Court Upholds Labour Tribunal's Finding Of Independent Contractor Arrangement

Author:Mr Hong Tran
Profession:Mayer Brown JSM
 
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In Lee Wai Kei Wicky (李伟基) v. World Family Ltd. (寰宇家庭有限公司) [2017] HKEC 2109 English Judgment, the Court of First Instance dismissed the Plaintiff's appeal against the decision of the Labour Tribunal that the parties' arrangement was one of independent contract.

An employment relationship is more regulated than an independent contract. As such, some see the merits of less regulation and try to structure their engagement as one of independent contract and not employment. Whether an arrangement is an independent contract and not employment is a matter for the courts to assess and the parties' agreement as to the nature of their arrangement will not be determinative.

The Facts

The Plaintiff joined the Defendant Company (the "Company") as an education consultant to promote the sales of English education materials in 1999. Under the "Agency Agreements" which the parties had entered into, the Plaintiff was not characterised as an employee of the Company and thus, was expressly precluded from receiving any benefits provided by the Company to its employees. The Plaintiff enjoyed great freedom at work. Apart from the highly flexible working hours and sales targets, the Plaintiff could also adopt his desired promotion methods.

When the Plaintiff left the Company in 2014, he brought a claim against the Company in the Labour Tribunal claiming that he had been employed by the Company and should be entitled to compensation and various statutory payments as an employee. The Presiding Officer (PO) held that the Plaintiff was not an employee of the Defendant and dismissed his claim. The Plaintiff then appealed to the Court of First Instance on the basis that the PO's decision was irrational and perverse.

The Law

In determining whether the relationship is one of employment, the court would consider all the facts and circmstances and see whether the factors and as a matter of overall impression, an employment relationship existed between the parties.

The Court of First Instance

On appeal, the main challenge launched by the Plaintiff was that the PO had failed to accurately evaluate the various indicia of employment.

First, the Plaintiff argued that the Company had exercised a high degree of control over him. In particular, he was bound to act and observe any directions, rules or regulations that might be advanced by the Company. However, the PO found that the control put in place by the Company was for good commercial reasons, such as that of upholding the...

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