3 HKLRD 30
Employees’ Compensation Case No 1763 of 2011
Judge Katina Levy
25 May 2018
Employment law - employees' compensation - applicant asylum seeker prohibited by law from taking employment - whether accident one in course of and arising from employment of applicant by respondent - whether court should exercise its discretion under s.2(2) to award compensation notwithstanding illegality of contract of employment - Employees' Compensation Ordinance (Cap.282) s.2(2)
In this application for employees' compensation, the applicant, T, was an asylum seeker who was prohibited by law from taking employment. On 23 November 2009, he met with an accident in which his right forearm was crushed and later amputated above the elbow. It was his case that he was working for R in a workshop in the New Territories and that his accident occurred at that workshop in the course of and arising from such employment. R denied that he had employed T. Three issues arose. (1) Was T's injury sustained in a traffic accident or in an industrial accident? (2) If the accident was sustained in an industrial accident, was it one in the course of and arising from employment of him by R? (3) If so, should the Court exercise its discretion under s.2(2) of the Employees' Compensation Ordinance (Cap.282) to award him employees' compensation notwithstanding the illegality of the contract of employment?
Held, dismissing the application, that:
(1) The unchallenged medical evidence pointed to T's injury having been caused by mechanical crushing in an industrial accident rather than by his having been hit by a vehicle in a traffic accident. When he initially told the police and the doctor that he had been injured in a traffic accident, T had been fabricating an account in order to conceal the fact of his illegal employment. The truth was what he subsequently told the doctor, namely that his injury was sustained in an industrial accident. That accident occurred in a workshop with four walls made of iron sheets in the New Territories. On the first issue, namely, whether T's injury was sustained in a traffic accident or in an industrial accident, the Court's finding was therefore that it was sustained in an industrial accident. (See paras.118-119, 188.)
(2) On the second issue, the evidence given by and given for T that he was employed by R was unreliable while R's evidence that he did not employ T was reliable. In truth, T was employed by an unknown Chinese male. On the second issue, namely, whether T's accident was one in the course of and arising from employment of him by R, the Court's finding was therefore that it was not, since T was not employed by R. The application was therefore dismissed. (See paras.167, 172, 178, 188, 194-195, 208.)
(3) Had T succeeded in establishing liability against R, the Court would, having regard to the public policy regarding unemployable persons performing lawful work stated by the Court of Appeal in Yu Nongxian v Ng Ka Wing, which was followed in Talat Arslan v Li Tak Cheung, have exercised its discretion in T's favour. On the third issue, namely, whether the Court should (if it were to find that T's accident was one in the course of and arising from employment of him by R) exercise its discretion under s.2(2) of the Ordinance to award employees' compensation notwithstanding the illegality of the employment, the answer was therefore that the Court should exercise its discretion to do that (Yu Nongxian v Ng Ka Wing  4 HKLRD 159, Talat Arslan v Li Tak Cheung (DCEC 1965/2014,  HKEC 2056) applied). (See paras.196-197.)
(4) If the application had succeeded, the award of employees' compensation to T would have been $595,775 plus interest at half the judgment rate from the date of the accident to the date of judgment and thereafter at the judgment rate until payment. (See para.206.)
This was the trial of an application for employees' compensation by an asylum seeker in respect of personal injuries allegedly sustained in the course of and arising from employment of the applicant by the second respondent. The facts are set out in the judgment.
[Editor's note: Section 2(2) of the Employees' Compensation Ordinance (Cap.282) reads: "If, in any proceedings for the recovery of compensation under this Ordinance, it appears to the Court that the contract of service or apprenticeship under which the injured person was working, at the time when the accident causing the injury happened, was illegal, the Court may, if having regard to all the circumstances of the case it thinks proper so to do, deal with the matter as if the injured person had at the time aforesaid been a person working under a valid contract of service or apprenticeship." In the Yu Nongxian litigation, the Employees' Compensation Assistance Fund Board sought leave to appeal to the Court of Final Appeal. It was refused leave by the Court of Appeal and then by the Appeal Committee of the Court of Final Appeal. In the course of refusing leave, the Appeal Committee said (in Yu Nongxian v Ng Ka Wing (FAMV 64/2007,  HKEC 99 at para.5) that the s.2(2) discretion "is in the widest terms and is necessarily to be exercised on the facts of each case, involving its own mixture of discretionary factors". Where the work is not illegal in itself and the only reason why the contract of employment is illegal is that the employee was prohibited by law from taking any employment, the cases suggest that the courts will, at least in general, exercise the s.2(2) discretion to award employees' compensation notwithstanding the illegality of the contract of employment. That emerges from what the Court of Appeal did in Yu Nongxian's case, what the District Court did in Talat Arslan's case and what the District Court would have done in the present case if the applicant's accident was one in the course of and arising from employment of him by the respondent.]