Court allows illegal workers to receive employees’ compensation

In the case of Jiang Zhong v Up Cheer Ltd & Ors, the court exercised its discretion under section 2(2) of the Employees’ Compensation Ordinance, Cap. 282. (“ECO”) to treat a person employed under an illegal contract as if he was employed under a valid contract of service.

Section 2(2) of ECO provides that:-

“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.”

Facts

In this case, the injured worker, Jiang Zhong (“Jiang”), was a Mainland national, who visited Hong Kong on a two-way permit. It was a condition of his stay that he was not permitted to undertake any employment in Hong Kong. Despite this, he was employed illegally as a construction worker and was injured during his employment. In this action, Jiang made a claim, among others, for the employees’ compensation.

As the employment undertaken by Jiang was a breach of his condition of stay and was therefore illegal, the primary issue before the court was whether Jiang was entitled to compensation under the ECO. The court shall decide whether or not discretion shall be exercised in favour of Jiang under section 2(2) of the ECO.

Decision

In exercising the discretion, the court shall take into account all the relevant circumstances, including public policy reason and the nature of work that the employee undertook. The court held that the discretion under section 2(2) of the ECO should be exercised in favour of Jiang for 2 reasons:-

1. First of all, it would not be conducive to stop illegal employment if the employers are allowed to escape from liability for compensation to illegal employees for injuries sustained during employment. In order to stop illegal employment, it was important to target at the employers and to permit the applicant to recover.
2. Further, apart from the fact that Jiang was an illegal worker, there was no other factor which called for a refusal of relief to Jiang. The works that Jiang was employed to do were lawful.

As such, the Employees’ Compensation Action was dealt with as if Jiang had at the time of the accident been a person working under a valid contract of service. This decision is in line with previous case law and reflects the court’s attitude in exercising the discretion in favour of an illegal worker in similar situations.

Key Contacts

Elsie Chan

Partner | Employment and Pensions

Email or call +852 2825 9604