10 JAN 2025

Tort Law in
Hong Kong,
Fifth Edition
Sweet & Maxwell HK

This PDF Contains

11.1.1.1 Contract of employment, p.505

11.1.1.1.1 Akin to contract of employment, p.513

10 JAN 2025 PAGE 505

Tort Law in Hong Kong, Fifth Edition

CHAPTER 11 VICARIOUS LIABILITY
11.1 Employer/Employee
11.1.1 Conditions for vicarious liability of employer for torts of employee
11.1.1.1 Contract of employment

11.1.1.1 Contract of employment

Almost everyone is at one time or another engaged in some form of paid work. Labourers,
skilled workers, craftsmen, professionals, artists, even student interns and tutors are paid
for the fruits of their labour, but only some of them are involved in employment
relationships that will give rise to vicarious liability.
In order for vicarious liability to attach to an employer, the plaintiff must show that the
person who tortiously caused the injury was the employee of the defendant at the time the
tort was committed. Put another way, the wrongdoer must be shown to have been engaged
in a contract of employment, sometimes referred to as a contract of service, with the
defendant at the time the tort was committed, as opposed to self-employment, often
described as a contract for services or an independent contract. The plaintiff bears the
burden of proof on this issue, an often difficult burden to discharge because the criteria for
an employment contract are imprecise.
Recent decades have witnessed the introduction of a more flexible approach whereby, in
appropriate cases, vicarious liability can attach to a relationship that is considered to be
one “akin to employment”. This background to this development and the conditions for
this relationship will be considered below. We will first consider the conventional
employment relationship, which is by far the most common and certainly more
straightforward route to establishing vicarious liability.
The question of employment relationship is largely one of fact, but is perhaps best
viewed as a question of mixed law and fact, given the extensive jurisprudence that has
developed over the years concerning the relevant principles that the trial judge is to take
into account. Where there is a written contract, it is sometimes assumed that the question
is primarily one of law, in the interpretation of the relevant documents ( Davies v
Presbyterian Church [1986] 1 WLR 323), but this is an over-simplification. The admonition
has been oft-repeated that appeal courts should be slow to overturn the decision of a judge
at first instance, a clear indication that the question of the nature of the employment
Lee Ting Sang v Chung Chi Keung [1990] 1 HKLR
relationship is primarily one of fact (
764 and Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156 (both considered
below)).
Over the years, the courts have struggled with different formulations to determine
whether or not the wrongdoer was truly an employee of the defendant. At one time, the
concept of control was used to make this determination. Under this approach, a high
degree of control exercised by the defendant (employer) over the worker (over how, when
and where the work was to be done) gave rise to a finding of a contract of employment, as
opposed to an independent contract. However much this approach seemed appropriate in
earlier times, when the hallmark of a typical contract of employment was subservience
and submission to the will of the employer, control in itself can no longer be a sufficient
indicator in a world of diverse employment arrangements in which many workers have
skills employers do not, and are paid to exercise a high degree of judgment and
independence in the application of their skills and knowledge. In modern times, the right
to exercise control may be more relevant than the actual exercise of control.
Later, the “organisation” or “enterprise” approach came to be preferred, partly as a
response to changes in management and organisational structures. Many employees in
modern work settings had come to exercise a high degree of control over their work, but
nonetheless did not enjoy the kind of autonomy and independence exercised by true
independent contractors. Under the organisation approach, a contract of employment
would be found if the worker’s duties were performed as part and parcel of the
organisation of the defendant, subject to the control of the defendant as to when and
where (although perhaps not as to how) the work would be done. This approach, although
a helpful addendum to the control approach, ran the risk of catching too many — for
instance, subcontractors repeatedly employed on the defendant contractor’s building
sites.
As with all contracts, the intention of the parties is important. Where there is a written
contract, the terms of the contract will be interpreted to help in this exercise. This is a
controversial issue in the context of the Hong Kong work place, where a practice has
developed among some unscrupulous employers to designate ordinary workers as
“independent contractors” in the written contract, in order to avoid the legal
consequences of a contract of employment. This phenomenon was already the subject of
academic criticism 45 years ago (see Rear (1972)), but there is much evidence that the
practice continues today. It is now clear that the court will not be bound by such a
designation (see 14.2.1 below) even, exceptionally, where the worker has effectively
accepted self-employed status when he opts for his own Mandatory Provident Fund
arrangements (as in Poon Chau Nam v Yim Siu Cheung, below), or in order to obtain
higher remuneration (as in Au Sou Lin v Zielona Transport Ltd [2011] 2 HKLRD 284).
Today there is no single or convenient test for making the determination of employment
status. What emerges is a nuanced but flexible approach in which the court tries to
acquire an “overall impression” based on an examination of a range of factors that have
been identified in the case law as relevant to this issue. In doing so, the courts emphasise
that there is no comprehensive list of factors, and that the list of potentially relevant
factors is not closed. Moreover, although reference must be made to these factors, the
determination of employment status cannot be reached by compiling a check-list or by
counting up the factors falling on one side or the other.
In Hong Kong, the Privy Council decision in Lee Ting Sang v Chung Chi Keung [1990]
1 HKLR 764 is the starting point for an understanding of the modern approach for
determining employment status. In that case, the applicant, a master chiseller injured in
the course of his work, sought compensation under the Employees’ Compensation
Ordinance (Cap.282) from the respondent subcontractor. Entitlement to compensation
under the ordinance requires proof that the applicant is in a contract of employment with
the employer. The Privy Council reversed the courts below and found the applicant to be
an employee. The case is important for the court’s endorsement of the approach for
determining employment status proposed by Cooke J in Market Investigations v
Minister of Social Security [1969] 2 QB 173:
 The fundamental test to be applied is this:

“Is the person who has engaged himself to perform these services performing them as
a person in business on his own account?”

If the answer to that question is “Yes”, then the contract is a contract for services. If the
answer is “No”, then the contract is a contract of service. No exhaustive list has been
compiled and perhaps no exhaustive list can be compiled of the considerations which are
relevant in determining that question, nor can strict rules be laid down as to the relative
weight which the various considerations should carry in particular cases. The most that
can be said is that control will no doubt always have to be considered, although it can no
longer be regarded as the sole determining factor; and that factors which may be of
importance are such matters as whether the man performing the services provides his
own equipment, whether he hires his own helpers, what degree of financial risk he takes,
what degree of responsibility for investment and management he has, and whether and
how far he has an opportunity of profiting from sound management in the performance of
his task.
As the appellant in Lee Ting Sang v Chung Chi Keung did not provide his own equipment
or hire his own helpers, had no responsibility for investment in or management of the work
on the construction site, and did not price the job but was paid either a piece-work rate or
a daily rate according to the nature of the work he was doing, he was found to be in a
contract of employment. Although the appellant was not supervised in his work, this was
not considered important for a skilled man who could simply be told what to do and be left
to get on with it.
The approach in Lee Ting Sang v Chung Chi Keung, including its endorsement of Cooke
J’s approach, was affirmed and further refined by the Court of Final Appeal in Poon Chau
Nam v Yim Siu Cheung (2007) 10 HKCFAR 156. This was also a case
concerning an application under the Employees’ Compensation Ordinance, but one in
which considerable weight had been placed in the lower courts on the requirement of
mutuality of obligation in reaching a finding of self-employment. The appellant was an air-
conditioning worker engaged by the respondent “on a casual, as-required basis”. Like the
appellant in Lee Ting Sang, he worked for the respondent from time to time but was free to
and did work for other employers. The court came to the view that, although the
respondent was not obliged to provide work to the appellant on a continuing basis, and
that mutuality of obligation was absent, each time the respondent engaged the appellant,
a contract of employment came into existence. This was established on the basis of the
kinds of factors identified by Cooke J in Market Investigations Ltd v Minister of Social
Security, resulting in an overall impression of an employment relationship. Ribeiro PJ said:

The air-conditioning business belonged to the respondent. … The respondent decided

which, if any, jobs should be assigned to the appellant and paid him to do them at the
daily rate of $550, plus any overtime. All the profits and losses of the business were for
the respondent’s account. The appellant bore no financial risks and reaped no
financial rewards beyond his daily-rated remuneration. The respondent managed the
business and hired several other workers, some of whom would sometimes work
alongside the appellant on a job. The appellant personally did the work assigned to
him. He did not hire anyone to help. Travel expenses incurred in the course of the
 work were borne by the respondent who sometimes drove the appellant to the work
site in his van, particularly where heavy equipment had to be transported there. Such
equipment was owned by the respondent and not the appellant. Whenever items had
to be purchased by the appellant for work purposes, he was reimbursed by the
respondent, even where the amounts were very small. The appellant was a skilled air-
conditioning worker and, like the others who were undoubtedly the respondent’s
employees, did not require supervision or control over the manner of carrying out the
work. So the control test is, in the circumstances, of little relevance. But the other
indicia all point clearly to an employer–employee relationship entered into for each
specific engagement. The main difference between the appellant and the other
workers was that his employment was of a casual nature whereas theirs was
permanent and paid on a monthly basis.

In Poon Chau Nam v Yim Siu Cheung, Ribeiro PJ emphasised the intuitive nature of the
exercise:

The modern approach to the question whether one person is another’s employee is
therefore to examine all the features of their relationship against the background of
the indicia developed in the abovementioned case-law with a view to deciding whether,
as a matter of overall impression, the relationship is one of employment, bearing in
mind the purpose for which the question is asked. It involves a nuanced and not a
mechanical approach, as Mummery J emphasised in Hall v Lorimer [1994] 1 WLR 209:

“In order to decide whether a person carries on business on his own account it is
necessary to consider many different aspects of that person’s work activity. This is not
a mechanical exercise of running through items on a check list to see whether they are
present in, or absent from, a given situation. The object of the exercise is to paint a
picture from the accumulation of detail. The overall effect can only be appreciated by
standing back from the detailed picture which has been painted, by viewing it from a
distance and by making an informed, considered, qualitative appreciation of the
whole. It is a matter of evaluation of the overall effect of the detail, which is not
necessarily the same as the sum total of the individual details. Not all details are of
equal weight or importance in any given situation. The details may also vary in
importance from one situation to another.”

Despite the warning sounded by Ribeiro PJ in Poon Chau Nam v Yim Siu Cheung against a
mechanical approach in favour of one based on an overall impression, the court can only
reach that impression after examining the specific features of the employment
arrangement at issue and paying due regard to them in the particular circumstances. A
number of factors have been found by the courts to be of relevance in making this
determination, bearing in mind that the weight to be given to each will vary depending on
the circumstances of the particular case. Thus, a factor considered important in one case
may carry very little weight in another.
Although control is no longer a sufficient indicator of employment status and may have
little or no role to play in some cases — for example those involving skilled workers able to
work without supervision as in Leung Chun Pong v Cheng Man Tung (HCPI 296/2007,
[2008] HKEC 1001), including even a company director who as a practical matter
controlled the work that he did but was found to be an employee of the company ( Lai
Wing Shun v Shun Shing Decoration Co Ltd (DCEC 1918/2014, [2016] HKEC 401)) — it
nonetheless remains the single most important consideration. Control can manifest itself
in many ways, for example: regular, timetabled hours of work; prohibition against working
for others; provision of transportation between job sites (as in Leung Chun Pong v Cheng
Man Tung (above)); regular and close supervision; instruction as to how, when and where
to do the work (as in Yeung Tin Sum v Wong See Ting (DCEC 1077/2006, [2007] HKEC
694)); the requirement to wear company uniforms and/or to display the company logo (as
in Wong Wai Ming v FTE Logistics International Ltd (DCEC 314/2007, [2008] HKEC
1441)); and submission to the employer’s internal rules, for instance the need to seek
approval before taking leave (as in Leung Kam Wah v Fung Yuk Ching (HCLA 43/2006,
[2008] HKEC 698)). These are all highly suggestive of a contract of employment, and
inconsistent with the notion of being in business on one’s own account. In Wong Wai Ming
v FTE Logistics International Ltd (above), a case of a delivery worker injured in a motor
vehicle accident, the requirements of mandated work hours, clocking in and out, the
wearing of the company uniform, the display of the company logo on the motorcycle, and
other aspects of close supervision overrode the fact that the worker provided his own
motorcycle and was described in the written contract as self-employed. The delivery
worker was found to be in a contract of employment.
Beyond the issue of control, there are a number of factors that have been identified by
the courts as relevant to the determination of contract of employment, again, none of
which are determinative, and the weight of each will depend on the circumstances of the
particular case.
A worker whose employer provides tools, equipment, protective clothing and the like is
more likely to be found to be engaged under a contract of employment (as in Cheung
Wai Yick v Lau Kin Wing (DCEC 1164/2007, [2009] HKEC 268), where the court found an
employment contract on the basis of the “overall impression”; and Chan Sau Ying v Yuk
Lung Sauna (HCLA 82/1994, [1995] HKLY 575) where the employer provided the
masseuses with uniforms, towels and massage oil).
A worker who is free to assign the work to others or hire workers, will not normally be
found to be in a contract of employment, because such freedom contradicts the concept of
employer’s control and the basic obligation of an employee to do the work personally (as in
Nguyen Van Vinh v Cheung Ying Construction Engineering Ltd (HCPI 1173/2004, [2008]
HKEC 882)). However, it is not a strict rule. In Pun Wai Ming v Tsang Chung Kai (CACV
301/2008, [2009] HKEC 1047) occasional delegation of some of the applicant driver’s
work was found not inconsistent with a finding of contract of employment. Moreover, it
should not be assumed that where a worker recruits other workers, he is necessarily their
employer. In Leung Kam Fat v Johnathan’s Fashion Manufacturing Ltd (HCLA 14/1988),
Nazareth J considered this to be only one factor. Further factors, that the first defendant
(who had recruited other workers) worked exclusively for the second defendant on the
second defendant’s premises, using the second defendant’s equipment and materials,
suggested that the first defendant was a supervisor or foreman, in the second defendant’s
employ, and not the employer of the workers he had recruited.
A worker who undertakes personal financial risks and who stands to make a profit from
his own management decisions is not likely to be found to be in a contract of employment
(Leung Chun Pong v Cheng Man Tung and Helskens Jan Bert Julia v AXA International
Ltd (HCA 1348/2005, [2008] HKEC 1450)). But this too is a subtle issue. In Tang Chao
Nong v Ng Pui Shan Stella (CACV 217/2012, [2017] CHKEC 586), the fact that the
plaintiff’s pay was affected by the profit of the engineering projects undertaken and that
he only received full salary upon payment by clients did not mean that he shared the
financial risks so as to deprive him of employment status.
In Hong Kong, mini-bus drivers are asked when hired to opt for employee or self-
employed status, but the ultimate legal determination of their status will be made by the
court. In Chan Siu Ming v Kwok Chung Motor Car Ltd [2008] 1 HKCLRT 13, while the
plaintiff drivers’ remuneration on an income-sharing basis would be affected by slow
traffic or bad weather, the plaintiffs had no responsibility for investment and management
and were not operating the business on their own.
On the other hand, in Singh Gurpinder v Craigside Investments Ltd (DCEC
1978/2011, [2013] HKEC 459), the fact that a pizza courier used and maintained his own
motorcycle, and could earn more money if he took shorter routes or avoided congested
areas when making deliveries, persuaded the court that the worker undertook financial
risks and management, which supported a finding of self-employment. This seems a
dubious conclusion, since workers in a contract of employment would no doubt do the
same, and at any rate, any financial gains that might accrue would be
miniscule. It certainly does not sit well with the decision in Wong Wai Ming v FTE
Logistics International Ltd (DCEC 314/2007, [2008] HKEC 1441) (above).
The fact that an employer does not make Mandatory Provident Fund payments on behalf
of a worker (the worker may or may not do so), may in some cases be treated as an
indication that the parties are not in an employment relationship (as in Helskens Jan Bert
Julia v AXA International Ltd above), but this is certainly not determinative, for otherwise
it would be exploited by employers as a means to avoid all responsibilities to workers.
Statutory documentation may be relevant but again not conclusive. Proof of the
employer having filed income tax returns on behalf of the workers obliging the workers to
pay salaries tax was found to be an important factor pointing toward employment status in
Chan Sau Ying v Yuk Lung Sauna (above). By the same token, where the worker was not
described as an employee in the forms filed with the Inland Revenue, the court inferred an
intention by the parties that the worker be treated as self-employed (Helskens Jan Bert
Julia v AXA International Ltd (above), and Zurich Life Insurance Co Ltd v Pang Man Yiu
(DCCJ 2465/2007, [2010] HKEC 543)). And as already seen, the filing by an employer of
Employees’ Compensation Ordinance Form 2 is suggestive of an employment relationship
but will not be treated as a binding admission on the part of the filer that he is the
employer of the injured worker (see 7.1.1.1 above).
Given the ultimately intuitive nature of the exercise, it is only natural that the kind of
work involved should bear some influence on the determination of the employment status
issue, although this consideration should not be overstated. Surely, it is in the nature of the
work of a restaurant waiter, a hotel bellhop, an office receptionist or a domestic worker,
that the finding of employee status is extremely likely. On the other hand one cannot rule
out the possibility of a “labour-only” subcontract as in Tam Hon Leung v Ng Wai Hing
[2006] 1 HKLRD 923. Tam Hon Leung involved the exceptional situation in which a
labourer, albeit a skilled labourer engaged by the defendant to repair damaged containers,
was found to be an independent contractor. The court so found because the plaintiff, after
his engagement by the defendant, recruited additional workmen, and did his work under
little or no supervision. Moreover, he was paid on the basis of the number of containers
repaired, and distributed this sum among the team of workers he had recruited. All of the
workers paid their own Mandatory Provident Fund contributions. The fact that the
defendant supplied the plaintiff with tools was considered only part of the overall picture.
The fact that in his tax return and in the Employees’ Compensation Ordinance Form 2
reporting the injury to the Labour Department, the defendant had described the plaintiff
as his employee, was treated as mere mis-description by the court and did not alter the
overall picture. A similar result was reached in Mohammad Munir v Yau Kei Tak (DCEC
251/2006, [2007] HKEC 562), again in circumstances where the applicant had recruited
workers to assist him in labour-only work.
In some cases the courts have placed emphasis on the presence or absence of mutuality
of obligation between employer and worker — ie whether the worker was obliged to work
when asked and whether the employer was obliged to provide work to the worker when it
was available, but this is no longer of importance for vicarious liability and for that matter
Employees’ Compensation Ordinance or common law negligence purposes after the CFA
decision in Poon Chau Nam v Yim Siu Cheung (above), however much it may be important
for some Employment Ordinance purposes. The fact of irregular working hours does not
imply self-employment and may only reinforce the worker’s status as employee at the beck
and call of the employer (Tang Chao Nong v Ng Pui
Shan Stella (above)). What is important is that at the moment of the accident causing
injury, the worker was engaged in a contract of employment.
As with all contracts, the intention of the parties in forming their relationship is
important and will be given due and normally considerable weight. Where there is a
written contract, the terms of the contract will be interpreted to help determine the issue
of employment status. The contract could be consistent with either a contract of
employment or a contract for services. What is now clear is that an express designation or
use of suggestive terms in a contract to the effect that the worker is self-employed will not
be determinative of the worker’s employment status. The parties’ own view, even
agreement as to the relationship, is but one factor in the determination ( Pun Wai Ming v
Tsang Chung Kai (CACV 301/2008, [2009] HKEC 1047) and Ho Wai Keung v Billion Rich
Investments Ltd (CACV 15/2022), [2023] HKEC 2985)). Rather, the court will examine the
substance of the employment arrangement, how it operated in practice, to determine the
issue of employment status, even to the point of overriding the worker’s apparent
willingness, when signing the agreement, to accept self-employment terms ( Lam Yau
Kuen v Easy (Hang Fung) Transportation Co Ltd (DCCJ 1/2006, [2006] HKEC 2218), and
Mak Ching Shan v Power Max Design Ltd (DCEC 301/2008, [2009] HKEC 1895)). This
position was reinforced by the Supreme Court in Autoclenz Ltd v Belcher [2011] 4 All
ER 745. The court found the plaintiff car-cleaners to be in a contract of employment,
despite the contrary features in their written employment contracts in which they were
described as subcontractors and under which they agreed to pay their own tax and
National Insurance, and were even entitled to provide a substitute to carry out the work.
The court looked at all the circumstances, paying close attention to the way the
employment was carried out from day-to-day, in order to ascertain “the true agreement
between the parties”. The express designation will be just one factor in the determination,
and probably a minor one ( Chan Siu Ming v Kwok Chung Motor Car Ltd [2008] 1
HKCLRT 13, and Leung Bing v Tanfory Co Ltd (HCLA 129/2002, [2003] HKEC 602)).
This must be so, for were it otherwise, employers could completely circumvent the
application of virtually all employment law by inserting in the contract a designation of
self-employment.
As already emphasised, not all of these factors will be relevant in all cases or carry equal
weight. A factor that may be relevant in one case may not be so in another. The court must
engage in a balancing exercise, identifying those factors that are relevant, and weigh up
those factors that point in one direction against those which oppose, and come to a
sensible determination on the facts, one that, inevitably, not all would agree with.
Appeal courts are generally reluctant to reverse the finding of a trial judge on the issue
of contract of employment/independent contract. This reluctance can be explained on the
basis that the determination is primarily a finding of fact, decided by the trial judge. In
Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336, a case concerning the contract
of employment issue in which the Court of Appeal had reversed the trial judge, Bokhary PJ
in the Court of Final Appeal restored the trial judge’s determination of a contract of
employment, and warned against appeal judges lightly substituting their views of the
evidence for that of the trial judge, who after all has the “advantage of having received the
evidence at first-hand”. This position was reinforced by the Court of Final Appeal in Poon
Chau Nam v Yim Siu Cheung (above), although in that case, the Court of Final Appeal
reversed the lower court decisions on the basis of what it characterised as an error of law.
The question of what constitutes a contract of employment as opposed to an
independent contract has relevance in other areas of the law, and will be revisited in
Chapter 14.
10 JAN 2025 PAGE 513

Tort Law in Hong Kong, Fifth Edition

CHAPTER 11 VICARIOUS LIABILITY
11.1 Employer/Employee
11.1.1 Conditions for vicarious liability of employer for torts of employee
11.1.1.1 Contract of employment
11.1.1.1.1 Akin to contract of employment

11.1.1.1.1 Akin to employment

In Hong Kong there have not been any cases imposing vicarious liability on a defendant in
circumstances other than where an employment relationship was established. This
remains the position despite a series of United Kingdom Supreme Court decisions in the
last decade imposing vicarious liability in circumstances of a relationship that fell short of
employment but were characterised as being “akin to employment”.
In Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1, the UK Supreme
Court was asked to consider whether an unincorporated association, “The Brothers of The
Christian Schools” (the Institute), could be vicariously liable for acts of sexual abuse
committed by its members (Catholic lay brothers) against pupils at a residential school (St
William’s). The Institute’s main mission was teaching. The lay brothers, who had taken
vows of poverty, chastity and obedience, taught at the school and lived communally on the
school grounds, but did not have a contract of employment with the Institute. They were
obliged to go wherever they were directed by the Institute, and those who were sent as
teachers to St William’s gave their earnings to a charitable trust for the benefit of the
Institute, which then provided them with food and accommodation. Lord Phillips, giving
the unanimous judgment of the court, found that the relationship between the lay brothers
and the Institute had many of the elements, and all the essential elements, of the
relationship between employer and employees, in particular, that of control:
(i) The Institute was subdivided into a hierarchical structure and conducted its activities
as if it were a corporate body.
(ii) The teaching activity of the brothers was undertaken because the provincial directed
the brothers to undertake it.
(iii) The teaching activity undertaken by the brothers was in furtherance of the objective,
or mission, of the Institute.
(iv) The manner in which the brother teachers were obliged to conduct themselves as
teachers was dictated by the Institute’s rules.

In Cox v Ministry of Justice [2016] AC 660, the claimant, who was working as the catering
manager in the defendant’s prison, was moving supplies with the help of prisoners who
were on prison service pay, when a bag of rice was dropped spilling its contents on the
floor. The claimant instructed the prisoners to stop work until the rice was cleared.
Ignoring her instruction, one prisoner attempted to get past and dropped a heavy bag of
rice on the claimant’s back, injuring her. She brought proceedings against the Ministry of
Justice as defendant, claiming damages for personal injury on the basis, inter alia, that it
was vicariously liable for the negligence of the prisoner. The prisoners did not have a
contract of employment with the prison service, but, drawing on its decision in Catholic
Child Welfare Society, the court found a relationship akin to one of employment. According
to Lord Reed, giving the sole judgment in a unanimous decision, prisoners working in
kitchens are integrated into the operation
of the prison. Their work forms an integral part of the activities that the prison carries on
in the furtherance of its aims, one of which is the provision of meals to prisoners. The
Ministry’s argument that prisoners’ work serves the purpose of rehabilitation and that the
prisoners have no interest in furthering the objectives of the prison service were rejected.
In many employments, the objectives of employees and employer may not converge. At any
rate, rehabilitation is not the sole objective. Penal policy also aims to ensure that convicted
prisoners contribute to the cost of their upkeep. The fact that a prisoner is required to
undertake work for nominal wages arguably binds him into a closer relationship with the
prison service than would be the case in ordinary employment. Lord Reed explained the
effect as follows:

24. … The result of this approach is that a relationship other than one of employment
is on principle capable of giving rise to vicarious liability where harm is wrongfully done
by an individual who carries on activities as an integral part of the business activities
carried on by a defendant and for its benefit (rather than his activities being entirely
attributable to the conduct of a recognisably independent business of his own or of a
third party), and where the commission of the wrongful act is a risk created by the
defendant by assigning those activities to the individual in question …
29. … It results in an extension of the scope of vicarious liability beyond the
responsibility of an employer for acts and omissions of its employees in the course of
their employment, but not to the extent of imposing such liability where a tortfeasor’s
activities are entirely attributable to the conduct of a recognisably independent business
of his own or of a third party. …
30. … The individual for whose conduct it may be vicariously liable must carry on
activities assigned to him by the defendant as an integral part of his operation and for its
benefit. …

In Armes v Nottinghamshire Council [2018] AC 355, foster parents were accused of

physically and sexually abusing the claimant while in their care. The claimant sued the
Council which arranged the placement, as being vicariously liable for the trespassory torts
committed by the foster parents. The Court found that although the Council did not
exercise day-to-day control over the manner in which the foster parents cared for the
claimant, with reference to the applicable regulations, it nevertheless had powers and
duties of approval, inspection, supervision and removal “without any parallel in ordinary
family life”. On this basis, the Supreme Court reversed the courts below and found that the
foster parents and the defendant Council were in a relationship akin to employment, and
thus the Council was vicariously liable for the torts of the foster parents.
Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB [2023] UKSC 15
concerned a rape committed against the claimant (Mrs B) by a man (Sewell), when they
were both members of a congregation of Jehovah’s Witnesses. Sewell had congregational
responsibilities as a ministerial servant and as an “elder”. He and his wife became friends
through the congregation with Mrs B and her husband. Mrs B became concerned when
Sewell began to pursue her romantically and spoke to Sewell’s father, also an elder, who
took no action. Sewell raped Mrs B at his home during a social visit by Mr and Mrs B.
Although not paid by the Congregation, Sewell
was nonetheless found to be in a relationship with the Congregation that was akin to one
of employment. Lord Burrows, giving the unanimous judgment of the court, found that the
important features were “that as an elder Mark Sewell was carrying out work on behalf of,
and assigned to him by, the Jehovah’s Witness organisation; that he was performing duties
which were in furtherance of, and integral to, the aims and objectives of the Jehovah’s
Witness organisation; that there was an appointments process to be made an elder and a
process by which a person could be removed as an elder; and that there was a hierarchical
structure into which the role of an elder fitted”.
The Brothers of the Christian Schools in Various Claimants, the prisoners in Cox, the
foster parents in Armes and the church elder in BXB lacked some of the recognisable
characteristics that normally define an employment relationship but did possess some of
them. In particular, each could be said to be performing their work activities “as an
integral part of the business … carried on by the defendant and for [the defendant’s]
benefit … and … the commission of the wrongful act [was] a risk created by the defendant
by assigning those activities to the individual in question”.
These decisions create huge potential for the extension of vicarious liability to new work
arrangements. However, there are limits. According to Lord Reed in Cox v Ministry of
Justice there would be no vicarious liability where the wrongdoer’s activities could more
properly be characterised as “attributable to the conduct of a recognisably independent
business of his own or of a third party”. Lady Hale agreed with this position in Barclays
Bank v Various Claimants [2020] AC 973, a case concerning a doctor appointed by
Barclays to conduct medical examinations of its prospective employees. Unfortunately,
neither Lord Reed nor Lady Hale provided a policy justification for the drawing of such a
firm line. Yet there will be cases where the apparently independent business is nothing
more than an organisational strategy designed to insulate the employer from liability
when the reality is one of considerable subordination and integration into the defendant’s
business. Singh Gurpinder v Craigside Investments Ltd (DCEC 1978/2011, [2013] HKEC
459) (above) is such a case.
In view of Lord Reed’s admonition, reiterated by Lady Hale, it is surprising that most of
the attempts in the Hong Kong case law to argue for the imposition of vicarious liability in
circumstances other than an employment relationship have concerned cases in which the
wrongdoer was plainly the defendant’s independent contractor or the independent
contractor’s employee. In Ho Kwok Kei v AS Watson & Co Ltd [2019] 3 HKLRD 592, the
first defendant, a supermarket chain, arranged through one of its related companies to
engage transport contractors (the third defendant) to provide transport services between
the first defendant’s warehouses and its stores. It was a term of the agreement that the
first defendant would provide some of its own vehicles for use by the third defendant. It
was also a term of the agreement that the parties were independent contractors. Eight
months later, in December 2010, the plaintiff, one of the first defendant’s store managers,
while assisting with the unloading of a delivery vehicle, was injured through the
negligence of one of the third defendant’s drivers. It is noteworthy that before 2010, the
first defendant employed its own team of drivers. The driver in the instant case had been
employed by the first defendant for 15 years, until 2010, before being employed by the
third defendant under the new arrangement. At the time of the accident, he was in fact
driving a vehicle provided by the first defendant. The plaintiff was able to establish liability
against the first
defendant on the basis of a breach of the employer’s duty in negligence, and against the
third defendant vicariously for the negligence of its driver. The plaintiff also claimed
against the first defendant in vicarious liability for the negligence of the third defendant’s
driver. The plaintiff, citing Various Claimants, Cox and Armes, argued that the delivery of
goods from the first defendant’s warehouses to its stores was integral to the first
defendant’s business activities, and that by engaging the third defendant to make
deliveries by means of its own vehicles, the first defendant had created a risk of the tort
being committed by the third defendant. Although an attractive argument on the facts, it
nonetheless failed: “it is clear that the application of the approach in Cox in a case such as
the present … would be a major change in the law. It would render the distinction between
an employee and an independent contractor far less significant, if not altogether
obsolete”.
Similar arguments had been made to impose vicarious liability for torts committed by an
independent contractor in Li Ming Tak v Hong Kong Airport Services Ltd [2015] 4
HKLRD 749 and Talat Zahid v Cheung Fat Metal Trading Co Ltd (HCPI 399/2012, [2017]
HKEC 1297). As in Ho Kwok Kei, the argument failed in both such cases. That such cases
are even brought demonstrates the unintended consequences of the Supreme Court case
law — the indeterminacy and ambiguity of the akin-to-employment principle inviting
desperate plaintiffs to try the argument for an akin-to-employment relationship.
Although the independent contractor/employee divide is a convenient place to draw the
line, it is to be regretted that no clear policy justification was put forward in either Cox or
for that matter Barclays Bank v Various Claimants. As has been seen, a contractor can
meet many of the characteristics of an akin-to-employment relationship. One may well
question why a plaintiff’s entitlement to damages should be affected by internal
arrangements in the defendant’s business structure. Arguably, there should be an
examination of the substance of the relationship before determining the issue of the
defendant’s vicarious liability. The fact that a contractor is likely to have insurance
coverage and that the defendant exerts less or limited influence on a contractor than on an
employee should not justify a blanket exclusion. The position is also inconsistent with
cases of dual vicarious liability (11.1.1.2.5 below). There, as contended by the plaintiff
here, a defendant is held vicariously liable for the tort of an independent contractor’s
employee.

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