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Article exclusively contributed by Johnson Stokes & Master

Wheels within wheels

by Hong Tran, Senior Associate Employment and Employee Benefits Group Johnson Stokes & Master

Mr Chen was employed by Whirlpool. His employment contract provided that Mr Chen would be based in Shanghai with responsibilities to a joint venture company (the JV company) formed between Whirlpool and a company in mainland China.

As a result of the contractual arrangement, Mr Chen did not do any work for Whirlpool and was never asked to report to Whirlpool. In effect, Whirlpool had no control or supervision over Mr Chen's work for the JV company.

One day, Mr Chen suffered serious injuries in a car accident on his way to attend a conference organised by the JV company in Beijing. Under the contract of employment, Whirlpool was obliged to supply a car and driver to Mr Chen. However, at the time of the accident, it was the JV company that supplied both the car and the driver.

Mr Chen made a claim for compensation under the Employees' Compensation Ordinance (ECO). Whirlpool settled the ECO claim for HK$2.29 million. Mr Chen subsequently commenced common law proceedings for negligence against Whirlpool for his personal injuries arising from the traffic accident. The judge in the Court of First Instance dismissed Mr Chen's claim for damages on the ground that the JV company was responsible for Mr Chen's safety instead of Whirlpool. Mr Chen then decided to appeal to the Court of Appeal.

The issues before the Court of Appeal were:

(a) Whether Whirlpool owed a duty of care towards Mr Chen as an employee in the circumstances of the case; and
(b) Whether Whirlpool had breached such duty of care to Mr Chen

The Court of Appeal found that the obligation to provide a safe system of work (including the provision of a reasonably safe car and a reasonably competent driver) had not been delegated by Whirlpool to the JV company. The JV company had supplied a car and driver to the employee for and on behalf of Whirlpool. Therefore, Whirlpool was vicariously liable for the negligence of the JV company towards Mr Chen.

On the basis of the available evidence, the Court of Appeal was satisfied that the JV company's driver was a reasonably competent driver although he was negligent in this one-off instance. The car provided to Mr Chen was also reasonably safe.

The Court of Appeal was satisfied that the JV company had not breached the duty of care which it had undertaken on Whirlpool's behalf in providing a reasonably safe car and a reasonably competent driver to Mr Chen. It follows that, if the JV company did not breach its duty, Whirlpool would not be liable for the injuries sustained by Mr Chen. Therefore, Whirlpool was not negligent and could not be held liable for Mr Chen's injuries.

Q & A on the duty of care
Q1 What is the duty of care?
A1 An employer owes a duty to its employee to take reasonable steps to provide a safe system of work.

Q2 When does an employer owe a duty of care to its employee?
A2 An employer owes a duty of care to its employees at all times while they are performing work for the employer, whether permanent or temporary, full-time or part-time. This duty is personal to the employer and cannot be delegated. The employer's duty of care to an employee ceases when the contract of employment terminates.

Q3 What are the factors that the Court would look at in considering whether the employer has satisfied its duty of care towards the employee?
A3 The relevant factors may include the place where the employee works, the nature of the site to which the employee is sent, the experience of the employee who is dispatched to work at such site, the nature of the work he is required to do and the degree of control that the employer can reasonably exercise in the circumstances.


Taken from Career Times 11 May 2007

(Last review date: 23 August 2013)


Disclaimer: The opinions expressed in this article are those of the contributor

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