NG CHI-LEUNG AND OTHERS v. GLOBE DYEING FACTORY LTD.

IN THE SUPREME COURT OF HONG KONG

LABOUR TRIBUNAL APPEAL NO. 9/88

(CLAIM NO. TM-45/88)

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J U D G M E N T

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1. This is an Appeal from two judgments given by Mr. Stephen Chow who was a Presiding Officer of the Labour Tribunal.

2. He gave judgment in favour of the 1st to 13th claimants (Employees) who were claiming Long Term payments under Part VB of the Employment Ordinance Cap.57. He dismissed the claims of the 14th to 21st claimants who were seeking redundancy payments.

3. Both counsel agreed that it would be convenient to deal with these appeals together.

4. The background to these cases is that the Applicant (The Employer) towards the end of last year had to vacate their Factory premises at Tsuen Wan They made arrangements to remove to Ping Shan - near Yuen Long in the New Territories where they would resume the Factory's business.

5. The Employer, who seems to me to have acted in a helpful and constructive manner attempted to make arrangements for existing Employees to transfer to the new premises. These arrangements included some provision for transportation and overtime payments. I understand that the majority of Employees were prepared to transfer their employment. The appeals I have to consider relate to some of the Employees who did not do so.

6. Mr. Chan for the Employer referred to the substituted Grounds of Appeal.

7. It is convenient to consider the first 3 grounds together These were as follows:

8. The learned Presiding Officer erred in law in

"1.    Holding the Claimants were entitled to Long Service Payments when there was no evidence to suggest that the Claimants had been dismissed by the Defendant within the meaning of section 31T of the Employment Ordinance, Cap. 57.

2.    Failing to hold that the Claimants had failed to discharge their burden of proof under section 31T of the Employment Ordinance, Cap. 57 to the effect that they had been dismissed by the Defendant.

3.    Failing to hold that the termination of the Claimants' contracts of employment were at the volition of the Claimants or by agreement between the Claimants and the Defendant and would not therefore entitle the Claimants to Long Service Payments."

9. Mr. Chan submitted that I should only consider the question of dismissal in the same way as the Presiding Officer had done. That is had the Employees been dismissed in accordance with S.31T(1)(a) of the Ordinances. This section reads:

"31T.    (1) For the purposes of and subject to this Part, an employee shall be taken to be dismissed by his employer if, but only if -

(a)    the contract under which he is employed is terminated by the employer with or without notice or payment in lieu thereof other than in accordance with section 9."

10. Section 9 deals with the situation where in general terms the Employee can be dismissed for cause.

11. He went on to argue that the burden of proof in establishing that a contract of employment had been terminated lay with the Employee. His authority for this was To Kin Wah v. Shui Hing Co Ltd (1) which was a judgment I had delivered on this subject.

12. In the particular circumstances of the present case I do not think it is essential to make a finding as to where the burden lies. I say this because the facts of the case speak for themselves, mainly from the documents, and there is not a great deal of dispute now as to what transpired on the 27th January 1988 which was the date when the notice I will be referring to was exhibited to Employees.

13. For what it is worth I would observe that my judgment in To Kin Wah was based upon a claim for severance pay. The provisions in Part VA of the Ordinance differ from those in VB and I do not consider that the burden of proof lies with Employees where they are claiming Long Service Payments.

14. Mr. Neoh for the Employees argued that their employment was indeed terminated on the 27th January 1988 in accordance with S 31T(1)(a).

15. At this point it may be convenient to consider the terms of the notice which was given on the 27th January.

    "    GLOBE DYEING FACTORY LTD.

16. Those who do not go to work in the new factory in Ping Shan

Van Shung Cheong Industrial Building, 9 Miles, Castle Peak Road, Tsuen Wan, N.T., H.K. Tel: 0-4934121-8"

17. To understand the effect of this notice it is necessary to determine the rights and obligations of the parties.

18. No provision is included in the contracts of Employment of the Employees entitling the Employer to require Employees to work at different places. This being the case it is then necessary to consider whether any such term can be inferred.

19. Mr. Neoh referred to 2 English cases where similar situations had arisen. The cases were McCulloch v. Moore (2) and O'Brien v. Assoicated Fire Alarms Ltd (3).

20. Perhaps the most satisfactory-statement of the position can be seen from a passage in the judgment of Denning MR at p. 95 of O'Brien v. Associated Fire Alarms

"In my opinion, therefore, the finding of an implied term could have been reviewed by the Divisional Court; and it can be reviewed by this court. On the facts found by the tribunes, I am quite clear that there was no such implied term. The three employees were recruited from the Liverpool area. They had their homes in the Wirral. They worked from their homes for years, going each day to work and returning home each night. They could not reasonably be expected to go off for months to a far place like Barrow, leaving their wives and children behind and only getting home at weekends. The tribunal, in several places of their written decision, admitted as much. The tribunal recognised that the company could not dismiss the employees at a moment's notice for their refusal, but would have to give them their full four weeks' notice. When talking about suitable alternative employment, they said that they had -

"no difficulty at all or doubt in holding that the refusal to go to Barrow was reasonable, in view of the domestic difficulties and the distance of travel."

All this goes to show that there was no implied term that they could be sent anywhere in the north-western area. The only persons who suggested that the employees could be sent anywhere were the young executives. One of them had been at the Liverpool office for four months. The other for fourteen months. They said that they "considered" that the employees could be sent anywhere in the area. That is quite insufficient to found the alleged implied term. I think that the only term to be implied in their contracts was that they should be employed within daily travelling distance of their homes or, if you please, within a reasonable distance of their homes. Barrow is far beyond a reasonable distance."

21. While I accept that the geographical situation is very different here in Hong Kong to the position in England I am nonetheless satisfied that the amount of upheaval which would be involved for workers, moving from Tsuen Wan to Ping Shan would be considerable and it is reasonable to view it in a similar way to Lord Denning.

22. In coming to this conclusion I have also borne in mind the way in which the Legislature has chosen to deal with what I think can conveniently be described as the 'reasonability' test.

23. It is helpful to consider the different ways in which the criteria for eligibility for severance pay and Long Service payments are dealt with.

24. S.31(C) which is in Part VA of the Ordinance deals with general exclusions from the right to receive severance payments when an Employee is dismissed.

25. The section reads:

"31(C).    (1) Except as provided by section 31H, an employee shall not be entitled to a severance payment by reason of dismissal where his employer, being so entitled by reason of the employee's conduct terminates his contract of employment without notice or payment in lieu in accordance with section 9.

(2)    An employee shall not be entitled to a severance payment by reason of dismissal if, not less than 7 days before the relevant date, the employer has offered to renew his contract of employment, or to re-engage him under a new contract, so that -

(a)    the provisions of the contract as renewed, or of the new contract, as the case may be as to the capacity and place in which he would be employed, and as to the other terms and conditions of his employment, would not differ from the corresponding provisions of the contract as in force immediately before his dismissal; and

(b)    the renewal of re-engagement would take effect on or before the relevant date,

and the employee has unreasonably refused that offer.

 (3)    An employee shall not be entitled to a severance payment by reason of dismissal if, not less than 7 days before the relevant date, the employer has made to him an offer in writing to renew his contract of employment, or to re-engage him under a new contract, so that in accordance with the particulars specified in the offer the provisons of the contract as renewed, or of the new contract, as the case may be, as to the capacity and place in which he would be employed, and as to the other terms and conditions of his employment, would differ (wholly or in part) from the corresponding provisions of the contract as in force immediately before his dismissal, but

(a)    the offer constitutes an offer of suit able employment in relation to the employee;

(b)    the offer constitutes an offer of employment no less favourable to the employee than Hitherto; and

(c)    the renewal or re-engagement would take effect on or before the relevant date,

and the employee has unreasonably refused that offer."

26. It will be noted from this that a number of situations are being contemplated by the Legislature and that the overall scheme of the section envisages a situation where the continuity of the employment is the overiding concern. Over and above this however is the necessity to demonstrate that an Employee is acting reasonably.

27. This is to be contrastd with the situation which arises under Part VB of the Ordinance dealing with Long Service payments.

28. There is no equivalent of S.31C in that Part.

29. The nearest approach to S. 31C can be found in S. 31T(2) which is as follows:

"31T(2)    An employee shall not be taken for the purposes of this Part to be dismissed by his employer if-

(a)    his contract t of employment is renewed or he is re-engaged by the same employer under, a new contract of employment; and

(b)    the renewal of re-engagement takes effect immediately on the ending of his employment under the previous contract."

30. Here there is no reference to the reasonableness or otherwise of the Employee in accepting or rejecting the new offer of employment which is made to him.

31. I do not think that this is an accident of omission. I believe that it was intention of the Legislature to widen the circumstances when Long Term Service payments were payable.

32. One consequence of removing the "reasonability" test is to substantially circumscribe the issues which have to be considered by the Presiding Officer. I do not think that it is necessary for him to weigh and consider the personal circumstances of each of the Employees to determine whether he or she has acted reasonably in deciding not to transfer to Ping Shan.

33. Grounds 4 and 5 of the Appeal deal with the way in which the Presiding Officer interpreted the 27th January notice.

34. In particular it is claimed that the Presiding Officer should also have taken into account the earlier notices and circulars issued by the Employer.

35. The answer to this complaint is twofold. In the first place it is evident to me that Mr. Chow did take care cognisance of the overall position in this judgment. In the 2nd place I do not think that the contents of the earlier notices really affect the position. The notices were cast in an advisory form and are in my opinion consistent with a view being taken that the employment was being terminated.

36. The result of this is that I am satisfied that Mr. Chow came to the right conclusion in the correct manner. Accordingly this appeal will be dismissed. Costs will be to the Employees and will be taxed in according with Legal Aid Regulations.

⁽¹⁾ Unreported Lab. Trib. App. 9/85

⁽²⁾ [1967] 2 All ER 290

⁽³⁾ [1969] 1 All ER 93