LEE WAN HUNG v. WANG TAT (CHINA) TRANSPORTATION CO. LTD.

DCEC92/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO.92 OF 2000

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JUDGMENT

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Background:

[1] In or about August 1998, the Applicant, Mr. Lee Wan Hung, commenced working for the Respondent transportation company as a Mainland and Hong Kong cross-border lorry driver. On 25/11/1998, the Applicant tendered one-month notice of resignation to the Respondent. The last working day was to be 24/12/1998. On 14/12/1998, while the Applicant was delivering a load of wooden doors and doorframes from Shunde City to Hong Kong, the rear tyre of the lorry he was driving suddenly burst. As a result he suffered injuries to his head, right hand, forearm, elbow and shoulder in the resulting accident.

[2] The Applicant was taken to the Dongguan City Humen Hospital where emergency operation was performed. On 17/12/1998, the Applicant returned to Hong Kong and was admitted to the North District Hospital where he received further surgeries and follow-up treatments. It was undisputed that the Applicant was granted sick leave from 17/12/1998 to 27/7/2000 or 19.4 months. The Employees' Compensation (Ordinary Assessment) Board (the "Board") assessed permanent loss of earning capacity at 13%. The Applicant was 39 years old at the time of the accident. He has been out of work since the accident and is claiming compensation under various sections of the Employees' Compensation Ordinance, Cap. 282 (the "Ordinance").

[3] The parties have agreed to the Board's assessment and medical expenses has been agreed at HK$2,812.00. The parties have also agreed that the Applicant's monthly earning was HK$11,513.00. With the exception on whether the Applicant was entitled to s.10 entitlements for his full sick leave period due to his resignation, the parties' main dispute was whether the Applicant was an independent contractor or an employee of the Respondent.

The Applicant's Case:

[4] In 1979, the Applicant arrived in Hong Kong from the Mainland and in or about 1990 obtained a Hong Kong driving licence. In 1998, he obtained a Mainland driving licence for medium goods lorry and started looking for work as a cross-border lorry driver. On or about 27/7/1998, he saw an advertisement recruiting for cross-border lorry drivers issued by the Respondent. The Applicant called and arranged an interview at the office of the Respondent with a Ms. Chung May Ha ("Ms. Chung") and one of the Respondent's directors, Mr. Yeung Kwai Mang ("Mr. Yeung").

[5] After the interview, the Applicant was told to wait for the Respondent's reply. There was no reply and after one week, the Applicant went to see Ms. Chung. Ms. Chung stated that she could not decide and asked the Applicant to wait for Mr. Yeung's telephone call. The next day, Ms. Chung called and arranged another meeting with Mr. Yeung. During the second meeting, Mr. Yeung stated that he had a lorry that had just been repaired and was available. Mr. Yeung then agreed to employ the Applicant as a cross-border driver. The Applicant's salary would be 25% of all gross transportation fees carried by the Applicant, if the transportation fee was below HK$60,000. For transportation fees above HK$60,000, the Applicant would receive 27% of the gross transportation fees. After the agreement, the Applicant was told to wait for delivery orders.

[6] On or about the middle of August 1998, Mr. Yeung told the Applicant to drive his lorry, registration number GM4577 (the "Lorry") around Yung Long for the Respondent's repairer to assess the Lorry's condition, since the repairer did not have the required driving licence. The following day, the Applicant was told to take the Lorry to the Kowloon Bay Vehicle Examination Centre for examination. After the examination, the Applicant drove the Lorry back to the Respondent's parking area and he was paid HK$600.00 for that day's work.

[7] The Respondent then arranged all of the necessary documentations, including the driving visa and close road permits, for the Applicant. On or about 19/8/1998, the Applicant was told to take the Lorry to Guangzhou for examination by the Mainland authority. After the examination, the Applicant was instructed to bring a load of goods to Hong Kong. Starting from 21/8/1998, the Applicant began to transport goods for the Respondent on a regular basis.

[8] The Respondent was responsible for all expenses of the Lorry. Each month, the applicant received HK$6,000.00 as advance for expenses to operate the Lorry, including fuel, parking fees, tunnel fees, customs charges and road maintenance fee. The Applicant was told to carefully record all expenses and at the end of the month submit the same to the Respondent. However, HK$6,000 was insufficient for the expenses and during the month, the Applicant used to get further advance payments of between HK$1,000 to HK$3,000 from the Respondent. The Applicant's wages were decided by the Respondent generally by a formula: (total transportation fees + outgoings - advance payments). Balance of the wages was usually paid two months in arrears.

[9] Most of the Applicant's task was transporting goods from the Mainland to Hong Kong. After the goods were loaded in the Mainland, the Applicant was required to report to Hainan Yuda (Q.T.) Transportation Co. Ltd. ("Yuda"), a company ran by Mr. Yeung's brother, Mr. Yueng Kwai Chung. After the Applicant had unloaded the goods in Hong Kong, he had to call Ms. Chung for further instructions. If there were no pending orders, the Applicant was required to drive the lorry to the Mainland to await further instructions.

[10] The Applicant did not get any statutory holidays nor rest days. Whenever he required a rest day, he had to inform Mr. Yeung or Ms. Chung and request their permission.

[11] One evening on or about September 1998, Mr. Yeung asked the Applicant to meet him at around 8 p.m. Mr. Yeung asked the Applicant to sign three documents representing a list of things that drivers were prohibited from doing. The driving cabin was dark and the Applicant alleged that he signed those documents without looking at them. It was not until late October 1998, when copy of these documents was received, that the Applicant realized the content of the documents. The Applicant alleged that he had never agreed to set up a company to do business with the Respondent; that he had never agreed their relationship was not one of employee and employer; that he had never agreed to employ Mr. Yeung's wife and a manager of the Respondent, Hui Yuk King ("Hui"), as part-time clerk. Although the Applicant protested, Mr. Yeung had never rectified these matters.

[12] On or about 25/11/1998, the Applicant decided to resign and one-month verbal notice was given to Ms. Chung over the phone. On 1/12/1998, the Applicant went to the Respondent's office and signed a written resignation notice. The last day of work was stated as 24/12/1998.

[13] On 13/12/1998, the Applicant had to pick up a load of wooden doors from Shunde City and deliver the same to Hong Kong. The Applicant met a lady friend and gave her a ride to Shunde City. After he picked up the load, the Applicant agreed to give the lady friend a ride back to Shenzhen. On their way back they met with the abovementioned accident.

[14] The Applicant alleged that his monthly incomes immediately prior to the accident were as follows:

8/1998		HK$ 1,725.00
9/1998		13,550.00
10/1998		12,063.00
11/1998		8,925.00
12/1998		6,125.00

The Respondent's Case:

[15] The Respondent's case was that on or about early July 1998, the Applicant approached Mr. Yeung for a job. At that time the Respondent was not recruiting; however, by the end of July, an existing driver expressed an intention of leaving and the Respondent placed an advertisement on the newspaper for cross-border lorry driver. The Applicant applied for the job, but the Applicant did not meet the Respondent's requirement and he was not considered for the job. In any event, the original driver did not resign and the Respondent never hired any replacement.

[16] In or about early August, the Applicant approached Mr. Yeung again. The Applicant was sent by an acquaintance and enquired about where to purchase a second hand lorry and on how to join a Hong Kong/Mainland goods delivery line. Mr. Yeung stated that he had a newly refurbished lorry but no one would allow anyone without cross-border transporting experience to join its line. However, after the Applicant begged Mr. Yeung, he agreed to make the necessary arrangement for the Applicant to join Yuda as a cross-border lorry driver under the business name 'Lee Wan Hung Transportation Company'.

[17] The Applicant had a verbal agreement with Yuda, where Yuda would retain 45% of all transportation fees as a deposit for expenses and charges incurred by the Applicant in performing his duties. 30% of the transportation fees would be paid to the Respondent as the Respondent's expenses. This verbal agreement was also contained in a written agreement, between the Respondent and Yuda, dated 26/8/1998 (the "Agreement").

[18] Mr. Yeung also agreed to sell the Lorry to the Applicant for the price of HK$110,000.00. The purchase price was to be repaid by 24 monthly instalments of HK$4,583.00, to be deducted from the transportation fees earned by the Applicant. Title of the Lorry would be transferred to the Applicant after all payments has been received. The Applicant was responsible for all expenses, repairs, maintenance, fuel, customs charges and road tolls.

[19] Unlike the Respondent's employees, the Applicant had no fixed working hours and was not entitled to statutory holidays or rest days. Furthermore, the Applicant was not required to park the Lorry in the Respondent's designated parking space. The Applicant was allowed to use the Lorry for any purposes, including other commercial or personal uses. The Applicant was free to designate his delivery to anyone else, while the Respondent's employees were prohibited from doing the same. It was also common for the Applicant to cross into the Mainland and disappear for days.

[20] To acknowledge the fact that the relationship between the parties was a business one, the Applicant was required to sign a declaration to acknowledge that there was no employment relationship between the parties (the "Declaration"). Only after the Applicant signed the Declaration, did the Respondent applied for the necessary certificates and governmental permits for the Applicant. On 3/9/1998 the Applicant trading as 'Lee Wan Hung Transportation Company', signed a commercial agreement with the Respondent (the "Commercial Agreement"). The Commercial Agreement clearly stated that the parties were business partners and there was no employment relationship. On the same day, the Applicant also signed an employment agreement (the "Employment Agreement") to hire Mr. Yeung's wife and one of the Respondent's employees, Madam Hui Yuk King ("Madam Hui") as bookkeeper for his business. The Applicant agreed to pay Madam Hui the sum of HK$1,000.00 per month as wages. Although the Employment Agreement was dated 28/8/1998, the Applicant signed it at the Respondent's office in the afternoon of 3/9/1998. Mr. Yeung had in fact signed Madam Hui's signature on the Employment Agreement on her behalf.

[21] A large portion of the Applicant's transportation business came directly from Yuda. Only a small portion came from the Respondent in Hong Kong. The Applicant was free to employ his own drivers without interference from the Respondent.

[22] On or about the middle of November 1998, the Applicant indicated that he wanted to terminate the business arrangement between the parties. When Mr. Yeung asked the Applicant for his business registration in relation to Lee Wan Hung Transportation Company, Mr. Yeung then learned that the Applicant had never registered his business with the Inland Revenue Department.

[23] On 14/12/1998, while making a delivery for Yuda, the Applicant was injured in a traffic accident. While Mr. Yeung visited the Applicant in the hospital, the Applicant asked Mr. Yeung to claim employee compensation for the Applicant under the Respondent's insurance policy. Mr. Yeung refused and later the Respondent received an application for employees' compensation from the Applicant.

[24] At first, the Respondent alleged that the Applicant's income for the period were as follows:

8/1998		HK$ 3,143.00
9/1998		5,919.00
10/1998		9,298.00
11/1998		4,897.00
12/1998		2,414.00

However, at trial Mr. Pang, solicitor for the Respondent, agreed that the income listed by the Applicant was correct.

The Issues:

[25] The main issue of this matter is whether the relationship between the parties was one of a contract for employment or a contract of employment.

The Law:

[26] Whether a relationship was a contract for service or one of contract of service is a complicated one. In Davies v. Presbystrain Church of Wales [1986] 1 WLR 323, it was held that if the relationship was solely dependent on the true construction of a written document, this was a question of law. In Lee Ting Sang v. Chung Chi Keung & another [1990] 2 WLR 1173, the Privy Council held that if the relationship has to be determined by an investigation and evaluation of the factual circumstances in which the work was performed, then it was a question of fact.

[27] The fundamental test on this question was established in Market Investigation Ltd. v. Minister of Social Security [1962] 2 QB 173 (approved in Lee Ting Sang, (supra)), Cooke J. stated the test as follows: "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 service. If the answer is 'No', then the contract is a contract of service."

[28] In Construction Industry Training Board v. Labour Force Ltd. (1970) 3 AER 220, approved by Nazareth J. (as he then was), in Leung Kam Fat and others v. Jonathan's Fashion Manufacturing Ltd., LTA No.14 of 1988, it was noted that this question often requires the court to perform a balancing exercise in weighing the relevant factors, each may be pointing to different directions. In Market Investigations Ltd. (supra), it was held that there was no exhaustive list of the relevant factors and no strict rules as to the relative weight each factor should carry in a particular case.

[29] Some of the tests that had been applied by the courts included:

(1) CONTROL

Control includes the power to decide how things are to be done, the way it should be done and the means to be employed in doing the work and when and place that it should be done. Per Mckenna J. in Ready Mix Concrete (South East) Ltd. v Minister of Pensions and National Insurance [1968] 2 QB 497; adopted in Ng Pik Yuk v. Wai Tai Knitwear Ltd. LTA No. 49 of 1987, Leung Kam Fat and others v. Jonathan's Fashion Manufacturing Ltd.(supra), and Wong Sai Yee v. Kong Kwan [1988] HKLR 367.

(2) INTERGRATION

The question is whether the person is part and parcel of the organization. Bank Voor Handel en Scheepvaart N.V. v. Slatford and another [1953] 1 QB 248; adopted in Ng Pik Yuk (supra), Leung Kam Fat (supra) and Wong Sai Yee (supra).

Under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under a contract for service, his work, although done for the business, is not integrated into it but is only accessory to it. John & Harrison Ltd. v. Macdonald & Evans [1952] 1 TLR 101; adopted in Leugn Kam Fat (supra).

(3) PROVISION OF EQUIPMENT

Per Cooke J. in Market Investigation Ltd. (supra); approved in Lee Tying Sang (supra).

(4) HIRING OF OWN HELPERS

Per Cooke J. in Market Investigation Ltd. (supra); approved in Lee Tying Sang (supra).

(5) PROFIT AND LOSS

What degree of financial risk the person performing the services takes, what degree of 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. Per Cook j. in Market Investigations Ltd. (supra); approved in Lee Ting Sang (supra), followed in Leung Kam Fat (supra) and Wong Sai See (supra).

(6) FREEDOM TO ATTEND WORK

Cheng Yuen v. The Royal Hong Kong Golf Club, Civil Appeal No. 146 of 1996, CA.

[30] In Lam Nai Cheun v. Lin Tat Transportation Co. Ltd., HCA No. A 4537 of 1992, where the defendant paid all expenses and the plaintiff receives 25% of the total business profit as remuneration, the defendant could tell the plaintiff, what goods to take and where to go but the method of carrying out the work was left to the plaintiff to decide, Sears J. held that the plaintiff, a cross-border driver, was an independent contractor. Unfortunately Sears J. did not state any reasons prior to reaching his decision and Lam Nai Cheun was of little guidance to me. I will have to consider the facts of this case in accordance with various factors stated above.

Findings:

[31] Irrespective of the Applicant's allegation that he did not look at the Declaration, the Commercial Agreement or the Employment Agreement (collectively referred to as the "Contractor Documents") before he signed them, the Contractor Documents nevertheless were central to the relationship between the parties. Looking at the terms of the Contractor Documents alone, there was no doubt that the parties' intention was to create a relationship of an independent contractor. If the parties had followed the terms of the Contractor Documents, my decision would have been easy. However, the parties did not follow the terms stated in the Contractor Documents and I am required to determine if the terms of the Contractor Documents were intended to truly govern the parties' relationship or were they merely a cover to avoid the responsibilities of an employer under various ordinances designed to protect the interest of an employee.

[32] I will be referring to the terms of the Agreement, the Commercial Agreement, the Employment Agreement and the Declaration extensively. For convenience, copy of the official English translations of these documents is attached at the end of my judgment.

[33] Paragraph 1 of the Commercial Agreement required the Applicant to provide a copy of a valid business registration document to the Respondent. Mr. Yeung however, testified that the Applicant had never provided the same to the Respondent. Mr. Yeung testified that the parties had agreed on all terms governing their relationship no later than 5/8/1998. Since the Commercial Agreement was not executed until 28/8/1998, there were more than three weeks for the Applicant to make the necessary filing with the Inland Revenue Department. There was no reason for the Respondent not to have insisted on compliance with this condition of the Commercial Agreement.

[34] Paragraph 9 of the Commercial Agreement stated that if the delivery charges completed by the Applicant was less than HK$60,000.00, the Respondent would pay the Applicant 25% of the delivery charges as a processing fee. For delivery charges above HK$60,000, the Respondent was to pay the Applicant 27% as his fees. This was substantially different from the Respondent's allegation. Mr. Yeung testified that there was a verbal agreement between the Applicant and Yuda that Yuda may withhold 45% of the delivery fees as expenses, charges and fees incurred by the Applicant. The Respondent's case was that the true terms of remuneration for the Applicant was contained in the Agreement. Terms of the Agreement also stated that the 45% deduction was inclusive of payment for insurance premiums and monthly instalments on the Lorry. Additionally, the Respondent was entitled to 30% of the delivery fees as management charges and interest incurred on prepaying expenses for the Applicant. The parties were to reconcile their accounts every six months. The terms of the Agreement differed substantially from the terms of the Commercial Agreement.

[35] According to the Respondent's own case, the terms of the Commercial Agreement did not reflect the true intention of the parties in some of the fundamental areas in the parties' relationship.

[36] The Employment Agreement required the Applicant to pay Madam Hui HK$1,000 as monthly salary. However, with the exception of August 1998's salary, Madam Hui admitted that the Applicant had never paid her any salary. Madam Hui testified that although she had chased the Applicant on many occasions, the Applicant had always claimed that he had no money. I found this extremely difficult to believe. Since Madam Hui was also the same person who arranged payments of the Applicant's monthly fees, it would have been simple for Madam Hui to withhold her monthly wages directly from the Applicant's monthly fees. However, nothing was done by Madam Hui to collect her monthly salaries from the Applicant. As to Madam Hui's allegation that the Applicant had paid her August 1998's monthly wages from a HK$2,000 cash transportation fees that the Applicant had collected from a customer in November 1998. I found that story incredible. In accordance with the Respondent's allegations, all transportation fees collected were subject to a 45% deduction for Yuda and a 30% deduction for the Respondent. The transportation fees did not belong to the Applicant to be disposed of as he pleased. I therefore came to the conclusion that the Employment Agreement also did not contain the true relationship between the Applicant and Madam Hui.

[37] Finally, although the Declaration stated that the Applicant have no employment relationship with the Respondent, it did not mention any specific arrangement between the parties, it will be necessary to investigate and evaluate the factual circumstances in which the Applicant had performed his duties in order to determine the true relationship between the parties. In accordance with the decision in Lee Ting Sang, this determination will be a question of fact only.

[38] I will now turn to some of the other factual disputes between the parties.

The Verbal Agreement between Yuda and the Applicant:

[39] One of the parties' factual disputes was whether the Applicant had a verbal agreement with Yuda in the same terms as stated in the Agreement. I found it extremely strange that whilst the Applicant and Yuda did not enter into a written agreement of their understanding, but the same was clearly stated in a written agreement between the Respondent and Yuda. It would have been easy to add the Applicant as a party to the Agreement when it was signed on 26/8/1998. In fact it would have been natural to do so. Finally, under one of the terms of the Commercial Agreement, the Respondent was to be compensated by HK$1,000.00 per month as arranging fees. There was no mention of this fee in the Agreement. The terms of the Agreement and the Commercial Agreement were clearly inconsistent.

[40] The fact that the Applicant was not made a party to the Agreement and the inconsistencies between the Agreement and the Commercial Agreement raised substantial doubt on the veracity of Respondent's allegations.

The Lorry:

[41] The Respondent's allegation was that Mr. Yeung had sold the Lorry to the Applicant for the sum of HK$110,000.00. The purchase price was to be repaid by 24 monthly instalments of HK$4,583.00. However, ownership of the Lorry had remained with Mr. Yeung and it was also insured under Mr. Yeung's name. Mr. Yeung's testimony was that the Applicant had requested him to retain ownership of the Lorry due to the Applicant's personal reasons.

[42] The problem with these allegations was that Mr. Yeung hardly knew the Applicant at the time. They had never met before that day, Mr. Yeung knew nothing of the Applicant's background and he was willing to give up possession of the Lorry to the Applicant, with in essence nothing more than a promise to pay by instalments. Additionally, there was every possibility that the Applicant may get into an accident and destroy the Lorry before completing the instalment payments. Adding the fact that detailed agreements were prepared by the Respondent to document the fact that the parties did not have an employment relationship, it was inconceivable that Mr. Yeung did not also want to document the sale transaction of the Lorry.

[43] Finally, Mr. Yeung admitted that he had never received any monthly instalment payments from the Applicant. This was so irrespective of the fact Mr. Yeung could have caused the Respondent to withhold payment from the Applicant's monthly fees. I must also point out my review of the Agreement revealed that the Lorry payments were listed as one of the expenses, charges and fees to be deducted from the 45% deduction required to be withheld for Yuda. Mr. Yeung never mentioned this fact during his cross-examination. This omission clearly indicated that the Agreement was a recent fabrication and not a representation of the agreements between the Respondent, the Applicant and Yuda.

[44] The fact that the sale of the Lorry was not documented, the Applicant had never paid any of the instalment payments and Mr. Yeung had failed to recall that in the Agreement, the monthly payments were included in the 45% deductions, lead me to conclude that the Lorry was never sold to the Applicant. Mr. Yeung had remained the owner of the Lorry throughout the Applicant's engagement with the Respondent.

The Expenses:

[45] One of the Respondent's allegations was that all expenses of operating the Lorry were the Applicant's responsibility. The parties were to reconcile the accounts once every six months. However, there were substantial problems with this story. First, Madam Hui acknowledged that the Respondent had paid the Applicant a total of HK$4,000.00 prior to his first transportation job. Second, there were consistent prepayments of expenses for the Applicant. The calculation of the Applicant's monthly payment had always equaled to the formula: (total transportation + outgoings - advance payments). Although Madam Hui explained that the repayment of the outgoings were prepayments to the Applicant, which must be reconciliated every 6 months, she also acknowledged that the reconciliation was never completed. Madam Hui alleged that the reconciliation could only be done in the presence of the Applicant, the Respondent and Yuda. However, Madam Hui already had all of the information required to complete the reconciliation, there was no reason why it was not completed 3 years after the Applicant's last working day.

[46] Accordingly, I found that the agreement between the Respondent and the Applicant was that all expenses in relation to operating the Lorry were on the Respondent's account.

The other terms:

[47] The Respondent also alleged that the Applicant's terms of appointment was substantially different from the Respondent's employees. First, there were no statutory holidays. Although the Applicant agreed to this allegation, the fact that an employee was deprived of one of his statutory rights under the Employment Ordinance was not determinative of whether the relationship was a contract for service or a contract of service.

[48] Second, the Respondent also alleged that unlike its employees, the Applicant did not have any rest days, a minimum monthly wage or fixed working hours. Mr. Yung Man Si ("Mr. Yung"), one of the Respondent's employee drivers, however testified that although theoretically he had a fixed working hour, due to the nature of his work, it was generally not possible to stay within his fixed working hour.

[49] Third, there was allegation that unlike Mr. Yung, the Applicant did not have a minimum monthly wage. Given the fact that Mr. Yung had been working for the Respondent for over ten years, it was natural for his term of employment to differ slightly from newly recruited employees. The important factor was that with the sole exception of a minimum monthly wage of HK$7,500, Mr. Yung's remuneration was identical to the Applicant's. As to rest days, Mr. Yung's testimony was that his rest days were not fixed, but usually it was on Saturdays or Sundays, because the factories on the Mainland were usually closed on these days. In fact the Applicant would be in the same position as Mr. Yung, since the factories were closed on Saturdays and Sundays, the Applicant would have to take a rest day anyway.

[50] Finally, Madam Hui alleged that the expense forms were created solely for independent contractors, because they had to account to the Inland Revenue Department for their expenses. Mr. Yung however testified that, although he did not use the monthly expense forms, they were available in the Respondent's office for anyone who wanted to use them. Mr. Yung also testified that he did not get any prepaid expenses from the Respondent and he just get the expenses back from the Respondent every time he submitted receipts to the Respondent. In view of the fact that Mr. Yung did not get prepaid expenses from the Respondent, it was not surprising that the procedure for him to claim expenses would be substantially less formal than the Applicant's procedure.

[51] In view of the above, I found that there were no substantial differences between the terms of the Applicant's engagement as compared with the Respondent's employees.

[52] I now turn to the factors to consider:

CONTROL:

[53] Although Mr. Yeung testified that the Applicant was not required to park the Lorry in any designated area, I preferred the Applicant's testimony that he was required to return to the Mainland to await instructions whenever there was no delivery to be made in Hong Kong. This was consistent with the fact that most deliveries were from the Mainland to Hong Kong.

[54] The Respondent alleged that it had little control over the Applicant; however, the Applicant testified that Ms. Chung would keep constant contact with him by two-way radios, while he was on the road. Whenever the two-way radio fails, Ms. Chung would contact him by portable phone. Orders were also passed to the Applicant via Yuda. In fact this arrangement was confirmed by Mr. Yung's testimony. Clearly, the Respondent had maintained control over the Applicant throughout his delivery journeys.

INTERGRATION:

[55] Although once on the road, the Applicant's work can be considered independent from the rest of the Respondent's operations, the fact that Yuda and the Respondent were closely related and the fact that once the Applicant finished with his delivery, he was required to await further instructions at Yuda's office, I found that the Applicant's work was an integral part of the Respondent's business operations.

PROVISION OF EQUIPMENT:

[56] I have already found that the Lorry was never sold to the Applicant and the same was provided by the Respondent to the Applicant as part of the required tools to complete his duties.

HIRING OF OWN HELPERS

[57] As to whether the Applicant was allowed to engage helper to complete his task, the Respondent stated that while the Applicant was not allowed to permit anyone else to drive before he crossed the border. Once over the border, the Applicant was free to hire any number of replacement drivers. The Respondent was however, unable to point to any incident where the Applicant had hired replacement drivers. While stating that he was not allowed to hire replacement drivers, the Applicant did confessed that due to illness, he once allowed someone else to drive, while he rested. Taking the total circumstance of this case into consideration, I prefer the Applicant's testimony to that of Mr. Yeung's.

PROFIT AND LOSS:

[58] I have already concluded that all expenses and fees in relation to the operation of the Lorry were the responsibility of the Respondent. There were no financial risks to the Applicant. Although the Respondent alleged that the Applicant was free to accept any other transportation work from other sources, no evidence was provide by the Respondent. I prefer the Applicant's testimony on this point.

FREEDOM TO ATTEND WORK

[59] The Applicant's testimony was that he was required to attend all works assigned to him. If he needed a rest day, he must obtain permission from either Ms. Chung or Mr. Yeung. Only after their approval, he was allowed to take the rest day. The Respondent's allegation was that the Applicant was free to accept or refuse any work assigned to him. The Applicant's version was supported by Ms. Chung's demeanor when she described the frustration she felt when she could not get in touch with the Applicant while there was a delivery pending. If the Respondent was free to reject any work, Ms Chung should not have been so frustrated when the Respondent could not get in touch with the Applicant. Therefore I found that the Applicant was required to attend work, unless permission was granted by the Respondent.

Whether the Applicant was under the order of Yuda or the Respondent at the time of injury:

[60] The Respondent also raised an argument that the Applicant was in fact an employee of Yuda and was performing duties for Yuda at the time of his injury. In view of the fact that Yuda and the Respondent were so closely related, in the Applicant's mind they were one of the same entity. Although there was no evidence on the shareholders of Yuda, the fact that Yuda was managed by Mr. Yeung's brother, clearly illustrated the close relationship between these two companies. While there was insufficient evidence for me to conclude that Yuda and the Respondent was one of the same party, I have no hesitation in finding that the Respondent had issued directions and orders to the Applicant through Yuda.

[61] Having considered all of the relevant factors and balanced all of the same, I found that the Applicant was the Respondent's employee at the time of his injury. I also found that the Applicant was performing his duties for the Respondent at the same time.

Whether the Applicant is entitled to periodical payment for the full period?

[62] The Respondent's argument was that since the Applicant had tendered a one-month notice of resignation on 25/11/1998, he was not entitled to periodical payments under section 10 of the Ordinance for the full period of his sick leave certificate. Section 10(3) of the Ordinance states:

" (3) Periodical payment under this section shall be payable on the same days as wages would have been payable to the employee if he had continued to be employed under the contract of service or apprenticeship under which he was employed at the time of the accident: ..." Emphasis added.

[63] The language of section 10 of the Ordinance was clear, once injured, the employee is entitled to periodical payment, as "...if he had continued to be employed under the contract of service..." There was nothing in section 10 or anywhere else in the Ordinance that suggested if the employee had given a notice of resignation, he would be deprived of the right to be treated as if he had continued to be employed. So far as section 48 of the Ordinance was concerned, this section prohibits an employer from terminating or giving notice of termination to an employee until a certificate of assessment was issued or an agreement has been entered under section 16CA(1) of the Ordinance. Section 48 of the Ordinance gave employees an additional protection and had nothing to do with the entitlement for periodical payments under section 10 of the Ordinance.

[64] Accordingly, irrespective of the Applicant's resignation, periodical payments are payable for the full sick leave period.

Assessment of Compensation:

[66] The total compensation is assessed at HK$325,176, to which there must be added interest at half the judgment rate of 5.43 percent for the period from 14/12/1998 until today and thereafter at the full judgment rate until payment.

[67] Costs are to the Applicant, to be assessed on Party-Party basis, unless agreed.

[68] The Applicant's own costs are to be assessed in accordance with Legal Aid regulations.