Skytech Construction Ltd v Liu Sai Wai

Court of First Instance
Labour Tribunal Appeal No 21 of 2011
Deputy Judge Louis Chan
Employment Law
30 March 2012

Engagement of workers collectively on “gross sum division” basis — such engagement could be form of employment

Ms BeckyWong, instructed by Chung and Kwan, for the appellant.

Mr Liu Sau Wai, the respondent, in person.

Xs, including X1, worked as “subcontractors” for the sub-subcontractor, SC, on a joint project chiselling the exterior of a building with their remuneration calculated collectively based on the total area covered by them as a group (the gross sum division). D, a subcontractor at the site, was ordered to pay arrears of wages to Xs. D appealed arguing that X1 was an independent contractor.

Held, dismissing the appeal, that:

The mode of “gross sum division” was but one form of employment. From the employer’s perspective, hiring workers individually and hiring workers collectively by way of “gross sum division” entailed the same consequences, since in both cases the workers were remunerated according to the amount of work they did, but the latter was administratively more convenient. “Gross sum division” could not be adopted by employers to avoid their legal obligation to provide employees with welfare benefits, such as paid holidays.

Accordingly, in this instance, P was an employee of SC under the “gross sum division” arrangement.