Lau Yiu Yee v. Tung Lee Engineering Co. (a firm) and Another

DCEC471/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES COMPENSATION CASE NO. 471 OF 2001

_______________

R U L I N G

_______________

1. This is my ruling, having again ascertained from the 2nd respondent that the only contention is the meaning of "the month's earnings" in section 11(1)(a) of the Employees' Compensation Ordinance. That is the only point at issue. Having ascertained that to be the only point, then I will make my ruling now.

2. This is an assessment of compensation related to employee's compensation as against the 2nd respondent, who is the principal contractor in this case.

3. Judgment on liability had been entered against the 1st and the 2nd respondent. Judgment had also been entered against the 1st respondent on compensation, as the 1st respondent consented to the claim for compensation of the applicant in full.

4. The 1st respondent's solicitors stated that for assessing the compensation he agreed on, the monthly earnings used by both parties was the monthly earnings of the applicant for the calendar month of May 1999 in the sum of $19,350.

5. Section 24(1) states the liability of the principal contractor to pay to the employee the employee's compensation which the principal contractor would have been liable to pay if that employee had been immediately employed by him. This is in a situation where the employee is employed by the subcontractor of the principal contractor, and section 24(1) continues to state there:

"The amount of any compensation calculated by reference to earnings shall be calculated by reference to the earnings of the employee under the employer by whom he is immediately employed."

6. The 2nd respondent's solicitor disputes the monthly earnings which was the basis for assessing the section 9 and section 10 compensation awarded against the 1st respondent. The 2nd respondent alleges that because the employee was employed on a casual basis and paid a daily wage, there should be a different method of assessing monthly earnings.

7. I go to section 11(1), which states the basis for computing monthly earnings. Section 11(1) states this:

"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 a 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 calculation is more favourable to the employee."

It is clear that the applicant relies on section 11(1)(a) as a basis for calculating the monthly earnings for section 9 and section 10 compensation.

8. The 1st respondent also agreed that section 11(1)(a) is to be relied on in this case. The reason is, section 11 states that in choosing between the two methods of calculating monthly earnings stated in (1)(a) and (b), it is the calculation which is more favourable to the employee that is to be adopted. In this case the method in (1)(a) is the more favourable method of calculating monthly earnings to the applicant. The intent of the ordinance is for the more favourable method of calculating monthly earnings to the employee to be adopted.

9. The 1st respondent, being the immediate employer of the applicant, had disclosed the list of monthly earnings of the applicant, and that is at page 15 of the bundle of documents. That is an admitted fact by the 1st respondent and, as the 1st respondent is the immediate employer, there is hardly any basis for challenging that by any third party.

10. We look at the list of earnings (that is, the monthly earnings) of the applicant paid by the 1st respondent. The months that are listed are the months of November 1998, December 1998, January 1999, February 1999, March 1999, April 1999, May 1999, and as far as June is concerned, as the accident occurred on the 28th - before the end of the month - the salary was not for the whole calendar month, but only for the period from 1 June 1999 to 28 June 1999, the date of the accident.

11. I look at the Annotated Ordinance of Hong Kong for the Employees' Compensation Ordinance. Paragraph 11.05, with a sub-heading of "(1)(b)" states that:

"Month" - that is, the word 'month' - "is defined in section 3 of the Interpretation and General Clauses Ordinance Cap. 1 to mean 'a calendar month'."

The interpretation for the word "month" has been defined by the Interpretation and General Clauses Ordinance Cap. 1. The definition of the word "month" applies wherever the word "month" occurs, and the definition is "a calendar month". So where the word "month" occurs in section 11(1)(a) and (b), it should mean "calendar month".

12. Hence, read in this way, section 11(1)(a) actually states:

"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 calendar month immediately preceding the date of the accident."

This then clarifies the fact that the monthly earnings for the method of calculating section 9 and section 10 compensation should be that for the calendar month of May 1999, and the sum of monthly earnings for the calendar month of May 1999 is $19,350, and this is the basis for the compensation which has been agreed as between the applicant and the 1st respondent. And I do not think there is any dispute in relation to section 10A compensation; therefore it is clear that the compensation that is assessed as against the 2nd respondent is the same as that agreed to be paid by the 1st respondent, that is, the sum of $588,676, credit to be given for the advance payment of $342,645, and there be interest on the balance sum of $246,031 at half judgment rate, namely 4.0625 per cent per annum, from 28 June 1999 to date of judgment, and thereafter at full judgment rate until payment. Such judgment as against the 1st and 2nd respondents to be joint and several.

(Discussion re costs)

13. The 2nd respondent do pay the costs of the application as against the 2nd respondent save that as regards the applicant's costs for preparation of the trial on liability, the 2nd respondent should pay two-thirds thereof but should pay 100 per cent of the applicant's costs for preparation of the trial on assessment of compensation together with costs of the hearing as against the 2nd respondent from 11.20 am to 13.20 pm such costs to be taxed if not agreed. The applicant's own costs to be taxed in accordance with the Legal Aid Regulations.