Legal Distinction between Temporary Contractor and Independent Contractor

[lionrock88]

Does anyone know what the legal distinction is between a Temporary Contractor and an Independent Contractor?

What I've heard so far is that a Temporary Contractor is in fact an employee and entitled to MPF, Paid Annual Leave, Sick Leave etc. as per the Hong Kong Employment Ordinance - but a "Contract for Services" is signed rather than a "Contract for Employment."

Whereas, an Independent Contractor is not an employee and is not entitled to any of the benefits.

If a company hires a Temporary Contractor, which is the required document? A "Contract for Employment" or a "Contract for Services"? If it is the latter, is it still possible to include statutory benefits as per the HK Employment Ordinance? Or would that make him essentially an employee in the view of the court?

Sorry a bit confused here and would appreciate any clarification from those in the know.

Thanks in advance.

[PDLM]

This document from the Labour Department may help.

[Zenon]

Hi - this is not legal advice but just a pointer - generally speaking the courts will be interested in what the actual relationship is, not what the parties choose to call it. For your purposes the important distinction is wheather the relataionship is one of employee/employer or principle/independent contractor.

When considering what a relationship is, one of employment or independent contractor, is a question of fact - but it will come down to wheather it can be truely said the contract is a "contract 'of' service" as opposed to a contract 'for' services.

Wheather the the relationship is called Temporary Contractor, Independent Contreactor, or Employment Contract or whatever is only one consideration. Courts will normally consider the following factors when determining wheather an individual is an employee or not: degree of control, balance of commerical risk (indemnities and the like), freedom to sub-contract, manner of payment (is it performence based or merly a salary type payment), wheather the contractor works for others etc.

I would not recommend paying anything to a genuine contractor that relates to any form of leave as this will merly point to the contractor actually being an employee. Perhaps as an alternative you could rase the other payments you were going to make to 'compensate' this if the individual is expecting such benefits (which they are not really entitled to as contractors). I would also insist, if you can, that the individual incorporate, as it is harder then for the individual to show that he or she was truley an employee as the contactual arrangement will be with the company and therefore the individual will have to show that that arrangement was a sham.

Lastly if you can afford it I would recommend you have your agreement checked by an employment lawyer to ensure that it does indeed ensure that the arranagement is what you think it is. It can be a costly mistake to get this wrong - i.e insurance, MPF, leave entitlements, severence payments blah blah.

Cheers
Zenon