CHOI TZE KEUNG v. GREEN CLUB

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(On Appeal from Labour Tribunal Claim No. E655 of 1995)

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JUDGMENT

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1. The Respondent Choi Tze Keung was the manager of the Appellant, Hong Kong Green Club. He started his employment with the Appellant on 18th February 1989. His contract of employment was terminated by the Appellant on 1st July 1994 during his absence. On his return to the Club on 22nd July 1994, the Appellant was given a cheque of $39,498.90. He accepted this cheque and signed a note in the following terms :

"I, Ricky Choi Tze Keung, with ID Card No. XXXXXXX(X), agreed and accepted the calculation of my salary payment given by the Hong Kong Green Club for termination of my employment. Since I have worked for The Hong Kong Green Club from 18th February 1989, I give up my rights for further claims from now on. No further payments should be offered to me in future. I accepted the sum of money is HK$39,498,90 of cheque number 205565 issued by the Bank of Tokyo Ltd at the date of 22 July 1994."

2. The Respondent subsequently filed a claim at the Labour Tribunal for arrears of wages, annual leave pay and severance pay.

3. The Appellant's case before the Presiding Officer was this :

4. The Appellant agreed before the Presiding Officer that the sum of $39,498.90 was for one month's wages in lieu of notice of termination of contract of employment, the Respondent's annual bonus on a pro rata basis and long service payment. The Appellant also agreed that the Respondent had not taken any annual leave during his employment.

5. The Presiding Officer found that there was a dismissal by reason of redundancy and the note signed by the Respondent did not bar the Respondent's claim since the Appellant could not by agreement reduce the benefits and protection afforded to the Respondent under the Employment Ordinance, Cap.57 ("the Ordinance").

6. On the allegation of misconduct, the Presiding Officer found that the Appellant had terminated the Respondent's employment by payment of wages in lieu of notice of termination. Thus, the Appellant had not relied on the alleged misconduct by reason of which they could have summarily dismissed the Respondent under s.9 of the Ordinance He awarded to the Respondent severance pay, annual leave pay and arrears of wages as claimed.

7. The Appellant now appeals on the ground that:

8. The Respondent acts in person and he has made no submission except indicating that he should be entitled to the sum he claimed.

9. On the first ground, the Appellant says it was part of the terms of the Respondent's employment that the Respondent would not take annual leave.

10. Section 70 of the Ordinance provides as follows :

"Any term of a contract of employment which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by this Ordinance shall be void"

11. Thus, in law, a term is void if it purports to contract out of the provisions of the Ordinance, reducing the rights and protection afforded to the employee by the Ordinance. The Respondent's agreement not to take annual leave is void under s.70 and not enforceable against the Respondent. The Appellant remains liable to pay annual leave pay for the leave not taken by the Respondent. Section 41D of the Ordinance provides that such payment should be made on termination of the Respondent's contract of employment.

12. On the second ground, the Appellant had paid wages in lieu of notice of termination to the Respondent. There was no evidence that the Respondent was aware of the allegations of misconduct. He was away from work when the termination took effect. The alleged misconduct were criminal offences but the Appellant never sought police assistance in their investigation. These allegations were made when the Respondent filed his claim at the Labour Tribunal and had not been raised at any time earlier. The circumstances were that the Appellant never relied on s.9 of the Ordinance to summarily dismiss the Respondent. The Presiding Officer cannot be faulted in concluding that the Appellant did not dismiss the Respondent for misconduct.

13. On the third ground, the Presiding Officer found the Club was closed. The Appellant admitted before me that since the dismissal of the Respondent, the Club remained closed. The Appellant accepted that licence was not granted by the authority because of the Appellant's failure to comply with fire regulations. This resulted in the closure of the Club and it was unlikely that any licence would be granted to the Club premises. This is a clear case of redundancy. The Respondent was dismissed because the nature of work for which he was employed had diminished. The Presiding Officer was correct to find that the dismissal of the Respondent was by reason of redundancy.

14. On the final ground, the note signed by the Respondent on 22nd July 1994 stated that he accepted the calculation of his salary payment and he gave up his rights for further claims. What the Respondent accepted and what rights he had forgone on 22nd July 1994 by signing the note must be viewed in the light of the circumstances when he appended his signature. The Appellant admitted that this sum was for wages in lieu of notice of termination of employment, annual bonus and long service payments. Particulars of these payments were listed on an attached note. The Appellant was fully aware that the Respondent's acceptance was in respect of these payments and not otherwise. What rights were given up by the Respondent is not clear. Was he giving up his right to make further claims for wages in lieu of notice. bonus and long service payment? Or was he giving up his claims for other entitlements of his employment? If it was the latter, the Respondent's promise not to claim was not supported by consideration. It could not be the Respondent giving up his entitlements in return for the Appellant forbearing to take action against him for the alleged misconduct. Neither was it the case that the Respondent was settling to avoid legal proceedings. There was no evidence on either of these situations. The Presiding Officer was correct to find that the note did not bar the Respondent from claiming annual leave and severance pay under the Ordinance.

15. The Presiding Officer could not be faulted. The appeal is dismissed and I make no order as to costs.