In recent years, the rise of the "platform economy" in Hong Kong has led to tremendous growth of "platform workers", covering food couriers, drivers, and shelter carers. These workers are dominated by the companies' digital platforms and are mostly considered self-employed, so they are not entitled to enjoy labour protection. Recently, the Labour Tribunal made a ruling on the employment relationship in the "platform economy".
Last year, Zeek, a courier platform company, owed wages to employees for a prolonged period, some even for about half a year, with the arrears more than HK$100,000. As media reports, from late February to late March this year, Zeek had about 2000 warehouse employees and drivers. In early 2023, a group of Zeek workers, mostly drivers, sued Zeek for the outstanding wages and the compensation for unfair dismissal. Some of them sought help from HKCIC.
The Labour Tribunal dealt with the first batch of employees (6 workers) who filed claims. All of them were drivers. The case was first heard in the Labour Tribunal in late March this year, and the second on May 29. The Tribunal ruled that there was an employment relationship between Zeek and the six claimants. Zeek had to pay the outstanding wages, payment in lieu of dismissal notice, and statutory holidays and annual leave payments. The Tribunal further ruled that Zeek had to pay the legal costs for two claimants as the compensation for their costs for processing the claim. The details of the compensations are listed as follows:
Wage arrears: HK$28,166 - HK$148,471
Payment in Lieu of dismissal notice：HK$49,546 - HK$61,276
Paid annual leave for a claimant: HK $23,547, Paid statutory holidays：HK$29,792
Legal costs for two claimants：HK$5,000 each one
The Labour Tribunal's ruling affirms the employment relationship between Zeek and the six employees and enables the workers to enjoy legal labour protection. Moreover, the Tribunal's understanding and interpretation of the relationship between platform companies and platform workers also make significant impacts about the rights of platform workers in Hong Kong.
In the Zeek case, the Labour Tribunal made its ruling with careful considerations of the following 11 factors (The following questions are excerpted from the Labour Tribunal documents):
Whether the alleged employer had the degree of control over the task of the alleged employee which was commensurate to his capacity as the employer?
Whether the alleged employee provided his own equipment for the task?
Whether the alleged employee hired his own helpers for the task?
Whether the alleged employee took any financial risk and the nature/degree of it?
Whether the alleged employee had an opportunity of profiting from sound management in the performance of his task?
Whether the alleged employee bore any responsibility for investment and management, and the nature / degree of it?
Whether the alleged employee was properly regarded as part of the alleged employer's organisation?
Whether the alleged employer bore any responsibility in relation to insurance and tax for the alleged employee?
Whether the alleged employee was carrying on business in the trade in question?
What was the parties' own view of their relationship?
Whether the traditional structure of the trade or profession concerned and the practices within it would assist with the understanding of their relationship?
The Labour Tribunal's considerations of the said factors are listed in the table below:
Factors | Labour Tribunal's considerations (recorded by the Riders' Rights Concern Group) |
1. Whether the alleged employer had the degree of control over the task of the alleged employee which was commensurate to his capacity as the employer? (The Tribunal maintains that the company has dominant control over the business, indicating that the couriers are highly likely to be employed.) | The claimants are the company's "preferred couriers". It is a measure of the company to ensure sufficient manpower. The company determines the delivery routes, work locations, and the orders. The claimants claim that couriers who refuse orders will be penalised, including points deduction, or even job termination. Couriers must report duties on time and must complete the orders within the designated time. They are required to wear uniforms with courtesy. The company takes irregular checks if the couriers observe the rules. Those couriers who break the rules will be penalised, including lower rating, lower priority to receive orders, half volume of orders, work suspension, or even being blacklisted. Couriers must log in the platform program as they start to work and cannot log out at will. The platform program monitors the delivery routes and delivery time of the couriers to ensure that the company's requirements are met. The company has absolute control over wages, and couriers have no power to bargain discuss service fees and cannot get money from customers directly. In theory, couriers can take jobs from other companies. However, the claimants’ working hours are so long that they must fulfil the duties of the company in order to save their jobs, and it is impossible for them to take other jobs. Parking fees and fines are reimbursed by the company. |
2. Whether the alleged employee provided his own equipment for the task? (The Tribunal maintains: this point hints an employment relationship.) | The claimant states that the delivery staff provide their own transportation tools, mobile phones, and hand trucks, while the company provides thermal bags and uniforms. The court notes that a crucial tool provided by the company is the digital platform software. It allows customers to place orders and calculates the fees. The company tracks the packages and calculates the delivery staff’s wages through the software. Although the delivery staff have invested in their own work tools, the company’s investment in the digital platform software is the most important part of the whole system. The platform is developed by the defendant company to collect vast amounts of data, and the delivery staff are company employees who use this software to contact customers and complete delivery services. |
3. Whether the alleged employee hired his own helpers for the task? (The Tribunal maintains: this point hints an employment relationship.) | The company states that it does not allow couriers to employ “substitutes” or subcontractors to do their work but allows the couriers to seek “assistants” to help their jobs. Couriers cannot drive others’ vehicles for their work, and they cannot share their work accounts with others, either. The Claimants state that if couriers cannot complete the work orders, bad performance are penciled down in their records. |
4. Whether the alleged employee took any financial risk and the nature/degree of it? (The Tribunal maintains: this point hints an employment relationship.) | The claimants’ remuneration is counted upon the volume of jobs they complete. Their daily wages vary, but they assume no financial risk. Couriers, with their hard efforts, earn more as they work more. They have no difference from salesmen who earn commissions and the workers who are paid on piece-counting. It is not a form of business operation. Couriers cannot change the form and the amount of payments. They are like employees being paid fixed wages or paid on piece-counting. In contrast, independent contractors can change their charges upon their wishes. |
5. Whether the alleged employee had an opportunity of profiting from sound management in the performance of his task? (The Tribunal maintains: this point hints an employment relationship.) | Couriers do not take part in management, and they have no other sources of income or profit. The company’s profits and losses are none of the business of the couriers. Couriers cannot change service charges and establish personal relationships with customers, nor do they offer discounts to customers. All the transactions between customers and the company go through the program. Couriers take no chance to get profits through managing business activities. |
6. Whether the alleged employee bore any responsibility for investment and management, and the nature / degree of it? | The claimants work as directed by the company and do not take part in investment or management. |
7. Whether the alleged employee was properly regarded as part of the alleged employer's organisation? | The company requires couriers to wear protective clothes when collecting and delivering packages. It is to help customers recognize couriers as ones of the company. Otherwise, customers will not hand over goods or sign receipts when receiving goods. |
8. Whether the alleged employer bore any responsibility in relation to insurance and tax for the alleged employee? | The claimants state that the company does not file tax returns to the concerned government department or pay the Mandatory Provident Fund for any couriers. Couriers are requested to afford the third–party insurance and file their tax returns to the government on their own. The company provides no personal accident insurance to the couriers. |
9. Whether the alleged employee was carrying on business in the trade in question? | Traffic fines and parking fees incurred by couriers are reimbursed. These expenses will be settled by independent contractors themselves. |
10. What was the parties' own view of their relationship?
| The claimants regard the working relationship as an employment relationship because they earn wages through their labouring. The company keeps the control and the couriers either follow the company’s instructions or lose jobs. The claimants regard themselves as “fixed route drivers” (The company determines the delivery routes and the work designations for the drivers, and the drivers must complete the assigned orders.). The company offers the claimants short-term “guaranteed income” (fixed basic salary), so they should be considered employees. If the couriers were contractors, the company would not pay them “guarantee income”. |
11. Whether the traditional structure of the trade or profession concerned and the practices within it would assist with the understanding of their relationship? | Traditionally, the delivery workers who work for SF Express, ZTO Express, DHL, etc., are employees. The work system of the claimants looks similar to those logistics companies. The company states that the claimants are “preferred couriers”. They are usually experienced drivers of the company and get used to complete work on time and meet the company’s requirements. But it does not fit the definition of “freelance job”. The company has absolute control over the drivers and does not allow the drivers to find others to do their work. The couriers cannot take break at will. The company will conduct irregular checks about the couriers’ services. If “preferred couriers” reject several orders, they will be disqualified as “preferred couriers”. |
Platform Workers Are Not Self-Employed
Under the circumstances of individual cases, does the Labour Tribunal weigh these 11 factors carefully and determine how much the factors play more crucial in their interactions. No single factor is decisive. In the Zeek case, the Labour Tribunal demands "comprehensive consideration".
Although various digital platforms seem to have similar operation, the Labour Tribunal is obliged to examine the specific circumstances of individual platforms in its rulings. Therefore, Zeek’s ruling cannot be simply applied to other platform workers in Hong Kong. However, the crucial factors the Labour Tribunal considers carefully in the Zeek case are generally present in the platform economy, and they should be well studied. They include:
1. The key tool for platform operation is the platform program software. It is the company's investment and it serves as the most crucial part in the whole system. The company provides tool. It enhances an employment relationship between the company and the workers. (Refer to Item 2 in the table above)
2. The higher the control the company exercises over workers, the more likely the employment relationship exists. (Refer to Item 1 in the table above)
3. The company does not allow employees to delegate or subcontract others to work, nor share their work accounts to others. It hints an employment relationship between the company and the worker. (Refer to Item 3 in the table above)
4. Workers' remuneration is counted upon the volume of work although it varies day by day. Workers earn more as they work more. It is not a business operation. Workers assume no financial risk. This point also hints an employment relationship between the company and the worker. (Refer to Item 4 in the table above)
Couriers cannot change the form and the amount of service fees. This point also hints an employment relationship between the company and the worker. (Refer to Items 4 and 5 in the table above)
Significances of ZEEK Case
No platform economy can operate without the platform program software. The Labour Tribunal rules that the platform program is a tool imposed by the employer on its employees. The ruling has had significant implications.
Among various types of platform workers, food couriers face similar control imposed by platform companies as the Zeek workers do so. For instance, the company has absolute power over wages and adjusts couriers' wages and conditions at will. Couriers have no right to bargain. Couriers must log in the platform program when they start to work, and the company monitors their delivery routes and delivery times. Couriers must complete their work on time. If couriers reject the orders of the company, they will be placed to lower groups with lower order prices (i.e., lower payments). If the couriers are criticized to break the rules, for instance, if couriers are complained by customers, or the delivery is slower than the company's expectations, the couriers will be penalized, including work suspension or even cancellation of their work account. The couriers could be fired. If couriers allow others to use their work accounts, the work accounts will also be repealed.
Platform workers assume no financial risk generally. They are paid upon the volume of work, so their daily pay varies. The Labour Tribunal maintains that all the said conditions hint an employment relationship and they happen to food couriers too.
In the Zeek case, the Labour Tribunal rules that the company maintains an employment relationship with the six claimants, who are not self-employed. Food couriers face similar situations as Zeek workers do so. Therefore, it is debatable when the food delivery platform companies deprive their couriers of the labour rights in an excuse of the self-employment of food couriers.
In March, this year, HKCIC and the Association for the Rights of Industrial Accident Victims met with the government officers of the Labour Department. In the long run, according to the officers, the government does not rule out the possible legislation to safeguard the labor rights of platform workers. The Labour Department will communicate with platform workers, platform companies, and the concerned groups, and collect data in the industry and explore how to improve the situation gradually. The ruling of the Zeek case by the Labour Tribunal and the Tribunal’s understanding and interpretation of the relationship between platform companies and platform workers can serve as an important reference for the government in its legislation and policymaking.
Legislation to Protect Platform Workers
Labour protection of platform workers is a global issue today. The key issue is the fact that "platform worker" is a new form of labour relation. It cannot simply define as an employment relationship, but it is not simply considered self-employment, either. The relationship lies between employment and self-employment, but workers enjoy no legal protection. On February 2, 2023, the European Parliament passed a resolution. It assumes all digital platform workers as employees, and it is the burden of employers to provide substantial evidence to prove a worker as "self-employed" genuinely. Unfortunately, the Hong Kong Government has not yet fixed the direction and the timetable for legislation and policymaking.
The population of platform workers in Hong Kong is increasing. Their works are flexible and seem to be self-governed and free. But the so-called "self-governance and liberty" have implied two options only: to work but to be manipulated; or not to work but to be unemployed. This is especially true to food couriers. They are at the bottom of the community and many of them are ethnic minorities or are forced to serve as food couriers due to lay-offs during the pandemic. Food delivery is a hard work with long working hours, unstable income, job insecurity, and high risk of exposure to traffic accidents. Good couriers not only transport food but also deliver goods for online supermarkets. Although the public has gradually become aware of the sufferings of food couriers, food platforms still regard them as self-employed, and the existing labour provisions provide them no protection. The Hong Kong Government has hitherto had no plan for legislation or support measures to address the issue.
HKCIC demands the Government to speed up the legislation and policymaking in order to provide comprehensive legal protection to platform workers. It includes, but not limited to, the following labour rights:
1. Platform workers should be entitled to enjoy sick leave, paid leave, and wage protection.
2. In case of the injuries at work, platform companies are obliged to provide compensation equivalent to the requirements as stipulated in the "Employees Compensation Ordinance".
3. Platform workers should be under protection by the "Occupational Safety and Health Ordinance", and platform companies are obliged to ensure the workers’ safety and health.
Riders' Rights Concern Group
Hong Kong Christian Industrial Committee
June 6, 2023