CHOW KOON SING (TRADING AS LEE CHEUNG TRANSPORTATION COMPANY) v. FAN KOK CHOY

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APPEAL NO. 26 of 1989

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J U D G M E N T

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1. This is an appeal from decisions of the Labour Tribunal by which the respondent, the employee, was awarded wages in lieu of notice, long service payment, statutory holiday pay and annual leave pay and a claim by the appellant, the employer, for payment in lieu of notice was dismissed. There is no dispute as the amount awarded to the respondent.

2. The first ground of appeal says that the Presiding Officer erred in law in holding that the conduct of the respondent in persistently disobeying lawful and reasonable orders of the appellant and/or supervising foreman did not amount such misconduct as would entitle the appellant to dismiss the respondent under section 9 of the Employment Ordinance, Chapter 57.

3. The Presiding Officer did not, of course, find on the facts that the respondent had persistently disobeyed lawful and reasonable orders, but Mr Chan explained that what the ground of appeal was intended to convey was that, on the facts, the Presiding Officer should have found that there was such persistent disobedience.

4. The facts as to the conduct of the parties found by the Presiding Officer, and his conclusions from these fact, were as follows -

'6. On 23/10/1988, the Respondent worked the day shift through to the night shift. Sometime between 2 p.m. and 3 p.m., his foreman ... told the Respondent and his fellow gang members ... that no matter what time they finished work that day they had to work the day shift the following day, i.e. 24/10/1988. When they finished work at 12 midnight, [the foreman] told them to return to work at 8 a.m. in the morning. In reply the Respondent said that if he was not given work in the late night shift he would not work the day shift.

7. The Respondent did not return to work in the day shift later that morning. On the afternoon of 24/10/1988 and 25/10/1988, [the foreman] phoned the Respondent at his home but could not get in touch with him. On the second occasion, the Respondent's wife told [the foreman] not to count the Respondent for work. Thereafter the Respondent did not receive any telephone call summoning him to work. After about one week, he rang [the foreman] for work. [The foreman] told him that he did not know anything about it. After some time, he rang the [appellant] and told him that if there was no work for him, he would go to the union. Thereupon the [appellant] said, "Union is almighty".

19. The effect of these two conversations [between the respondent and the foreman and between the respondent and the appellant] is clear. [The appellant] has by his own conduct and that of [the foreman], for whom he is responsible, unequivocally indicated to the respondent that there will no longer be any work and wages for him to earn and that was the end of his contract of employment. The Respondent was therefore entitled to treat himself as having been dismissed by the [appellant] on that day.'

5. As to the nature of the contract, the Presiding Officer found -

4. The Respondent was summoned to work as and when work was available. Sometimes his foreman would ring him at his home and tell him to go to work. Sometimes, he would be told as he finished work when to report for duty again. Sometimes, he would ask the foreman whether work was available. He has to work whatever shift was allocated to him. He is unlike the ordinary worker who has to go to work on fixed days of the week and at regular hours.'

6. Mr Chan placed considerable emphasis on the finding in italics, but it is necessary to read paragraph 14 to ascertain what the Presiding Officer meant by this -

'14. I have outlined in paragraph 4 how the Respondent was summoned to work. He did not have regular shift and regular working days. He was just summoned whenever work was available or informed to come back at the time he went off duty or he had taken the initiative to telephone his foreman to ask for work. If an employee cannot demand work on a scheduled timetable, for example like a factory worker, there is no reciprocal obligation on his part to render himself ready and willing to provide service every day and every time he is called upon to do so. It is unfair that he should wait at the employer's door and leave it to his mercy whether to engage him for that day. He therefore as a right to decline work offer His peril, of course, is that if he does that often enough he may find he has broken the continuity of his employment and lost other employment protection. I therefore find that when he said he was not working the morning shift on 24/10/1988, he was not absenting himself without leave nor was he terminating his employment.'

7. Mr Chan concedes that the contents of the passages I have quoted are all findings of fact that he cannot challenge. Reading the findings as a whole, it is clear that Presiding Officer found that, if the respondent wished to work on a particular day, he had to work the shift allocated to him, but he was not bound to work on any particular day if he did not wish to do so. The contract was flexible both ways: The employer was not bound to provide regular and continuous work and the employee was not bound to work when his employer asked him to do so, but the freedom allowed to each was to be exercised within reasonable limits. The respondent acted within those reasonable limits, but the appellant did not when he indicated to the respondent that work for him was at an end. As Mr Chan accepts, I cannot upset those findings even if I were inclined to do so, which I am not. It follows that, on the facts, there was no persistent disobedience by the respondent, and the basis for this ground of appeal disappears.

8. The second ground of appeal says that the Presiding Officer erred in holding that the appellant repudiated the contract of employment when there was no or no sufficient evidence on which to base such a finding. I do not accept this. The foreman's statement that he knew nothing about the respondent's request for work and the appellant's response to the respondent's statement that if there was no work for him he would go to his union are clearly reasonably capable of the construction that the appellant was dismissing the respondent. On that evidence, I would have come to the same conclusion as the Presiding Officer.

9. The first ground of appeal in relation to the dismissal of the appellant's claim says that the Presiding Officer erred in holding that the respondent was entitled to terminate his contract of employment without notice or payment in lieu when there was no or no sufficient evidence that the respondent was so entitled. The Presiding Officer held that, on the facts, the appellant had repudiated the contract, and, of course, the respondent was entitled to accept that repudiation. As I have found, the Presiding Officer was perfectly entitled to hold so. There is nothing in this ground of appeal.

10. The second ground of appeal in relation to the dismissal of the appellant's claim is on the basis that the Presiding Officer erred in placing the burden of proof on the appellant to show that the termination of the contract of employment by the respondent was justified in law.

11. In fact, the Presiding Officer made no mention of the burden of proof, and there was no need at all for him to have done so. He found the facts and gave his judgment accordingly. Attention to the burden of proof is necessary only if a judge cannot come to a firm conclusion on the facts.

12. Mr Chan urged that the burden of proof is on the employee to show that the termination of his contract is not justifiable in law. This is startling proposition. I sack my employee summarily. The law allows me to say that it is for him to prove that my termination of the contract is not justified? I told Mr Chan that I thought this submission could not be right, but he assured me that there is authority for it, and indeed there is.

13. In Labour Tribunal Appeal No.9/85, To Kin Wah v. The Shui Hing Co. Ltd., Mayo. J held that it was for the employee to prove that he had not been dismissed for cause. He seems to come to that conclusion because section 31D(1) of the Employment Ordinance says '... an employee shall be taken to be dismissed by his employer if, but only if ... the contract under which he is employed is terminated by the employer with or without notice or payment in lieu thereof other than in accordance with section 9 ... .' The words '... other than in accordance with section 9 ...' do not, Mayo J, says, appear in the equivalent provision in the Redundancy Payments Act, 1965 of the United Kingdom. Section 9 of the Ordinance says that an employer may terminate a contract of employment without notice or payment in lieu in the specified situations.

14. This proposition has been accepted by Barnett J. in Kwan Hang-ching v. So Ching Labour Tribunal Appeal No. 12 of 1987, and also by Mortimer J. in Pao Yee-wak v. Chung Wai Stationery Factory Ltd. Labour Tribunal Appeal No. 45/85.

15. I must confess that I do not think that it is at all clear that the onus is on the employee to prove that he was not dismissed for cause. In my view, this position would be contrary to principle and would require clear words in the statute to displace a conclusion that, in accordance with commonsense and such principle, it would be for an employer to justify the termination of a contract of employment.

16. I accept readily enough that a reading of section 31D, and section 31T, which is more applicable to the case before me, alone may lead one to the conclusion, with some surprise I suggest, that it is for the employee to show that the employer terminated his contract without cause, but I believe that this impression is neutralised by sections 31C(1) and 31S(1). These sections say -

'... an employee shall not be entitled to a [severance or long service payment] by reason of dismissal where his employer, being so entitled by reason of the employee's conduct, terminates his contract of employment without notice or payment in lieu in accordance with section 9'

17. I appreciate, of course, that it seems that the legislature uses the word 'dismissal' in these sections without much regard to the way that it uses the word dismissed in sections 31D and 31T, but my view is that one is not driven to conclude by a construction of the provisions concerned that the legislature intended, in a statute largely designed to protect employees, to tell the courts that they should find that contracts of employment are terminated justifiably by employers unless employees prove that there was no proper cause for such termination.

18. As I have said, the point does not need to be decided in this case because the Presiding Officer was able to find the facts on the evidence and come to proper conclusions based on those facts without having regard to any onus, but the matter is one of some importance and it is to be hoped that a decision of the Court of Appeal can be obtained to settle the law.

19. In the result, the appeal is dismissed. There seems no reason on the face of it why the appellant should not pay the respondent's costs and I make an order nisi accordingly.