The foregoing summarises some of the major distinctions between employees and independent contractors under Hong Kong law.
In determining whether the person in question is an independent contractor or an employee, the Court will adopt the modern approach and examine all the features of the parties’ relationship against the background of the indicia of engagement.
The parties’ labeling of their relationship is not determinative, nor would it be considered the sole factor, which the Court takes into account. Hence, on top of stating the nature of the service relationship, it is important for parties to clearly define any employment/ contract of services relationship and delineate the scope of work and each party’s responsibilities and obligations from the outset, in order to ensure that the terms reflect the parties’ common intentions and that the terms are consistent with the service relationship stated. The parties should also remain cognisant of the engaged person’s scope of work throughout the service period, and regular checks and review should be in place to ensure the scope of work and service, remain consistent to the service relationship as stated in the contract. The parties who conduct themselves in a manner that properly reflects their true intention as to the nature of their relationship during the day-to-day management can also help to avoid any potential adverse consequences on re-characterization.