Gray Zone in Hong Kong’s Employment Ordinance? Discover the Vague Employment Status from Doubt of Compensation Shortfall on Uber Eats Hong Kong’s Exit
kanriAmong the former workers, there were workers who did not receive sickness allowance even after 6 months from his work injury, and also workers who did not ever receive any paid annual leaves and statutory holidays. The reason behind is all about whether the workers are “self-employed” or not.
In this blog, we are going to introduce the definition of “employees” and “self-employed individuals” under Hong Kong’s Employment Ordinance, using the case of Uber Eats as an example.
Only 2 Types of Employment Status under Hong Kong’s Employment Ordinance
First of all, Hong Kong’s Employment Ordinance is applicable to all the employees, except self-employed individuals, civil servants and those who are employed by the Hong Kong government, those who are applicable to the Merchant Shipping (Seafarers) Ordinance and the Apprenticeship Ordinance.
People usually classify employment status into “full time” and “part time”, which different employers may have their own definitions. While under the Employment Ordinance, employment status are only classified as the following 2 types:
1. “Continuous Contract of Employment”
An employee who has been employed continuously by the same employer for four weeks (*) or more, with at least 18 hours worked in each week is regarded as being employed under a “Continuous Contract”.
* the definition of “week” in “Continuous Contract of Employment” specifically means “weeks ended with Saturday as the last day”. In other words, to fulfill the condition of “Continuous Contract”, the employment period should include at least 4 Saturdays.
2. Status that are not under “Continuous Contract of Employment”
Any situations that are not fulfilling the above definition. In any dispute as to whether a contract of employment is a “Continuous Contract”, the onus of proving that it is not a continuous contract shall be on the employer.
Employees who are applicable to the Employment Ordinance, no matter how long their working hours, could enjoy basic guarantees such as payment of wages, prohibition of wage deductions, and statutory holidays.
For employees who are employed under the “Continuous Contract”, they would be able to enjoy more statutory rights, such as rest days, paid annual leaves, sick allowances, severance payment and long service payment.
The Gray Zone between “Employee” and “Self-Employed Individual”
For “self-employed individuals”, they are more like in a “partnership” relation than “being employed”, and the Employment Ordinance is not applicable to them. However, there are NO specific factors to clearly distinguish the differences between “employment” and “partnership”.
Normally the following 3 perspectives could help to judge:
1. Dominance
In the case of employment, working time, work content and instructions are usually established by the employer.
2.Ownership and Offer of Productive Factors
In the case of employment, tools needed are usually provided by the employer. While in partnership, tools are often owned by the employees themselves. For example, when a hair stylist is self-employed, he/she probably works with his/her own hair cutting scissors.
3.In Economic Aspect
In the case of employment, employees do not need to take the risk of economic loss. While in partnership, the self-employed individuals may need to take the risk of part of the loss.
Also, on the issue of tax and Mandatory Provident Fund (MPF), employers would declare the income tax return for their employees, while self-employed individuals would have to complete the procedures by themselves.
Yet, the difference may still be unclear. Always remember that only the court could make the final judge.
For the case of Uber Eats Hong Kong, according to chairman Wong of HKFSU, the riders involved in this case had been working for Uber Eats for 2-5 years, with working time and area fixed by Uber Eats, and working 6-7 days each week with 9-12 hours per day. They must apply leaves in advance, and sick leaves must be applied at least 1 hour in advance. “Moreover, as the riders are restricted by factors such as completion rate of orders, it is no doubt that UberEats dominates most part of the work. Thus we consider this relationship as employment rather than partnerships.” Chairman Wong added.
Suggested Method for Companies to handle
To avoid dispute on the employment status gray zone, employees should check all the conditions carefully before signing any employment contracts.
But how about the companies?
1.State clearly if the contract is for “employment” or “partnership”
Despite verbal explanations, companies are strongly suggested to WRITE clearly, “employment” or “partnership” on the contract itself, for the sake of companies themselves.
However, the written content on contract is not everything. Same to the case of Uber Eats, if there are conditions that bring doubt to the employment status, such as actual work schedule and content controlled by the companies’ side, even if the contract is written as “partnership”, it would probably bring dispute to the relationships.
2.Treat the workers as employees anyway
The safest method is to treat your workers as employees. But expenses such as workers’ compensation insurance, tools and MPF would increase in this case, so it would be better to consider the cost balance before taking the action.
MAY Planning provides support on human resources management to serve your company’s needs. We would be glad to provide guidance for your company in Hong Kong or overseas. Feel free to contact us anytime.
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