CHAN MAN FU v. LEO TOP DEVELOPMENT LTD

DCEC1415/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1415 OF 2003

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JUDGMENT

1.  This is an assessment of employees’ compensation.   The issues in the assessment are:

1）The monthly earnings of the Applicant

2）The period of sick leave for section 10 compensation

3）The % of permanent loss of earning capacity

2.  The Applicant in the Application appeals against the assessment of the Employees’ Compensation (Assessment) Board under section 18 of the Ordinance.

The 1st Issue

3.  In relation to the monthly earnings of the Applicant the Applicant submits a letter from the Inland Revenue Department dated 1 January 2004 which showed the particulars of the Applicant’s Employer’s Return for years of Assessment of 2000/01 and 2002/03 filed by the Applicant’s employers.   The facts show that from 11.7.2002 to 7.8.2002, the Respondent had paid the Applicant the sum of $8,472.   This sum was a sum in respect of 27 days wages.  

4.  It is the Respondent’s contention that for this month, the Applicant was paid $8,200 per month but upon the resignation of the Applicant, he was paid a further 3 days wages for leave which he did not take.  

5.  The Applicant does not have a stance on this.  

6.  In respect of the period from 1^st April 2002 to the date of the accident on the 2^nd June 2003, the Respondent states that the Applicant was paid a wage of $6,800.   The Respondent produces three pieces of evidence in support of this.   They are:-

1）	The Conditions of Employment  at pages 34 and 35 of the Bundle of Document.
2）	The salary receipts for the month of April 2003, May 2003, and Salary Receipt for 1-2 June as well as receipt for section 10 compensation for 3 – 30 June signed by the Applicant which stated the salary for the month was $6,800.  These are at pages 55 to 57 of the BD.
3）	Paragraph 3(6) of the Application in this action states that for the month immediately preceding the accident and on average during the 12 months (or any lesser period of employment with the employer) prior to the accident, the Applicant was paid HK$6,800 (subject to discovery).   Balanced with this, it is clear that even on the 20 October  2003, when the Applicant filed his notice of appeal against the assessment of compensation by the Labour Department he stated that he wanted to appeal against the monthly earnings stated therein as his monthly salary was stated to be $8,000.   This is found at page 52 of the BD.

7.  The Applicant however stated that he did not sign the front side of the Conditions of Employment at page 34 of the BD which contained a statement of monthly salary at $6,800.  He stated that when he was employed the salary was stated to be $8,000 but it was due to SARS that the Respondent asked to reduce his salary to $6,800.  The Applicant’s Counsel submitted that the font used in the front side (page 34 of BD) of the Conditions of Employment is entirely different from that in the Conditions of Employment other side of the page (page 35 of BD) and further page 34 of the BD is not signed.  It is clear that there is a space for signature by the employee at page 34 of BD which is left blank.  The Applicant relied on page 59 of BD, the receipt for section 10 compensation etc. on which the computation is based on monthly salary at $8,000 p.m.  

8.  The Respondent’s explanation of the monthly salary stated at page 59 at $8,000 p.m. is that the Applicant requested to borrow money from the Respondent.   The Respondent decided to give $1,200 extra as salary to the Applicant in lieu of the full amount of the loan requested and therefore the sum stated to be the monthly salary in July was increased to $8,000 p.m.    However, this appears to be not a satisfactory explanation, as instead of stating $1,200 as a gift, it is actually stated to be a part of the salary.   This is not a reasonable approach for any employer to take.   I therefore find the Respondent’s explanation of this to be unacceptable.

9.  In my view the front side of the Conditions of Employment at page 34 of BD, where monthly salary is stated to be at $6,800 is suspect as it is in fact an employment application form and is not an employment contract.   The top part of the form contains details of the Applicant.   In the space where the Applicant should place his signature, there is no signature of the Applicant.  The monthly salary is inserted in the part of the form which is for details to be filled in by the employer.   The detail related to salary is just a detail filled in by the Respondent and is not stated to be a term agreed between the parties.   The font on page 34 is clearly different from that in page 35.    It is not difficult to print something on a blank side of the Conditions of Employment as found at page 35 with the contents at page 34.   Page 34 by its description is clearly not a part of an employment contract with terms agreed between the parties.   I do not place any weight on page 34 of the BD as being a part of the terms agreed between the parties.     

10.  There still remains the salary receipt for April and May which stated the monthly salary to be $6,800.   The Applicant’s explanation was that he was employed at $8,000 and it was because of SARS that his salary was reduced to $6,800.   He stated that he had not agreed to this unilateral reduction of salary.   I find this explanation of the Applicant to be believable.   

11.  I do not accept the Respondent’s explanation related to the reasons for stating the Applicant’s salary at $8,000 in the receipt for section 10 compensation at page 59.  

12.  Having considered the aforesaid, I come to the finding that I accept the Applicant’s evidence related to the agreed salary between the parties that it was $8,000 p.m. but it was because of the on-set of SARS that the Respondent unilaterally imposed a lowering of salary to $6,800 p.m.    The agreed salary of $8,000 p.m. should be used as the basis of computation of employees compensation.

The 2nd Issue

13.  The sick leave period as stated in the Certificate of Assessment (Form 7) assessment of the Assessment Board should be 63 days.   However as the Applicant had returned to work within the sick leave period for 8 days, 8 days should be deducted from the sick leave period.   Hence the period for section 10 compensation should be 55 days.  

The 3rd Issue

14.  The Applicant relies on the medical report of Dr. C. K. Hung dated 18^th March 2005.   Dr. Hung’s report takes into consideration the medical reports referred to by him in his medical report at pages 120 to 124 of BD.   He saw the Applicant on 7^th January 2005.   In his report he refers to the Current Complaint of the Applicant which states

“Pain at Right Lower Limb

The pain at the injured area had persisted since the accident and associated with itchiness few weeks after the injury.  In the initial 2 months of the injury, the pain was so severe that he became crippled hence unable to resume working.  At present, he also experience pain radiating to the back of right knee and thigh.  Because of the pain, Mr. Chan required taking painkillers regularly after the he was injured in June 2003.

Psychological Deficit

The pain at right thigh interfered his sleeping pattern during the initial few weeks.  Subsequently he developed depression and persistent insomnia, which required constant psychological therapy.”

15.  In his report under “Comment” he stated that “the main complaint at present is residual pain and itchiness at right lower limbs, which may interrupt some activities of daily living and result in psychological disturbances.  During the 18 months after the injury, the symptoms and signs of the wound has been found improving, any form of treatment is not suggested.  Although the degree of burn injury to the right thigh was not serious, Mr. Chan noticed tremendous discomfort especially pain and itchiness, which interfered substantially with his daily activities so that he encountered difficulties to seek work as waiter and labourer.  On evaluating the physical disability due to thermal burn scarring, I will offer 4% impairment of the whole person for Mr. Chan.”

16.  In his report he did not state the degree of any permanent loss of earning capacity.   That indeed is not for the medical profession.   He only referred to impairment of the whole person and that is stated to be 4 %.   However he had stated no basis for his finding.  

17.  As Dr. Hung stated in the last paragraph of page 123, page 4 of his Report that the residual pain and itchiness at right lower limbs, which may interrupt some activities of daily living and its result in psychological disturbances is the main complaint.   However during the 18 months after the injury the symptoms and signs of the wound has been improving.    

18.  Apart from the report of Dr. Hung I refer to the medical report of Dr. Chan Chung Yuk of Yan Chai Hospital which is a full report with the history of the Applicant’s consultations with the General Practice Clinic of the Hospital.  It showed that after the healing of the wound, the Applicant continued to complain of wound pain.   As late as 7 August 2003 he complained that there was persistent right thigh wound pain.   The pain occurred when it was soaked by sweat, slight touch and there was pain even at night during sleep.  As a result his sleep was disturbed.   Dr. Chan stated that because they had difficulty to differentiate whether the patient had genuine wound pain or not and whether he had depression, he was sent to the Psychiatrist for consultation.   It was however clear, when he consulted the General Practice Clinic again and complained on the wound pain when walking that he disclosed he had other problems that caused his depression, because he was in the process of divorce with his wife and missed his children. 

19.  In my view it seems to me that his psychological problems may not be wholly related to his injury.   His injury may have been one of the several issues he was dealing in his life.   Some of the symptoms of wound pain may have been exaggerated.  

20.  In view of the aforesaid, and also because there is no clear basis for the finding of Dr. Hung, I am not able to fully accept the finding of Dr. Hung.    I find his medical report helpful to some extent but his assessment is not acceptable.   I find that the percentage of permanent loss of earning capacity arising from the injury caused by the accident could at most be 2% taking into account any psychological effect from the injury on the Applicant.  

21.  I assess permanent loss of earning capacity arising from the injury caused by the accident at 2%. 

22.  I assess section 9 compensation on the basis of monthly earnings at $8,000 and 2% permanent loss of earning capacity at 8,000 x 96 x 2% = $15,360.

23.  I assess section 10 compensation at $8,000 x 4/5 x 55/ 30 = $11,733.33.

24.  I assess section 10A compensation at $491.   These total $27,584.33.   

25.  I give final judgment to the Applicant for the sum of $27,584.33 together with interest thereon from the date of accident on 2^nd June 2003 to the date of judgment at half judgment rate namely 4% p.a. and thereafter at judgment rate until payment.   I grant an order nisi for costs of the action  to the Applicant to be taxed if not agreed.