WONG YUN SUN AND OTHERS v. WEARBEST GARMENT MANUFACTURING CO LTD

LABOUR TRIBUNAL ORDINANCE

(CHAPTER 25)

LABOUR TRIBUNAL APPEAL No.2 OF 1984

IN THE SUPRENE COURT OF HONG KONG

HIGH COURT

Claim No. 3731 of 1983

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JUDGMENT

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1. On the 22nd December, 1983 the Tribunal upheld the claim of the Respondent (1st Claimant) against her employer, the Appellant (Defendant) for $1,560 wages in lieu of notice of termination of employment under section 8A of the Employment Ordinance (Cap.57) and $12,935.00 severance pay under section 31B of the same Ordinance. The Respondent's case was heard at the same time as that of the abovementioned 2nd and 3rd Claimants. The Tribunal held that the Respondent's employment had been terminated on the 31st August, 1983. It was common ground that the employment of the 2nd and 3rd Claimants was terminated on the 5th September, 1983 and that all three Claimants had worked on the 4th floor of the Appellant's factory as piece rated inspecting garment workers. The Tribunal awarded sums of wages in lieu of notice and annual leave pay to the 2nd and 3rd Claimants but dismissed their claims for severance pay.

2. On the 15th May, 1984 the Appellant was granted leave to appeal against the award of severance pay to the Respondent on the two additional grounds authorised by the court pursuant to rule 8A(2) of the Labour Tribunal (General) Rules. The two grounds were in substance that-

3. On the 16th July, 1984 after hearing Mr. Mok of counsel for the Appellant and the Respondent in person, I directed pursuant to section 35(1)(c) of the Labour Tribunal Ordinance (Cap. 25) that the issue of redundancy be remitted to another presiding officer for a new hearing. I now give my reasons for that remission.

4. In his written decision dated the 22nd December 1983 the presiding officer referred to the two claims of the Respondent for wages in lieu of notice for dismissal and for severance payment and observed -

"The whole argument between the parties is whether there has been dismissal of the Claimant from her employment with the Defendant in the circumstances of the matter and I find for the Claimant in this regard".

5. He then gave his reasons for his finding on the dismissal issue and referred to the relevant evidence which he found decisive. No appeal has been pursued in respect of the decision on that issue. He concluded by dealing with the claim for severance pay in the following terms -

"Severance Payment is payable under section 31B of the Employment Ordinance if the Claimant has been dismissed by reason of redundancy. Under section 31Q of that Ordinance redundancy is presumed unless the the contrary is proved. The Defendant in this case has failed to rebut the presumption, though the same was clearly explained to them (sic) by the Tribunal."

6. In the context of a hearing where three claimants who had all worked together in the same part of the employer's factory doing the same work and had all been dismissed within a matter of days of each other it seems wholly inconsistent that, in the absence of any distinction on the evidence between the three claims, the Respondent's claim for redundancy payment was upheld in reliance on the presumption under section 31Q of the Ordinance but the redundancy claims of the 2nd and 3rd Claimants were dismissed. However the apparent inconsistency between the two findings does not necessarily mean that the decision in the case of the Respondents claim was wrong, and it is her claim alone with which this appeal is concerned.

7. In the circumstances of the present appeal the dismissal of the Respondent gave rise to an obligation on the part of the Appellant to make a severance payment to the Respondent by reason of redundancy pursuant to section 31B(1) and (2)(c) of the Employment Ordinance if the dismissal were attributable wholly or mainly to the fact that the requirements of the business of the Appellant (for the purposes of which the Respondent was employed by the Appellant) for employees to carry out work of a particular kind in the place where the employee was so employed have ceased or diminished or are expected to cease or diminish.

8. The effect of section 31Q is that unless the contrary is proved by the Appellant the Respondent is to be presumed to have been dismissed by reason of redundancy. It follows that, as counsel for the Appellant rightly conceded, in the circumstances of this case the onus was upon the Appellant as the employer first to rebut the presumption by establishing on the balance of probabilities that the requirements of the Appellant's business for employees to carry out inspection work at the place where the Respondent worked as a garment inspection worker had not diminished and were not expected to diminish. If the Appellant had succeeded in establishing that there was no such diminution or expectation thereof there could be no redundancy situation.

9. If on the other hand the Tribunal had come to a conclusion in favour of the Respondent on this issue, then it should go on to consider whether the Appellant had established that the dismissal of the Respondent was attributable wholly or mainly to the diminution in the requirements of the Appellant's business or to the expectation of such diminution: c.f. the observations of Sachs L.J. in Hindle v Percival Boats Ltd. [1969] 1 All ER 836 (C.A.) at pp. 841-2 with which Widgery L.J. agreed at p.848 H notwithstanding the dissenting judgment of Lord Denning M.R.

10. Although the presiding officer stated at the beginning of his written decision that the whole argument between the parties to this appeal was over the dismissal issue it is clear from the record of the proceedings that he did bear in mind his duty under section 20(3) of the Labour Tribunal Ordinance to investigate the redundancy issue because he recorded a series of questions concerning redundancy put by him to and the answers given by the Appellant's foreman (DW2) Mr. Lam Cho-yuet who had supervised the Respondent's work.

11. However after careful consideration of all the relevant evidence that was before the presiding officer I consider that it is demonstrably clear that he failed to investigate the redundancy issue adequately and that he failed to make any primary findings of fact on the substantial body of evidence that was adduced at the hearing on that issue. In my judgment he was not justified in falling back solely on the presumption under section 31Q and, in effect, brushing aside the evidence from both sides on the redundancy issue.

12. The Respondent (and the 2nd and 3rd Claimants) asserted, in statements made before the hearing which were treated as evidence at the hearing, that the three Claimants and a fourth worker had been dismissed at around the same time and that another worker had taken leave for about a month but the Appellant had only employed one worker to fill up the vacancies.

13. Counsel for the Appellant assembled the relevant evidence adduced in rebuttal of the presumption of redundancy by the Appellant in his additional grounds of appeal.

14. The Appellant had relied on documentary records in the form of exhibited lists of checking workers (Exhibit DD4) for July to October 1983 and on exhibited wages records (Exhibit DD6) for the same period. The lists of checking workers purported to show that the number of inspection workers employed by the Appellant had been 87 in the second half of August, 1983 (when the Respondent was dismissed), 88 in the first half of September, 1983 (when the 2nd and 3rd Claimants were dismissed), 90 in the second half of September and 88 in the first half of October 1983. On the face of it this was important evidence in rebuttal of the presumption of redundancy.

15. The wage records were so prepared that it was possible to identify the purported number of inspection workers from time to time employed on the 4th floor of the Appellant's factory (where the Respondent and the 2nd and 3rd Claimants worked) together with their total earnings and working hours. These records purported to show the following information regarding the inspection workers on the 4th floor :-

16. Again, on the face of it, this data concerning the actual unit where the Respondent and the 2nd and 3rd Claimants worked is cogent evidence in rebuttal of the presumption of redundancy, subject to the important obscurity in (d) above.

17. Mr. Lam Cho-yuet, the foreman of the Respondent and the 2nd and 3rd Claimants said, at page 12 of the record, under questioning by the presiding officer, that there were two groups of checking workers on the 4th floor - one group of 4 and one group of 5. He also said that after their dismissal there were no replacements for the Respondent and the 2nd and 3rd Claimants and their colleague (who comprised the group of 4 workers) until about October (he could not remember the date) and that there were only 6 checking workers on the 4th floor until November when two new workers were recruited. He said that he did not know about the number of checking workers on other floors. This evidence of Mr. Lam is inconsistent with the data purporting to be recorded in the wage records for the 4th floor which indicate that there were 12 and 13 workers working on that floor in the second half of September and the first half of October 1983 respectively.

18. On the other hand, when questioned later by the presiding officer at page 17 of the record regarding the volume of the Appellant's business, Mr. Lam stated that there was more work in the second half of 1983 than in the first half and that there was more business in the third quarter than in the fourth quarter. He also told the presiding officer that there had always been a notice board for recruiting workers at the factory entrance.

19. In his written decision the presiding officer simply did not deal with any of this evidence from both sides and fell back on the presumption under section 31Q. On appeal the court is unable, in the absence of any stated reasons, to ascertain why this evidence has not been dealt with. There are no findings of fact made in respect of the evidence on both sides.

20. It may be that the presiding officer wrongly considered that once he rejected the Appellant's contention that the Respondent had never been dismissed he was bound, without further inquiry, to conclude that her dismissal was wholly or mainly attributable to redundancy by virtue of the presumption under section 31Q. However it is not for the court to speculate where no reasons for the failure to deal with the evidence on the issue of redundancy have been given. Suffice it to say that in my judgment the failure to deal with the substantial volume of relevant evidence on the redundancy issue and the failure to enquire and decide whether the Appellant's evidence rebutted the presumption of redundancy under section 31Q was an omission amounting to an error of law.

21. Furthermore, even if the presiding officer rejected the Appellant's evidence in rebuttal of the presumption of actual redundancy without actually expressing that rejection, there is no indication in the written decision that he ever went on to enquire or decide whether the actual reason for the dismissal of the Respondent was wholly or mainly attributable to redundancy or to a genuinely mistaken belief on the part of the Appellant that the Respondent was still on sick leave and had not been dismissed.

22. I was urged by counsel for the Appellant to allow the appeal and substitute a finding that the Appellant had adduced overwhelming evidence rebutting the presumption of redundancy. He contended that that by taking this course the court would not be infringing section 35(2) (b)(i) of the Labour Tribunal Ordinance because in this case the presiding officer had made no determination of fact regarding redundancy.

23. I declined to take this course because I do not consider that it is for the appellate court to make findings of primary fact where, on the evidence, there is a clear conflict which has not been resolved by the Tribunal. Moreover Mr. Lam's evidence was not consistent with the data purporting to be recorded in the wage records. In my judgment the proper course is to remit the issue of redundancy to the Tribunal for a new hearing. In all the circumstances I acceded to the application of counsel for the Appellant that there should be a direction for a new hearing before a different presiding officer.

24. I conclude by observing that in finding the presiding officer to have erred in law in this case I do so with no implication of censure. I am mindful of the difficult task performed by presiding officers in dealing with complex dismissal and redundancy claims without the benefit of legal representation.