HSIEH CHIA MING OLIVIA v. WEMBLEY INTERNATIONAL (HK) LTD.

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 36 OF 1998

(On appeal from Labour Tribunal Claim No. LT1270 of 1998)

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J U D G M E N T

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1. The Respondent Company, Wembley International (HK) Ltd. (the respondent) was at the material time the management company in charge of the Hong Kong Stadium accountable to Urban Council as the Board of Governors. The Appellant, Ms. Hsieh Chia Ming Olivia, (the appellant) was employed as the Finance Director of the respondent reporting to its General Manager. She was responsible for all financial and administration operation of the respondent.

2. The appellant was dismissed summarily by the respondent on 3.9.1997. She subsequently brought proceedings in the Labour Tribunal claiming wages in lieu of notice, year end payment and damages for unreasonable dismissal under Part VIA of the Employment Ordinance.

3. The appellant failed in her claim entirely and hence the present appeal.

4. Leave to appeal was granted by Deputy Judge Wong on the following points of law, namely:-

i) whether on the facts as found by the Presiding Officer, the conduct of the claimant justified an instant dismissal; and

ii) whether the claimant in law is entitled to pro-rata bonus notwithstanding instant dismissal.

5. Under section 11F of the Employment Ordinance, pro-rata end of year payment is only payable if the contract of employment is terminated "otherwise than by the employee under section 6 or 7 or by the employer under section 9."

6. Section 9 of the Employment Ordinance of course deals with termination of contract without notice by employer, in other words, summary or instant dismissal. If the summary dismissal was justified, the appellant is not entitled to be paid any pro-rata end of year payment.

7. The appellant suggested that her salary was structured in such a way that her annual salary would be divided into 13 parts. In addition to the 12 monthly payments, the 13th part would be paid at the end of the year. She suggested that the claimed end of year payment was in fact arrears of wages.

8. The appellant relied on the terms of her employment contract which stipulated that she would be entitled to an annual income of initially $500,000.00 which amount included the 12-month salary and the Chinese New Year Bonus.

9. She also suggested that there had been subsequent agreement to the effect that her annual income, including the Chinese New Year Bonus should be considered as her annual salary. She claimed to have been misled by the tribunal officer when she included in the claim form the claim for year-end payment and not arrears of wages.

10. Under the Employment Ordinance, "end of year payment" means "any annual payment (whether described as 'thirteenth month payment', 'fourteenth month payment', 'double pay', 'end of years bonus' or otherwise) or annual bonus of a contractual nature, but does not included any annual payment or any annual bonus, or any proportion thereof, which is of a gratuitous nature or which is payable only at the discretion of the employer."

11. The initial employment contract between the appellant and the respondent clearly indicated that the annual income of the appellant included the 12-month salary and the Chinese New Year Bonus. The Chinese New Year Bonus was contractual in nature which was payable on top of the 12 month salary at the end of the year. The Chinese New Year Bonus in issue clearly falls within the definition of "end of year payment" in the Employment Ordinance.

12. Indeed, the annual salary adjustment of the appellant in June 1997 stated that her monthly salary would be increased from $58,000 to $62,060 with effect from 1 April 1997. It did not mention at all that her monthly salary should include part of the Chinese New Year Bonus and would therefore be increased to over $67,000.

13. In the claim form filed by the appellant, not only did she claim the Chinese New Year Bonus as a year end payment, she also calculated her claim for wages in lieu of notice on the monthly salary of $62,060 and not $67,000. These contradicted her assertion that the Chinese New Year Bonus should be treated as part of her monthly salary.

14. There was justification for the learned Presiding Officer to conclude as he did that the Chinese New Year Bonus in question should be treated as a year end payment and not part of her monthly salary.

15. The appellant's contention that she should be paid the Chinese New Year Bonus as the arrears of wages even if the summary dismissal against her was justified could not be right.

16. The primary issue involved in this appeal is whether the respondent was entitled to summarily dismiss the appellant under section 9 of the Employment Ordinance. The question of compensation only arose if the summary dismissal was unjustified.

17. Section 9 of the Employment Ordinance provides:-

"An employer may terminate a contract of employment without notice or payment in lieu-

(a) if an employee, in relation to his employment-

(i) wilfully disobeys a lawful and reasonable order;

(ii) misconducts himself such conduct being inconsistent with the due and faithful discharge of his duties;

(iii) is guilty of fraud or dishonesty;

(iv) is habitually neglectful in his duties; or

(b) on any other ground on which he would be entitled to terminate the contract without notice at common law."

18. The undisputed factual background relevant to the issue and those found by the learned Presiding Officer can be succinctly stated as follows:-

"In mid-1997, the General Manager of the respondent had left and commencing from July 1997, the Deputy General Manager, Mr. Simon Hill started acting as the General Manager until the new General Manager arrived. There was a circular that Mr. Hill had been so appointed and the appellant must have notice of such appointment.

Unfortunately, the relationship between the appellant and Mr. Hill was not cordial due to past disputes.

Despite the fact that Mr. Hill had been properly appointed as the General Manager and had the authority as such, the appellant chose not to co-operate with him. At some stage, she challenged the authority of Mr. Hill.

In mid-August 1997, Mr. Hill orally asked the appellant for some Payroll information in order to prepare a paper to present to the Board of Governors, namely the Urban Council on 20.9.1997. The appellant ignored such requests. On 20 August 1997, Mr. Hill made the request in writing. Again his request was ignored by the Appellant.

On 21 August 1997, Mr. Hill brought the matter to the attention of of Alan Coppin who was the Chief Executive of Wembley PLC Group in the U.K. In the fax message to Mr. Coppin, Mr. Hill said, "We spoke the other day and you faxed by return a letter of authority which, in the eyes of my Finance Director, clearly isn't enough. Despite two verbal requests and a memo I am still unable to obtain the information I require to compile this report."

In response, Mr. Coppin gave the following instruction to the appellant in a letter dated 21 August 1997, 'I am most concerned to learn that Mr. Simon Hill has been unable to compile a report for the Board of Governors because he has not received the necessary information from you. I have already sent a fax to Simon for him to show to all executives and staff, confirming his position as interim General Manager. In this position Simon should be provided with whatever information relating to the Stadium activities that he requires.

Please ensure that Simon receives whatever information he requires forthwith.'

Despite such clear instruction to the appellant, she still had reservation about the authority of Mr. Hill. She still wanted to seek clarification from Mr. Coppin by writing a letter dated 22 August 1997 to him. The letter read as follows:-

'Recently, Mr. Simon Hill has come to my office asking for the payroll records of the Stadium. I understood that he is required to write a paper concerning Stadium Staffing and Expenditure Levels which the Urban Council has scheduled to be presented in October 97. Since I myself and my staff, Ms. Amanda Mak are familiar with this subject, I offered Mr. Hill our help as we did to our ex-CEO, Mr. Alan Murray. In those days, Mr. Murray would invite our inputs to similar issues at the weekly Administration meetings. All I suggested to Simon is for us to hold a meeting for reviewing existing staff levels, brainstorming ideas and strategies that we would recommend the Board of Governors to adopt for the Stadium. To me, I am not holding up information from him, rather, I am offering my help.

As this issue has already been escalated to you, I am grateful to follow your instruction in this respect. If your goodself concluded that Mr. Simon Hill should proceed with this proposal alone, we would simply photostat the payroll records to him. Please advise.'

By a fax message dated 22 August 1997, the appellant was told in no uncertain term that Mr. Hill has full responsibility for the day to day management of the Hong Kong Stadium and it was for him to determine how the appellant should best support him."

19. The appellant claimed that by the time she read the fax message dated 22 August 1997 from Mr. Coppin, Mr. Hill had already given her the letter of termination with three months' notice on 25 August 1997.

20. The learned Presiding Officer also found as a fact that after 25 August 1997, Mr. Hill had approached the appellant for the information. The appellant still failed to release such information. The appellant was hence summarily dismissed on 3 September 1997 when she was also suspected of trying to shred some important documents or report the internal financial matters of the company to the Urban Council.

21. The learned Presiding Officer expressly rejected the appellant's suggestion that she was not approached again for the information after 25 August 1997.

22. Under section 32 of the Labour Tribunal Ordinance, a party who is dissatisfied with an order of the tribunal can appeal on points of law or jurisdiction only. The High Court on an appeal from the Labour Tribunal is bound by the finding of facts of the tribunal.

23. On the undisputed facts and the facts found by the learned Presiding Officer, there could be no doubt whatsoever that the appellant had wilfully disobeyed the order by Mr. Hill to supply the payroll information which order was lawful and reasonable.

24. However well-intended the appellant might be, there was no justification for her to question the authority of Mr. Hill which authority had been made known to her.

25. The learned Presiding Officer was right in concluding that the summary dismissal against the appellant was justified.

26. The appellant had suggested that there was a practice in the company in that summary dismissal against an employee would only be evoked if the employee had been previously warned by written notice. Such practice, if ever in existing did not have the effect of overriding the provisions of the Employment Ordinance.

27. Under Part VIA of the Employment Ordinance, an employee who had been dismissed by an employer was entitled to claim for remedies against the employer if there had been no valid reason for the dismissal by reason of the conduct of the employee. If the employer was justified in summarily dismissing the employee under section 9 of the Employment Ordinance, a fortiori there must have been a valid reason for the dismissal by reason of the conduct of the employee.

28. Since the respondent was justified in summarily dismissing the appellant, there was no valid basis for the claim for any terminal payments under section 32O in Part VIA of the Employment Ordinance.

29. On the undisputed facts and the facts found by the learned Presiding Officer, he was right in dismissing the claim by the appellant.

30. In the circumstances, the appeal must be dismissed.

31. As the parties are not legally represented, I make no order as to costs. The order on costs is an order nisi to be made absolute 14 days after the handing down of this judgment.