Angela Wang & Co.

Introduction

The rise of the gig economy has sparked legal debates over the employment status of platform workers. The gig economy, also known as the freelance economy or sharing economy, is a labour market (usually through digital platforms) characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

In Gurung Sanjayaman v Deliveroo Hong Kong Limited [2024] HKDC 1932, the case discussed whether food delivery riders qualify as employees or independent contractors. Depending on the answer, the statutory protections under the Hong Kong employment laws would be entirely different.

Background

Mr Gurung Sanjayaman (“Claimant”), worked as a delivery rider for Deliveroo Hong Kong Limited (“Deliveroo”), a food delivery platform.  He claimed that he had suffered injuries during one of his deliveries and sought compensation under the Employees’ Compensation Ordinance (Cap. 282).   Section 5(1) of the Employees’ Compensation Ordinance provides that “if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee, his employer shall be liable to pay compensation”. Generally, if a worker is deemed an employee, the employer is liable to pay compensation for work-related injuries resulting in permanent incapacity or reduced earning capacity. This is usually covered by workman compensation insurance policy.

Deliveroo applied to strike out the Claimant’s claim and denied that he was an employee by reason that he received the benefit of a voluntary insurance policy provided by Deliveroo and argued that its drivers were not employees.

Issues

The Court referred to the following indicators to determine whether there was an employment relationship between the Claimant and Deliveroo :-

1. Level of control : The Claimant was free to accept or reject orders offered to him. He could choose when and where to work. The tracking features on the riders’ app were for legitimate commercial purpose and for providing information to restaurants and customers. Thus, Deliveroo had a low degree of control over the Claimant.

2. Provision of equipment : The Claimant used his own motorcycle and mobile phone at work.

3. Work arrangement : The Claimant can delegate his delivery tasks to third parties and work for Deliveroo’s competitors.

4. Financial risk : The Claimant maintains his motorcycle and pays for the petrol in it. He had to also bear the risk of committing any traffic offences.

5. Investment or management responsibility : The Claimant assumed investment and management responsibility as he had the choice of whether to accept orders and could manage his working hours by taking into account the costs of providing and using his own equipment.

6. Integral part of business : The Claimant was not engaged on an ongoing basis and had no management obligations with Deliveroo. Although Deliveroo encouraged the use of its branded equipment, the Claimant was not required to do so.  As such, the Claimant was not part of Deliveroo’s business.

7. Agreement of parties : The parties expressly agreed that their relationship was one of supply of services. There was no reference to an employment relationship in the contract.

8. Tax and insurance : Deliveroo did not make any MPF contribution or tax filing for the Claimant. It only purchased a voluntary insurance policy that was not required by law.

9. Industry standard : The court noted that there was no industry standard or usual structure of the trade which could provide substantial guidance in respect of the food delivery industry.

In view of the above, the Court concluded that most indicators favoured Deliveroo and there was no employment relationship between the Claimant and Deliveroo. The case was struck out as an abuse of the process of court.

Conclusion

It should be reminded that notwithstanding this case, not all gig workers will be treated as independent contractors. To determine whether a worker is an employee or an independent contractor, each case will depend on its own facts and circumstances. Employers should structure their contract clearly with their workers and consider the indicators mentioned above to minimize the risk of disputes. If you have any questions about this eNews or require legal assistance regarding any employment issues in Hong Kong or China, experienced employment lawyers will be happy to assist you.