TEAM CONCEPTS INTERNATIONAL LTD v. SHER WAI LING and Others

LABOUR TRIBUNAL APPEAL NO. 72 OF 1995

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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R E A S O N S    F O R    D E C I S I O N

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1. This is an appeal against the decision of the Presiding Officer at the Labour Tribunal awarding to the 3 Respondents severance payments totalling $43,517. The appeal is dismissed and I give my reasons as follows:

2. On 30 September 94, the 1st Respondent who was then employed by the Appellant as PCB draftsman and the 2nd and 3rd Respondents then employed as senior clerks were dismissed from their positions. What happened is that they were given the choice of either resigning from their positions or they would be dismissed. They chose to resign and they claimed that by reason of being offered no choice but to resign they were constructively dismissed. The Appellant before the Presiding Officer at the Labour Tribunal contended that there were reasons for the dismissal. However, it is now conceded by the Appellant that there is no cause for dismissal and the Respondents were not dismissed under S. 9 of the Employment Ordinance. All Respondents had been employed for more than two years and they claimed severance payments.

3. The Appellant contended at the Labour Tribunal that the Respondents were not dismissed by reason of redundancy. The Appellant's case is that the requirement for the nature of work for which the Respondents had been employed had not diminished. To support that they adduced evidence that since October 94 advertisements had been placed in newspapers to recruit replacements. Three persons had been employed to take up the positions left by the Respondents. These new employees told the Presiding Officer that they obtained their employment though the advertisements. Figures showing overtime work had increased in October, 94 and the following few months were adduced before the Presiding Officer purporting to show that the Respondents' workload had to be shared by other workers and there was no diminution in work. The Appellant asserted that there were other reasons for the Respondents' dismissal such as their incompatibility with other workers and unsatisfactory work performance and improper conduct.

4. The Presiding Officer found as a fact that the new recruits were employed not to replace the Respondents although they were employed to do similar work. He also found the salary of the replacement for the 1st Respondent was 27% less than what the 1st Respondent had been paid and there was a gap of more than 4 months between the departure of the 1st Respondent and the employment of the new recruit and this gap had not been explained. He referred to S. 31Q of the Employment Ordinance which is as follows:

"31Q. For the purpose of this Part an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy."

5. The Presiding Officer concluded that the Appellant had not discharged the burden to show the Respondents were not dismissed by reason of redundancy.

6. The Appellant appealed principally on the ground that the Presiding Officer had not investigated or inadequately investigated into the issues of redundancy and thus erred in law. The areas complained of that he failed to investigate are the advertisements and overtime work. The complaint is that the Presiding Officer has not referred to these important aspects of evidence in his judgment.

7. Mr. Vaughan for the Appellant submits that although the burden is on the Appellant to rebut the presumption of dismissal by reason of redundancy under S. 31Q, this may be discharged if the Appellant shows on balance of probabilities that the dismissal is not attributable to redundancy. He relies on a passage in Hindle v. Percival Boats Ltd. (1969) 1 WLR 179 at 187:

"... the claimant succeeds on this issue unless the employer demonstrates that a diminution in the requirement of the business is not the main cause. .... All he (the employer) must do is prove that redundancy is not the main cause and he does this by proving that the requirements of the business for the workers of the relevant kind had not diminished."

8. Mr. Vaughan submits that on the evidence of employment of the replacements, the advertisements and the overtime records, there is at least a doubt on the presumption that there is redundancy. This in fact, he submits is prima facie evidence of no reduction of work and no redundancy.

9. Mr. Hui for the Respondents submits that the question which the Presiding Officer has to investigate is whether or not there was a replacement after the Respondents had been dismissed. The issue is relevant to the question whether there was any reduction in the work for which the Respondents were employed to do. He submits that the Presiding Officer must have considered the question of advertisements when he considered the evidence of these witnesses. He also submits that the evidential value of the advertisement is little since these advertise for PCB Draftsman without experience who requires training whereas the 1st Respondent is an experienced PCD Draftsman; in the case of the 2nd and 3rd Respondents who were senior clerks, the advertisements are in respect of clerks. The recruits were not expected to perform the work of the Respondents.

10. It is now established that because the hearings at the Labour Tribunal are inquisitorial in nature and legal representation is not allowed, it is necessary that the Presiding Officer should observe his duty to investigate under S. 20(3) of the Ordinance in a manner that will not lead to injustice in a fair and proper determination of the issue. If he has gone into the main contentions between the parties, that in my opinion will be adequate. It would be absurd to require him to inquire into every matter that is at issue.

11. The issue in the present case for the Presiding Officer to decide is whether the Appellant has showed that the Respondents' were not dismissed by reason of redundancy. Requirement of the Appellant's business for workers like the Respondents is an important issue to take into account and whether there had been replacements after the Respondents' dismissal is a question the President Officer should investigate. The evidence of advertisements were before the Presiding Officer. Witnesses of the Appellant said that they were employed through the Appellant's advertisements. The Presiding Officer accepted their evidence. In deciding whether they replaced the Respondents, he must have considered the evidence of the advertisements even though he did not say so in his judgment.

12. The increase in overtime hours after the departure of the Respondents proves nothing one way or the other. There are many reasons for increase in overtime work such as to meet a deadline or because it was year end. It could be that even if the Respondents remained employed by the Appellant, there would still be the same increase in overtime work. This does not show that the workload of the Respondents had to be shared by the remaining workers. Neither does it mean that by reason of increase in overtime work, there is no redundancy.

13. On this note, it is pertinent for me to refer to the passage cited by Mr. Hui from the judgment of Cumming-Bruce J. in Delanair Ltd. v. T.L. Mead (1976) IRLR 343:

"The fact that upon a reallocation of duties some or much of the work previously done by a dismissed employee is carried out by the remaining staff working overtime is not of itself inconsistent with redundancy. Before making a finding that the requirement of the business for employees to carry out the work had not diminished by reason that after a dismissal others worked overtime, it is necessary to make a careful analysis of the hours of overtime worked by the employees in question. ..."

14. DW1 Kwok Kwai Chun who gave evidence for the Appellant stated that the recruit Ms. Kau was employed to replace a Ms. Lam. Ms. Lam had been promoted to replace a senior clerk Ms. Tam who had resigned. Ms. Kau was clearly not employed to fill the vacancy left by the 2nd Respondent's departure. There is no evidence that another clerk had been employed. DW5 Ms. Lau, was said to replace the 3rd Respondent who belonged to the Consumer Electronics Division. But Ms. Lau was employed as a clerk in the Marketing Department. This was a different department. DW3 Ms. Ko stated she had no experience in PCB Drafting. The Presiding Officer was not convinced that they were replacements for the Respondents. This is a finding of fact which an Appellate Court should not intervene.

15. The Presiding Officer having regard to the nature of work of a PCB Draftsman and the skill that is required of him, is entitled to reject the explanation of the Appellant that the delay is due to difficulty in finding someone suitable for the job. Because of this long time gap, the Presiding Officer may draw the inference that there was a decline in PCB work at the time of dismissal of the Respondents.

16. There is ample evidence for the Presiding Officer to determine that the Appellant has failed to rebut the presumption under S. 31Q. His decision and awards cannot be interfered with. The appeal is dismissed.

(A. Leong)

Judge of the High Court