FONG ANNE v. HONG KONG ADVENTIST HOSPITAL

HCLA 33/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 33 OF 2009

(On appeal from Labour Tribunal Claim No. LBTC 2991 of 2008)

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J U D G M E N T

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INTRODUCTION

Introduction

1.  This is an appeal by the Defendant (the “Hospital”) against the Presiding Officer’s award made on 16 September 2009 entering judgment in favour of the Claimant (“Anne”) against the Hospital in the amount of $431,630.03 in respect of annual leave pay, holiday pay, sickness allowance and severance payment. 

2.  Anne had been employed by the Hospital since 3 August 1982 as a dental hygienist.  The parties had not entered into a written contract.  On 25 May 1998, by a written notice the Hospital terminated Anne’s employment with effect from 1 September 1998.  On 4 August 1998, Dr Erlandson who was the dental department manager of the Hospital entered into a written contract of employment effective from 1 July 1998 with Anne.  That apart, there was no change in the nature of Anne’s employment and she continued working in the Hospital.  That arrangement was made because the parties believed that hygienists could only be lawfully employed by registered dentists and not by hospitals pursuant to the Ancillary Dental Workers (Dental Hygienists) Regulations, Cap 156.

3.  Anne’s employment with the Hospital was regularised in 2000 when the Hospital entered into written contracts with her.  The first such written contract was entered into on 31 March 2000 for a term of two and half months ending on 15 June 2000.  Clause 4.5 of that contract was an exclusive service provision.  It provided as follows:

“The Hygienist shall not, without the prior written consent of the President of the Hospital, during the term of this Agreement, directly or indirectly provide any Services to any other person, company, business entity or organization other than those Patients assigned to her by the Hospital.” 

Since then, Anne was paid a percentage of her gross production.  Thereafter, the contract was renewed on similar terms except that the restriction under clause 4.5 of the first contract no longer featured.  Initially those contracts were renewed on a yearly term until 16 May 2006, after which on six-monthly term.  The last one was renewed on 12 November 2007 for a term of six months until 20 June 2008.  During the currency of her last contract, Anne was paid 44% of the fees actually received by the Hospital from patients less collection charges and the equivalent amount of contribution paid by the Hospital pursuant to the Mandatory Provident Fund Scheme Ordinance, Cap 485.

4.  On 31 January 2008, the business manager of the Hospital, Ms Leung (“Leung”), had a meeting with Anne to discuss about possible re-organisation of the dental department.  At the conclusion of the meeting, Anne considered her contract of employment was prematurely terminated with effect from 1 April 2008.  What transpired during that meeting was in dispute. 

5.  Thus, Anne’s employment could be divided into three periods:

(a) from 3 August 1982 to 30 June 1998 when Anne was employed by the Hospital without any written employment contract;

(b)    from 1 July 1998 to 31 March 2000 when Anne was employed under a written contract entered into between her and Dr Erlandson; and

(c) from 1 April 2000 to 31 March 2008 when Anne was employed under successive written contracts of employment with the Hospital.

6.  On 15 August 2008, Anne lodged a claim in the Labour Tribunal for annual leave pay, holiday pay, sickness allowance and severance payment.  Her case was that she had been engaged under a continuous contract of employment with the Hospital since 3 August 1982 and was dismissed for reason of redundancy by the Hospital during the meeting on 31 January 2008 with effect from 1 April 2008.  The Hospital did not dispute that Anne commenced her employment with the Hospital on 3 August 1982.  The Hospital’s case was that Anne’s employment with the Hospital was broken between 1 July 1998 and 31 March 2000 when she was employed by Dr Erlandson and thereafter she worked as a casual hygienist and was not under continuous employment with the Hospital.  The Hospital denied having dismissed Anne and alleged that Anne over-reacted during the meeting on 31 January 2008, the purpose of which was consultation only.  

7.  The Presiding Officer found that the continuity of Anne’s employment with the Hospital was broken during the second period, i.e. her employment with Dr Erlandson.  He held that Anne was employed under a continuous contract of employment with the Hospital, i.e. from 11 June 2000 through to 31 March 2008 (“continuity issue”).  Obviously, the Presiding Officer was misled about the date when Anne’s employment with the Hospital re-commenced, which was 1 April 2000 and not 11 June 2000.  He further held that Anne was dismissed by the Hospital on 31 March 2008 (“dismissal issue”).  For the above reasons, he awarded Anne severance payment calculated on the basis of her employment with the Hospital commencing on 11 June 2000.  He also awarded Anne’s claim for annual leave pay, holiday pay and sickness allowance.  The Hospital appeals against the Presiding Officer’s finding on both the continuity issue and dismissal issue.

THE CONTINUITY ISSUE

The parties’ case

8.  Anne’s case was very simple.  She claimed that she commenced employment with the Hospital on 3 August 1982 and that she worked four days a week from 9 am to 6 pm on Monday to Thursday since 1990.  Her services included cleaning, polishing and scaling of teeth, taking X-ray photographs, advising on matters relating to dental hygiene and other duties stated in the dental hygienist job description.  In addition, she had to set up the necessary equipments and accessories (in Anne’s words “setting up the tray”), polish tools, tidy up the room and fill in patients’ treatment records.  She arrived before the time scheduled for the first patient and spent ten minutes in between patients to do preparatory work.  She spent forty-five minutes after the last patient doing post-treatment tidying and cleaning work.  On the days when she had no patient or during the time in between patients, she either stayed in the Hospital to wait for patients requiring urgent treatment or stayed at home on call in case she would be required to provide services to such ad hoc patients.  She lived close to the Hospital and could return to the Hospital at short notice.

9.  The Hospital’s case was that Anne was employed as a casual hygienist.  With that in mind, the Hospital scheduled Anne’s working hours so that her employment could not and did not qualify as continuous employment under the First Schedule of the Employment Ordinance, Cap 57.  In other words, the Hospital consciously built in breaks in Anne’s employment in any period of four weeks.  The Hospital produced records of Anne’s weekly appointment lists for the period from 3 August 2001 to 31 March 2008 and an appointment analysis prepared from the information contained in those lists.  The appointment analysis showed that there were many weeks throughout the years in which Anne worked for less than 18 hours per week and 13 weeks in which she had no appointment at all.  According to Leung, Anne only arrived five minutes before the time scheduled for the first patient.  Specifically, Leung said that Anne was not required to stay in the Hospital if there was no patient scheduled to receive treatment by her.  Leung’s evidence was supported by Ms Ng (“Ng”), the front desk receptionist, who scheduled appointments for Anne’s patients and prepared Anne’s daily appointment list.  According to Ng, usually Anne’s first appointment started at 9 am and her last appointment started at 3:30 pm and Anne usually left the Hospital at least 15 minutes after her last appointment.  Anne’s appointments were usually full and she seldom had to stand-by at home for ad hoc patients.  If Anne’s appointments were not full, Anne was free to leave the Hospital even as early as 12 noon if she had finished her last appointment or was free not to turn up in the Hospital until her first appointment even if it was as late as 3 pm.  Ng had never asked Anne to stand-by for any patients and Anne was free to leave the Hospital in between patients.  If hygienist’s services were needed by any ad hoc patients, she would call the hygienist of the patient’s choice if any, otherwise, she would call any of the hygienists including Anne. Anne was free to accept or decline her request.  If no suitable hygienist was available, she would schedule anappointment for the ad hoc patient.

The Presiding Officer’s findings

10.  On the law, the Presiding Officer properly directed his mind to section 3 and the First Schedule of the Employment Ordinance.  Section 3 provides that a “continuous contract” means a contract of employment under which an employee is deemed by virtue of the provisions of the First Schedule to be in continuous employment.  Under paragraphs 2 and 3, an employee is deemed to have been in continuous employment if he has been employed under a contract of employment during the period of four or more weeks next preceding such time and that he worked for 18 hours or more in each of those weeks (commonly referred to as the “4-18 Rule”).  He also directed his mind to the Court of Appeal decision in Lui Lin Kam & Others v Nice Creation Development Limited trading as Fu On Seafood Restaurant, [2006] 3 HKLRD 655, in which it was held that even a one-week break, amounting to working less than 18 hours within one week, provided it was a real break, was sufficient to break the continuity of a contract of employment.

11.  The Presiding Officer analysed the evidence of the parties in paragraphs 21 to 33 of his reasons for decision.  He said in paragraph 33:

「本席信納申索人的説法，在日常工作的過程之中，被告會臨時編排病人給予申索人服務，所以申索人需要在沒有預約病人時的隨時候命。因此，申索人在沒有預約病人而留在醫院候命的時間須視之為申索人為被告工作的時間。申索人為被告工作的時間並非僅限於她為預約病人提供服務的時間，而是牙科診所向病人提供服務的整段時間，即由上午9時至下午6時，每天9小時。申索人每星期工作4天，其總工時為36小時。申索人與被告協議每星期工作4天，因此，在申索人沒有工作的日子，屬於附表1第3(2)(b) 段 “因 ······ 雙方的安排、或因行業、業務或經營的習慣而被視為仍繼續受僱主為任何目的而僱用的情況下缺勤” 的情況，不會中斷申索人與被告的僱傭合約的連續性。」

12.  Thus, in essence, the Presiding Officer accepted Anne’s evidence.  He found that apart from providing her professional services to her patients, Anne’s duties included doing pre-treatment preparatory work, post-treatment tidying work and to stand-by in the Hospital even if she had no patient scheduled for her.  Hence, he found that Anne’s employment hours were not limited to the time she attended to scheduled patients but was the same as the Hospital’s operating hours, i.e. from 9 am to 6 pm.  For these reasons, he found that Anne worked 36 hours a week.  In respect of the weeks in which Anne had no appointment, he applied paragraph 3(2)(b) of the First Schedule and regarded her absence as continuing in the Hospital’s employment.  He concluded that Anne was employed under a continuous contract with the Hospital at the time of termination of her contract of employment.  Save for the application of paragraph 3(2)(b) of the First Schedule, all these were finding of fact and credibility of witness which are wholly within the Presiding Officer’s arena which the appellate court shall not interfere unless the finding is not supported by evidence or one which no reasonable tribunal could reach or one which was based on a disregard or misunderstanding of the evidence. 

Grounds of appeal

13.  The Hospital’s grounds of appeal can be summarised as follows.  Firstly, the Presiding Officer’s finding on the continuity issue is against the weight of the evidence.  More specifically, his finding that Anne was required to stand-by in the Hospital or at home was not only contrary to the evidence of Leung and Ng but was not even supported by the evidence of Anne.  Secondly, upon finding that Anne was required to stand-by in the Hospital or at home, the Presiding Officer erred in jumping to the conclusion that Anne was employed by the Hospital during the stand-by time without directing his mind to the question whether as a matter of law Anne was employed during the stand-by time when she was not actually providing any services under the contract of employment.  Thirdly, the Presiding Officer erred in law in his application of paragraph 3(2)(b) of the First Schedule by regarding Anne’s total absence from work for six specific weeks as continuing in the employment of the Hospital.  Hence, the Hospital argues that the Presiding Officer should have directed his mind to the need to make a finding of the number of hours Anne had actually worked in providing her services for each consecutive period of four weeks and determine if she had worked for less than 18 hours in any of the weeks.  Under section 3 of the Employment Ordinance, the employer bears the burden of proving that employment was not continuous.

14.  The issues raised by this appeal are:

(1) whether the Presiding Officer erred as a matter law in finding that Anne was required under her contract of employment to stand-by in the Hospital in between patients or at home;

(2) if the Presiding Officer did not, whether Anne was in the employment of the Hospital during the time she was on stand-by duty;

(3) whether the Presiding Officer erred in his application of paragraph 3(2)(b) of the First Schedule by regarding Anne’s total absence from work for six specific weeks as continuing in the employment of the Hospital; and

(4) whether in the light of the finding in (1), (2) and (3) above, the Hospital has proved that Anne’s employment with the Hospital was not continuous.

Whether Anne was required to stand-by under her contract of employment

15.  The starting point of this enquiry must be the contract of employment.  Looking at the evolution of Anne’s employment relationship with the Hospital, that relationship certainly commenced as a continuous employment in August 1982.  Dr Erlandson was the dental department manager of the Hospital.  As there was no real change in the nature of Anne’s employment during the duration of her written contract with Dr Erlandson, I assume (without hearing argument) that that relationship continued throughout her contract with Dr Erlandson to the end of her first written contract with the Hospital on 15 June 2000.  That first written contract was a peculiarly short one for two and half months only.  Clause 4.5 of that contract prohibited Anne from working for any other employer without the prior written consent of the Hospital.  Impliedly, the Hospital was under an obligation to provide work for Anne and her employment was under a continuous contract.  Thereafter, her subsequent contracts were renewed with the prohibition removed.  Not only that, the Hospital expressly refrained from undertaking to offer a minimum number of hours of work during a particular week or month.  The parties entered into an arrangement under clause 4.2 which was repeated in all the subsequent contracts.  That clause provided as follows:

    “The Dental Hygienist shall provide her services during the normal operating hours of the Dental Department at such times that are mutually agreeable to the Dental Hygienist and the Hospital.  The Hospital will seek to give the Dental Hygienist at least two days notice of the hours it wants the Hygienist to work during a particular week at the Dental Department.  The Dental Hygienist will give to the Hospital a schedule of her availability to work during a particular week at least 2 weeks before the commencement of that particular week.  It is agreed that there shall be no specific number of hours that the Dental Hygienist may work during a particular week or month and that the Hospital does not undertake to offer either a maximum nor a minimum number of hours of work to the Dental Hygienist for any given week or month during the term of this Agreement.”

Anne’s remuneration was also changed under the new arrangement.  Under clause 5, Anne was remunerated according to her production.  She was given an one-hour appointment to treat each patient.  She was to be paid 44% of the fees actually received by the Hospital from patients less collection charges and the equivalent amount of contribution paid by the Hospital pursuant to the Mandatory Provident Fund Scheme Ordinance.  Under clause 6.1, Anne specifically acknowledged that she was a casual employee and not entitled to any benefits provided to the Hospital’s permanent full time and part time employees to which she was formerly entitled.  Clause 6.1 provided:

“The Dental Hygienist agrees that she is a casual employee who is not continuously employed by the Hospital and that she shall not be entitled to any of the benefits provided by the Hospital to its permanent full time and part time employees unless otherwise specified herein or as required by the laws of Hong Kong SAR.”

16.  Clearly, starting from 11 June 2000 there was a very dramatic change in the nature of the parties’ employment relationship.  Under clause 6.1, Anne expressly acknowledged that she was a casual employee.  Under clause 4.2, Anne was to provide her services at such times as was mutually agreed with the Hospital which had no obligation to provide work.  It is important to note that it was mutually agreed that there shall be no specific number of hours that Anne may work during a particular week or month and that the Hospital did not undertake to offer either a maximum nor a minimum number of hours of work for any given week or month.  There was no obligation on the part of the Hospital to employ Anne for work and no obligation on the part of Anne to make herself available for employment.  The arrangement was that Anne would give the Hospital a schedule of her availability to work during a particular week at least two weeks in advance of that week and the Hospital would give Anne at least two days’ notice of the hours during a particular week it required her services.  Thus, in terms of invitation to treat, offer and acceptance, when Anne gave the Hospital a schedule of her availability to work in a particular week, she was giving the Hospital an invitation to treat.  When the Hospital gave notice of the hours in the week in which the Hospital required Anne’s services, it was making an offer of employment.  When Anne agreed to provide her services at the time which was mutually agreeable, she was accepting the offer.  In practical term, acceptance took place when the front desk staff gave Anne the appointment list the day before.  The reality was that each appointment or each series of consecutive appointments was a separate engagement.  Anne was not employed by the Hospital in between patients or when she had no appointments.  I accept the submission of Ms Chan, counsel for Hospital, that Anne was not employed for four days a week from 9 am to 6 pm.  In view of the changes noted above, I have no difficulties to accept, as Ms Chan submits, that on an objective view the Hospital and Anne intended to engage in an employment relationship which was casual in nature and not one of the nature of a continuous contract of employment.  That intention was expressed in clause 6.1 every time they renewed their contract.  But of course, I must also bear in mind that the issue I have to decide is whether as events unfolded and by reason of the conduct of the parties, Anne’s employment was nevertheless deemed to be continuous under the First Schedule. 

17.  The Presiding Officer found that Anne was required to stand-by in the Hospital in case her services might be required by an ad hoc patient.  This is a finding of fact which the appellate court will not usually interfere.  The point to note, however, is that the written contract was silent as to the requirement to stand-by.  There was also no evidence of any oral agreement to stand-by, nor can such a term be implied into the contract as a matter of necessity.  There was a total lack of such evidence.  Mr Lee SC, counsel for Anne, argues that this finding is consistent with the evidence.  He referred to clause 4.2 of the contract which provided that Anne “shall provide her services during the normal operating hours of the Dental Department”.  He submits that this clause is crucial and reflects the true quid pro quo that the Hospital gets from Anne because the Hospital itself operates in a way it is available to all patients for appointments from 9 am to 6 pm and hence Anne must avail herself during those hours regardless whether there were actual appointments for each and every of those operating hours.  He argues that the nature and terms of Anne’s employment necessarily contemplates an element of standing by in the Hospital. 

18.  With respect, Mr Lee SC’s quotation of the first sentence of clause 4.2 is incomplete.  In its entirety, that sentence reads “The Dental Hygienist shall provide her services during the normal operating hours of the Dental Department at such times that are mutually agreeable to the dental hygienist and the Hospital”.  Furthermore, that clause also provided for a system for Anne to give notice to the Hospital of her availability and for the Hospital to give notice of the hours it required Anne’s services and that the Hospital was under no obligation to provide work or indeed any maximum or minimum number of hours of work.  As the Hospital had no obligation to provide work, it is simply nonsensical that Anne should be required to stand-by in the Hospital without any scheduled patient and without being paid for the stand-by time.  It was the clear understanding of the parties that Anne would only be paid if she provided services to a patient and she would not be paid for waiting even if a patient failed to show up.  Thus, read in its proper context, Anne’s obligation under clause 4.2 was to provide her services at such times as were mutually agreed and those times shall be those within the normal operating hours of the Dental Department.  Clause 6.1 was clear that Anne was a casual employee, each appointment or series of consecutive appointments constituted one engagement and Anne was not employed by the Hospital in between patients or when she had no appointments.  That clause could not have imposed a contractual duty on Anne to stand-by in the Hospital while there was no patient scheduled for her.

19.  The Presiding Officer found as a matter of fact that Anne was required to stand-by in the Hospital for the purpose of providing services to ad hoc patients.  Based on that finding of fact, he concluded that Anne was employed not only during the hours when she was providing services, but also during her stand-by time.  However, with respect to the Presiding Officer, not only was this finding not supported by the express or implied term of the contract of employment, it was even contrary to Anne’s evidence as recorded at page 86 of the transcript of proceedings:

“Q:    Did you stay -- looking at the appointment list over the years, did you stay between patients if you had, say, a patient in the morning and a patient in the afternoon?  Did you stay between those two patients?

A:    Yes.

Q:   But you just said that you do not get paid so did you -- I guess, why did you stay if you weren’t getting paid between those hours?

A:    Because I needed to wait for the next patient.  In addition, patient might be added to the list anytime.  And sometimes patient wanted to come earlier, and for example a patient was set to start at 9 o’clock, 9 am, but he or she is not available at 9 and it had to be postponed to 10, then I had to be on stand-by anytime for the patient to come.

Q:   Were you told by the hospital that you needed to stay?

A:    Well, all along I worked like this, no one from the hospital ever told me that I didn’t need to stay there.  That is to say all over for so many years, I didn’t change the working pattern, and the terms were not changed as well.

Q:   Did the hospital ever say that you would be paid for waiting?

A:    I don’t know what you meant by whether I was -- I get paid or not.  Anyway, I needed to be on stand-by, waiting for the patient.  Anyway, I needed to wait there.”

(Emphasis added)

20.  Thus, according to Anne’s own evidence, far from being instructed by the Hospital to stand-by in the Hospital or at home for stand-by duty, Anne just stayed on her own accord, or in counsel’s word, to ply for hire.  The Hospital’s evidence, which presumably was rejected by the Presiding Officer, was that no one from the Hospital instructed Anne to stay in the Hospital in between patients or to turn up in the Hospital when she had no patients.  However, in answer to the same question put to her in cross-examination, Anne only gave an indirect answer by saying that no one from the Hospital ever told her that she did not need to stay.  In effect, she was admitting that no one required her to stay in the Hospital.  She relied on what she called was her practice of staying over the years.  But, there was a very significant change in the terms of her contract in 2000 when her employment became one of a casual nature.  She was paid by a percentage of her production.  The Hospital was to give her at least two days’ notice of the hours it wanted her services during a particular week.  There was nothing to suggest that the Hospital could compel Anne, firstly, to stay in the Hospital when she had no patient; and secondly, to oblige her to attend to a patient not scheduled on the appointment list.  The Hospital could not discipline her for refusing to undertake either of those duties.  Even if she did develop or continue a practice of staying in between patients, such practice could not harden into a term of the contract of employment mutually binding on her and the Hospital. 

21.  At pages 87 and 93 of the transcript, Anne admitted that on those days or those hours when there was no appointment scheduled, she did not turn up for work in the Hospital but just waited at home for calls from the front desk.  This is consistent with Leung’s and Ng’s evidence that Anne was not required to turn up at the Hospital where there was no appointment.  If Anne could not be contacted or declined to provide service to an ad hoc patient, Ng would simply refer the patient to another hygienist or give the patient a scheduled appointment.  At page 92 of the transcript, Anne admitted that alternatively she might return to the Hospital to see if by chance she would be assigned any ad hoc patients.  Thus, the Presiding Officer’s finding that Anne was required to stand-by was contrary to Anne’s own evidence.

22.  On the other hand, the Hospital’s evidence is that Ng never asked Anne to stand-by for any patients and Anne was free to leave the Hospital in between patients.  There was no evidence that Anne was actually required by the Hospital to stand-by.  When Anne said that she “needed to be on stand-by”, she was in effect saying at the highest that she felt it necessary for her to be on stand-by.  That was a convenience and a benefit to the Hospital, Anne as well as the patient that she stayed in between patients or waited at home to take up any ad hoc patients.  It, nevertheless, was not part of the terms of her contract of employment that she should stand-by.  She cannot by her voluntary act force on the Hospital a term with the consequence of creating a continuous contract of employment which the parties expressly agreed to avoid.

23.  Mr Lee SC draws my attention to the Presiding Officer’s remark at paragraph 32 of his reasons for decision, in which the Presiding Officer said that the appointment lists do not reflect the reality.  He submits that the Presiding Officer was expressly saying that he did not think that the real working hours of Anne could be ascertained from the appointment lists.  This is a finding of fact which I would not seek to differ.  However, this statement is far from saying that Anne’s working hours were from 9 am to 6 pm.  I shall come back to this finding of the Presiding Officer when I come to consider the fourth issue.

24.  Mr Lee SC then quoted the case of Peries v Wirefast Ltd UKEAT/0245/06/DA in which the United Kingdom Employment Appeal Tribunal held that what started off as a concession can ripen by custom and practice into a contractual right.  In that case, the Employment Appeal Tribunal held that a policy statement contained in an employees handbook bearing the logo that “this is not part of your contract” was capable of hardening into a contractual right and remitted the case back to the tribunal for further consideration on that issue.  I do not think Peries v Wirefast Ltd helpful.  It is not any authority for the proposition that a concession by a party will, as a matter of law, harden into a contractual right.  It only repeated the all too familiar general principle that something which started off as a concession can ripen by custom and practice into a contractual right through consistent practice without exception over a substantial period of time.  There was simply no such evidence in this case. 

25.  To conclude, stand-by was not an obligation under the express terms of Anne’s contract of employment.  On a proper interpretation of clause 4.2 of her contract of employment as explained in paragraph 16, it could not have been an implied obligation either.  There is no dispute that Anne was not paid for her stand-by time.  All these factors weigh against the Presiding Officer’s finding that Anne was required to stand-by in the Hospital from 9 am to 6 pm.  While the appellate court is bound by the finding of fact of the Labour Tribunal, this finding of the Presiding Officer is contrary to the evidence, including Anne’s own evidence.  It must be set aside as an error of law.  While that finding of fact could be set aside without disturbing the Presiding Officer’s other finding that Anne did stay in the Hospital in between patients and at home on call, it makes Anne’s evidence on that issue ridiculous and incredible.  For the present purpose, I shall consider the merit of this appeal on the basis that Anne was not required by the Hospital to stand-by but did stay in the Hospital in between patients and at home to be on call on her own accord without pay to ply for hire.

Whether Anne was in the employment of the Hospital while standing-by

26.  If I should uphold the Presiding Officer’s finding that Anne stood-by in the Hospital or at home, Ms Chan submits in the alternative that as a matter of law Anne’s stand-by time should not be counted as part of her employment.  In view of the conclusion reached in the above section, there is no need to deal with this submission of Ms Chan.  If Anne was not under any contractual obligation to stand-by, there could be no question whether such voluntary stand-by formed part of her employment.  Anne was just plying for hire.  If she was hired, then her time spent in providing services would form part of her employment but not otherwise.  I shall, nevertheless, deal with this submission for completeness.

27.  The word “stand-by” covers a variety of situations.  It covers the situation where an employee is required to make himself contactable by the employer for the purpose of providing his services if called upon to do so to the situation where an employee is required to stay at a place designated by the employer for the same purpose.  In between these two extremes are situations where the employee is required to stay at home or office, or within a certain distance therefrom.  Certainly, if the employee is called upon to perform services, he is employed by the employer when actually performing those services.  The question is whether he is so employed while standing-by awaiting for calls from his employer.  He is not performing any services other than waiting or making himself available to be contacted.

28.  The leading case is the House of Lord’s decision in Suffolk County Council v Secretary of State for the Environment and Alcock (1984) ICR 882 is apposite.  In that case, a retained fireman was obliged to attend for training and maintenance duties for an average of two hours a week and to be permanently on call.  The fireman claimed that as a retained fireman on permanent call, he was a whole-time employee of the county council and was therefore entitled to participate in the superannuation fund maintained by the council for its employees under the Local Government Superannuation Regulations 1974.  Regulation A3(1) of those Regulations defines a “whole-time” employee as one “whose contractual minimum hours of employment regularly or usually amount to 30 hours or more in each week”.  The House of Lords held that employment involves work or some other activity carried out for the purposes and at the behest of the employer.  The head-note reads:

“A retained fireman is only bound to spend two hours training each week and he is only bound to devote more time to his occupation as a fireman if there is a fire and if he is called out in consequence.  The contractual minimum hours of employment of a retained fireman do not therefore amount to 30 hours or more in each week.  The authority which bound the High Court to reach a contrary decision, Bullock v Merseyside County Council [1979] IRLR 33, was wrongly decided and would be overruled.

  Employment involves work or some other activity carried out for the purposes and at the behest of the employer.  A contractual obligation to remain on call within a prescribed area does not constitute employment.  A retained fireman is not employed to wait even though he is paid for waiting.  He is employed to fight fires and obey the lawful instructions of his employer once he has been called.  The hours of work of a retained fireman consist only of the hours while he is on duty following a call.  The contractual minimum hours of a retained fireman, therefore, do not include all the hours that he is on call.  When he is not on duty he can do as he pleases and his hours are not hours of employment by the fire authority.

  The decision in Bullock v Merseyside County Council [1979] IRLR 33 was based on a misunderstanding of the differences between a regular fireman who is on duty and a retained fireman who is on call.  A fire authority has control over and can give directions to a regular fireman who is on duty; such a fireman is working for the fire authority even when he is sitting in the recreation room.  But a retained fireman is not working for the fire authority until he is called.  He is not at the disposal of or under the control or direction of the fire authorities and his services cannot be required until a fire takes place.  The regular fireman sitting in the recreation room during his hours of duty cannot go home or carry on any activity other than the activity for which he is paid.  A retained fireman sitting at home can undertake any activity he pleases, when he pleases and wherever he pleases until he is called upon to perform the duties for which he is paid.”

At paragraph 14, Lord Templeman said:

“Employment involves more than a contractual obligation to remain within a prescribed area.  Employment involves work or some other activity carried out for the purposes and at the behest of the employer.  Hours of employment do not include hours devoted to an activity which is pursued for the benefit and by the choice of the employee.  A regular fireman is employed when he is on duty, whether he is fire-fighting or sleeping, because he is carrying on both those activities under the instructions of his employer the council.”

Thus, in order that the time spent in standing-by be treated as part of the employee’s employment, the employee must fulfil two requirements.  Firstly, the employee be under a contractual obligation to stand-by, i.e. to remain within a prescribed area, be it his place of employment or home or a designated distance within his home or place of employment.  Secondly, while standing-by, the employee must be involved in work or some other activity carried out at the behest or instruction of the employer.  The first requirement is not met in the present case.

29.  Mr Lee SC sought to distinguish Suffolk County Council from Anne’s case.  He referred to the differences in the contractual duties of the retained fireman and Anne’s.  The contractual duties of the retained fireman included the obligation to attend at the fire station to which he was attached for training and maintenance duties, promptly at the fire station in response to a call at any time and at any fire or other occurrence or at any other station for reserve or stand-by duties.  Anne’s contractual duties were provision of dental hygiene services during the normal operating hours of the dental department of the Hospital at such times that are mutually agreeable and to be on stand-by for ad hoc patients.  He then argues that the important distinction between the retained fireman’s case and Anne’s case is that the stand-by time spent by the retained fireman were devoted to an activity which is pursued for the benefit and by the choice of the retained fireman whereas Anne was hired by the Hospital to be on stand-by in the Hospital for ad hoc patients and to act under the instructions of the Hospital to perform other duties as stipulated under her employment contract even if she was not engaged in a patient appointment.

30.  I appreciate the force of that argument.  For the purpose of the present discussion, if indeed Anne were employed by the Hospital to be on stand-by duty in the Hospital for the purpose of providing services to ad hoc patients as found by the Presiding Officer, both requirements under Suffolk County Council would be satisfied.  Anne’s case would be distinguishable from the retained fireman’s.  Her case would be similar to that of the regular fireman.  The regular fireman is required to stand-by in the fire station.  He cannot carry on any activities other than staying inside the fire station.  He is deemed to be working while sleeping or doing other form of recreational activities.  Similarly, if Anne were required to stand-by in the Hospital for the purpose of providing services to ad hoc patients, she would be in the employment of the Hospital during the stand-by time.  But she was not.

Whether the Hospital has proved that Anne’s total absence during six specific weeks should not be regarded as continuing in the employment of the Hospital under paragraph 3(2)(b) of the First Schedule

31.  The Presiding Officer held in paragraph 33 of his reasons for decision that on the days when Anne had no appointments, she was regarded as continuing in the employment of the Hospital by virtue of paragraph 3(2)(b) of the First Schedule.  He gave no reason for his conclusion.  A straight reading of his dicta is that because Anne worked from 9 am to 6 pm from Monday to Thursday for a total of 36 hours in the week, paragraph 3(2)(b) of the First Schedule applied.  I assume he was not addressing his mind to Anne’s absence during the remaining three days of the week but to the 13 weeks in which Anne had no appointments.  With respect to the Presiding Officer, I cannot find any nexus between Anne’s working 36 hours a week and the application of paragraph 3(2)(b) of the First Schedule to those 13 weeks.  Paragraphs 2 and 3 of the First Schedule provide as follows:

“2.  Subject to the following provisions, where at any time an employee has been employed under a contract of employment during the period of 4 or more weeks next preceding such time he shall be deemed to have been in continuous employment during that period.

  3   (1)  For the purposes of paragraph 2, no week shall count unless the employee has worked for 18 hours or more in that week, and in determining whether he has worked in any hour the provisions of sub-paragraph (2) shall apply.

(2)  If in any hour the employee is, for the whole or part of the hour –

(a)  incapable of work in consequence of sickness or injury; provided that any such incapability in excess of 48 hours is supported by a certificate issued by a registered medical practitioner or registered dentist; or (Amended 5 of 1995 s. 11)

(b)  absent from work in circumstances such that, by law, mutual arrangement or the custom of the trade, business or undertaking, he is regarded as continuing in the employment of his employer for any purpose,

then, save as provided in paragraph 4, that hour shall count as an hour in which he has worked.

32.  To determine whether an employee has been employed under a continuous contract of employment, one starts with paragraphs 2 and 3(1) of the First Schedule and ask the question whether the employee has worked as employee for the employer during the period of 4 or more weeks preceding the relevant time and whether in each of the weeks he has worked for 18 hours or more, i.e. the 4-18 Rule.  If he has, he is deemed to have been employed under a continuous contract of employment.  It matters not how he worked out his 18 hours during the week.  He could work all 18 hours in one day, or slightly more than two and half hours a day for seven days, or in any other combination.  It does not matter if he has been employed as a regular employee or on a casual daily or even hourly basis.  It does not matter that there was no mutual obligation to work or to offer employment on a day to day basis or there was no global contract: Lui Lin Kam & Others and Nice Creation Development Ltd [2006] 3 HKLRD 655, per Tang JA at paragraphs 23-25 (see paragraph 36 below).

33.  If the employee does not qualify under the 4-18 Rule, the next question is whether his absence would be regarded as continuing in his employment by law or by mutual arrangement, or the custom of trade, business or undertaking under paragraph 3(2)(b) of the First Schedule.  Paragraph 3(2)(a) is about absence due to sickness and injury which is not relevant to the present case.  Counsel are in disagreement as to whether paragraph 3(2)(b) is only applicable if an employee is able to show mutuality of obligation in respect of future engagement.

34.  Ms Chan relied on Wong Man Kwan & Others v Chun Shing Holdings Ltd [2003] 3 HKLRD 403 as authority for her proposition that paragraph 3(2)(b) of the First Schedule may only be invoked if an employee is able to show mutuality of obligation.  Deputy High Court Judge Lam, as he then was, said at paragraphs 27 to 30:

“27.  The combined effect of Paras. 2 and 3 is that so long as an employee has worked for four weeks preceding the relevant date and worked at least 18 hours for each week, he would be deemed to be in continuous employment, or in other words, deemed to be employed under a continuous contract.

  28.  Paragraph 6 makes it clear that it does not matter that the employee was working under different contracts and there were gaps in between so long as he worked for the same employer. Hence, if there were a successive series of ad hoc engagements which, on proper analysis, amounted to successive contracts of employment, an employee is entitled to add them together to make out a case of continuous employment by showing he has worked for the same employer for four consecutive weeks with at least 18 hours of work in each week.

  29.  On the other hand, if a casual worker cannot show that, he might have to resort to the concept of "global contract". If he could establish a case of "global contract", he would be able to rely on para. 3(2)(b) of Sched. 1 and argue that the absence from work was by mutual agreement and should also be counted as working hours. For this purpose, the question of mutuality of obligation is important.

  30.  Therefore, the absence of mutuality of obligation is not necessarily fatal to all the claims of the claimants. The Presiding Officer should have approached the claims by first asking whether the claimants worked as employees for the defendant in respect of each engagement. If they were, he should then consider whether the test for continuity of employment in Sched. 1 could be satisfied without any global contracts.  It is only when a claimant needs to rely on para. 3(2)(b) of Sched. 1, the mutuality of obligation is essential.”

(emphasis added and relied on by Mr Lee SC)

35.  Mr Lee SC submits that Ms Chan misinterpreted the above dicta.  He argues that it is clear from paragraph 29 of that judgment that what Deputy High Court Judge Lam meant was that “if” the employee could establish a case of global contract, he would be able to rely on paragraph 3(2)(b) of the First Schedule to excuse his absence from work on the ground of mutual arrangement.  He argues that his Lordship did not say, nor should he be interpreted as saying in paragraph 30 of the judgment, that paragraph 3(2)(b) of the First Schedule can be relied on only if the employee seeks to establish a global contract where mutuality of obligation is essential.  Hence, he submits that the last sentence of paragraph 30 should be interpreted in the context as follows:

“It is only when a claimant needs to rely on para. 3(2)(b) of Sched. 1, in order to set up a global contract that the mutuality of obligation is essential.”

36.  Mr Lee SC then argues that Ms Chan’s submission is in direct contradiction to the Court of Appeal’s decision on global contract in Lui Lin Kam & Others and Nice Creation Development Ltd [2006] 3 HKLRD 655, where Tang JA said at paragraphs 23-25:

“23.  Put very briefly, a person who has worked for a minimum of 18 hours per week for four continuous weeks would be regarded as having been employed on a continuous contract.  That is so, even if each new day was the subject of a new contract of service for the day.  Any week in which he has worked for less than 18 hours would not count and would break the continuity of his employment, subject to the provisions of para. 3(2) which would enable an hour or part of an hour not worked to be counted as an hour worked.  Also para. 4 would enable an hour or part of an hour during which the employee was absent from work not to break the continuity of his employment.

24.  In other words, it does not matter that a person was employed on a casual daily basis.  Provided such casual employment continued for a period of four weeks or more, during which he had worked a minimum of 18 hours each week, he would be regarded as having been in continuous employment.  It does not matter that there was no mutual obligation to work or to offer employment on a day-to-day basis.  Take the case of a factory which was in the habit of hiring casual workers on a daily basis from persons who presented themselves at the factory gate each morning for the purpose.  If a casual worker is chosen for a day, there is a contract of service for the day.  In this hypothetical case, I proceed on the basis that the contracts were of service and not for service.  In other words, they were contracts of employment.  If a man has been chosen four weeks in a row and worked at least 18 hours a week, he would be regarded as having been in continuous employment for four weeks.  It does not matter that the factory was not obliged to choose him.  Nor that he was not obliged to offer himself for work.  If such a person happened to be chosen continuously for 24 months, he would qualify for the benefits which are available to a person who has been in continuous employment for a continuous period of 24 months.  There is no need for a global contract.  If for any reason the casual worker was not picked for seven consecutive days because he did not offer himself for work or that he was simply not chosen, then his period of continuous employment would have been broken.  The factory was perfectly entitled not to choose the same person for more than three consecutive weeks, or more than 18 consecutive months, because it did not wish to incur the obligations of such continuous employment.

  25.  Although the primary purpose of Sch. 1 is to enable casual workers to be regarded as being in continuous employment, its language is flexible enough to cover fixed term contract.  For example, if a person is employed on a fixed term of 24 months, under which he is entitled to two-weeks’ leave every year, the two-week leave would not break the continuity because under para. 3(2) he would be regarded as continuing in his employment “by law” or by “mutual arrangement”.”

(emphasis added and relied on by Mr Lee SC)

Based on the above dicta, Mr Lee SC submits that the language of paragraph 3(2)(b) is flexible enough to cover fixed term contract and completely destroys Ms Chan’s submission.

37.  With respect to Mr Lee SC.  He misinterpreted the above dictum in Wong Man Kwan & Others by giving it an unnecessary twist by introducing the words “global contract”.  I think Deputy High Court Judge Lam’s dicta are very clear.  He explained in great detail how in his view paragraph 3(2)(b) of the First Schedule permits the concept of mutual obligation or global contract to be applied to bridge what would otherwise constitute a break in continuity between two separate and distinct engagements.  Mutuality of obligation is what enables an employment relationship over one individual engagement to extend to another to constitute a continuing overriding arrangement which is conveniently referred to as a “global contract” or “umbrella contract”.  Thus, mutuality of obligation proves a global contract.  The two terms may be used interchangeably.  If an employee cannot satisfy the 4-18 Rule, he will have to rely on paragraph 3(2)(b).  To do so, he will have to prove mutuality of obligation in terms of future engagement, which is another way of saying to prove a global contract.  Hence, the gloss which Mr Lee SC seeks to add to the last sentence of paragraph 30 in Wong Man Kwan & Others is both superfluous and misleading.

38.  As for Mr Lee SC’s argument that the Court of Appeal in Lui Lin Kam & Others held that paragraph 3(2)(b) is applicable to fixed term contract and not just to global contract, he is certainly right, but he is quoting the two cases out of their proper context.  In Wong Man Kwan & Others, Deputy High Court Judge Lam was asked to determine whether the Presiding Officer was correct in rejecting the claim of casual workers on the ground of absence of a global contract.  In Lui Lin Kam & Others,the Court of Appeal was dealing with the number of weeks of less than 18 hours required to break the continuity deemed under the First Schedule.  There was no question about global contract and separate engagements.  The example quoted by the Court of Appeal was the case of an employee employed on a fixed term contract of 24 months, during which term there must be mutuality of obligation before as well as after the employee took his two-week leave.  Mutuality of obligation cannot be an issue in the case of a fixed term contract, but is an issue in the case of a casual worker engaged under a general engagement because mutuality of obligation is the essential link to enable his employment relationship over one engagement to extend to another.  Wong Man Kwan & Others was quoted and discussed in Lui Lin Kam & Others.  There was nothing to suggest it was disapproved by the Court of Appeal.

39.  Accordingly, I am of the opinion that in order to rely on paragraph 3(2)(b) of the First Schedule, a casual employee who does not satisfy the 4-18 Rule has to show, firstly, that his engagements constituted a global contract and, secondly, that his absence from work between engagements were in circumstances such that, by law, mutual arrangement or the custom of the trade, business or undertaking he is regarded as continuing in the employment of his employer.

40.  On the evidence, Mr Lee SC argues that the onus is on the Hospital to prove Anne was actually absent from work during those six weeks.  In other words, Mr Lee SC is arguing that lack of production during those weeks which is not disputed is not evidence of absence from work.  He submits that the Hospital has to prove absence from work by showing that no appointments were scheduled for Anne during those six weeks.  Technically, he is correct.  The Hospital’s appointment lists were re-generated in August 2008 updated with additional ad hoc patients who received treatment while the names of patients who did not turn up were deleted.  Those lists are not evidence that no appointments had been scheduled for Anne for the weeks in question.  Had the original appointment book, if there was one, or the original copies generated the day before the relevant date been produced, the issue could have been proved beyond dispute.  But this is not the case.  There is of course a very remote possibility that appointments had been scheduled for Anne in those weeks but none of the patients turned up.  But that is unrealistic.  Alternatively, there is also the remote possibility that though no patients had been scheduled for Anne, yet she returned to the Hospital to stand-by for ad hoc patients.  But such stand-by did not constitute part of her employment.  Though the onus of proving that Anne’s employment was not continuous lies on the Hospital, in the absence of a scintilla of suggestion, let alone evidence from Anne that appointments had been arranged for her for those weeks or explanation that the continuity of her employment had for some reason not been broken by the absence of production, the common sense conclusion must be that either the Hospital or Anne must have unilaterally arranged to disengage each other during those weeks.  This inference can be readily drawn as the Hospital had no obligation to provide work and in view of the work arrangement under clause 4.2 of the contract.  I am satisfied that the Hospital has discharged the burden of proving Anne’s absence during the six weeks on a balance of probability.

41.  On the facts, Anne was employed expressly as a casual employee.  Under the contract of employment, there was no obligation on the part of the Hospital to provide work and on the part of Anne to accept employment.  There was no mutuality of obligation in terms of future engagements after each day’s engagement.  There was no global contract.  Paragraph 3(2)(b) of the First Schedule is inapplicable.  Furthermore, there was, not a scintilla of suggestion, let alone evidence, that Anne’s absence for the six weeks now relied on by the Hospital was in circumstances such that, by law, mutual arrangement or the custom of the trade, business or undertaking she was regarded as continuing in the employment of the Hospital.  There was not a scintilla of suggestion, let alone evidence from Anne that appointments had been arranged for her for those six weeks of total absence or explanation that the continuity of her employment had for some reason not been broken by the absence of production.  There was no suggestion that the Hospital was closed because of public holidays or for any particular reasons during those six weeks.  In fact, the Hospital has been extremely fair in not relying on Anne’s total lack of production (which evidences total absence) for the weeks commencing 22 January 2001, 11 February 2002, 7 February 2005, 30 January 2006, 19 February 2007, 14 May 2007 and 21 May 2007.  Probably, this was because Anne was sick from 14 May to 25 May 2007 and that long public holidays fell on the four days during which Anne usually worked in the other five weeks.  The Hospital saved argument on whether Anne’s absence during those weeks be regarded as continuing in the employment of the Hospital.

42.  Accordingly, the Presiding Officer’s finding that Anne was regarded as continuing in the employment of the Hospital during those six weeks’ of total unexplained absence must be set aside as an error of law.  Three of those weeks commenced on 7 August 2006, 2 October 2006 and 3 December 2007 which were all within the period of 24 months immediately prior to the termination of her employment on 31 March 2008.  This conclusion necessarily disqualifies Anne from her claim for severance payments.  The Presiding Officer’s award of severance payment must therefore be set aside.

Whether the Hospital has proved that Anne’s employment was not continuous in respect of the other weeks

43.  The Hospital’s case is that apart from the six weeks of total absence discussed in the above section, there were numerous weeks throughout the years when Anne worked for less than 18 hours resulting in repeated breaks in the continuity of her employment.  This issue is relevant as regards Anne’s entitlement to annual leave pay, holiday pay and sickness allowance.  

44.  The Hospital produced the appointment analysis which showed that Anne had worked for less than 18 hours a week for 20 to 32 weeks a year between 2000 and 2007 and for six out of twelve weeks in 2008.  Ms Chan argues that even assuming that Anne stayed in the Hospital in between patients or at home to stand-by, as a matter of law Anne was not in the employment of the Hospital, those stand-by time should not be counted as part of Anne’s employment.  By discounting the stand-by time which the Presiding Officer wrongly took into account, Ms Chan argues that in respect of those weeks Anne did not meet the 4-18 Rule under the First Schedule.

45.  At the trial, Anne disputed the correctness of the appointment lists.  She produced her copies of 17 appointment lists from 29 July to 6 March 2008 which showed that she had more patients than that shown on the Hospital’s appointment lists.  After comparing the Hospital’s appointment lists with Anne’s in respect of sixteen days during that period, the Presiding Officer found in paragraph 32 of his reasons for decision that the number of patients treated by Anne was more than that shown in the Hospital’s appointment lists.  He noted that on ten days, Anne’s lists showed that she had between one to four more patients than that shown in the Hospital’s appointment lists.  Ms Chan disputes the Presiding Officer’s finding and the correctness of Anne’s appointment lists.  Mr Martin Lee SC accepts that the Presiding Officer had erred in favour of Anne.  Anne’s appointment lists were copies of the appointment lists prepared by the front desk staff and given to Anne the day before the appointment.  The Hospital’s appointment lists were regenerated from the actual attendance record in August 2008 for the purpose of this litigation.  There is no dispute that the Hospital’s appointment lists showed correctly the number of patients who had received treatment whereas Anne’s appointment lists showed the number of scheduled patients and ad hoc patients.  Some of the scheduled patients did not actually turned up.  Some of those vacated appointments were filled by ad hoc patients and some were not.  In terms of the number of patients actually treated by Anne, the Hospital’s appointment lists were accurate.  Probably, Anne deliberately misled the Presiding Officer.   

46.  Thus, the truth is that the Hospital’s appointment lists correctly showed the number of patients treated by Anne.  Those appointment lists included the number of ad hoc patients treated by Anne, but they did not show the number of patients who did not show up.  The number of no-shows and the number of ad hoc patients could not be ascertained from the Hospital’s appointment lists.  Based on the 16 appointment lists available from both parties, it could be seen that Anne’s appointment lists showed that on 10 out of 16 days there were between one to four more patients named in her appointment lists than the number of patients she actually treated.  Thus, on the average Anne probably had one no-show on each day.

47.  Accordingly, the appointment analysis only showed the number of patients who actually received treatment from Anne and based on which Anne was paid.  It is not conclusive evidence of the duration of Anne’s employment.  It does not show the time spent by Anne in pre-treatment preparation work, post-treatment tidying work and waiting for no-shows.  Though those services were unpaid, Anne must be taken to be employed while providing those services in the Hospital.  She was employed as a dental hygienist.  Her duty was to provide services to patients assigned to her by the Hospital.  She had to set up everything ready to receive patient before the scheduled appointment, such as setting up the tray and getting the equipments ready.  Likewise, she had to tidy up the place after her last patient, polish and maintain the tools and equipments etc.  She had to read the patient’s record before starting her treatment and to update the patient’s record, if these were not to be performed within the one-hour appointment.  If a patient did not turn up and did not cancel his appointment in advance, Anne would, nevertheless, have to wait for the patient even up to the end of the one-hour scheduled for that patient.  All these can fairly be described as services, which were reasonably necessary and incidental to her appointment.  It must necessarily follow that the time spent in performing such duties and waiting time in case of no-shows were time spent in the course of her employment, even though under her contract of employment she was not specifically paid for those services.  Though it can be argued that the remuneration she received for treating the patient contained an element of reward for those unpaid services, that did not mean Anne was not in the employment while performing those duties. 

48.  Ms Chan submits that even after giving a very generous allowance for Anne’s unpaid employment, the appointment analysis shows her employed hours fell short of 18 hours a week by a wide margin.  I have difficulties agreeing to that submission.  The Presiding Officer wrongly accepted Anne’s evidence about being required to stand-by and jumped to the conclusion that Anne’s working hours were from 9 am to 6 pm four days a week without making any finding as to how much time was spent by Anne during the above mentioned unpaid employment.  He had not properly weighed the evidence of Leung and Ng.  He had not directed his mind to Anne’s evidence which was contrary to her own case.  I am unable to assess the duration Anne’s unpaid employment.  I am unable to proceed with the course which Ms Chan invited me to take.  I am wholly unable to determine which parts of Anne’s employment was continuous and their duration.  Those finding of fact are necessary for the purpose of determining Anne’s entitlement to annual leave pay, holiday pay and sickness allowance.  Those issues must be remitted back to the Presiding Officer for investigation.

THE DISMISSAL ISSUE

The parties’ case

49.  Anne’s case was that she was dismissed by the Hospital as a result of re-organisation of the dental department.  Her evidence, which was mostly unchallenged, was that in mid January 2008, Leung told her that the dental department was a piece of “rotten meat” and had to be re-organised.  Leung said that one of the three hygienists’ posts would be converted to a full time post and invited her to apply.  She told Anne that she might work until the end of February 2008.  Then on 31 January 2008, Leung had a meeting with Anne at her office.  There she told Anne that as Dr Giles would leave the Hospital in mid March, Anne could work until the end of March 2008.  Hence, Anne’s case was that she was dismissed with effect from 1 April 2008.

50.  The Hospital’s case was that the discussions during the meetings Leung had with Anne were just consultations and that Leung had never terminated Anne’s employment during those meetings.  Anne declined to apply for the full time post during the first meeting in mid January 2008.  During the meeting on 31 January 2008, Leung again invited Anne to apply for the full time post and to submit application on or before February 2008 because her application would have to be considered by the human resources committee.  Thereupon, Anne replied that she had suffered enough and would not apply or continue employment with the Hospital in whatever form.  Later, Anne informed the front desk staff not to make appointments for her with effect from 1 April 2008.  The Hospital’s case was that Anne over-reacted to the discussions and terminated her employment, that Leung had no authority to dismiss staff and that Anne’s contract of employment could only be terminated by written notice and such notice had not been given.

The Presiding Officer’s reasons for decision

51.  The Presiding Officer’s reasons for decision on this issue was very brief.  In essence, he accepted Anne’s evidence.  Indeed, Anne’s evidence was not seriously challenged and was supported by contemporaneous letters she wrote to the Hospital.  It appeared that the issue of Leung’s authority to dismiss staff and the requirement of written notice of termination were not raised before the Presiding Officer.

52.  On the undisputed evidence, Leung and Anne had two meetings in which re-organisation of the dental department and conversion of one of the posts of hygienists into a full time post were discussed, Anne was invited to apply for the full time post and was told that she might work initially until February 2008 and then until end of March 2008.  On 28 February 2008, Anne wrote to Leung setting out the discussion during the meeting on 31 January 2008 and sought a confirmation that her last working day would be 31 March 2008.

53.  Leung replied to Anne on 3 March 2008.  She did not dispute what Anne alleged as having been discussed at the meeting on 31 January 2008.  In particular, she did not dispute that she had told Anne to work until 31 March 2008.  She mildly played down the effect of the meeting by saying that the meeting was to share and discuss about the possibility of change on the staffing need of the dental department.  She did not categorically deny that Anne’s contract of employment was to be terminated with effect from 1 April 2008, but said that the decision was for the Hospital administration and that decision as to employment and termination were the functions of the human resources department.  Then she replied in general terms that “once [the Hospital Board] have a final decision on future staffing needs, the staff will be notified for the necessary information as soon as possible”.

54.  Anne refuted that letter and retorted back.  Leung replied to Anne saying: “If the [Hospital] terminates your employment contract, you will be notified in writing”.

55.  Though Leung impliedly denied having terminated Anne’s contract of employment in her two letters, one wonders why it was so difficult for her to categorically tell Anne that she had not terminated Anne’s employment if that was what had never happened.  The undisputed fact was that Leung invited Anne to apply for the full time post twice.  If a decision had not been reached to re-organise the dental department rendering Anne’s employment redundant, there was no need for Leung to tell Anne initially that she was to work until February 2008 and later until 31 March 2008 to dovetail with Dr Giles’ departure and to invite Anne to apply for the full time post.  The Presiding Officer was certainly entitled to find on the totality of the evidence that when Leung told Anne that she might work until the end of March 2008 Anne was dismissed with effect from 1 April 2008.

56.  There is no magic formula to terminate a contractual relationship.  To tell an employee who is to be paid by production that work will no longer be available with effect from a certain date must be a very clear manifestation of the fact that his employment will be terminated with effect from that date.  The repeated invitation to Anne to apply for the full time post further reinforced the Hospital’s intention to terminate Anne’s contract of employment.

57.  The question of Leung’s authority to terminate Anne’s contract of employment had not be canvassed before the Presiding Officer.  Leung might not have actual authority to hire and fire in a big organisation such as the Hospital which has a specialised human resources department.  However, that does not necessarily preclude her from having the ostensible authority to do so.  Leung was the business manager of ancillary services of the Hospital and had authority to manage the dental department.  She was the most senior officer to whom Anne may contact in relation to her employment.  She informed Anne about the re-organisation of the dental department, that her services would no longer be required after 31 March 2008 and invited Anne to apply for the full time post.  There is no doubt that Leung was an agent of the Hospital.  Having put Leung in such a position as to enable her to make the above representation, the Hospital has clothed her with the authority to terminate Anne’s employment in order to implement the re-organisation of the dental department.

58.  Lastly, on the question of written notice, which was also not canvassed before the President Officer, termination is just a question of fact.  A contract of employment may be terminated in accordance with the terms of the contract or by breach.  Anne’s contract may be terminated by the Hospital given one month’s notice in writing in accordance with clause 10.2 of the contract.  Alternatively, it may be terminated by breach, i.e. without notice or without written notice.  The fact that no notice or written notice was given could not prevent a termination from being effective.  On 31 January 2008, Anne could insist on a written notice.  In fact that was what she did via her letter of 28 February 2008.  She did not get one.  If the Hospital ceased to perform its part of the contract, Anne would be entitled to one month’s wages in lieu of notice pursuant to clause 10.2.  But that right could be waived.  Obviously, by telling the front desk receptionist not to make appointments for her with effect from 1 April 2008, Anne accepted the Hospital’s breach and waived her right to written notice.  Indeed, she did not claim any wages in lieu of notice.

59.  Accordingly, there was evidence on which the Presiding Officer could find that Anne was dismissed by the Hospital.  There was direct evidence that two of the three hygienists had to leave the Hospital and that the Hospital always had idle capacity for hygienists.  The termination of Anne’s employment was obviously the result of the impending re-organisation of the dental department such that the Hospital’s requirement for casual hygienists had ceased or were expected to cease or diminish.  If Anne had been employed under a continuous contract of employment for a period of not less than 24 months prior to the termination, she would be deemed by virtue of section 31B(2) of the Employment Ordinance to have been dismissed by reason of redundancy and entitled to severance payment. 

60.  Ms Chan argues that pursuant to sections 31C(2) and (3) of the Employment Ordinance, Anne was, however, not entitled to such severance payments because within seven days of termination of the contract, the Hospital was able to offer a new contract to her on terms not differing or no less favourable than the current terms or otherwise providing Anne with suitable employment.  However, the evidence was that Anne was only asked to apply for the full time post and was not promised or offered that post.  Leung expressly said that her application would have to be considered by the human resources department.  Furthermore, the post was either a full time salaried position and not casual profit sharing position or one with reduced profit sharing ratio of 20%.  Neither of these positions could be said to be not differing or no less favourable than Anne’s then position.  This argument must necessarily fail.

61.  Hence, the Presiding Officer was right to find that Anne was dismissed by reason of redundancy.  But this finding is of no consequence as Anne was not entitled to severance payment because of the breaks in the continuity of her employment during the 24 months immediately prior to her dismissal.  

CONCLUSION

62.  For the above reasons, I find that the Presiding Officer erred in ignoring Anne’s total lack of production for the entire weeks commencing on 1 April 2002, 19 January 2004, 19 September 2005, 7 August 2006, 2 October 2006 and 3 December 2007 and hence erred in failing to find that Anne was absent from work for those six weeks.  Three of those weeks occurred during the 24 months of her employment immediately prior to her dismissal on 31 March 2008.  There was no evidence that Anne’s absence during those three weeks was regarded as continuing in the employment of the Hospital by law, mutual arrangement or custom of the trade, business or undertaking with the result that the continuity of her employment with the Hospital was broken.  Hence, the Presiding Officer erred in awarding Anne’s claim for severance payment in the amount of $117,150.  Accordingly, the Presiding Officer’s award for severance payment is set aside and Anne’s claim for the same is dismissed.

63.  The Presiding Officer also erred in his finding that Anne was required to stand-by in the Hospital or at home when she had no patients scheduled on her appointment lists and that Anne’s working hours were from 9 am to 6 pm.  He should have assessed Anne’s working hours to be those hours in which Anne provided services to the patients as shown on the Hospital’s appointment lists, plus such time as he may allow for pre-treatment preparation work, post-treatment tidying work and one hour waiting time for each scheduled patient who did not turn up and who failed to cancel the appointment.  For that purpose, he may have to call for additional evidence.  He should on that basis determine if the continuity of Anne’s employment had been broken in any four weeks period and in the light of that finding determine Anne’s claim to annual leave, holiday pay and sickness allowance.  Accordingly, the Presiding Officer’s award in respect of those claims are also set aside and those claims are remitted back to the Presiding Officer for further consideration.

64.  In the end, the appeal is allowed.  I make an order nisi that there be no order as to costs.

65.  I record the Court’s gratitude to Mr Lee SC for his pro bono appearance on behalf of the Respondent, which is of great assistance to the Court.