‘The law can’t catch up:’ Hong Kong delivery riders chasing unpaid wages seek regulation of gig economy
Hong Kong Free Press
She launched a legal battle against her employer over months-long pay arrears totalling tens of thousands of dollars and won her case – but along with other delivery riders, is still waiting for payment.
“Everything we’ve done was so that we could get back the wages that the company owes us, but we might not even be able to do that,” said the rider, who asked to be identified only as Cousin when she outlined her plight to reporters.
Cousin was one of the six workers whom the Labour Tribunal ruled were employed by Zeek, a delivery platform ordered in May to pay outstanding arrears.
The tribunal’s ruling was seen as a test of whether delivery riders such as those working for Zeek are covered by existing labour legislation. Riders such as Cousin did not get contracts, or any other written employment agreements, only verbal ones.
The Riders’ Rights Concern Group, part of the Hong Kong Christian Industrial Committee with members from delivery platforms including Zeek, Deliveroo, and Foodpanda, has urged the government to regulate the digital platform economy and improve legal protections for its workers.
The concern group describes gig workers as “between employment and self-employment.” As such, they do not generally enjoy benefits such as wage protection, paid leave, or compensation for work injuries as provided by law.
The six Zeek workers sought to recover wage arrears ranging from HK$28,166 to HK$148,471, payment in lieu of notice ranging from HK$49,546 to HK$61,276, paid annual leave of HK$23,547 in the case of one claimant and paid statutory holidays worth HK$29,792 for another. Two of the six asked for HK$5,000 in legal costs.
But despite their legal victory, Cousin said they would have to claim arrears from a government fund after Zeek’s CEO Chiu Ka-ki told the Labour Tribunal the company had gone bankrupt.
Wages withheld
Cousin said she could count on earning HK$55,000-65,000 per month at Zeek as a “fixed-route driver” by making around 60 to 80 deliveries a day within a specified district. She would work both day and night shifts, meaning her workday could last up to 14 hours. That was before she quit in November after a year and three months at the company.
Established in 2017, the firm began rolling out delivery services in 2019, just months before the pandemic hit the city. Two years later, it was widely reported that the company had accumulated total funding of US$25 million (HK$195 million).
Zeek started delaying salary payments in mid-August last year, with delays lasting up to two months, according to Cousin. “The riders would think, ‘As long as we get our money eventually, it’s fine.’ But things got out of hand,” she said, adding that she was eventually owed HK$81,000 in wages from the period from October 2 to November 19 last year.
Cousin said the tribunal ruled that she was owed more than HK$195,000 in total, including salary and paid leave arrears, as well as payment in lieu of notice.
Other Zeek employees, including sales and customer service staff and warehouse workers, also had their wages withheld. Drivers ended up “selectively” striking in October, Cousin said, by only picking up certain deliveries or by working one shift per day.
They would then get calls from customer service staff reminding them to work, “but we’d just demand to get paid first,” Cousin said. In response to the strike, drivers from rival delivery companies were hired to make up for the lack of manpower at Zeek, Cousin added.
She first took her case to the Labour Department last December, just weeks before Zeek announced it had ceased operations citing “cash flow problems,” then launched her case against the company in January.
Former Zeek riders, some of whom say they are owed more than HK$100,000, initially gave up on filing claims, believing that they would be better off earning the money back instead of having to pay legal fees and spending time in court. “But when the ruling came out, they realised that they could actually file those claims,” Cousin said.
According to the concern group’s estimates, Zeek still had 2,000 warehouse workers and drivers in February and March. More than a hundred claims have been filed by Zeek employees, and the Labour Tribunal’s May ruling will be considered a “test case” for them, said Mak Tak-ching of the concern group.
What is an employee?
The tribunal’s ruling affirmed that Zeek employed the six and they were thus entitled to legal labour protections, according to a summary of the judgement issued last month by the concern group. The ruling referred to 11 factors listed in a 2007 Court of Final Appeal case that granted employee status to an air-conditioner repairman, making the employer liable to pay compensation.
One of those factors is the degree of control exerted by the employer, such as control over wages and penalties for failing to meet the company’s standards. In particular, Mak pointed to the company’s ability to monitor drivers via an app as a feature of working relationships under the digital platform economy.
The 11 factors listed in the Labour Tribunal’s judgement – Click to view.
- Whether the alleged employer had a degree of control over the alleged employee’s tasks commensurate to his capacity as the employer
- Whether the alleged employee provided his own equipment for the task
- Whether the alleged employee hired his own helpers for the task
- Whether the alleged employee took any financial risk and the nature/degree of it
- Whether the alleged employee had an opportunity to profit from sound management in the performance of his task
- Whether the alleged employee bore any responsibility for investment and management, and the nature/degree of it
- Whether the alleged employee was properly regarded as part of the alleged employer’s organisation
- Whether the alleged employer bore any responsibility in relation to insurance and tax for the alleged employee
- Whether the alleged employee was carrying on business in the trade in question
- What was the parties’ own view of their relationship
- Whether the traditional structure of the trade or profession concerned and the practices within it would assist with the understanding of their relationship.
Delivery apps typically have a built-in GPS tracker and riders who veer off their designated routes are warned. Another volunteer at the concern group who identified himself as Hing said he was fired by Deliveroo for making too many detours.
Drivers who broke the rules would be penalised by having their ratings and priority lowered. Furthermore, Hing added that riders’ orders could be halved if they were the subject of complaints. “In effect, that means your salary gets cut in half,” Hing said.
Asked whether there was a standard procedure for handling complaints at Zeek, Cousin said the company would investigate and check with riders, but the riders were not allowed to appeal against complaints.
Deliveroo and Foodpanda, unlike Zeek, provide personal accident insurance but riders say payouts are stingy. Hing told reporters he received HK$300 – the equivalent of 75 per cent of his usual salary – daily for six months after he broke eight ribs in a traffic accident while driving for Deliveroo in April 2020. Full employee status would have made him eligible for hundreds of thousands of dollars, Mak said.
Last July, riders petitioned Foodpanda to improve its insurance plan after a driver died in a crash on his way to work. The company said the policy only covered accidents when a worker was on shift.
Calls for regulation
“We’re tired: we’ve had to make time to go to court and see the [Labour Department] officers, to prepare documentation and proof. The whole process took a lot of time but in the end [Zeek CEO Chiu] didn’t even have to pay out of his own pocket,” Cousin told a press conference in June.
“We just feel so helpless. We won, but we’re not happy, because the employer didn’t get his comeuppance.”
Employees owed wages or other outstanding payments from insolvent companies can receive payment from the government’s Protection of Wages on Insolvency Fund.
“We had to apply to claim from the fund, which doesn’t allow you to claim the full sum,” Cousin said. According to the Labour Department, the payment for wage arrears is capped at HK$80,000. Claims for wages in lieu of notice are capped at HK$45,000, and pay for annual leave and untaken statutory holidays has a ceiling of HK$26,000.
Possible payments from the Protection of Wages on Insolvency Fund – Click to view
- Arrears of wages
- Wages owed to an applicant in respect of services rendered to their insolvent employer during the period of 4 months prior to the last day of service
- Outstanding payment of pay for annual leave taken, pay for statutory holidays taken, maternity leave pay, paternity leave pay and sickness allowance
- End of year payment
- Wages in lieu of notice
- Up to the equivalent of 1 month’s wages
- Pay for untaken annual leave and pay for untaken statutory holidays
- Pay for untaken annual leave payable to an employee upon termination of employment contract under the Employment Ordinance including:
- (a) pay for any annual leave earned in the employee’s last full leave year and not yet taken; and
- (b) pro rata annual leave pay for the last leave year where the employee has at least 3 but less than 12 months’ service entitled upon termination of employment contract
- Pay for statutory holidays entitled but not yet taken by an employee within 4 months before their last day of service
- Pay for untaken annual leave payable to an employee upon termination of employment contract under the Employment Ordinance including:
- Severance payment
The insolvency fund, which is financed by an annual levy of HK$150 on business registrations, only covers “wages owed to an applicant in respect of services rendered to his insolvent employer during the period of 4 months prior to the last day of service,” according to the Labour Department.
But the point at which gig workers cease to provide services can be ambiguous, said Mak. “When it comes to platform gigs, just because you’re not working doesn’t mean you’ve been let go. So you can see that the law can’t catch up with the platform economy,” he said, adding that what counts as a “service” is up for the Labour Department to decide.
“Under these new labour relationships, there should be new laws to cater to the rights of workers,” said Mak. “The technology is only going to improve, and when more and more people are depending on these platforms to make a living, shouldn’t the government and society at large adapt to these new systems?”
“Right now, it’s mostly just food delivery. But once more employers figure out that they can save money by operating in these legal grey areas, workers in more and more industries will lose protections,” Cousin added.
Winding up
A former office employee at Zeek who asked not to be named for fear of repercussions told HKFP the company had continued to receive payments from its clients – including IKEA, McDonalds, KFC, and HKTVMall – in February. He also said Zeek’s offices in Singapore, Malaysia, Thailand, Vietnam, and Taiwan were still operating smoothly.
| 💡HKFP grants anonymity to known sources under tightly controlled, limited circumstances defined in our Ethics Code. Among the reasons senior editors may approve the use of anonymity for sources are threats to safety, job security or fears of reprisals. |
Three companies were named in the Labour Tribunal’s case against Zeek: Kin Shun Information Technology (Hong Kong) Limited, Kin Shun Information Technology Limited, and Kin Shun Information Technology Management Limited.
A marketing agency called KAShow Limited, is listed alongside Kin Shun Information Technology Management Limited as the parties in a winding-up petition to be heard at the High Court next Wednesday, July 19. According to an annual return filed in January, Chiu is listed as a director of KAShow, in which another company founded by Chiu, UNIKI Group Limited, holds a 90 per cent stake.
According to the Labour Department, employees – as creditors – can petition the court to wind up the company.
HKFP has contacted Chiu and two of Zeek’s executive-level employees for comment. Former Chief Commercial Officer Eric Kong declined to comment, while former Chief Strategy Officer Vincent Fan said he had “limited knowledge” of Zeek’s operations. Chiu has not replied to inquiries.
Government funding
The government’s Innovation and Technology Venture Fund and the Hong Kong Science and Technology Parks Corporation – a government-backed statutory body – both contributed to Zeek’s US$10 million (HK$78 million) funding round in December 2020.
The Innovation and Technology Commission, which manages the venture fund, said it made a one-off payment of US$680,000 (HK$5.32 million) to Zeek at that time.
The commission said it has ordered Radiant Tech Ventures, which is responsible for recommending suitable investment targets, to follow up with Zeek’s management.
“The fund managers, in addition to looking after the investment from a business perspective, should also play a role in assisting the investees to grow and expand their business,” the commission said. Separately, the Labour Department has been studying measures to protect the rights of digital platform workers.
“The department is studying measures adopted by other economies to protect digital platform workers and commissioning the Census and Statistics Department to arrange a Thematic Household Survey to collect data on the working situation of workers,” a spokesperson told HKFP.
“We will continue to explore appropriate measures for enhancing the protection for platform workers.”
Kin Shun Information Technology Management Limited and its director, Zeek CEO Chiu, were prosecuted by the Labour Department in April and July this year for failing to pay employees. They were fined a total of HK$293,000, and ordered to pay an outstanding sum of more than HK$666,000.
The department said the ruling would send “a strong message to all employers, directors and responsible officers of companies” that they must pay wages within the time limit stipulated by law, along with other payments ordered by the Labour Tribunal or the Minor Employment Claims Adjudication Board.
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