Legal Update: Court rejects Deliveroo rider’s claim as employees

Web-Platform workers such as Uber drivers and food delivery ‘riders’ are part of a new and developing group in Hong Kong, which has greatly expanded during and following the COVID-19 pandemic.

The District Court case of Gurung, Sanjayaman v Deliveroo Hong Kong Limited [2024] HKDC 1932 is one of the more relevant cases in recent years which shed some light on the issue of whether these platform workers are regarded as employees or independent contractors.

Background

The Applicant, a Deliveroo rider (“Rider”), applied under the Employees’ Compensation Ordinance (“ECO”) for compensation following a traffic accident during one of his deliveries.

The Respondent, Deliveroo Hong Kong (“Deliveroo”), applied to strike out the Rider’s application on the ground that, among other things, the application was frivolous and vexatious since it was plain and obvious that the Rider was not an employee of Deliveroo, as required pursuant to section 5 of the ECO, but was a self-employed contractor.

Relevant Legal Principles

The case authorities on the status of workers over the years in Hong Kong developed a list of 11 indicia to determine, as a matter of overall impression, whether there is an employment relationship. The 11 indicia are as follows (see Court of Final Appeal decision in Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156 as summarised in Lee Wai Kei Wicky v World Family Limited HCLA 35/2015 Judgment dated 3 October 2017):-

Indicia 1:	level of control
Indicia 2:	whether the person who provided the service provided his own equipment
Indicia 3:	whether such person could hire his own helpers
Indicia 4:	what degree of financial risk he took
Indicia 5:	whether he could profit form sound management in performing his task
Indicia 6:	whether he assumed investment and management responsibility
Indicia 7:	whether he could be identified as part of the employer’s business
Indicia 8:	whether he could perform his own business in the area
Indicia 9:	the parties’ own views of their relationship
Indicia 10:	incidence of tax and insurance
Indicia 11:	traditional structure of the trade and arrangements within it

Decision

The Court made the following assessment in relation to the 11 indicia in the Rider’s case.

1. Indicia 1: level of control

The Rider was free to accept or reject orders offered to him and he was not forced to achieve a specified number of deliveries to be completed over a set period.

Any basic tracking functions on the platform for the benefit of Deliveroo can be sufficiently explained by commercial realities and the need for business efficacy found even in non-employment relationships.

2) Indicia 2: provision of equipment

It was significant for the Court that the Rider provided and used his own motorcycle and mobile phone. The provision of ‘Rider’s App’ being only an app, however, was insignificant.

3) Indicia 3 and 8: work arrangements

The Rider was expressly entitled to delegate the delivery tasks to third parties and engage in other businesses including those with Deliveroo’s competitors. Whether the Rider actually did so is immaterial to the determination.

4) Indicia 4 and 5: financial risks

The Rider arranges and maintains his own motorcycle and pays the expenses relating to it (e.g. price of petrol). He alone would bear the risk of committing any traffic offences. Accordingly, he retained ownership of any financial risk and profit.

5) Indicia 6: investment / management responsibility

The Rider made management and investment decisions over his own work which determined his productivity and, therefore, his income. He had a choice whether to accept orders and manage the time of his work taking into account the costs of providing and using his own equipment.

6) Indicia 7: integral part of business

The Rider was not engaged on an ongoing basis and had no management obligations. Even if Deliveroo encouraged the use of Deliveroo’s branded equipment, the Rider was not required to do so.

7) Indicia 9: agreement of parties

The parties expressly agreed that the relationship was one of supply of services. Nothing in the agreement between the parties referred to having an employment relationship.

8) Indicia 10: tax and insurance

Deliveroo did not make any MPF contributions or tax filings on behalf of the Rider. Deliveroo only purchased a voluntary insurance policy not compelled by law.

9) Indicia 11: industry standard

No usual structure or industry standard can be discerned at the time of this decision. The Court did not put any weight on the Labour Tribunal’s ruling in Zeek’s case (where it was held that gig workers on the digital platform were employees) as there was no published written decision (see the report from the media) and, in any case, the facts were distinguishable.

Ultimately, the Court concluded that there was no employment relationship for the purpose of the ECO compensation application and Deliveroo successfully struck out the Rider’s claim.

Key Takeaways

In this case, the Court expressly acknowledged that the status of platform workers is a developing area of employment law in Hong Kong where there is no established industry standard or usual structure for reference. Hence, each case involving the status of platform workers will likely turn on its specific facts and circumstances.

Companies are remined to structure their relationship with employees or workers appropriately so as to minimise the risk of any dispute (similar to Gurung and Zeek case above) having regard to the relevant indicia, and in such a way that all relevant aspects are consistent with the relevant structure.

Employers should also have in mind the precise nature of the relationship with their workers and the potential pitfalls in the use of ‘contract workers’ and ‘agency arrangements’ in using workers in “gig” and/or zero hours arrangements. There are authorities where even under such arrangements implied contracts of employment may exist between the workers and ‘end user’. For more details of implied contract of employment under such circumstances, please see our previous articles on agency arrangements and ‘zero hours’ arrangements.

A comprehensive overview of the employment law in Hong Kong covering the legal position on status of workers as employees or contractors is available in our article on the key points of Hong Kong employment law.

Russell Bennett and Mark Chiu

For more information on employment matters, please contact:

Russell Bennett

Partner | Email

Mark Chiu

Consultant | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.