Recent ruling addresses the employment status of a gig delivery worker

At a glance

• A recent decision in the courts ruled that it was 'plain and obvious' that a gig delivery worker's claim that they were an employee was unsustainable and should be struck out.
• The case involved a gig delivery worker seeking compensation for a traffic injury under statutory provisions normally available only to employees.
• To arrive at its decision, the court applied the modern overall impression test to determine whether the gig delivery worker was an employee.
• The case reflects a significant decision in Hong Kong addressing the employment status of gig delivery workers following an earlier case in 2023 which had found that certain gig workers who worked for Zeek, a food and parcel delivery platform company, were employees.

It is common for individuals to advance claims that they are in substance in an employment relationship to fall within statutory protections normally afforded to employees. In the case of Gurung, Sanjayaman v Deliveroo Hong Kong Limited [2024], a gig delivery worker sought compensation from Deliveroo under the Employees' Compensation Ordinance (ECO) for a traffic injury they suffered while collecting a food package for delivery. The primary issue faced by the courts was whether a the gig delivery worker was misclassified and was actually in substance an employee. If the gig delivery worker was in substance an employee, then they would be entitled to receive compensation under the ECO 'if in any employment, personal injury by accident arising out of and in the course of the employment is caused to [the gig delivery worker]'.

To determine whether the gig deliver worker was an employee, the courts applied the modern overall impression test which examines all the features of the relationship in question to arrive at a view as to whether as a matter of overall impression, the relationship is one of employment. The court's analysis thus considered a number of factors which suggested they were not an employee including but not limited to the following – the gig delivery worker had:

• the freedom to accept or reject work and choose when and where he was available for work;
• to provide his own motorcycle and mobile phone;
• the ability to delegate delivery tasks to third parties.;
• the ability to engage in other businesses or even compete with Deliveroo;
• borne financial risks;
• made his own management or investment decisions in respect of his own business which included choosing whether to accept orders, to manage his working time and to consider the equipment costs arising from the use of his own motorcycle;
• no ongoing engagement or management obligations; and
• not been labelled or referred to as an employee in the contractual documentation.

The court concluded that the gig delivery worker was not an employee even in light of the following factors which were each analysed in the court's judgment:

• the gig delivery worker was required to log on to the Deliveroo Rider's App which had tracking capabilities;
• Deliveroo had the right to terminate the gig delivery worker where there were repeated customer complaints against him;
• the gig delivery worker turning down jobs would cause him to lose a 'boost fees' bonus;
• the gig delivery worker was not able to negotiate the details of orders nor the calculation of the delivery fees;
• Deliveroo had provided the gig delivery worker with a 'Rider's Kit' and the 'Rider's App';
• the gig delivery worker did not utilize the right to delegate or to compete in practice; and
• there was an earlier case in 2023 which had found that delivery workers working for a food delivery digital platform, Zeek, were employees.

Ultimately, the court ruled that it was 'plain and obvious' that the gig delivery worker was not an employee, thus striking out the compensation claim.

It should be noted that the gig delivery worker in this case had brought the compensation claim even when he had already applied and received the maximum payout of HKD100,000 under Deliveroo's voluntary insurance policy available for its gig delivery workers. As such, the court found that in addition to finding the gig delivery worker's claim (ie that they were an employee) to be groundless, the court also found that the claim was 'being used as a means of vexation and oppression' and formed another ground to strike out the gig delivery worker's claim.

Takeaways

Whilst the outcome of this case was that the gig delivery worker was not an employee, it should not be treated as binding authority that every gig worker will not be considered an employee. The assessment of whether an individual is an employee is a fact sensitive exercise and will vary from case to case.

The decision does show that the courts are willing to strike out misclassification claims in appropriate circumstances. It is therefore important to have a well-thought out and structured gig economy business model such that all the potential circumstances that may be considered by the courts suggest that the relationship is not one of employment to the maximum extent feasible.

While the courts will look beyond any labels given to an individual in the contractual documentation, how the individual is labelled and how the arrangement is structured in such documentation will continue to be an important part of assessing many of the other factors. It would thus be prudent to ensure that any independent contractor agreement is carefully prepared prior to use.