CHENG MO CHIU AND OTHERS v. MING KAI DYEING FACTORY (H K) LTD

HCLA91/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO.91 OF 2005

(ON APPEAL FROM LBTC 2503 OF 2005)

----------------------------------

------------------------

-----------------------

J U D G M E N T

-----------------------

1. On 1 September 2006, I dismissed the applicant’s/ 1^st defendant’s (employer’s) appeal and awarded costs to the claimants/respondents (employees).  The following are my reasons therefor.

2. The six claimants were the employees of the employer, being the 1^st defendant/applicant herein.  The relevant period of employment was from 17 October 2004 to 18 April 2005.  On the last working day the employer informed these six employees that their daily wages of $300 could not be maintained and they would be assigned other duties at $250 a day.  They refused to accept such a breach of an earlier oral agreement of redeployment at the same daily rate.  They therefore were adjudged as having accepted the repudiation of the employer.  They sued for their various entitlements under the Employment Ordinance.

3. The only issue of dispute in this appeal is whether the presiding officer erred in law in calculating the normal working days of the employment.  The learned presiding officer, Mr George Own, arrived at the following calculations :

(1)  From 17 October 2004 to 18 April 2005, there were 26 weeks.

(2)  Each week there should be 6 working days and, therefore, there should be 156 normal working days.

(3)  Less 7 days of statutory holidays, there should be 149 normal working days.

4. Pursuant to section 31E(1)(d) of the Employment Ordinance, two-third of 149 working days should be 99⅓ working days.

5. However, C1 to C3 only worked for 78 days, whereas C4 to C5 only worked for 80 days and C6 only worked for 79 days during the relevant period.

6. Accordingly, all six claimants worked less than the statutory requirement of two-third of the normal working days and they were therefore adjudged as having been dismissed by way of redundancy as the employer had not re-employed other workers in their place.  The employer also agreed that less working days were offered to the claimants because the low-tide period of the dyeing industry at that time.

7. The evidence and analysis of the learned presiding officer so far is beyond criticism as to his assessment of normal working days and the finding that they were laid off by way of redundancy. 

8. Thus counsel for the respondents has quite rightly pointed out that even if the 7 annual statutory holidays were to be deducted, the employer is still short of the statutory requirement of having sufficient days of work for the workers. 

9. This case is essentially the diminution of work for which the employees have been employed, and “diminish” means diminishing either permanently or temporarily and for whatever cause.  There were abundance of factual evidence which suggested diminished requirement for the employees’ services and this has not been rebutted by the employer.

10. Accordingly, the presiding officer is quite right in finding that the employees had been constructively dismissed on 18 April 2005 as the employer defaulted in its agreement with the employees that it would offer different works to the employees at the same daily rate of $300.  The unilateral reduction of the daily rate to $250 would in effect entitle the employees to reject and refuse to work for the employer any more.

Conclusion

11. For the aforesaid reasons, the employees were entitled to claim severance payments from the employer and this appeal must be dismissed with costs to the respondents.