LI MAN YUEN v. LI CHUNG I t/a V.F. ELECTRIC MANUFACTURING COMPANY

IN THE COURT OF APPEAL

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JUDGMENT

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Silke, V.-P.:

1. Li Man Yuen - "the workman" - aged 38 met with an accident on 13th September 1985.

2. On that day he was working on a heavy machine-  heavy enough to require two or three persons to lift it - in the premises controlled and owned by the Respondent company, now the Appellant: Li Chung I trading as V.F. Electronic Manufacturing Company - "the company".

3. He processed materials for the manufacture of nylon nets on the machine which was the only one of its kind on the premises.

4. The company provided the materials to the workman and required him to carry out the work on their premises.

5. At trial no issue was taken as to the nature of the injury, which was the crushing of the left hand necessitating an amputation of the left index finger and damage to another finger. This injury took place while he was in the process of using the actual machine in what way we know not. No point was taken on any issue of disability.

6. There was evidence that the workman worked at the time of the accident for another company as a cook and from which employment he earned the majority of his wages.

7. The application, under the Employees Compensation Ordinance - "the Ordinance" - was heard by His Honour Judge Gall in the District Court and the judge found in favour of the workman making an award in the sum of $ 90,345. This was under Section 9 (disability), Section 10 (loss of earning) and Section 10A (medical expenses) of the Ordinance.

8. That quantum of that award is not in issue before us.

9. There is in issue, as there was before the trial judge, the question was the workman an employee within the meaning of that term as defined in the Ordinance.

10. When the application was filed, the company made answer in these terms:

"    We wish to declare that

Mr. Li Man Yuen was not employed under contracts of employment by our factory and he was only a outworker of our factory.

 

        We further to the Application of the Ordinance of the Workmans' Compensation Legislation of Labour Dept. Section 2(1) Proviso - The Ordinance does not apply to Outworker; that our factory is not liable to pay any compensation." (sic)

 

11. Outworker is defined by Section 3 as meaning:

"A person to whom articles or materials are given out to be made up, cleaned, washed, altered, ornamented, finished, or repaired, or adapted for sale in his own home or on other premises not under the control or management of the person who gave out the materials or articles."

12. Miss Lam has valiantly argued that, on the evidence given at trial, the judge should not have found in the fashion he did. She has suggested that the workman was aware of that which she describes as his rights as an outworker. He had an option to work on or off the premises.

13. It is of relevance that the case, as it was presented in the Court below, is neatly encapsulated in a question which was asked in the course of cross-examination by the then lay representative of the company of Madam Kui Lap who had introduced the workman to the company:

"During time you worked in V.F. you knew worker operating moulding machines were in category of outside workers doing extra work?"

The answer given was:

"Many people do that kind of work even work made in factory don't know what kind of workers they are."

14. It is clear from the evidence that there was no question of the Applicant's ever taking any work to his home or to other premises not under the control of the company. He was on call according to his own evidence and did receive telephone calls from Mrs. Kwok, who was a functionary within the company, to come and do this particular type of work. It appears that no one else did this work or used this machine.

15. He did at one stage sign some form of statement - this was not produced in evidence - that he was an "extra outside worker" but that clearly is a label attached to him by the company and which has no real significance given the evidence as to the actual work which this man carried out.

16. He had worked intermittently for the company since 1984 and, as I have said, always on call. He clearly was working on articles given to him by the company, to be made up on the company's premises. Even if there were an option, which we doubt, his being an outworker simply does not arise. We see no reason to disturb the finding of the trial judge on this particular aspect.

17. Miss Lam has gone on to suggest that he was in fact a person who was providing a contract for services rather than an employee on a contract of service; that he was, in effect, an independent contractor. The judge she says should have gone on to consider whether he was an employee even apart from the outworker issue.

18. This raises the question of control and the tests which are set out in Wong Po Sin v. New Universal Paper Co. Ltd.⁽¹⁾ where at page 68, Blair-Kerr J., in delivering the judgment of the Full Court, cited from the judgment of Cooke J. who delivered the judgment of the Divisional Court in Market Investigations Ltd. v. Minister of Social Security ⁽²⁾.

19. The quotation is this:

"..... the fundamental test to be applied is this: 'Is the Person who has engaged himself to perform these services performing them as a person in business on his own account?' If the answer to that question is 'yes', then the contract is a contract for services. If the answer is 'no', then the contract is a contract of service. No exhaustive list has been complied and perhaps no exhaustive list can be complied of the considerations which are relevant in determining the question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can he said is that control will no doubt always have to be considered although it can no longer he regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task."

20. In Ready Mixed Concrete (South East) Ltd. v. Minister of Pensions and National Insurance⁽³⁾, McKenna J. said at page 515 as to "control":

"Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant."

21. I do not intend to reiterate the various tests that had been set out in Wong⁽¹⁾ or in Ready Mixed ⁽²⁾ but none of those tests fall to be answered in the company's favour.

22. It was suggested that the company had no duty to give work to the workman. It was suggested there was no restriction on his hours of work. It was further suggested that there was no supervision. All these matters, says Miss Lam, were indicative of an independent contractor.

23. We do not agree. The reality of this case is that the workman was a casual piece worker paid on a piece-work basis; paid monthly for his own convenience; not paid for any defective work. He received the goods when he arrived at the premises signing them out and then returned them also on the premises at the end of his stint when they were inspected. He was an employee.

24. In these circumstances this appeal must be dismissed.

(1)    [1973] H.K.L.R. 59 (F.C.)

(2)    [1969] 2 Q.B. 173

(3)    [1968] 2 Q.B. 497