SHUM YAU SANG t/a CHEONG HING BRASSIERES PAD FACTORY v. WOO WAI LEUNG

DCCJ 540/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 540 OF 2005

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DCCJ 771/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 771 OF 2005

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(Actions consolidated by the Order of Registrar Yu dated 11 March 2005)

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JUDGMENT

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1. The Plaintiff claims against the Defendant, a merchandiser, for damages as a result of the Defendant’s failure to comply with the instructions from its manager Mr. Shum for not obtaining authorization from him prior to issuing 3 purchase orders i.e. P.O. 23026W, 23035W and 23046W.  The Defendant was summarily dismissed by Shum on 11 December 2004.

2. The Defendant claims against the Plaintiff for wrongful dismissal.

3. Those 3 purchase orders were orders to the Plaintiff’s suppliers New Horizon & Sun Tak for accessories or component parts of undergarments ordered by the Plaintiff’s client Kappahl. 

4. Shum had given instructions to the Defendant not to issue any purchase orders without first obtaining his approval and signature.  The reason was to prevent incorrect or unnecessary orders being placed and if the materials turned out to be wrong and could not be used the Plaintiff would suffer loss. 

5. The purchase orders issued by the Defendant contained specifications not yet approved by Kappahl and the materials ordered by the Defendant were rejected and the Plaintiff suffered loss.  The mistakes were discovered later after the Defendant left the Plaintiff company.  Shum had immediately contacted the suppliers to stop the orders.  The Plaintiff was only able to stop the dyeing works on materials to be supplied by New Horizon.

The Plaintiff’s Evidence

6. Shum gave evidence to the effect that the Defendant was responsible for handling and processing customers orders and arrange for purchase of materials from the Plaintiff’s suppliers and co-ordinate the manufacturing process.  The Defendant was specifically instructed to inform Shum and seek his prior approval and signature before issuing purchase orders.  The Defendant had complied with Shum’s order until November 2004.

7. On 5 December 2004 Shum by e-mail sent to the Defendant a warning concerning his unacceptable job attitude.  This was because on 4 December 2004 Shum ordered the Defendant to complete certain purchase orders on that date on an urgent basis so that Shum could check the same on 5^th or 6^th December however the Defendant failed to perform and complete his instructions.

8. Given the seriousness of the Defendant’s conduct in relation to the 3 purchase orders complied with other instances of misconduct in relation to other purchase orders the Defendant issued earlier without Shum’s approval and the antagonistic attitude in the Defendant’s e-mail reply to Shum’s warning e-mail there was ample justification for summary dismissal.

The Defendant’s Evidence

9.  The Defendant agreed that he had to seek Shum’s approval and signature before he could send out the purchase orders.

10. His working relationship with Shum was harmonious until October 2004 when one of his colleagues Frankie Lo resigned.  He was told by Shum to follow up the works left by Lo.  As Lo left his work in complete mess he was not able to follow up.  Shum was unimpressed.  Shum tried to follow up himself but was unable to do so.

11. On 4 December 2004, a Saturday, at about 12 noon Shum handed him a pile of papers and commanded him to prepare all the Purchase Orders including Pos Nos. 23035W, 23046W and 23026W the same day.  He had arranged to go to China at 2 p.m. that day to visit his grandchild but because of Shum’s order he stayed on to work.  As the details and information Shum gave was insufficient he was unable to complete all the purchaser orders on that day.  He left at about 4.15 p.m. and left everything in the computer.

12. He was surprised to receive the e-mail sent by Shum on 5 December 2004.  He was upset and replied the e-mail on 6 December 2004.

13. He then tried to explain about the 3 purchase orders in question but then as it turned out in cross-examination he did not obtain Shum’s approval and signature before he sent out these purchase orders.

14. On or about 11 December 2004 they had an argument about the “lap-dip” of lace sent to Kappahl for approval, the conversation turned into a quarrel and Shum lashed out and ordered him to disappear immediately.

Damages under the 3 Purchase Orders

15. On the Defendant’s own admission he had to seek Shum’s approval and signature on the purchase orders before the purchase orders could be sent out.  Although those 3 purchase orders were prepared in a hurry, the informations supplied by Shum were insufficient, all the more the Defendant should consult Shum for clarification and information.  Instead the Defendant sent out those 3 purchase orders without Shum’s approval.  As a result the goods purchased were useless.  The Plaintiff had therefore suffered loss.

16. There is no evidence that the Plaintiff had suffered loss in respect of Purchase Order No. 23035W.  However there is evidence that the Plaintiff suffered a loss of $6,610.50 and $37,969.64 on Purchase Orders Nos. 23026W and 23046W.

17. In the premises the Defendant is liable to the Plaintiff in the sum of $44,580.14.

Was the instant dismissal justified

18. Shum gave evidence in an arrogant manner.  He said there was no fixed working hours for merchandisers.  With respect that does not mean he has to be on duty 24 hours a day.  No doubt as a merchandiser he might have to canvass for business after officer hours, however the Defendant had a legitimate expectation that he would work during office hours.  In the absence of prior notice there was no reason why he could not arrange to go to China with his wife in the afternoon on a Saturday.  Shum without prior notice asked him to deal with a lot of purchase orders without sufficient information or details.  The Defendant swallowed such unreasonable demand and worked until 4.30 p.m. on a Saturday.  The only thing he did wrong was to store what he did in his computer instead of printing them out and placed them on Shum’s desk before he left.  The warning e-mail was unjustified and there was every reason for the Defendant to be upset.

19. Even Shum in his statement said that until November 2004 “the Defendant did show the compliance with such procedure” and it was only later that he found out about the breach of the procedure for issuing those 3 purchase orders.

20. Because of the reply by the Defendant to Shum’s e-mail， in less than a week the Defendant was told by Shum to disappear immediately.  In my judgment the Defendant had been dismissed without sufficient notice and wrongful.

Damages for wrongful dismissal

21. The Defendant was employed at a monthly salary of $16,000 and an additional $16,000 bonus at the end of each year on pro rata basis.  The other terms and conditions follow the provisions of the Employment Ordinance.

22. The Plaintiff agreed that should I find the dismissal wrongful the Defendant is entitled to the following:-

(i)	Wage in lien of notice	$16,000.00
(ii)	Arrears of wages
	1.12.04 to 11.12.04	$5,161.29
(iii)	Annual leave pay	$2,280.91
(iv)	Pro rata bonus
	3.5.04 to 11.12.04	$9,748.63
	Total	$33,190.83

23. For reasons above since these are 2 actions consolidated in respect of the Plaintiff’s claim:-

Judgment for the Plaintiff in the sum of $44,580.14 with interests at 1% above prime p.a. from date of writ to judgment.

24. In respect of the Defendant’s claim:-

Judgment for the Defendant in the sum of $33,190.83 with interests at 1% above prime p.a. from date of writ to judgment.

25. Order nisi:-

(i)	(a) Costs to the Plaintiff in respect of the Plaintiff’s action.  Certificate for Counsel.
	(b) Defendant’s own costs to be taxed in accordance with Legal Aid Regulations.
(ii)	(a) Costs to the Defendant in respect of the Defendant’s action.
	(b) Defendant’s own costs to be taxed in accordance with Legal Aid regulations.