CHAN KWOK HUNG v. HOTEL PANORAMA CO LTD

HCLA 30/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 30 OF 2009

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 3185/2009)

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DECISION

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1.  This is the defendant’s application for leave to appeal against the decision and award of the Deputy Presiding Officer made on 10 September 2009, whereby the defendant was ordered to pay the claimant wages in lieu of notice, annual pay leave and end of year pay in the total sum of $13,893.09 together with interest.  There is also an inter partes summons for stay of execution pending appeal.   The defendant’s previous application to the Labour Tribunal for stay of execution had been refused.

2.  The Application for Leave to Appeal on Point of Law filed on 23 September 2009 contained no substantive ground of appeal.  It merely stated that the Presiding Officer erred in finding the claimant was entitled to his claim and erred in finding the defendant was not entitled to summarily dismiss the claimant.  It was only on 10 November 2009, one day before the hearing of the leave application, that an Amended Application containing nine grounds was lodged with this court.  As I pointed out in the course of the hearing, this is unsatisfactory.  The Deputy Presiding Officer had given oral reasons for her decision in the presence of the parties.  The defendant through its representative should have known the basis for the decision and the Application should at least indicate the broad ground of appeal.  To the extent it was explained that the grounds of appeal can only be settled after receiving from the Tribunal the written reasons, it is not an acceptable approach to make an application for leave to appeal without first knowing whether there is any ground to appeal.

The facts

3. Briefly stated, the relevant facts are as follows.  On 13 May 2008, the claimant became employed by the defendant as a security officer at Hotel Panorama.  He completed his probationary period on 8 December 2008 and was confirmed as a permanent employee.  On 3 March 2009, he was summarily dismissed. 

4. The issue at the trial in the Labour Tribunal was whether the defendant was justified in summarily dismissing the claimant under section 9 of the Employment Ordinance, Cap.57.  If it were, then the claimant’s claim would fail.  Conversely, if summary dismissal were not justified, the claimant would be entitled to judgment.

5. The defendant’s defence as stated in the Statement lodged in the Tribunal is that the claimant “was summarily dismissed due to [sic] his habit of getting into arguments with people, i.e. colleagues and taxi drivers despite having been warned numerous times.”   

6. The evidence before the Tribunal shows that the claimant had been issued with two Misconduct Notices on 30 December 2008 and an Employee’s Notice on 10 February 2009.  The first Misconduct Notice is about an incident in September 2008 involving one of the hotel bell attendants, Mr Rajinder. It was said that the two had a dispute over arrangement for valet parking and the claimant used racist, insulting and threatening language against Mr Rajinder.  The Misconduct Notice recorded a verbal warning was issued to the claimant.  The second Misconduct Notice relates to an incident on 30 December 2008 in which the claimant had an argument with the hotel bell captain over the responsibility and authority over traffic in the hotel driveway.  The second Misconduct Notice recorded a written warning was issued to the claimant.  The bell captain was also given a Misconduct Notice.  The claimant disputes the two incidents and had refused to sign on the Misconduct Notices.  As to the Employee Notice, it was issued because the claimant could not be located between 15:00 hour and 15:35 hour on 10 February 2009.  It recorded that an “Advise” was given to the claimant.

7.  According to the defendant’s representative and personnel manager, Mr Saga, the immediate reason for the summary dismissal is an incident on 1 March 2009.  It started with the claimant, having observed a taxi driver to have overcharged a hotel guest, told the guest about it.  Eventually, the taxi driver made a refund to the guest.  Afterwards, the taxi driver and the claimant engaged in a verbal exchange, with the taxi driver refusing to drive off, causing obstruction to the driveway, and calling the police.  The taxi driver finally left and the police took no follow up action.

8.  According to the defence witness, Mr Kelvin Wong, the taxi driver complained the claimant had threatened him.  The claimant denied this.  It seems, however, that the defendant had preferred the taxi driver’s version.  In any case, the defendant considered that the claimant had failed to refrain from getting into disputes with others within the hotel area, and that the incident adversely affected the reputation of the hotel.

The Decision of the Deputy Presiding Officer

9.  The Deputy Presiding Officer accepted the claimant’s account of the 1 March 2009 incident and accepted that he did not threaten the taxi driver.  She found the claimant set out to discharge his duty of safeguarding the hotel guest’s interests and not to stir up a dispute or purposely quarrel with the taxi driver within the hotel area.  She held that the claimant did not commit any misconduct on the day and the incident could not amount to the immediate cause or a ground for summary dismissal.

10. In respect of the incidents leading to the two Misconduct Notices and the Employee Notice, the Deputy Presiding Officer pointed out that even though the defendant considered the claimant to have misbehaved ormisconducted himself, it had not summarily dismissed the claimant there and then.  Instead, the defendant was prepared to and did afford the claimant opportunities to correct himself and to improve his relationship with the colleagues.  She found that the defendant had forgiven the claimant. In this connection, she noted that after the September 2008 incident (the subject matter of the first Misconduct Notice), the claimant was considered to have successfully passed probation and was confirmed as a permanent employee in December 2008.  Further, on 15 January 2009, the claimant was paid a bonus in appreciation “for a job well done”. 

11. On the subsequent incident on 10 February 2009, the Deputy Presiding Officer was of the view that even if the misconduct complained of were true, it was an isolated incident and a minor matter.  Her view was based on the fact that the defendant had only issued an Advise, not a verbal or written warning.  This, she held, demonstrates that the defendant did not regard the incident as sufficiently grave to merit the punishment of suspension or summary dismissal.   

12.  In conclusion, the Deputy Presiding Officer held that even if the various incidents of misconduct, which were disputed by the claimant, were proved against the claimant, they could not amount to repudiatory breach as justifying summary dismissal: para.43 of the Decision.

Intended grounds of appeal

13.  Under section 32(1) of the Labour Tribunal Ordinance, Cap.25, leave to appeal against the award or determination of the Labour Tribunal may only be granted where the same is (a) erroneous in point of law, or (b) outside the jurisdiction of the Tribunal.  The threshold onus of the applicant is to show that the intended appeal is arguable.

14.  The nine amended grounds of appeal advanced in the Amended Notice of Application for Leave to Appeal are:

(1)  The Deputy Presiding Officer, not having rejected the evidence of the defence witnesses, failed to consider the cumulative effect of the series of incidents of misbehaviour on the claimant’s part.

(2)  Alternatively, the Deputy Presiding Officer failed to make finding of fact as to whether the previous incidents of misconduct did take place and the circumstances in which they happen.

(3)  The Deputy Presiding Officer erred in applying the rules of evidence, including the rule against hearsay, and as a result did not have sufficient regard to the complaints against the claimant made by the defendants’ employees who did not testify.

(4)  The Deputy Presiding Officer erred in concluding that the incidents complained of only related to interpersonal relationship, and did not amount to misconduct, or wilful disobedience of a lawful and reasonable order.

(5)  The Deputy Presiding Officer failed to consider the express term of the employment contract that the claimant shall use his best effort to promote the interests and reputation of and to advance the business of the defendant, and erred in failing to find that the claimant’s conduct of having arguments in the public area did adversely affect the reputation, interests and business of the defendant.

(6)  The Deputy Presiding Officer failed to consider the nature of the defendant’s business as a hotel and the claimant’s position in evaluating whether the misbehaviour complained of justified summary dismissal.

(7)  The Deputy Presiding Officer erred in finding that the earlier conduct of the claimant had been forgiven in that there was no evidence of forgiveness or waiver by the defendant.

(8)  The Deputy Presiding Officer failed to have any or sufficient regard to the claimant’s failure to obey the defendant’s reasonable and lawful order to keep peace with his co-workers.

(9)  In all the circumstances, the Deputy Presiding Officer erred in finding the claimant’s conduct did not amount to a repudiation of the employment contract as to justify summary dismissal.

An overview of the case

15.  Before looking at the individual grounds of appeal, it is necessary to have an overview of the case before the Tribunal so as to properly understand the Deputy Presiding Officer’s reasons for decision and also to set the context for the consideration of the intended grounds of appeal.

16.  In summary, prior to 1 March 2009, the claimant was regarded by the defendant to have misbehaved on several occasions, the last of which happened on 10 February 2009 resulting in the Employee Notice.  As a result of the series of misbehaviour, the defendant had issued verbal and written warnings and an Advise to the claimant and also reminded him of the importance of not getting into disputes with others.  Then on 1 March 2009, there was the incident involving the taxi driver.  On 3 March 2009, the claimant was summarily dismissed.

17.  The defendant’s case, as put before the Tribunal and in this leave application, is that the past series of misbehavour of the claimant together with the incident on 1 March 2009 justify the summary dismissal on 3 March 2009.  It is of significance to note that until the incident on 1 March 2009, the defendant had decided not to dismiss the claimant; notwithstanding it regarded the claimant to have misbehaved in the course of his work, including having disputes with co-workers.  Plainly, it was the 1 March 2009 incident that triggers off the decision of summary dismissal.  To put in simply, the 1 March 2009 incident is the last straw for the defendant.  It is therefore crucial to see what are the findings of the Tribunal on the 1 March 2009 incident.

18.  In a nutshell, the Deputy Presiding Officer held that the claimant did not misbehave or misconduct himself in the incident.  Underlying this holding are a number of factual findings.  First, she found as a fact that the claimant did not threaten the taxi driver.  Second, she did not accept that the claimant was at fault in not immediately notifying Mr Wong, the manager in duty.  Third, she found the claimant had discharged his duty by alerting Mr Wong as soon as circumstances permit.

19.  Upon holding that the claimant did not commit any mistake in the course of carry out his work on the day, she found that his conduct could not amount to repudiation of the employment contract.  Accordingly, she held that the defence case that the 1 March 2009 incident is the triggering cause for the summary dismissal is not substantiated.

20.  With the holding that the claimant did not misbehave or misconduct himself on 1 March 2009, there is no room for the argument that the claimant’s summary dismissal is justified by reason by a series of misconduct taken together with the 1 March 2009 incident. Neither is there room to contend that it is the cumulative effect of a series of misconduct that merits the summary dismissal.  The short point is: Without the 1 March 2009 incident, the defendant only has the past series of misconduct to rely on.  But in relation to the previous misconducts, whether singly or collectively, the defendant had already taken the decision of not summarily dismissing the claimant and had in fact meted out other punishment (i.e. issuing verbal or written warning or Advise).  There is no proper basis, as a matter of law or reason, for the defendant to go back on its decision and to invoke those past conduct as justifying summary dismissal.  It is in fact not the defendant’s case that the claimant was being summarily dismissed for his past series of misbehaviour alone, without the last straw of the 1 March 2009 incident.

1 March 2009 incident

21.  Thus analysed, what is fundamental to, and a pivotal point in, the defence case is the incident on 1 March 2009 and in turn the Deputy Presiding Officer’s findings on it.  However, there is no specific reference or challenge to the findings on the 1 March 2009.  It is only in oral submissions that Miss Lan seeks to challenge the holding that the claimant did not misbehave or misconduct himself during the 1 March 2009 incident.  It is to the arguments advanced against the findings on the incident that I shall first turn.  

22.  The first submission of Miss Lan is that the Deputy Presiding Officer did not anlayse the evidence and did not give full reasoning for not accepting the defence case that the claimant had threatened the taxi driver.  It is also said that the Deputy Presiding Officer was wrong to give no weight to Mr Wong’s evidence of what he was told by the taxi driver on the ground that it was hearsay evidence.  It is further argued that the Deputy Presiding Officer ought to have conducted investigation into the matter.  I do not accept these submissions can amount to arguable point(s) of law on which leave to appeal may be given.

23.  In the first place, Mr Wong and none of the defence witnesses were eyewitnesses to the exchange between the claimant and the taxi driver.  Plainly, Mr Wong can only relate what the taxi driver said to him, but cannot testify on the veracity of the allegation.  It is also noteworthy that the claimant was not cross-examined on this aspect of the incident. Secondly, the Deputy Presiding Officer, having seen and heard the claimant, accepted his evidence that he did not make any threat.  In coming to this view, she took note of the fact that the police did not take further action.  This is a finding of fact that she, as the trial judge, is entitled to make in light of the evidence before her and the reason she gave is not out of bound with reason or logic.  Thirdly on the hearsay rule, it is correct that the straight rules of evidence do not apply in the proceedings in the Labour Tribunal.  However, a presiding officer in exercise of his fact finding power, is entitled to afford little or weight to a witness’ evidence when it is clear that the witness himself cannot testify to its veracity.  In fact, what happened in this case is:  During the cross-examination of Mr Wong, the claimant put to him that he did not threaten the taxi driver whereupon the Deputy Presiding Officer explained that Mr Wong was only relating what he was told by the taxi driver, which is in the nature of hearsay evidence.  In my view, the Deputy Presiding Officer cannot be faulted for saying this.  Fourthly about the duty to investigate, I cannot see what further investigation could the Deputy Presiding Officer have conducted in the circumstances when other than the claimant, there was no eyewitness to the exchange between the claimant and the taxi driver.

24.  Miss Lan’s second batch of submissions against the findings on the 1 March 2009 incident is that the Deputy Presiding Officer did not have regard to the nature of the defendant’s business and the importance of its reputation and the fact that under the express term of the employment contract, the claimant was obliged to promote the interests and reputation and to advance the business of the defendant.  It is said that the claimant was wrong in not promptly reporting the matter to the senior management and should not have directly dealt with the taxi driver.  It is further contended that the defendant had disobeyed instruction and order not to have dispute with co-workers and the public within the hotel area.  In my view, these grounds do not involve any arguable point of law.

25.  Firstly, Mr Wong’s evidence in the Tribunal is that he did receive a telephone report from the claimant, as a result of which he went to the scene.  The Deputy Presiding Officer’s finding is that the claimant made the report as soon as circumstances permitted.  The defendant seems to be suggesting that the claimant should not have personally intervened and should have left it to the senior management.  However, it is also Mr Wong’s evidence that when overcharging of taxi fare occurs, it is part of a security officer’s duty to intervene and remind the taxi driver to make a refund.  Other than the fact that the claimant had a history of disputes with his co-workers, there is no discernable reason why the claimant should act differently on 1 March 2009.   The fact that he had a history of misbehaviour by itself is not a valid ground to make the claimant’s act of intervening and helping the hotel guest to get the refund a wrongful one.  That aside, it is unrealistic to suggest that the claimant should refrain from any action and should simply wait for the arrival of Mr Wong or other senior staff.  Among other matters, before any senior staff appeared, the taxi driver would more likely than not have left.  It is a situation that demands prompt and immediate response and the claimant’s response was not shown to be unreasonable or improper.   Secondly, the events as found by the Deputy Presiding Officer, show that the problem and confrontation was brought about by the taxi driver’s actions in overcharging the guest in the first instance and refusing to drive off in the second.  There is no evidence of the claimant doing any act that was against the interests or reputation of the hotel.  Hence, the fact that the defendant operates a hotel business and that reputation is important to the well being of the business has no relevance.  There is at the same time no evidence and basis for saying that the claimant acted in breach of order or instruction not to get into dispute with others.  As the Deputy Presiding Officer rightly held, it is not the case that the claimant stirred up a dispute or caused a confrontation with the taxi driver.

26.  In a nutshell, the challenges to the findings and holding on the 1 March 2009 are in their nature challenges on the facts and do not involve any point of law, let alone arguable point of law.

27.  I turn now to the nine intended grounds of appeal, of which Grounds (1) and (7) are the core ones.

Grounds (1) and (7)

28.  Ground (1) relates to the defence case of the cumulative effect of the series of misbehaviour in the past.  As stated above, the defendant had decided not to resort to summary dismissal based on the previous incidents of misbehaviour, whether singly or cumulatively.  The triggering or immediate cause for the summary dismissal is the 1 March 2009.  As the claimant was found not to have misbehaved and not to be at fault in the incident, the cumulative effect argument cannot stand.

29.  Under Ground (7), the defendant takes issue with the Deputy Presiding Officer’s view that the previous conduct of the claimant had been forgiven.  Insofar as the defendant argues that there is no evidence of forgiveness, this cannot be right.  As identified by the Deputy Presiding Officer, the confirmation of the claimant as a permanent employee on account of his satisfactorily completing the probationary period in December 2008, and the payment of a bonus on account of performance in January 2009 are indicative of the claimant being for forgiven.  There is also evidence from the defence witnesses that the defendant had decided to give the claimant opportunity to improve. 

30.  Miss Lan also submits that there is no basis of a finding of waiver on the defendant’s part.  While it may be the case that the defendant would not be barred from relying on the previous incidents if and when there were new or further incidents of misconduct, there can be no doubt that the defendant has in the past elected to affirm the employment contract and had waived its right to summary dismissal on account of the previous incidents, whether taken individually or cumulatively. 

31.  Miss Lan criticises the Deputy Presiding Officer for referring to Boston Deep Sea Fishing & Ice Co v. Ansell (1888) 39 Ch D 339, 358 where it held that if an employer was aware of the wrongful act of the employee and still continued to employ him, it might be held that he had condoned it and prevented himself from insisting on the legal right.  Miss Lan refers to the case of Wyldbore v. Bayuhay [1987] 2 HKC 305, in which Barnett J said (at 309B) that waiver must be treated with caution in contracts for personal service where clear indication of forgiveness is required and that, as in that case, simply allowing a contract to continue for three weeks, perhaps out of consideration for the past and satisfactory service is not enough. 

32.  In my view, there is no inherent conflict between the two cases.  It is ultimately a matter of evidence whether an employer has forgiven the employee for his misconduct or has waived the right to summary dismissal.  An employer’s knowledge of the misconduct and, if he has knowledge of it, his subsequent conduct are all relevant considerations.  In the present case, it is not a mere case of the claimant’s employment being allowed to continue or to continue for a brief period.  The claimant was accepted by the defendant to have passed the probationary period.  There was positive action of conferring permanent employment and the issue of bonus based on performance.  Further, having regard to the finding that the claimant did not misbehave on 1 March 2009, this is also not a case of continuous and ongoing breaches by the employee that Deputy Judge Evans was referring to in Keung Man Lun v. Oceanic Universal Garment Manufacturers Co [1987] 1 HKC 27. 

33.  In the circumstances of this case, the Deputy Presiding Officer is entitled to the considered view that there was forgiveness and/or that any right to summary dismissal on account of the past series of misbehaviour alone had been lost. 

Ground (2)

34.  It follows from the above analysis that the questions of whether the previous incidents of misconduct did take place and the circumstances in which they arose are not pertinent to the determination of the claim.  This explains why the Deputy Presiding Officer indicated in her reasons that summary dismissal could not be justified even if the previous incidents of misconduct were proved against the claimant.  It also follows that it is not necessary for the Deputy Presiding Officer to make specific findings on the previous incidents, including the subject matter of the Misconduct Notices and the Employee Notice.  The complaint under Ground (2) that the Deputy Presiding Officer erred in not making findings on the previous incidents is therefore misplaced.

Ground (3)

35.  For the same reason, it is not necessarily for the Deputy Presiding Officer to go into each of the past incidents of misbehavour alleged against the claimant and mentioned by the defence witnesses.  This includes the “Donald and Ken” incident.  Hence, the argument under Ground (3) that the Deputy Presiding Officer did not have sufficient regard to the complaints made against the claimant by co-workers who did not testify at trial is not relevant.

Grounds (4) and (8)

36.  Ground (4) concerns paragraphs 38 and 42 of the written Decision, where the Deputy Presiding Officer stated that even if the misbehaviour or misconduct stated in the Misconduct Notices were proved against the claimant, they related to interpersonal relationship and did not involve dereliction of duties.  Both under this ground and Ground (8), it is argued that the Deputy Presiding Officer ought to have considered that there was wilful disobedience of the reasonable and lawful order that the claimant should refrain from having disputes with others.

37.  Three points have to be made on these grounds.  First, the Deputy Presiding Officer was factually correct when she said the incidents involved in the two Misconduct Notices related to shortcomings in interpersonal skill and did not involve dereliction of duties.  Second, the statements in paragraphs 38 and 43 of the Decision were made in the context of the forgiveness or waiver point, namely, whether the defendant could have summarily dismissed the claimant on the basis of these incidents, after it had decided to deal with them by way of verbal and written warnings.  There is no finding that because they were merely shortcomings in interpersonal skill, it did not come within the causes for summary dismissal.  Third, in light of the holding on the 1 March 2009 incident, whether the past incidents constitute wilful disobedience of lawful and reasonable order is of no consequence. 

Grounds (5) and (6)

38.  As for Grounds (5) and (6), it is correct as a matter of law to say that in deciding whether there is serious misconduct justifying summary dismissal, the nature of the employer’s business and the employee’s contractual obligations are relevant considerations.  And there is also some justifications for the contention that it is not conducive to a hotel business for its employees to be engaged in disputes among themselves or with the public within the hotel premises.  However, in the present context, these considerations have no application.  As far as the 1 March 2009 incident is concerned, the facts as found are that the claimant did not stir up any dispute and he was acting within his duty to alert the hotel guest to the overcharging.  As far as the previous incidents of disputes with co-workers are concerned, they can only be of assistance to the defence case had the 1 March 2009 incident amounts to misconduct.

Ground (9)

39.  Ground (9) is a general ground. For the analysis above, it cannot stand.

Conclusion on the application for leave to appeal

40.  For the reasons set out above, the defendant has not been able to show that the intended appeal involves arguable point(s) of law.  The application for leave to appeal is refused.

Application for stay of execution

41.  It follows from the refusal of the application for leave to appeal that the summons applying for stay of execution should be dismissed. And I so order.  As the claimant was absent, I make no order as to costs on the summons.