to do so. Only if the answer is in the affirmative may Shiddik be considered as a lawfully employable person under section 17G(2) of the IO.

….

65. I have no basis to believe that Shiddik was permitted to take employment while he remained in Hong Kong on recognizance during the period of temporary incapacity. As it is not shown that Shiddik was capable of being lawfully employed during the period of temporary incapacity, the premise for awarding section 10 compensation is lacking.

66. For the above reason, I decline to make an award under section 10 of the ECO. For completeness, in the event that I am wrong, the compensation under the section should have been …..”

68.  The above view was expressly adopted in Qadir Sher v Siddiqui Muhammad Faisal & Ors, DCEC 404/2011, unreported, 13 August 2012 at §30.

“30. Although the Applicant is claiming also compensation under Section 10 for temporary loss of earning capacity, I agree with the views of His Honour Judge Leung in Abu Bakkr Shiddik v M M & Co Auto Parts, Dismantling & General (A Firm) that the Applicant is not entitled to the same as illegal worker.”

69.  Both parties agreed that Shiddik is not binding on this court.

70.  Mr Yip, counsel for the applicant, has also referred this court to some other cases[9] decided after Shiddik in which section 10 compensation was awarded to illegal worker applicants.  The courts in those cases were not referred to the Shiddik case and had not considered the views of HH Judge Leung.  I would not draw any assistance from those cases on this point.

Analysis on entitlement to section 10 compensation

71.  The discretion under section 2(2) of ECO is “in the widest terms and is necessarily to be exercised on the facts of each case, involving its own mixture of discretionary factors.” [Yu Nongxian v Ng Ka Wing, FAMV 64/2007, unreported, 17 January 2008 at §5].

72.  Once the court has decided to exercise its discretion in favour of an illegal worker applicant, on the express provision of section 2(2), the court may deal with the matter as if the applicant had, at the time of the accident, been a person working under a valid contract of service.  The matter referred to in the provision must include the issues of liability and quantum.  The contract of service must then be regarded as a lawful one for all purposes under the ECO.  [Chan Cheuk-ting v Analogue Engineering Co Ltd. [1986] HKLR 935 at 942C]

73.  The Court of Appeal in Yu Nongxian and Chen Xiu Mei had thoroughly considered the question on the exercise of discretion under section 2(2) of ECO in the case of an illegal worker applicant, and the public policy considerations relevant to contract tainted with illegality.  I highlight the following remarks and rulings :-

(1)     There was a long line of authorities where “the courts maintained the principle that while the refusal of the court to enforce illegal contracts often leads to injustice and unjust enrichment of the defendant, the justification is not based on any principle of justice but rather of policy.”  [Yu Nongxian §98]

(2)     “The application of the rule ought to be narrowly watched, and ought not to be carried a step further than the protection of the public requires.” [Yu Nongxian §99]

(3)     The court’s approach to illegality, as illustrated in cases for recovery of loss of earnings from unlicensed hawking (which was illegal), was that the court must examine all relevant circumstances, and decide in these circumstances, whether it would affront the public conscience or offend the ordinary right-thinking citizens if compensation for the loss is awarded.  The board question seems to be: would it be more offensive to the notion of justice held by right-thinking people generally to allow the recovery in light of the actual illegality involved or would it be more offensive to such notion to refuse them a remedy.  [Yu Nongxian §65 quoting Chung Man Yau & Anor v Sihon Co Ltd [1997] HKLRD 1221]

(4)     “[i]n order to stop illegal employment, it is important to target the employers.  Unlike illegal employees who are likely to be driven by necessity, employers are usually driven by greed.  A good deterrent for a greedy person is to hit him in his pocket.”  If the employee was not allowed to recover from the employer, the employer would have got scot-free, especially when the employee has no incentive to testify against the employer.  [Yu Nongxian §§77-78]

(5)     Hong Kong is a caring society, “it would take an extremely cynical and indeed harsh view to say that public policy should deprive an employee who was physically injured or killed in an industrial accident from recovering compensation from an employer who knowingly employed him to carry out lawful work despite his lack of permission to work in Hong Kong.”  [Yu Nongxian §101]

(6)     “Irrespective of whether an employer has provided insurance coverage for his employees or not, he is still personally responsible towards the employees for the compensation.” [Yu Nongxian §104]

(7)     “Having regard to the public policy regarding illegal employment, I believe allowing recovery is also conducive to serving such public policy.”  [Yu Nongxian §87]

74.  Both Yu Nongxian and Chen Xiu Mei are fatal cases, section 10 compensation was not engaged.  Nonetheless, one can discern from the Court of Appeal decisions that, as a matter of public policy, the ECO protection given to illegal workers doing lawful works was not intended to be more restrictive than the protection given to the other workers legally employable in Hong Kong.  

75.  The applicant’s legal capability to work must have been considered at the stage when the court determined whether discretion under section 2(2) was to be exercised. Once the court decided to exercise discretion in favour of the illegal worker applicant under section 2(2), the corollary is that the applicant’s lack of legal capability to work would not disentitle his claim for compensation under the ECO. 

76.  The intention of the ECO is to provide a quick financial relief to injured employees in a no-fault scheme.  [LKK Trans Ltd v Wong Hoi Chung [2006] 9 HKCFAR 103].

77.  In the context of considering whether an employee bears the burden of proving that he had no earnings that he was earning, or was capable of earning, in a suitable employment during the period of temporary incapacity[10] so that there should be no reduction under section 10(1), the Court of Appeal held that the employee does not bear the burden, and clearly stated that there was an assumption that the employee would have continued in the same type of employment receiving the same earnings had the accident not occurred.  [Yu Tat Kam v Chu Tung Shing and other CACV25/2008, unreported, 8 October 2009].

“25. Does the employee bear the burden of proving that he had no earnings that he was earning, or was capable of earning, in a suitable employment during the period of temporary incapacity so that there should be no reduction under s.10(1)? Although the employee is the applicant for compensation, we are of the view that he does not bear that burden. The intention of the Ordinance is to provide quick financial relief to employees incapacitated by work-related injury in a no-fault scheme (LKK Trans Ltd v Wong Hoi Chung [2006] 9 HKCFAR 103, 114). It is assumed that had the accident not occurred, the employee would have continued in the same type of employment receiving the same earnings. ...” (emphasis by bold type added)

78.  Section 10(1) is a formulation for calculating the amount of compensation.  The first sentence of section 10(1) provides that the compensation shall be the “periodical payments hereinafter mentioned or a lump sum calculated accordingly, having regard to “the probable duration, and probable changes in the degree of the incapacity.”  

79.  The second sentence in section 10(1) provides the formula for calculating the “periodical payments” referred to in the first sentence: that is four-fifth of the differences between two parameters, (a) the applicant’s monthly earnings at the time of the accident (“Parameter A”); and (b) the monthly earnings which the applicant was earning (“Parameter B1”) or was capable of earning (“Parameter B2”), in some suitable employment or business during the period of temporary incapacity after the accident. Parameters B1 and B2 are factors in the formula that give a reduction to the actual amount of compensation an injured employee may obtain under section 10.

80.  Given the objective of the Ordinance, the proper construction of section 10(1) and the underlying policy considerations for illegal workers’ claims, section 10(1) is not to be construed as a section to introduce once again a hurdle for obtaining compensation by reason of the applicant’s legal incapability to work.  

81.  Let me test the proposition derived from the Shiddik case by comparing the position of an asylum seeker like the applicant and the position of a hypothetical asylum seeker who is not legally employable in Hong Kong, but for whatever reason, he did get employed after the accident to do works that he was physically capable to do and obtained actual monthly earnings.  This hypothetical worker who continued to make an earning “illegally” after the accident could obtain section 10 compensation by applying Parameter B1 (“the monthly earnings which he is earning”) and does not need to rely on Parameter B2 (capability of earning).  However, an illegal worker, like the applicant, who stopped to make earnings “illegally” after the accident could not get the compensation at all.  This, in my view, would not be the intended effect of section 10.

82.  I am very grateful to Miss Wong, counsel for the respondent and Mr Yip, counsel for the applicant for their diligence and helpful assistance in the research on the application of provisions equivalent to section 10 in the other common law jurisdictions, although we cannot draw any assistance from the other jurisdictions on this point due to the differences in the applicable statutory provisions equivalent to section 10.

83.  I found that the applicant is entitled to section 10 compensation.  The amount shall be HK$13,000 x 4/5 x 18 months = HK$187,200.

Section 10A is not engaged

84.  The applicant made no claims under section 10A as his medical expenses have been waived by the public hospital.

The Award

85.  In summary, the total compensation awarded to the applicant under the ECO is as follows :-

Section 9	$ 62,400
Section 10	$187,200
Total:	$249,600 =======

86.  The applicant is successful in this application.  I make a costs order nisi that the respondent shall pay the applicant the costs of this action, to be taxed if not agreed, with a certificate for counsel.  The applicant’s own costs shall be taxed in accordance with the legal aid regulations.

87.  I express once again my gratitude to both counsel for their helpful assistance.