GARLITZ INVESTMENT LTD. v. HUI LAI PING

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APPEAL NO.79 OF 1996

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J U D G M E N T

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1. This is an appeal from a decision of the Labour Tribunal where the appellant was ordered to pay to the respondent one month's wage in lieu of notice of termination, long service pay, food allowance, interest and costs.

Background

2. The respondent, a lady sales supervisor, was an employee of the appellant which at all material times operates a number of high-end fashion outlets in the Landmark. She was first employed by the appellant in March 1982 and was dismissed by the appellant summarily on 13.6.1995.

3. In dismissing the respondent the appellant relied on a series of acts of the respondent which included her refusal to sign and acknowledge a letter transferring her to work in another shop in the Landmark; being late in reporting for work on three occasions; reading magazines whilst at work on two occasions and her generally unacceptable attitude towards her superiors. Those incidents occurred between 15 May to 6 June 1995 and three warning letters dated 20, 23 and 25 of May were issued to the respondent. On 13 June the respondent was dismissed summarily and thereafter the respondent commenced proceedings in the Labour Tribunal against the appellant for wrongful dismissal.

4. The learned Presiding Officer found as a fact that such incidents did take place and went on to find that none of the incidents relied upon by the appellant was in itself a sufficient ground for summary dismissal under s. 9 of the Employment Ordinance. In so finding he ordered the appellants to pay to the respondent one month's wage in lieu of notice of termination $17,100, long service pay of $153,425, food allowance of $400 and cost of $3,000.

The Grounds of Appeal

5. The appellant pursued this appeal on two grounds. The first is that the learned Presiding Officer was wrong in law in finding that the warning letter dated 20 May 1995 was a conditional condonation of the wrongful acts of the respondent and secondly he erred in failing to take into account of the respondent's acts on the 15 of May and to direct himself on the cumulative effect of the series of incidents on the part of the respondent between 15 May and 8 June.

6. If the appellant succeeds in this appeal the respondent would not be entitled to any claim for one month's wages in lieu of notice of termination under section 9 of the Ordinance nor would she be entitled to long service payment under section 31S.

The warning letter of 15.5.1993

7. On 15 May the appellant informed the respondent by letter that she would be transferred from the Claude Montana Shop in the Landmark to the Bazaar Boutique, another fashion outlet operated by the appellant in the same shopping mall. Under the new arrangement she was to work under a Miss Melissa Yuen as the assistant supervisor of the Bazaar shop and her terms and service conditions remain unchanged. One Mr. Tam, the administrator of the appellant together with a Miss Jenny Kwok went to the to deliver the letter of transfer to the respondent. After reading the letter of transfer the respondent threw into a rage and started to make degrading remarks against Kwok in front of staff members and customers. The end result of the disturbances was that security guards in the Landmark were summoned and the respondent made a report to the police. Upon investigation the police decided not to take any further action.

8. In the two days that followed the respondent failed to report for duty at the Bazaar shop. It was only on 18 May that the respondent reported for duty and she did not come on to the sales floor until after 11:05 although company regulations required that work should commence at 10 o'clock every morning.

9. Regarding the incident on the 15 May the Presiding Officer had this to say at page 7 of his judgment:

" The Defendant relied heavily on this incidence to support their right to dismiss the Claimant under Section 9 of the Employment Ordinance. Taking this incidence at the highest, the Claimant had refused to receive an order of the defendant. She admitted calling Defendant Company representative scum, which is a misconduct. However, as the Claimant had chosen not to leave, she must observe her duty as an employee. In that, while I appreciate the tension on her, and I would expect reaction, the abuse of Defendant Company representative, and her refusal to co-operate with DW1 are not proper conduct.

As a result she received a warning letter on her said conduct on 25/5/1995 which is a fair disciplinary action by the defendants. The warning must be interpreted as a conditional condonation of the act of the Claimant on 20/5/1995."

10. The Presiding Officer found the respondent's behaviour to be improper but the legal or factual basis upon which the Presiding Officer found that the warning letter was an act of conditional condonation on the respondent's behaviour was, however, not clear. In the last paragraph of the warning letter it was stated in no uncertain terms that:

" Your extremely poor attitude and appalling behaviour on May 15, 1995 were totally unacceptable by the top management. Your are reminded that the Company will not tolerate the kind of behaviour in the future. If you are found to breach the Company's rules and regulations, fail to perform your duties wilfully disobey a reasonable order, you will be subject to disciplinary action or summary dismissal."

11. The letter was strongly worded and it addressed the respondent to her misbehaviour.

12. There were two further similarly worded warning letters which were dated 23 and 25 May respectively. For reasons not apparent on the judgment, the Presiding Officer did not consider the two subsequent letters to be conditional condonation or waiver of the respondent's conduct complained by the appellant. The fact that he had treated the first letter as conditional condonation appears to me to be entirely arbitrary.

The cumulative effect of the Respondent's behaviour

13. The second ground of this appeal is that the Presiding Officer, in finding wrongful dismissal, had failed to take into consideration of the cumulative effect of the series of incidents that had taken place since 15 May. It is an accepted legal principle of law that an employer, in dismissing an employee under section 9, may either rely on a single incident or the cumulative effect of a series of incidents. The principle has been stated by Barnett J. in So ching t/a South Sea Company v. Kwan Hong Ching [1987] 2 HKC 297 in which the learned judge said:

" The conduct which is relied upon by an employer for dismissing an employee may be a single incident, such as one wilful refusal to obey lawful order, or it may be a series of incidents on the part of an employee. This is illustrated by Pepper v Webb to which I have just referred and which may well be 'termed the last straw case'. But that case is no more that followed a principle which was laid down almost a hundred years ago in Boston Deep Sea Fishing and Ice Co v. Ansell (1888) 39 CH D 339"

It is conceded by counsel for the respondent that the Tribunal Officer made no specific reference in his judgment that he had addressed himself the issue of the cumulative effect of the respondent's behaviour. In page 7 of his judgment he said:

" The claimant was dismissed by the Defendant on 13/6/96 (sic). Defendant company representative told me that there is no particular incident on 13/6/96 (sic) that called for a summary dismissal. I have to investigate all events raised by the parties between 16/5/95 to 13/6/95."

14. Having made this observation the Tribunal Officer proceeded to examine the incidents that had taken place since 16 May. It was perhaps understandable that no reference was made of the incident on 15 May since he had already found conditional condonation.

15. From the facts which were found by the Presiding Officer the objectionable conduct of the respondent can be grouped into three broad categories.

16. Firstly there were the incidents of being late for work on three consecutive days on 18, 19 and 20 May. The respondent resided in Tuen Mun. For her conduct she received two warning letters dated 23 and 25 May.

17. The 23 May warning letter was directed at the respondent's behaviour on 18 May when she was found to be late for 18 minutes in arriving at work and then spent an inordinate amount of time in putting on her make-up. On this occasion she was warned that if she did not improve her work attitude and comply with the Company's regulations, she will be subject to summary dismissal.

18. The 25 May warning letter refers to the respondent being late again for work on 19 and 20 May. She was warned that if she does not comply with the Company's rules and regulations, she may be dismissed instantly without further notice or warning.

19. The two letters were worded in such a way that there could be no room for any of them to be interpreted as waiver or condonation of any form. The learned Presiding Officer nevertheless made the following observations:

" I am prepared to take judicial notice of the very poor traffic condition from Tuen Mun to Hong Kong Island. When there is no other report of being late after 20/5/95, I found that the Claimant had in fact improved herself."

20. By this remark he seemed to suggest that those who live at Tuen Mun can be excused for being late in reporting to work. This simply defies logical reasoning.

21. The second group of misbehaviour were the incidents on 4 and 7 May when the respondent was found sitting down and read magazines during working hours. Such conduct was contrary to the instructions contained in a Circular No. PM/206/95 dated 3 April 1995 issued by the appellant to the sales staff. The circular reads:

" ...in no circumstances should they (staff) sit down to read even when no customers are in the boutique."

It appears that the Tribunal Officer had made a mistake when he considered the issue of reading magazines during working hours. He referred to circular No. PM/118/94 dated 14 February 1995 which had already been superseded by the April circular quoted above. Not realizing his mistake he went on to find that:

" (the February circular) provides that no sales staff should be sitting down when there are customers in the shops. While I also note that the instruction to Claimant attach to her transfer memo requested her not to sit down at any time, I do not consider sitting down occasionally should be a serious misconduct to justify summary dismissal. And from the evidence, only 2 to 3 occasions of sitting down to read fashion magazines has been substantiated."

22. His findings of fact on this issue was based on a misconception of the evidence before him.

23. The third area of complaint was the poor attitude of the respondent towards the management staff and her colleagues. The unchallenged evidence before the Tribunal was that during the period in question the respondent had adopted a generally obstructive and uncooperative attitude and at times refused to communicate with the management even after repeated requests. The Tribunal Officer failed to deal with this aspect of the evidence in his judgment all together.

24. In the last page of the judgment the Tribunal Officer commented that the letter of termination of 13 June has grouped all the complaints from 15 May onwards. In the judgment he embarked on an exercise to identify and scrutinize each incident and see if each alone could constitute a ground of summary dismissal at the end of which he satisfied himself by saying that there were none. In so doing he had failed to consider the culminative effect of the respondent's behaviour and had there misdirected himself on the issue of justifiable summary dismissal. This is an error of law.

Conclusion

25. It is urged upon me by counsel for the respondent that an appellate court should be show in disturbing the primary findings of fact of the trial court. In the present case, however, the Presiding Officer had arrived at his conclusions based on his erroneous approach of the evidence which I had identified above. What remains to be said is that had the Tribunal Officer considered the evidence before him in their proper perspective, including the events of 15 May, I am convinced that no reasonable tribunal of fact would have come to the conclusion as the Presiding Officer did in the present case.

26. For the reasons given I am allowing the appeal. The award of the Tribunal made in favour of the respondent is set aside.

27. I shall now hear the parties on costs.

(K.K. Pang)

Deputy Judge of the High Court