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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 Such as 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. 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
(The hotline is handled by the "1823 Call Centre")
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