SINGH GURPINDER v. CRAIGSIDE INVESTMENTS LTD t/a PIZZERIA ITALIA

DCEC 1978/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1978 OF 2011

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JUDGMENT

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INTRODUCTION

1. The applicant, who delivered pizza for the respondent by motorcycle, met with a traffic accident when he was returning to the respondent’s shop after one such delivery on 17 December 2010.  He claims compensation against the respondent under the Employees Compensation Ordinance, Cap 282, saying that he was an employee of the respondent.  The respondent, whilst accepting that it had hired the service of the applicant, denies that he was its employee. 

ISSUES

2. Thus, the sole issue for the court to decide is whether the applicant was an employee of the respondent.  If he was not, then no compensation would be payable under the Ordinance.  If the applicant was the respondent’s employee, then there is no dispute that the compensation payable by the respondent would be $32,845.55 which relates to his 113 days sick leave ($32,385.55) recommended by the doctor and the medical expenses ($460).  The applicant has suffered no permanent loss of earning capacity. 

MATTERS NOT IN DISPUTE

3. By way of background, for all intents and purposes Mr Eric Kee (“Kee”) was the owner of the respondent which operates a pizza shop in the name of Pizzeria Italia (“Pizzeria”) in Mosque Street, Mid-Levels, Hong Kong.  Pizzeria does only takeaway and delivery. 

4. At the material time, Pizzeria had two pizza chefs, Walia and Dave, both of them were Indians, a Filipina receptionist called Maria and a part time cashier called Mirabelle. Pizzeria also engaged a number of delivery workers, all of whom including the applicant were Indians, to deliver orders to customers.  Different delivery workers had different working hours and there would be more of them working on weekends and public holidays.  A timetable showing the delivery workers’ designated working hours was posted in Pizzeria somewhere near or in the cashier counter.  Back in the respondent’s office, which situated in another building on the same street, Kee had Mr. Paulus Chan (“Chan”) who handled the accounts and paper work of Pizzeria and his other businesses.  Chan was assisted by his colleague Jessica. 

5. The applicant started to work for the respondent on 27 August 2010 through the introduction of a fellow Indian called Ricky who also delivered pizza for the respondent. Initially, the applicant only worked in the evening from about 6 pm up to 10 pm and sometimes up to about 11 pm.  Between 6 September 2010 and 22 October 2010, he also worked during day-time starting at about 11:30 am, the reason being that another delivery worker, King, had left Hong Kong for Indian for about a month and the applicant took over King’s hours.  However, from 23 October 2010 onwards the applicant returned to his previous working hours in the evening only after King had returned from India.  He stopped working for the respondent after the accident. 

6. The following matters were not in dispute:-

(a)  The delivery workers had to arrange their own motorcycles to do the work and were responsible for the maintenance and petrol of their motorcycles.  Although the applicant said in evidence that he was told by King that King drove the company’s motorcycle, that was hearsay.  I note also that when Kee and Chan gave evidence, they both testified that the respondent did not own any motorcycles and their evidence in this regard was not challenged.

(b)  The respondent would not be responsible for any traffic tickets and third party insurance relating to the motorcycles of the delivery workers.

(c)  The delivery workers were not required to wear any uniform and the rear boxes of their motorcycles did not bear the respondent’s name or logo.

(d)  The respondent initially paid the delivery workersa retainer fee at $40 per hour and an additional $10 for each delivery they made.  Subsequently, as a result of a discussion in mid September 2010 between Kee and the delivery workers, the hourly rate was raised to $50.  The additional fee per delivery remained at $10 for short distance orders but increased to $20 for long distance orders.  The delivery workers would be reimbursed for tunnel fees incurred for making delivery.  The delivery workers were not entitled to any paid sick leave.  The respondent did not contribute to their Mandatory Provident Fund. 

(e)  For the purpose of calculating the remuneration of the delivery workers, each of them had a timecard.  The timecards recorded the “in” and “out” times of the delivery workers and also the number of delivery they made.  The punching of the “in” and “out” times were done by the receptionist.  Based on the timecards, Chan would prepare a monthly statement for each delivery worker to sign and distribute the month’s remuneration to the delivery worker in cash contained in a plastic bag. 

RELEVANT LEGAL PRINCIPLES

7. The test for whether a person is an employee can be found in the judgment of the Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156:-

(1)  The modern approach is to examine all the features of their relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment.  This involved a nuanced and not a mechanical approach: painting a picture from the accumulation of detail.  The indicia included:-

(i)  the degree of control exercised by the “employer”;

(ii)  whether the person performing the services provided his own equipment;

(iii)  whether he hired his own helpers; what degree of financial risk he took;

(iv)  what degree of responsibility for investment and management he had; and

(v)  whether and how far he had an opportunity of profiting from sound management in the performance of his task.

(2)  Contracts of employment might arise on two different levels in the context of casual workers: (a) an umbrella or global contract (although uncommon), that is an over-arching and continuous agreement between the parties, encompassing a series of specific engagements within its span; and (b) a contract in relation to a specific engagement.  The absence of a mutual obligation to supply and take up work was fatal to the existence of (a), but irrelevant to the existence of a contract of employment arising out of (b).  There could be a contract of employment based on a specific engagement, regardless of the absence of any global contract.

APPLICANT’S SUBMISSONS

8. Mr Wong, counsel for the applicant, relied on the following matters which he said showed that there was an employer/employee relationship between the respondent and the applicant:-

(a)  the job interview with Kee;

(b)  Kee checking the applicant’s identity card and driving licence during the job interview;

(c)  Chan arranging the roster of delivery workers;

(d)  the clocking in and out requirement;

(e)  the work requirements;

(f)  the applicant taking up King’s hours of work;

(g)  the increment of the hourly rate;

(h)  the need for Chan’s approval before taking leave; and

(i)  the lack of financial risk and additional reward for sound management.

9. Many of the above matters depend on my findings of fact as there was conflicting evidence from the parties.  I will consider the evidence relating to each of these matters first.  In this regard, I bear in mind that the burden is on the applicant to prove his case on balance of probabilities.  After that, I will examine whether, by the application of the modern approach set out in Poon Chau Nam v Yim Siu Cheung to my findings, the applicant was in law an employee of the respondent.

CONSIDERATION OF THE EVIDENCE

(a) Job interview

10. The applicant gave evidence that about two days before 27 August 2010 he went to Pizzeria for the first time and met Walia.  It happened that the applicant had known Walia before.  Walia made a phone call and afterwards Kee arrived.  Kee and Walia then had a private talk in front of Pizzeria for 4 to 5 minutes. 

11. On the other hand, Kee gave evidence denying that there was such a meeting.  He said, however, that he had seen the applicant twice before sitting near Pizzeria with other people.  On both occasions, he did not have any meaningful conversation with the applicant.  He first became aware that the applicant worked for Pizzeria on 27 August 2010 or one or two days later. 

12. On the balance of probabilities, I find that the applicant had been introduced to Kee a few days before 27 August 2010.  I also find that it is probable that they had talked about how the applicant would be remunerated for delivering pizza for the respondent.  However, I do not find that it was a formal job interview. Even according to the applicant, he and Kee had chatted for about 4 to 5 minutes only.  Also, I am not satisfied that Kee had said in that chat that he would “employ” the applicant.  Kee was consistent in that he paid all delivery workers on the same terms and he regarded none of them as his employees.  There was therefore no reason to believe that Kee would have used the word “employ” or “employee” in his conversation with the applicant.  That said, whether the applicant was in law the respondent’s employee does not depend on the label or description used by the parties, but is to be decided after an examination of all the relevant indicia: see Chan Kwok-kin v Mok Kwan-hing & Anor [1991] 1 HKLR 631, at 635G-J and 636A-B; and Poon Chau Nam v Yim Siu Cheung, supra.  Whether or not Kee had used the word “employ” is not necessarily determinative of the issue.

(b) Checking of identity card & driving licence

13. The applicant said that in his aforesaid chat with Kee outside Pizzeria, he had shown Kee his identity card and driving licence at Kee’s request.  Kee denied that he had ever checked the applicant’s documents.

14. I find against the applicant on this point.  I do not accept that Kee had asked for or checked the applicant’s documents.  My reasons are as follows.  First, the applicant did not mention this in his witness statement.  Second, even according to the applicant’s version given in court, Kee had never asked him for the copies of his documents.  If Kee was so careful as to check the applicant’s documents before engaging him, then it would appear strange that he did not also ask for copies or otherwise make a written record that he had in fact checked the applicant’s documents.  Third, Kee gave evidence that when Walia changed his position in Pizzeria from a delivery worker to an assistant chef, he asked Walia to bring along his identity card to see Chan.  This is consistent with Chan’s evidence that the respondent company only kept identity card copies of the chefs, the receptionist and the cashier who were regarded as the respondent’s employees, but not those of the delivery workers. 

(c) Duty roster and working hours

15. There was no dispute that the duty roster of the delivery workers, in the form of a timetable, was posted in Pizzeria.  There was also no dispute that the duty roster was in Chan’s handwriting.  The issue is whether it was Chan who decided the designated working hours and days off of the delivery workers.

16. The applicant said that he only learnt about his designated working hours from the duty roster and he had not been consulted beforehand.  He did not have personal knowledge as to how the duty roster was decided.  On the other hand, Chan gave evidence that he wrote the duty roster based on the information King provided him.  King, who had influence among the delivery workers, acted as the contact between the respondent and the delivery workers.  Chan did not know how King got the information but he guessed that the information was the result of discussion among the delivery workers.  Chan said he would copy the information on a blank form rather than asked King to do it, as King’s handwriting was poor.  Chan said his purpose of posting the duty roster in Pizzeria was to inform the receptionist. 

17. On this issue, I accept the evidence of Chan that he wrote the duty roster based on the information given to him by King.  From my observation of Chan giving evidence in court, he did not speak very good English.  On the other hand, it would be natural for King, who was also an Indian, to speak to the delivery workers.  Moreover, it is in my view improbable that either Chan or Kee would concern himself with who should work on which day and for what hours, provided that there were sufficient delivery workers to meet delivery pizza at the time.  Therefore, In my view, that it is more probable than not that Chan would rely on King to liaise with the other delivery workers to sort out their designated working hours and days off.  As to how King obtained the information in which the duty roster was based, there was no evidence on this and I will not speculate.  However, I accept that Chan did not decide the designated working hours and rest days of the delivery workers and he was content to leave the duty roster to the delivery workers to decide among themselves. His bottom line was that there should be sufficient workers for the work.

(d) Time card

18. The evidence before me which I accept is that the delivery workers would not punch their respective time cards.  It was the receptionist Maria who did it. 

19. Mr Wong submitted that the fact that the timecard was controlled by the receptionist was a means to ensure accuracy.  As to this, I agree. 

20. However, I do not find that the timecard was also a means to ensure punctuality. Although Kee said that he expected delivery workers to be punctual for work, there was no evidence before me that there would be any warning or penalty for not being punctual.  To the contrary, the applicant’s timecards showed that there were many occasions where he had been late.  Chan also gave evidence that the receptionist had been complaining about delivery workers being late for work.  The respondent did not seem to have done anything about it. 

(e) Work requirement

21. Kee gave evidence that he required the delivery workers to be polite to customers, to dress smartly and not to drink during working.  He paid the delivery workers an hourly retainer and he expected the delivery workers not to work for others whilst being so retained.  There was, however, no written code for conduct for the delivery workers.

22. Although Kee would like the delivery workers to return to Pizzeria immediately after each delivery, as he said and which I accept, he did not actually know whether they did.  On the other hand, I find that the delivery workers had incentive to do more as they would be paid an additional fee for each delivery they made. 

23. As to the work procedure of the delivery workers, the evidence was that they had to turn up at Pizzeria and wait, to deliver pizza and collect the money, to return to wait again for the next delivery and at the end of the day to account to the receptionist for all money they received.  The applicant agreed that when an order was already for delivery, the receptionist or the chef would press the bell and whoever was waiting would come up to take up the order.  If there were more than one delivery workers waiting, they would do it by turns.

24. Based on the evidence, I find that the receptionist or the chef did not assign work or give instruction to the delivery workers in the sense that they did not determine which particular delivery worker was to deliver which particular order.  In my view, it is improbable that the receptionist or the chef would care who was to delivery an order, provided that there was somebody to do it. I find that in reality the delivery workers who were waiting outside Pizzeria would by turns come up when the bell was pressed.  It was entirely up to the individual delivery workers to decide whether to take up a particular delivery order.  A delivery worker would do more rounds if he wanted to earn more. 

(f) Applicant taking up the hours of King

25. There was no dispute that when King was away from Hong Kong between early September and late October 2010, the applicant took up King’s hours and worked in the daytime as well as in the evening.  The applicant evidence was that he had been asked by King to take up his hours before King left.  Neither Kee nor Chan talked to him about this.  It was only King.  The applicant returned to work in the evening only after King’s return. 

26. Kee’s evidence was that he had not been informed beforehand about King’s departure but was informed Chan subsequently that King had gone back to India for one to two months.  According to Kee, delivery workers come and go.  He would not mind if a delivery worker was substituted by another provided that there were people to do his job.  Chan’s evidence was that King spoke to him about his leaving Hong Kong for India 2 or 3 days before departure.  King said to Chan that the applicant would take up his hours.  Chan insisted that he was only informed by King.  He was not asked for approval or permission. 

27. I accept Chan’s evidence that he was informed by King that the applicant would take up his hours whilst he was away.  There is no evidence to contradict Chan in this regard.  I do not think that either Chan would not concern himself with whether it was the applicant or somebody else who would take up King’s hours, provided that there was somebody.  I do not accept Mr Wong’s submission that the mere fact that King talked to Chan about the applicant taking up his hours necessarily means that Chan’s approval was required in this regard.  It is equally possible that King was trying to be helpful or that he wanted to do the applicant a favour.  In my view, the fact that King chose to talk to Chan is a neutral factor. 

(g) Increment of hourly rate

28. The applicant’s evidence that he and other delivery workers had a discussion with Kee in mid-September 2010 seeking an increase of their fees and that led to adjustment of the hourly rate from $40 to $50.  Initially, Kee cross-examined that the applicant on the basis that he had not discussed this with the applicant.  That part of the cross-examination occurred before the luncheon break on 27 February 2013.  Mr Wong submitted that Kee was dishonest in putting something to the applicant that Kee knew was not true. 

29. In view of Mr Wong’s criticism of the way Kee had cross-examined the applicant, the relevant part of the recordings was retrieved and played in court.  After having heard the recording, I am satisfied that Kee immediately after the luncheon break, at 1441 hours, informed that he no longer took issue about the existence such a meeting.  I note also that when Kee gave evidence in chief, he said that his account about the discussion on the hourly rate was similar to that of the applicant. 

30. I am satisfied that Kee had not deliberately put to the applicant that there was not such a meeting when he knew that there was.  I am satisfied that Kee had a slip of memory when he put to the applicant that he had not discussed with the applicant about the increase of the hourly rate and he soon corrected the mistake during the cross-examination of the applicant.

(h) Approval for taking leave

31. There were several occasions when the applicant had not turned up for work, namely, 1-3, 5 and 8 November 2010[1] and 6-8 and 13-15 December 2010.[2]  The applicant’s evidence was that he was sick for those days in November.  As regards the days in December, he said his father had come from India and he had to accompany him to visit relatives.  The applicant said he had spoken to Chan and asked for permission before taking leave.  He added, in particular, that on 12 December 2010, he met Chan face to face and sought his permission before taking leave on the following days. 

32. Chan, on the other hand, gave evidence that the applicant had not spoken to him before taking leave.  He said that the receptionist was very angry because of the applicant’s absence in December as there was no one to deliver pizza.  Chan remembered that he had asked King about the applicant and King said he did not know why the applicant was absent.  Chan said that he could not have met the applicant on 12 December 2010 as it was a Sunday and he (Chan) had never worked on Sundays.  I note that it had not been put to the applicant in cross-examination that he had not met Chan on 12 December 2010.

33. On balance, I accept that the applicant’s evidence that he had informed Chan in relation to those days in November 2010 which he said he was sick.  I also accept that he informed Chan on both occasions in December 2010 that his father had come from India.  I also accept that the applicant had on all those occasions asked Chan whether he was allowed to be absent from work and Chan had agreed to the applicant’s absence on those days. 

34. However, in my view what is important is not whether the applicant had in fact sought Chan’s approval before he had his leave.  The applicant might have thought that he had to have Chan’s approval and that was why he asked Chan.  However, that was not the point.  The point was whether, as a matter of the respondent’s policy and procedure, the delivery workers were required to obtain the approval of either Chan or Kee before their leave.  On this point, there was no evidence from the applicant as to any prior discussion with Kee or anyone about the procedure for taking leave.  The applicant’s evidence was only that if Chan had not agreed to his absence, he would have to return and work.  Kee’s evidence in this regard, which I accept, was that he had not gone into such details with the delivery workers as to the procedure for taking leave.  I note that the delivery workers would not get any pay for the day on which they did not work.  I also note Kee’s and Chan’s evidence that they left it to King and the delivery workers to sort out the arrangement of substitutes.  I am not prepared to draw the inference that the respondent’s prior approval was required from there mere fact that the applicant had in fact sought Chan’s approval.  I accept Kee’s evidence that he relied on King and the other delivery workers, in case a delivery worker was absent from work, to make arrangement for a substitute. 

(i) Financial risk and reward

35. Mr Wong submitted that there were indicia that the applicant was an employee in that he had no financial risk in doing work for the respondent and similarly he would not have made any additional gain for sound management of his work. 

36. I do not accept the submissions that the applicant’s work involved no financial risk on his part.  The fact that delivery workers would be reimbursed for tunnel fees if incurred is a neutral factor.  The more important evidence, in my view, was that the applicant had to arrange and maintenance his own motorcycle and to pay for expenses relating to the motorcycle.  The applicant alone would bear any risk of committing any traffic offences and meeting with accidents resulting in injuries or damages to third parties, as the respondent would not be paying for any traffic tickets or third party insurance.  He had to pay for his own petrol and therefore any fluctuations in the price of petrol would also be his risk.  He would not be able to do as many rounds as he liked in case of traffic congestion.

37. On the other hand, the applicant could earn more money if he did more rounds of delivery by employing a more efficient time management or taking shorter routes or avoiding congested areas when making delivery. 

CONCLUSION

Liability

38. Applying the test in Poon Chau Nam v Yim Siu Cheung, supra, and having taken everything aforesaid into account I find that the applicant was not an employee of the respondent.  I give weight to the following factors:-

(i)  the respondent exercised minimum administrative control over the applicant in that:-

·   the delivery workers were not required to wear uniform and the rear-boxes of their motorcycles did not bear the respondent’s logo;

·   King and the applicant made their own arrangement for the applicant to take up King’s work hours when King was away;

·   there was no sanction for delivery workers being late for work;

·   the receptionist and the chef did not assign orders or give instructions to individual delivery workers;

·   Chan did not decide on the duty roster and he left it to the delivery workers to sort it out among themselves; and

·   there was no requirement in the respondent company that delivery workers had to obtain prior approval before taking leave;

(ii)  the applicant had to arrange his own motorcycle for doing the respondent’s work;

(iii)  the applicant had to bear financial risks concerning the use of his motorcycle, the changes in the price of petrol and the traffic condition;

(iv)  delivery workers took up orders for delivery voluntarily by turns and it was entirely up to the individual to decide whether he would take up a particular delivery order or not; and

(v)  the applicant had to make efficient use of his time in order to do more rounds and earn more money.

In my judgment, the above factors, taking as a whole, clearly point to the conclusion that the applicant was not an employee of the respondent.

39. It follows that, in my judgment, the applicant is not entitled to any compensation from the respondent under the Employees Compensation Ordinance.

Costs

40. The respondent acts in person.  I make an order nisi that the applicant pay the respondent’s cost, if any, to be taxed if not agreed.