The Labour Tribunal of Hong Kong has provided welcome guidance on determining the employment status of platform workers, in a case brought by sham-self-employed couriers.
Background
The burgeoning gig economy has long presented a conundrum for employment law, with its unique model raising significant questions about employment status, as well as workers' rights and entitlements. This new form of work often blurs the boundaries of traditional employment categories, making it difficult to know whether to classify gig workers as employees or independent contractors.
A recent ruling by the Labour Tribunal of Hong Kong has shed new light on the status of gig workers. The Labour Tribunal ruled in favour of six gig-worker couriers who worked for Zeek, a food and parcel delivery platform. The tribunal considered 11 factors in deciding whether there was an employment relationship between Zeek and the couriers, ultimately holding that the couriers were employees. In reaching this conclusion, the Tribunal followed the approach set out by the Hong Kong Court of Final Appeal in 2017 (Poon Chau Nam v Yim Siu Cheung).
The Tribunal's decision
In determining whether there was an employment relationship, the tribunal considered 11 factors. The first of these was the degree of control that was exercised over the couriers. Zeek determined the delivery routes, work locations, orders and the couriers' remuneration. Further, the couriers could not receive money from customers directly. The couriers also showed that Zeek had a penalty system whereby couriers who refused orders were penalised and then at risk of termination. Zeek conducted irregular spot checks and those who refused orders would be placed on a lower priority to receive orders, or could be suspended from work for not abiding by the company's rules. Couriers logged onto a platform that monitored their delivery routes and their start times, and were not free to log out when they wished. The couriers argued that although they were free to work for other companies, the long hours they had to commit to Zeek effectively left them with no time to work elsewhere. The Tribunal maintained that this high degree of control exercised by Zeek indicated that the couriers were likely employees of Zeek.
The Tribunal also considered that the equipment provided by Zeek to the couriers suggested an employment relationship. While the couriers provided their own transportation and phones, Zeek provided the digital platform that allowed customers to place orders and calculate fees, through which Zeek also tracked the packages and calculated the couriers' remuneration. The couriers were allowed to find 'assistants' for their jobs but were barred from subcontracting their work, driving another person's vehicle for work or sharing their user accounts with others. Incomplete work orders were recorded as bad performance. The Tribunal found that the prohibition on engaging substitutes pointed towards an employment relationship.
Unlike independent contractors who can change their fees as they wish, the couriers were paid a fixed amount based upon the number of jobs they completed. The Tribunal considered that this was similar to the position of a sales representative who earned a commission, and the lack of financial risk assumed by the couriers suggested an employment relationship. Moreover, the fact that the couriers had no opportunity to profit from good management of their own tasks was also held to indicate an employment relationship. The couriers had no other sources of income and the company's profits and losses did not concern them. The couriers did not charge service charges, did not offer discounts, and did not establish personal relationships with customers. All of the transactions between customer and company that related to the couriers' work were carried out through Zeek's platform.
The Tribunal also found that the couriers worked at Zeek's direction and did not invest or participate in the management of Zeek. The couriers had to wear uniforms to enable customers to easily identify them when collecting and delivering packages. However, it was noted that Zeek did not file tax returns, pay pension (MPF) contributions, or provide personal accident insurance for any of their couriers. The couriers had to pay for their own third-party insurance and file their own tax returns. Unlike independent contractors, traffic fines and parking fees incurred by couriers were reimbursed to them which hinted at an employment relationship.
Finally, the Tribunal considered how the couriers themselves viewed their relationship with Zeek. The couriers regarded the working relationship as one of employment as they earned wages through their labour and the company controlled and monitored the way they did the work assigned to them. Zeek offered their couriers short-term 'guaranteed income', unlike independent contractors would be, and it was therefore argued they should be considered employees. Further, it was noted that workers in the delivery business are normally considered employees in Hong Kong. Delivery workers for companies like SF Express, ZTO Express, and DHL are usually engaged as employees, and the situation of the claimants was held to be similar.
Given all this, the Tribunal concluded that the couriers were employees. Zeek was ordered to pay outstanding wages, pay in lieu of notice, annual leave and statutory holiday entitlements.
The message for employers
This case has significant implications for the gig economy and platform workers in Hong Kong. It offers important guidance on the factors that the Labour Tribunal will consider in determining employment status for platform workers. However, there is no one size that fits all: the terms and conditions of Zeek's engagement of their couriers will not be identical to those used by other platforms. The situation of other groups of workers will need to be assessed on its facts, looking at each of the factors in the context of the circumstances of individual cases.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
