BRETON JEAN v. HK BELLAWINGS.JET LTD

CACV 101/2022

[2022] HKCA 1736

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 101 OF 2022

(ON APPEAL FROM DCCJ NO. 3612 OF 2017)

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R E A S O N S   F O R   J U D G M E N T
a n d
D E C I S I O N   O N   C O S T S

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Hon Chow JA (giving the Reasons for Judgment and Decision on Costs of the Court):

INTRODUCTION

1.  The principal issue for determination in this appeal is whether, upon the true construction of an employment contract between the Defendant (employer) and the Plaintiff (employee), the Plaintiff should be regarded as having a “day off” on those days that he was required to be on “standby” to report for duty within a “reasonable period of time”/“4 hours” upon being notified to do so but in the event was not called out to “work”.

2.  At the conclusion of the hearing of the appeal, we dismissed the Defendant’s appeal and reserved our decision on the issue of costs. These are our reasons for dismissing the appeal, and our decision on the issue of the costs of the appeal.

BASIC FACTS

3.  For the purpose of explaining our reasons for dismissing the appeal, the following brief summary of the background facts should suffice.

4.  The Defendant is a business jet management company, while the Plaintiff is a pilot.

5.  By a written agreement dated 13 July 2015 (“Employment Contract”), the Defendant employed the Plaintiff as Captain. The Plaintiff’s employment with the Defendant commenced on 12 July 2015. With effect from 17 December 2015, he was promoted to the position of Lead Captain of a Bombardier jet (“VPCEE”) registered with the Civil Aviation Authority of the Cayman Islands. On 31 December 2016, the Plaintiff was summarily dismissed by the Defendant.

6.  On 24 March 2017, the Plaintiff commenced proceedings in the Labour Tribunal (LBTC 1283/2017) against the Defendant to recover, inter alia, “rest day pay” during the period of his employment from 12 July 2015 to 31 December 2016. Those proceedings were subsequently transferred to the District Court.

7.  In brief, the Plaintiff claimed that:

(1)  Under the Employment Contract, he was entitled to be given “days off”, the details of which we shall return to later in this judgment.

(2)  During the time of his employment by the Defendant, except when he was on flight duty or annual leave, he would be placed on “standby duty” which required him to turn on his mobile phone provided by the Defendant so that the Defendant could reach him and give him instructions to report for duty on short notice.

(3)  The Plaintiff should not be regarded as having a “day off” on those days that he was placed on such standby duty by the Defendant.

(4)  During the period of his employment by the Defendant, he was entitled to, but was not given, a total of 135 “days off” (43 days during the period from 12 July 2015 to 31 December 2015, and 92 days during the period from 1 January 2016 to 31 December 2016).

(5)  Accordingly, the Plaintiff commenced the action to recover damages for the Defendant’s breach of the Employment Contract in respect of the 135 days of unpaid and untaken “rest days”.

8.  The Defendant raised two principal grounds of defence to the Plaintiff’s claim:

(1)  There was a mutual “understanding” between the Plaintiff and the Defendant that the Plaintiff would be considered or treated as having a “day off whenever he was not flying, whether he was at home base or at another location”, even though he was required to be accessible by phone and report for duty on short notice being given by the Defendant[1].

(2)  Upon the true construction of the Employment Contract, the Plaintiff should not be regarded as being on “standby duty” merely because he was required to be accessible on his work phone unless he was actually contacted by the Defendant to perform work for the Defendant.

THE EMPLOYMENT CONTRACT

9.  The Employment Contract was contained in a letter from the Defendant to the Plaintiff dated 13 July 2015 and signed by both parties (“the Employment Letter”). It provides, inter alia, as follows:

“1 Employment Position

The position being offered by the Company is CAPTAIN based in Hong Kong Special Administrative Region.

3 Duration

Your employment shall commence on 12 July 2015 under a continuous contract, subject to your eligibility to work as an Employee in Hong Kong …

6 Working Hours

You have no regular working hours and will be required to work on demand, which is at all times subject to amendment on reasonable notice by the Company. You will be required by the Company or Aircraft Owner to perform standby duty where the Company considers that to be necessary.

If you are designated to standby duty, you will be on call and accessible by pager and/or phone. You shall answer paging or phone calls within 1 hour of receipt of the page or the call and perform the necessary flying duties within a reasonable period of time.

11 Annual Leave

You will be entitled to forty-two (42) days paid annual leave, including public holidays ...

The Company leave year commences from 1^st January. Annual leave not taken in the previous year, not more than seven (7) days can be carried over to the subsequent year until 31^st March. Subject always to the Employment Ordinance, and seven (7) days of leave not so taken will be forfeited.

14 Other Terms and Conditions

Additional rules, regulations, rights, benefits or protection from time to time promulgated under the prevailing Company’s policies also form part of this contract. In the event of discrepancy between these rules, regulations, rights, benefits and protection and the terms and conditions stipulated in this letter, the latter shall prevail.

24 Law and jurisdiction

This contract shall be governed by and construed in all respects in accordance with the laws of Hong Kong and the parties hereby submit to the exclusive jurisdiction of the Courts of the Hong Kong in connection herewith.”

10.  It is common ground that the Defendant’s “Operation Manual - Part A” (“OMA”) was incorporated as part of the Employment Contract pursuant to Clause 14 of the Employment Letter. There are two relevant versions of the OMA, namely, (i) “OMA Rev 1”, and (ii) “OMA Rev 2”, which came into effect on 19 February 2016. Only a portion of OMA Rev 1 (Chapter 14) was produced as an exhibit at the trial, and included in the appeal bundles. Save as expressly indicated below, we shall proceed on the basis that the corresponding provisions of OMA Rev 1 and OMA Rev 2 are materially the same.

11.  Chapter 7 of OMA Rev 2 is titled “Flight Time Limitation”. The following provisions in Chapter 7 are relevant for the purpose of the present appeal:

(1)  Paragraph 7.2 defines -

(a)  “Duty and Duty Period” to mean -

“Any continuous period during which a crew member is required to carry out any task associated with the business of [the Defendant]. It includes any Flight Duty Period, Positioning, Ground Training, Ground Duties and Standby”.

(b)  “Day Off” to mean -

“A single day off is a period of 24 hours starting at 0001 local time. A rest period may be included as part of a day off”.

(c)  “Rest” to mean -

“The word rest shall be taken as meaning repose or sleep”

(d)  “Rest Period” to mean -

“A period of time before starting a [Flight Duty Period] which is designed to give crew members adequate opportunity to rest before a flight.”

(2)  Paragraph 7.3.1 provides that -

“Duty Period (DP)

Any continuous period during which a crew member is required to carry out any task associated with the business of the company. It includes any flight duty period, positioning, ground training, ground duties and standby”.

(3) Paragraph 7.8 of OMA Rev 2[2] states as follows -

“Days Off

Crew Members shall:

· Not work more than 7 consecutive days before being given a day off;

· Have at least 3 days off in any consecutive 14 days, of which at least 2 days must be consecutive;

· Have a minimum of 8 days off in any consecutive 28 days.

All crew members shall have a minimum of 24 hours rest following a return trip involving long-range operations.”

12.  Also of relevance are Paragraph 14.7 of Chapter 14 of OMA Rev 1 and Paragraph 14.8 of Chapter 14 of OMA Rev 2. Chapter 14 of OMA is titled “Crew Rules and Regulations”.

(1)  Paragraph 14.7 of OMA Rev 1 states as follows -

“Conduct of Crew Out of Base

Company Mobile phones is assigned to every crew member with a company mobile phone.

All Crewmembers are required to be contactable by phone unless they are on scheduled annual leave or a DDO [Domestic Days Off], and must return any company phone call during the standby period within 1 hour and be ready to perform necessary duties within a reasonable period of time (determined at the time of duty assignment).”

(2)  Paragraph 14.8 of OMA Rev 2 states as follows -

“Conduct of Crew

Every crew member is issued with a company mobile phone. All crew members are required to be contactable on their company phones unless they are on scheduled annual leave or resting, and must report for duty within 4 hours.”

THE JUDGMENT

13.  The Plaintiff’s claim for unpaid and untaken rest days was tried by Deputy District Judge Jonathan Wong (as he then was) on 18-20 November 2019. In his Judgment dated 22 January 2021 (“the Judgment”), the Judge also dealt with other issues, including the Plaintiff’s claim for 2 months’ pay in lieu of notice, and whether the Defendant was entitled to summarily dismiss him on 31 December 2016. It is unnecessary to say anything further about the Judge’s findings on those issues, because they fall outside the scope of the present appeal.

14.  The Judge upheld the Plaintiff’s claim for unpaid and untaken rest days. In coming to his conclusion in favour of the Plaintiff, the Judge:

(1)  found against the Defendant, on the facts, in respect of the defence of mutual “understanding” referred to in §8(1) above; and

(2)  held that, upon the true construction of the Employment Contract, the Plaintiff, on those days that he was required to be on “standby” to report for work on short notice, should not be regarded as having a “rest day” or “day off”.

THE PRESENT APPEAL

15.  The Defendant was not satisfied with the Judge’s decision to uphold the Plaintiff’s claim for unpaid and untaken rests days, and issued a summons on 19 February 2021 seeking leave to appeal. On 25 February 2022, the Judge granted the Defendant leave to appeal.

16.  Three grounds of appeal are raised in the Defendant’s Notice of Appeal dated 3 March 2022, as follows:

(1)  The Judge erred in adopting the notion and related principles of “rest day” under s 2 of the Employment Ordinance (Cap 57) when the Plaintiff’s pleaded claim against the Defendant for its failure to provide him with “days off” placed no reliance upon any breach of the Employment Ordinance at all (“Ground 1”).

(2)  Further or alternatively, the Judge failed to properly construe the meanings of “days off” and “standby” within the context of Chapter 7 of OMA Rev 2, and thus erred in concluding that the Plaintiff was not provided with “days off” as per Paragraph 7.8 of OMA Rev 2 (“Ground 2”).

(3)  By reason of the aforesaid, the Judge erred in finding the Defendant liable for the Plaintiff’s “day off” pay claim, and hence erred in awarding damages to the Plaintiff, when the Plaintiff did not prove on the balance of probabilities that he had not been given “days off” by the Defendant (“Ground 3”).

GROUND 2 - TRUE CONSTRUCTION OF THE EMPLOYMENT CONTRACT

17.  We shall first deal with Ground 2, which raises a short point of construction of contract, and is dispositive of the present appeal.

18.  In our view, it is clear, upon the true construction of the Employment Contract, that the Plaintiff, on those days that he was required to be on standby to report for duty on short notice given by the Defendant, should not be regarded as having a “day off”, regardless of whether he was actually called upon by the Defendant to report for duty or perform work for the Defendant, for the following reasons:

(1)  Under Clause 6 of the Employment Letter, the Plaintiff did not have regular working hours, and was required to perform standby duty when the Defendant considered that to be necessary. Further, when the Plaintiff was designated to standby duty, he was required to be on call and accessible by pager or phone, and to answer paging or phone calls from the Defendant within 1 hour of receipt of the page or call, and perform necessary flying duties within a “reasonable period of time” (which was specified to mean “4 hours” in OMA Rev 2).

(2)  On those days that the Plaintiff was required to be on such standby, he was designated to “standby duty” within the meaning of Clause 6 of the Employment Letter.

(3)  By virtue of Paragraph 7.3.1 of OMA Rev 2 and/or the definition of “Duty and Duty Period” in Paragraph 7.2 thereof, any period of time that the Plaintiff was designated to standby duty would constitute a “Duty Period”, and the Plaintiff would be regarded as being on “Duty” during such period.

(4)  Although there is a definition of “Day Off” in Paragraph 7.2 of OMA Rev 2, that definition only explains how a “Day Off” should be reckoned (namely, a period of 24 hours starting at 0001 local time), but does not explain what constitutes a “Day Off”.

(5)  As a matter of ordinary language, a person should be not regarded as being on a “day off” if he is on “duty”, and vice versa.

(6)  Paragraph 14.7 of OMA Rev 1 and Paragraph 14.8 of OMA Rev 2 also make it clear that a crew member in the employ of the Defendant is required to be on standby/standby duty unless he is on “domestic day off”/“resting” or on “scheduled annual leave”.

(7)  The above construction of the expression “day off” in the Employment Contract to exclude those days that the Plaintiff was placed on standby duty is consistent with, and reinforced by, the concept of “rest day” in the Employment Ordinance, which is defined to mean “a continuous period of not less than 24 hours during which an employee is entitled … to abstain from working for his employee”. In Leung Ka Lau v Hospital Authority (2009) HKCFAR 924, the Court of Final Appeal held that where a doctor in the employ of the Hospital Authority was on-call on a particular day (which meant that he had to remain within 30 minutes of the hospital, could not drink alcohol, had to remain mentally ready to respond to calls for his services, and was not entitled to abstain from working for the Hospital Authority), that day could not, by its nature, be a “rest day” within the meaning of s 2 of the Employment Ordinance. Similarly, on any day that the Plaintiff was placed on standby duty, he had to answer the Defendant’s call within 1 hour, could not drink alcohol[3], had to remain mentally ready to report for flying duties within a short period of time, and was not entitled to abstain from working for the Defendant, and thus that day could not constitute a “rest day” within the meaning of the Employment Ordinance. We shall further consider the relevance of the concept of “rest day” in the Employment Ordinance to the Employment Contract under Ground 1 below.

19.  Having reached the above conclusion, it is unnecessary for us to consider the definition of “Day Off” in the “Avoidance of Fatigue in Aircrews CAD 371 (2^nd Edition)” guideline published by the Hong Kong Civil Aviation Department which, as pointed out by Mr Benny Lo, only applies to aircraft registered in Hong Kong, but not the VPCEE which is registered in the Cayman Islands.

20.  On behalf of the Defendant, Mr Lo advances two arguments in support of the proposition that “a day on which P was required to be contactable by his phone (and to report on duty within 4 hours) but not actually called out to work should be regarded as a ‘day off’ under OMA Rev 2 §7.8”[4].

21.  First, Mr Lo argues that: (i) although Paragraph 7.8 of OMA Rev 2 is silent on the meaning of the term “day off”, it explicitly draws a distinction between the notions of “work” and “day off”; (ii) where an employee is to be contactable during a standby or on-call period but is not required to be at a place designated by the employer, only the time that he is called upon to provide service is to be regarded as “working”[5], and (iii) thus, if the Plaintiff was merely on standby on any day without being called out to do any actual work, he did not actually “work” and had a “day off” on that day[6]. This argument plainly has no substance. Paragraph 7.8 of OMA Rev 2 is concerned with the question of when a crew member is entitled to a day off or consecutive days off, and the minimum number of days off to which a crew member is entitled within a specified period. It is not concerned with the question of what constitutes a day off. There is thus no basis to import the requirement of absence of “work” (or “actual work”) into the concept of “day off”.

22.  Second, Mr Lo argues that the essence of the concept of “Duty and Duty Period”, as that expression is defined in Paragraph 7.2 of OMA Rev 2, lies in the carrying out of actual task(s) by a crew member. It was only when the Plaintiff was actually called out to work for the Defendant on any standby day that he was not given a “day off”[7]. This argument likewise has no validity. As mentioned above, the expression “Duty and Duty Period” is defined in Paragraph 7.2 of OMA Rev 2 to mean -

“Any continuous period during which a crew member is required to carry out any task associated with the business of [the Defendant]. It includes any Flight Duty Period, Positioning, Ground Training, Ground Duties and Standby.”

Mr Lo’s argument focuses upon the words “carry out any tasks” in the first sentence of the definition, but fails to have regard to the second sentence, which expressly includes “Standby” within the definition of “Duty and Duty Period”. In other words, a crew member who is placed on standby is regarded as being on “Duty”, and the period of time that he is on standby is treated as a “Duty Period”.

GROUND 1 - RELEVANCE OF THE CONCEPT OF “REST DAY” IN THE EMPLOYMENT ORDINANCE

23.  Under this ground, Mr Lo argues that the Judge was wrong to allow the Plaintiff to rely on the notion of “rest day” in the Employment Ordinance to construe the expression “day off” (and proceeding to adopt the same himself in the Judgment), when this did not form part of the Plaintiff’s pleaded case[8]. Mr Lo further argues that the Judge erred by adopting the notion of “rest day” under the Employment Ordinance as the meaning of “day off”, when the notion of “rest day” in the Employment Ordinance and the notion of “day off” under Chapter 7 of OMA Rev 2 are “two different and separate schemes with different provenance and minimum entitlement”[9].

24.  Neither argument of Mr Lo has merits. In respect of the pleading point, as observed by the Judge at §22 of the Judgment, the Defendant’s own pleaded case did not draw any distinction between “rest day” and “day off”[10]. There was nothing unfair to allow the Plaintiff to rely on the concept of “rest day” in such circumstances[11]. In any event, the proper construction of the expression “day off” in the Employment Contract is a question of law. Whether the concept of “rest day” in the Employment Ordinance is relevant to the true construction of the Employment Contract is a matter for argument, not a matter of pleadings. We see no reason why the Plaintiff could not rely on the notion of “rest day” in the Employment Ordinance in aid of his argument concerning the proper construction of “day off” in the Employment Contract.

25.  In respect of the substantive point concerning the relevance of the concept of “rest day”, Clause 24 of the Employment Letter expressly provides that the contract shall be governed by and construed in all respects in accordance with the laws of Hong Kong. Clause 11, relating to “Annual Leave”, also expressly refers to the Employment Ordinance. It is clear that the provision of “days off” in the Employment Contract is to give crew members an opportunity for adequate rest so that they would be able to properly discharge their flight duties. The concepts of “day off” and “rest day” are, in our view, obviously related. While the expression “day off” in the Employment Contract does not necessarily have to bear the same meaning as “rest day” in the Employment Ordinance, the meaning of “rest day” in the Employment Ordinance is clearly relevant to the proper meaning that should be given to “day off” in the Employment Contract. In the absence of any clear indication to the contrary, there is, we believe, much to be said for taking the view that the parties intended the two concepts to bear the same meaning to ensure consistency and coherence of their rights and obligations under the Employment Contract and Employment Ordinance. As we read the Judgment, the Judge did not simply apply the statutory definition of “rest day” in the Employment Ordinance to construe the expression “day off” in the Employment Contract. He also took into account other provisions of the Employment Contract as well as the factual matrix[12] in the construction exercise. In our view, the Judge was correct to rely on the statutory definition of “rest day” in the Employment Ordinance as an aid to the proper construction of the expression “day off” in the Employment Contract.

GROUND 3

26.  Mr Lo accepts that the validity of Ground 3 is dependent on Grounds 1 and 2. Since we have rejected Grounds 1 and 2, it is not necessary to consider Ground 3 separately.

DISPOSITION

27.  For the above reasons, the Defendant’s appeal is dismissed. We see no reason why costs should not follow the event, save that we agree with Mr Lo that the Plaintiff should not be entitled to recover any part of his costs incurred in relation to the Respondent’s Notice, because the Respondent’s Notice does not contend (i) that the Judgment should be varied, either in any event or in the event of the appeal being allowed in whole or in part, or (ii) that the Judgment should be affirmed on grounds other than those relied on by the Judge, or (iii) by way of cross-appeal, that the Judgment was wrong in whole or in part, under Order 59, rule 6(1) of the Rules of the High Court (Cap 4A). The Respondent’s Notice is, in substance, another set of the Plaintiff’s skeleton argument to resist the appeal. It is, in our view, a misuse of the procedure for the Plaintiff to put in skeleton submissions under the guise of a respondent’s notice. Accordingly, we make an order that the Defendant shall pay the Plaintiff’s costs incurred in resisting the appeal, to be taxed if not agreed, save that no costs in connection with or arising out of the Respondent’s Notice shall be allowed on taxation of the Plaintiff’s costs.