MAK LYTHRUM v. WINDSOR JOAILLIERS LTD

[English Translation – 英譯本]

HCLA 8/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 8 OF 2007

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 2445 OF 2006)

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BETWEEN

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JUDGMENT

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Background

1. The Claimant was employed by the Defendant company as an executive assistant. On 30 December 2005, the Claimant tendered resignation, thereby terminating the employment relationship between the parties. The Claimant subsequently commenced proceedings in the Labour Tribunal, claiming against the Defendant a sum of HK$12,000 being payment in lieu of notice. After hearing, the Presiding Officer allowed the claim. The Defendant applied for review of the decision, and the Presiding Officer dismissed the application.

2. The Defendant now appeals.

Grounds of appeal

3. The two stated grounds of appeal are:

(1)     The finding of fact made by the Presiding Officer that the Claimant did not voluntarily resign is wrong because he failed to consider or determine whether the Appellant had sufficient grounds for immediately terminating the employment contract pursuant to section 9(1) of the Employment Ordinance. There was therefore insufficient evidential basis for the Presiding Officer’s finding of fact.

(2)     The Presiding Officer failed to conduct thorough investigation of the case in accordance with section 20(3) of the Labour Tribunal Ordinance, in that he failed to investigate whether the Appellant had sufficient grounds for immediately terminating the employment contract.

Discussion

4. In my view, whether the Claimant is entitled to payment in lieu of notice must depend on the answers to the following questions:

(1)   Was she dismissed by the Defendant?

(2)   If Yes, did the Defendant have sufficient grounds for dismissing her summarily in accordance with section 9(1) of the Employment Ordinance?

5. On the first question, the crucial issue is whether the Claimant voluntarily resigned or was constructively dismissed.

6. The Claimant’s evidence runs as follows: at about 10 a.m. on 30 December 2005, Ms Yau Kin Yan, an assistant manager at the Defendant company, told the Claimant that the boss was not satisfied with her performance at work and asked her to leave the company on the same day. She asked Ms Yau how the company would deal with the matter if she did not want to resign. Ms Yau replied that the company would then dismiss her and would neither pay to her the balance of annual leave pay nor give her any reference letter. After consideration, the Claimant decided to submit a resignation letter. Subsequently, Ms Yau gave her the salary for the month of December and a reference letter.

7. The Defendant did not call any witness but agreed that the above conversation had taken place between the Claimant and Ms Yau. The Defendant’s representative submitted to the Presiding Officer that, as the Claimant was frequently late for work, the Defendant had issued oral and written warnings to her, and that the Defendant was entitled to terminate the employment contract with the Claimant immediately pursuant to section 9(1) of the Employment Ordinance without having to give her any payment in lieu of notice.

8. In paragraph 9 of the Reasons for Decision, the Presiding Officer said:

I have considered the Claimant’s evidence. On 30 December 2005, Ms Yau of the Defendant company notified the Claimant that the boss of the company was not satisfied with the Claimant’s performance at work and asked her to leave the company on the same day. If she did not resign, the Defendant would dismiss her. In this situation, the Claimant was left with no choice whatsoever. She decided to submit a resignation letter in exchange for annual leave pay and a reference letter. This decision was reluctantly made and cannot be taken to mean that the Claimant voluntarily resigned. In my judgment, the Claimant was not the party who purported to terminate the employment contract. She was dismissed by the Defendant.

9. Ms Lam, Counsel for the Defendant, submits that, in determining whether the Claimant resigned voluntarily or under duress, the Presiding Officer should have considered an important factor of causation, namely whether there were sufficient reason for the Defendant to rely on section 9(1) of the Employment Ordinance to terminate the employment contract immediately, but he had failed to do so.

10. In my judgment, whether the Claimant resigned voluntarily or was constructively dismissed is not to be determined solely by reference to the wording of the relevant documents or the means by which the parties purported to terminate the employment contract. Rather, the court or tribunal has to decide which party in fact terminated the contract: see paragraph 8 of the Judgment of Cheung J on 22 August 2005 in the case of Wong Hiu Chau v The Salvation Army Hong Kong and Macau Command, HCLA 27/2005.

11. When an employer notifies an employee that there are sufficient grounds for summarily dismissing the employee pursuant to section 9(1) of the Employment Ordinance but then gives the employee an option to resign voluntarily, one of the following scenarios may ensue:

(1)   The employee accepts what the employer says and resigns voluntarily.

(2)   The employee accepts what the employer says but refuses to resign voluntarily, and is then dismissed by the employer.

(3)   The employee does not accept what the employer says but, after negotiating with the employer, agrees to resign voluntarily.

(4)   The employee does not accept what the employer says but, in the absence of alternatives, is forced to resign.

(5)   The employee does not accept what the employer says and refuses to resign voluntarily, and is then dismissed by the employer.

12. In scenarios (1) and (3), the employee resigns voluntarily and no question of constructive dismissal arises.

13. In scenario (4), the employee prima facie resigns voluntarily but is in effect dismissed by the employer. In other words, he is being constructively dismissed.

14. In scenarios (2) and (5), the employee is indeed dismissed by the employer, but this does not constitute constructive dismissal.

15. On the above analysis, in determining whether an employee has resigned voluntarily or has been constructively dismissed, the key issue is how he considered the employer’s allegation and what decision he then made; and an important factor is, when the employee made such consideration and decision, whether the employer did have sufficient grounds for summarily dismissing him. This being the case, the Presiding Officer should have properly investigated whether the Defendant had sufficient grounds for summarily dismissing the Claimant before concluding whether the Claimant was forced to resign.

16. Furthermore, even if the Claimant has been constructively dismissed, this does not necessarily mean she can recover payment in lieu of notice. As stated in paragraph 4, this depends on whether the Defendant had sufficient grounds for relying on section 9(1) of the Employment Ordinance to dismiss her summarily; if the answer is in the affirmative, she is not entitled to payment in lieu of notice. It follows that, even if the Claimant was forced to resign, the Presiding Officer should have investigated whether the Defendant had sufficient grounds for relying on section 9(1) of the Employment Ordinance to dismiss her summarily before allowing her claim.

17. For the above reasons, the Presiding Officer’s decision cannot be sustained.

Conclusion

18. I order that the appeal be allowed, that the case be remitted to the Labour Tribunal for re-hearing before another Presiding Officer, and that costs be in the cause of the re-hearing, which means that the party in whose favour judgment is given after the re-hearing will be awarded costs of the present appeal. Such costs are to be taxed if not agreed.