LOK MING RESTAURANT v. LAU KWAI CHONG AND ANOTHER

HCME 7/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MINOR EMPLOYMENT CLAIMS APPEAL NO. 7 OF 1999

(On appeal from Minor Employment Claim

No. MB 1466/1999(A))

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J U D G M E N T

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1. The appellant appealed against an award made by consent by an adjudication officer of the Minor Employment Claims Adjudication Board (the "MECAB"). The grounds of appeal as filed by the appellant were that the wage rate as claimed by the respondent employees were inflated and that it was the respondents who quit their employment and not that they were dismissed. These grounds, of course, are not valid grounds under section 31 of the MECAB Ordinance, Cap. 453. However, leave to appeal was granted on the grounds, firstly, that an adjudication officer must resolve a claim by determination and he cannot approve a settlement for which the procedure prescribed in section 14(2) and (3) of the MECAB Ordinance must be followed and, secondly, as to the propriety of the adjudication officer's conduct in the course of the proceedings below. I shall now treat these as the appellant's grounds of appeal.

2. The first ground of appeal can be disposed of quickly. Section 14 provides as follow:

"14. Conciliation certificate and settlement

(1) The Board shall not hear a claim until a certificate signed by an authorized officer is filed with the registrar to the effect that -

(a) one or more of the parties have refused to take part in conciliation;

(b) conciliation has been attempted but no settlement has been reached;

(c) conciliation is unlikely to result in a settlement being reached; or

(d) conciliation may prejudice the interests of a party.

(2) If a settlement of a claim is reached, the terms of the settlement shall be reduced to writing in such form as the registrar may specify and signed by the parties to the settlement.

(3) A settlement, which has been reduced to writing and signed by the parties thereto, shall be filed with the registrar.

(4) A settlement filed under subsection (3) shall be treated for all purposes as if it were an award of the Board."

3. Sub-sections (2) and (3) have to be read in conjunction with sub-section (1). Sub-section (1) provides that the Board shall not hear a claim until a certificate has been signed by an officer authorized by the Commissioner for Labour and filed with the registrar of MECAB. Thus conciliation by an authorized officer is a condition precedent before the claim will be heard by an adjudication officer. If conciliation is successful, then the procedures in sub-sections (2) and (3) apply. In short, these two sub-sections provide that the settlement agreement shall be reduced to writing and signed by the parties and filed with the registrar. If the conciliation is unsuccessful, then the authorized officer signs a certificate certifying in accordance with paragraphs (a) to (d) of sub-section (1), and the matter proceeds to adjudication before the adjudication officer. Thus in my view, section 14 applies to the proceedings before an authorized officer and not to the proceedings before an adjudication officer.

4. Further, an authorized officer, not being an adjudication officer, has no power to make any award. But if he adopts the procedures prescribed in sub-sections (2) and (3), then sub-section (4) gives the agreement the force of an award of the MECAB. Therefore, in my view, sub-sections (2) and (3) apply only to the conciliation before an authorized officer and has no application to the proceedings before an adjudication officer.

5. The position of an adjudication officer is peculiar. He is not a holder of a judicial office specified in Schedule 1 of Judicial Officers Recommendation Commission Ordinance, Cap. 92. He is appointed under section 4 of the MECAB Ordinance by the Commissioner for Labour. But he is a judicial officer as specified in Schedule 3 of the Oath and Declarations Ordinance, Cap. 11, and has to take the Judicial Oath, like any magistrate, or presiding officer of the Labour Tribunal, before a judge of the Court of First Instance. He performs a judicial function in determining employment claims and is vested with such judicial powers as are necessary for the discharge of his function. I consider him a judicial officer.

6. An adjudication officer is empowered under sections 3(4) and 5 of the MECAB Ordinance to inquire into, hear and determine the claims specified in the Schedule. If a claimant agrees to reduce his claim and if the defendant agrees to admit liability to that extent, there is no reason why an adjudication officer could not determine the claim on that basis by making the agreement an award of the Board. To require the adjudication officer to ignore the will and the interest of the parties by holding an inquiry and calling witnesses, on his own initiative, on behalf of the parties and then determine the claim is putting too restricted a meaning on the word "determine" in section 5. In my view, the adjudication officer, being a judicial officer, can validly approve a settlement agreement and make it an award of the Board if he is satisfied that a settlement agreement is voluntarily entered into by the parties in the exercise of their free will, is lawful in its contents, that the parties have the capacity to enter into such an agreement, and that the terms of the agreement is fair and reasonable and in the interest of the parties after taking into account of all the circumstances. An award made by an adjudication officer is outside the scope of section 14. The procedures prescribed therein are not applicable to an award made by an adjudication officer. This disposes of the first ground of appeal.

7. I shall now turn to the second ground of appeal. Interestingly, this appeal is prosecuted not by the appellant personally, but by his employee, Mr Ma, who was the licence holder of the appellant's restaurant in which the respondents were employed. It was Mr Ma who signed and filed the Application for leave to appeal (Form 13) and who appeared before the Court when the application for leave to appeal was heard. Mr Ma also represented the appellant before me at the hearing of the appeal today and yesterday.

8. In brief, Mr Ma told the judge hearing the application for leave that he appeared before the adjudication officer on 2 August 1999, but the adjudication officer refused to hear him as he was not the employer, though he was the one involved in the dispute with the respondents. The adjudication officer then adjourned the hearing to 28 September 1999 for the employer, Mr Li, to attend personally. But Mr Li had no personal knowledge of the dispute. Then he told the judge that the adjudication officer "steam-rollered" Mr Li into settling with the respondents and did not allow Mr Li to consult him before agreeing to the terms of the settlement. At the hearing before me, the respondents disputed what Mr Ma said. As Mr Ma was not before the adjudication officer in the proceeding below, I adjourned the hearing to the following afternoon for Mr Li to testify before me in support of this ground of appeal.

9. I had the opportunity of seeing Mr Li, the real appellant, in his testimony. He impressed me as a really nice, pleasant, accommodating and very honest person. He said the adjudication officer suggested them to compromise and suggested an amount for him to consider. He then asked if he could discuss with Mr Ma, but the adjudication officer said there was no need for him to discuss with anybody as he was the boss. He then agreed to the figure proposed by the adjudication officer. After that, the adjudication officer asked the respondents if they would accept that figure. The respondents agreed. He also admitted what in effect was very close to what was recorded by the adjudication officer in the notes of proceedings.

10. Mr Ma's complaint is that the adjudication officer did not allow Mr Li the opportunity to consult him. Mr Ma argued that Mr Li had no personal knowledge about the dispute and did not know that the wages claimed were inflated. In fact, the adjudication officer did not actually forbid him from consulting Mr Ma, he only suggested to Mr Li that it was not necessary for him to consult Mr Ma as he himself was the sole proprietor. I believe, if Mr Li had insisted, the adjudication officer would certainly have allowed a brief adjournment to enable him to discuss with Mr Ma. On the other hand, Mr Li himself was the employer and proprietor. Though he had no knowledge of the dispute, he knew full well that the hearing was adjourned to allow for his personal attendance. He knew the amount of the claim from the claim form. He ought to have discussed with Mr Ma and acquainted himself with the background, the respondents' wages and the facts leading to the dispute before the hearing. He ought to know whether he has a valid defence, or if he had a counterclaim. There is no reason for the adjudication officer or a reasonable by-stander to think otherwise. There is nothing to suggest to the adjudication officer that Mr Li does not have the legal capacity or the ability to make such a simple decision. It might have been preferable if the adjudication officer had invited Mr Ma to attend the discussion, but that is not anything that deserves criticism. I am satisfied that Mr Li was not "steam-rollered" into a settlement as alleged by Mr Ma and that the adjudication officer has acted with due propriety.

11. In view of the small amount in dispute, the settlement agreement is prima facie a good agreement for both parties. Both parties compromised to save time and costs and avoided the uncertainty of litigation. Mr Li made a good management decision. In his own words as recorded by the adjudication officer, he said "Being a busy person, I do not think it worthwhile to spend any further time on this case." I am satisfied that Mr Li entered into the settlement agreement at his own free will and knowing what price he was giving for the convenience. In all the circumstances, I consider it appropriate that the adjudication officer should approve the settlement agreement. Accordingly, I dismiss the appeal. In view of the very fair and honest attitude of Mr Li, who actually is the appellant, I make no order against him in respect of the appeal, save and except the costs of the adjournment which were awarded yesterday. I award costs of the adjournment in favour of each of the respondent in the amount of $500.00 each, in lieu of taxation, against the appellant.

12. Another grievance of both Mr Li and Mr Ma is that the adjudication officer refused to allow Mr Ma to represent the defendant. Their grievance is well understood as Mr Ma was the person who actually employed the respondents, was responsible for the day to day management of the appellant's restaurant and was involved in the dispute with the respondents. The adjudication officer considered that Mr Ma had no right of audience before him by reason of section 22 of the MECAB Ordinance. With respect, I do not agree. The section is neither exhaustive nor exclusive. It does not purport to give an exhaustive list of who may or may not appear before the Board. Sub-section (1) provides who shall have a right of audience as of right before the Board, while sub-section (2) generally excludes members of the legal profession unless they are parties to the dispute. In my view, provided Mr Ma is not a lawyer and is properly authorized by a party, he may with the leave of the Board (I emphasize that leave is important) appear before the Board. The view taken by the adjudication officer is unduly restrictive. To put the matter beyond dispute, I would recommend the Commissioner for Labour to amend section 22 of the MECAB Ordinance to mirror section 23(1)(d) of the Labour Tribunal Ordinance which gives right of audience to duly authorised representatives of unincorporated companies.