Points to Note for "Employees" and "Self-employed Persons"

If an employee sustains an injury or dies as a result of an accident arising out of and in the course of his employment, his employer is in general liable to pay compensation under the Employees' Compensation Ordinance (ECO).

According to the ECO, an injured employee of a sub-contractor can make a claim against the principal contractor for employees' compensation if his employer has failed to pay him his entitled compensation. In such circumstances, the injured employee may issue a written request to his employer for the supply of the name and address of the principal contractor in order that he could make a claim against the principal contractor.

In employees' compensation cases, notwithstanding the production of a contract by the "employer" indicating the worker is a self-employed sub-contractor, the court could still make adjudication on whether there exists an "employer-employee" relationship between the parties concerned, based on the facts of the case. Should an "employer-employee" relationship be established between the two parties, the employer is liable to pay compensation to the injured employee in accordance with the ECO.

A Court case for reference:
In a civil case adjudicated by the Court of Appeal of the High Court of the HKSAR (CACV 273/98), the family members of a scaffold worker who died as a result of falling from height were awarded compensation under the ECO. In the case, the employer alleged that the work was sub-contracted to the scaffold worker who was an independent self-employed person. On a detailed analysis of the relevant evidence and facts of the case, the Court eventually ruled that the scaffold worker was an employee, and not an independent sub-contractor, and the employer was obliged to pay the employees' compensation. The following are factors considered by the Court for verifying whether there exists an employer-employee relationship in the case:

1. Any agreement on lump-sum remuneration for completion of the work and any confinement on the work scope
It is to be noted that even in case of an "employer-employee" relationship, the parties involved might sometimes agree on piece-rate for computing the employee's wages.
2. Degree of control over the work
Generally, the more the control the employer has over the procedures, the pace and the manner adopted for the production, the more the likelihood that both parties are bound by an "employer-employee" relationship.
3. Provision of work equipment
Generally, an employee is provided with equipment and tools by his employer. However, it is not uncommon in some trades that the employees would carry with them their frequently-used tools when attending work.
4. Recruitment and dismissal of other helping hands
If the employer also hires some other employees to assist a worker in completing his work, there is a higher likelihood that the worker in question is just another employee of the employer.
5. Bearing of financial risks
In general, employees do not have to bear any financial risks, even if he is a piece-rated worker.
6. Responsibility for investment and management
Generally, an ordinary employee does not have to input capital for investment or assume a management role.
7. Profit making through effective work management
Generally, an employee does not have such an opportunity.
8. Other relevant factors
Including the intention of both parties.

Self-employed person should consider taking out personal accident insurance
The Employees' Compensation Ordinance does not cover self-employed persons. A self-employed person should carefully assess the possible risk at work and take out a personal accident insurance policy of appropriate amount for safeguarding the interest of himself and his family members. It is to be noted that persons taking out personal accident insurance policy may not necessarily be self-employed as employees could also take out personal accident insurance policy for securing a better insurance protection.

Notes for employees
An employee should ascertain that his employer has taken out an employees' compensation insurance policy with adequate amount of insurance cover. An insured employer (with the exception of employers of domestic helpers) is required to display, at a conspicuous place of the work place, a notice of a valid employees' compensation insurance policy. An employee should notify the Labour Department immediately if he discovers that his employer has not taken out an employees' compensation insurance policy for him (Tel:2815 2200).

Enquiry Phone number: 2717 1771