PAJEL JEONA ANN CALANTES v. LO WING CHUN

HCME 7/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MINOR EMPLOYMENT CLAIMS ADJUDICATION BOARD

APPEAL NO 7 OF 2014

(ON APPEAL FROM MINOR EMPLOYMENT CLAIMS

ADJUDICATION BOARD APPEAL NO MB 0349 OF 2014(B))

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JUDGMENT
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INTRODUCTION

1.  The appellant (“the employer”) appeals against a decision of the Minor Employment Claims Adjudication Board (“the Board”) on 9 grounds. In substance, she complains that the Adjudication Officer had erred in exceeding his jurisdiction, determining the claim without a proper trial and failing to give reasons for his review.  The relevant order appealed against was dated 1 December 2014 (“the December order”).  I am satisfied that notice of hearing has been served on the respondent (“the employee”) and I can hear this appeal in her absent.

PROCEDURAL BACKGROUND

2.  The employee sued the employer for wages in lieu of notice ($3,920), air passage cost ($1,500), travelling allowance ($100) and bus fare ($85), making a total of $5,605.

3.  On 14 May 2014, in the absence of the employer, judgment was entered in terms as claimed (“the May award”).  There was no order for costs.

4.  Upon the employer’s application and upon her payment of $6,000 security into court, the May award was set aside save for the claim item on air passage of $1,500.

5.  On 14 July 2014, the Board ordered that the claim be re-opened for hearing on 12 August 2014, with directions for witnesses to attend.

6.  In the meantime, the employer filed her defence stating that it was the employee who had wanted to obtain 7 days’ urgent leave to return to the Philippines to see her father.  The employer was prepared to grant her 10 days.  Upon knowing that she would not be given round trip tickets and pay during the leave period, the employee allegedly resigned.  She purportedly signed, in the presence of the agent, a form giving one month’s notice of termination.  The employer claimed after discussion with the employee, there was mutual waiver and agreement, whereby the employer waived the notice period and the employee could leave at once to visit her father. 

7.  The employer paid the employee arrears of wages, leave entitlement and $100 for travelling allowance.  The employer claimed that she had arranged an air ticket for the employee but the employee failed to attend the agency to collect it.

8.  The employer’s husband and the employment agent gave witness statements for the employer, setting out details of the termination of the employment. The form to the Immigration Department signed by the employer and the employee showed the date of termination to be 18 March 2014 instead of what the employee originally wanted (17 April).

9.  On 12 August 2014, the employee was absent at the hearing.  The matter was adjourned to 10 September 2014, and later to 22 October 2014.  The employer was directed to produce further evidence or submission to support her application to set aside the May award.

10.  On 22 October 2014, the employee was again absent.  The employer produced records showing, amongst others, that she had left Hong Kong on 14 May (9:16 am) and returned on 23 May 2014. The Adjudication Officer decided to give the employer a further chance to defend her case.  It was ordered that judgment would be delivered on 13 November 2014.

11.  On 13 November 2014 (“the 1^st November order”), it was ordered that,

“By admission, claim item no.2 (air passage back to place of origin) in the sum of $1,500 be awarded for Claimant and the said sum be deducted forthwith from the deposit ($6,000) kept by the Board;

The Board’s order/award of 14.5.2014 be set aside (save for claim item no.2 mentioned above);

Claim items 1, 3 and 4 be adjourned sine die; and

Remaining deposit of $4,500 be fully refunded to Defendant on 13.2.2015 (unless the Claimant seeks to restore the case before that date).”

12.  The employer applied for review of the 1^st November order, pointing out that she had never admitted the employee’s claim and that there was no reason to adjourn the other claims sine die.

13.  On 19 November 2014, it was ordered (“the 2^nd November order”) that:

“1. Defendant applied to review the Board’s award/order of 13 November 2014.

2. At the same time, the Board also reviews the above award/order of its own motion in accordance with S.30 of the Minor Employment Claims Adjudication Board Ordinance. (“the Board’s own review”)

3. The review hearing is scheduled for 25 November 2014 at 2:30 p.m.  Defendant and her witnesses shall attend accordingly.”

14.  On 25 November 2014, the hearing took place in the absence of the employee.  The Adjudication Officer made it clear in the Decision that the Board had not accepted the application for review at this hearing.

15.  This led to the making of the December order in these terms:

“1. Defendant’s application to set aside the award/order of 14.5.2014 be refused, the said award/order be still in force, and Defendant shall pay costs/interest in the sum of $2,850.

2. Defendant shall pay via the Board within 28 days a total sum of $8,455 (i.e. after deducting the security of $6,000, Defendant shall pay the remaining balance of $2,455).”

This order is the subject matter of this appeal.

THE REASONS FOR DECISION GIVEN BY THE ADJUDICATION OFFICER

16.  The Adjudication Officer gave written reasons for his decisions (“the Decision”) that purportedly covered the hearings on 14 May, 12 August, 22 October and 25 November and the December order.  For unknown reasons, the Decision was not given to the employer (or her solicitor).  This court handed a copy to counsel during the hearing.

THE GROUNDS OF APPEAL

17.  Under section 31 of the MECAB Ordinance, Cap 453 (“the Ordinance”), any party who is aggrieved by a decision of the Board may, with leave, appeal to thiscourt on a question of law alone.

18.  I have granted leave to appeal on all the 9 grounds of appeal setting out errors of law of the Adjudication Officer. Mr Lau, counsel for the appellant, does not pursue the ground about conciliation being a pre-condition for making a claim.  I broadly categorized the remaining grounds as follows:

A. Determining various heads of claim against the employer without a proper trial;

B. Exceeding the jurisdiction of the Board;

C. Failure to provide the employer with the grounds of the Board’s own review so as to allow a reasonable opportunity for the employer to respond to the same;

D. Ordering the employer to pay the “costs/interest” in the sum of $2,850 in the absence of any legal or factual basis.

LEGAL PRINCIPLES

19.  The Board is under a legal duty to give reasons for its award, whether orally or in writing: section 21(2) MECAB Ordinance.  This is all the more important since the parties before the Board all act in person.

20.  Breach of the duty to give reasons can give rise to a self-standing ground of appeal:

“(1) The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties – especially the losing party – should be left in no doubt why they have won or lost. This is especially so since without reasons the losing party will not know (as was said in Ex p Dave) whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not.

(2) The first of these aspects implies that want of reasons may be a good self-standing ground of appeal.  Where because no reasons are given it is impossible to tell whether the judge has gone wrong on the law or the facts, the losing party would be altogether deprived of his chance of an appeal unless the court entertains an appeal based on the lack of reasons itself.”

Flannert & anor v Halifax Estate Agencies Ltd [2000] 1 All ER 373, at 377j-378b; followed in English v Emery Reimbold & Strick Ltd [2002] 3 All ER 385, at 392f-393b

Ground A:  Determining various heads of claim against the employer without a proper trial

21.  I have set out the orders in some detail to reflect the changes in the Adjudication Officer’s decisions.  It was regrettable that the Decision was tainted with all sorts of procedural errors, some being fundamental.

22.  Firstly, the notices for the hearing on 14 May 2014 issued to the employer by ordinary and registered post were returned marked “unclaimed or refused/no such person”.  The Adjudication Officer nevertheless considered that “due process had been served” on the employer and entered judgment in default. The May award was returned to the Board marked “unclaimed or refused/no such person”.  (p.3)[1]

23.  The travel records of the employer clearly showed that the employer was not in Hong Kong and could not have attended the hearing on 14 May 2014.  The making of the May award was irregular and should have been set aside as of right for lack of proper service of the notice of hearing.   

24.  Secondly, the Board found that the employer and her family had “intentionally ignored” the Board’s notices of hearing and the May award by marking on the envelops “refused” or “no such person”.  The Board also found that her travel records did not support her allegation that she was not able to receive such correspondence.  The Board found the employer to have used her travel documents to “cover up” her intention to evade court proceedings from the outset.  All of these findings did not point to any evidentiary base and were in breach of the duty to give reasons.

25.  Thirdly, the reasons the Adjudication Officer gave for proceeding in the absence of the employee was speculative.  In respect of the 25 November 2014 hearing, he stated as follows:

“On the other hand, Claimant might not be able to attend simply because she was still in the Philippines when her father’s situation had not settled down and/or she had yet to find a new employer in Hong Kong before she could apply for a visa to come to Hong Kong.” (p.6-7) (italics supplied)

“The Board further found as fact that Claimant had not returned to Hong Kong yet. … Probably Claimant’s family situation had not been resolved, or she had not found a new employer and obtained a new visa to re-enter HK.” (p.10) (italics supplied)

There was simply no evidence that he relied on to support that statement.

26.  Fourthly, the employer has raised disputes which should be properly tried:

(a) Air passage: The Adjudication Officer found that the employer had “admitted” the claim and entered judgment against her.  The Decision never identified the admission.  In fact, the finding of an admission was contrary to the defence, which asserted that the employer had provided an air ticket but the employee had not proceeded to collect it.  This meant that although the employer admitted the liability for providing the air ticket, she also claimed that she had discharged that duty.  There had never been any investigation by the Adjudication Officer as to the latter limb of the defence.

(b) There is an issue as to whether or not there was mutual waiver of the notice period and the wages in lieu of notice pursuant to section 8(a) of the Employment Ordinance, Cap 57: Kao, Lee & Yip v Lau Wing (2008) 11 HKCFAR 576, §33.  The Adjudication Officer nevertheless resolved disputed facts despite the lack of a chance for the employer to cross-examine the (absent) employee.

(c) Travelling allowance and bus fare: Clause 7 of the employment contract stipulated that the employer shall provide the employee, on termination of the contract, free return passage to her place of origin and daily food and travelling allowance of $100 per day.  The Adjudication Officer took into account the remote place of origin of the employee, lack of direct flights from Hong Kong and the alternative of a bus journey.  He considered that the employee had reasonably asked for one more day’s travelling allowance and $85 for local transportation.  Defendant was “so mean” as to deny even this small amount of claim.  With respect to the Adjudication Officer, this was not a question of reasonableness or meanness but evidence.  The employer was denied the right to cross-examine the employee on this part of her evidence. The Adjudication Officer did not in his Decision deal with the documentary proof that the employee had signed in receipt of the travelling allowance but permitted her to claim it again.

27.  More importantly, after the defences were raised by the employer, the employee had never appeared to answer them.  In taking upon himself to analyse the evidence and questioning the employer, the Adjudication Officer appeared to be acting as an advocate for the employee.  The employer was not afforded a proper trial, notwithstanding that the Adjudication Officer had purported to give reasons.  

28.  On any of the 4 reasons that I have given, Ground A is made out.

Ground B:  Exceeding the jurisdiction of the Board

29.  The Board has no power to determine a claim in the absence of a claimant.  The following sections of the Ordinance are relevant:

“18. Failure of claimant to appear at hearing

(1) If, upon the hearing of a claim, the claimant does not appear, the Board may strike out the claim, without prejudice, however, to the restoration of such claim by the Board, on the application of the claimant, on such terms as it may think just.

(2) An application under subsection (1) shall be made within 7 days after the hearing or such further period as the Board may allow.

19. Hearing of claims in the absence of defendant

If a defendant fails to appear at the hearing of a claim by himself or by a representative referred to in section 22, the Board may, if it is satisfied that-

(a) a copy of the claim and the notice of the date and place of hearing have been served on the defendant under section 13; and

(b) the facts relating to the claim are sufficiently established,

inquire into, hear and determine the claim and make such award or order as it may think fit, notwithstanding the absence of the defendant.”

30.  There is a clear distinction in treatment, in law, of a claimant and a defendant’s absence.  Under section 18, if a claimant is absent, the Board may (or may not) strike out the claim.  It has no power to inquire into, hear and determine the claim and give an award, unlike section 19 where a defendant is absent.

31.  It was apparent from the terms of the 1^st Novemberorder that the Adjudication Officer accepted that there were arguable defences (except, in his view, to the air passage claim). He postponed the return of the deposit to the employer, apparently to give a chance to the employee to restore the claim within 3 months.  The employee never restored the claim.  The Adjudication Officer nevertheless proceeded to consider the claim on 2 occasions, 22 October and 25 November 2014 in her absence.  He had acted beyond his powers and hence the December order must be set aside.

32.  The Adjudication Officer was aware of the employer’s intention to have the claim struck out, although she did not use that term.  This could be seen from his statement as follows (p.11):

“[The employer] repeatedly used Claimant’s non-appearance on 12 August as an excuse to put pressure on the Board to treat this as an abandoned claim. The Board considered that yielding to such pressure would unfairly compromise Claimant’s legal right to pursue her claims and would unduly distort the course of nature justice.”

33.  It was of course within the discretion of the Board to adjourn and give a chance to the absent employee to pursue or restore her claim.  However, she had been absent on a total of 3 occasions.  It would be a denial of justice to the employer for the Board not to strike out the claim.

34.  Ground B is substantiated.

Ground C:  Failure to provide the employer with the grounds of the Board’s own review so as to allow a reasonable opportunity for the employer to respond to the same

35.  The only reason given in the Decision for the Adjudication Officer’s review on his own motion was that having delivered the 1^st November order, “the Board also felt a lingering doubt”.  What was that doubt? What matter would the Adjudication Officer need to review on his own motion that was not covered by the employer’s review?  These were never made clear.  The employer was not given a reasonable opportunity to respond to the Board’s own review.  I find Ground C to be substantiated.

Ground D:  Ordering the employer to pay the “costs/interest” in the sum of $2,850 in the absence of any legal or factual basis

36.  According to the Adjudication Officer, the costs of $2,850 in the December order included the cost of passage ($2,250) and incidental board and lodging expenses ($600) “that would be incurred to (sic) Claimant in coming back to HK to recover her entitlements, which should have been paid months ago”.  (underline supplied)

37.  The May award did not contain such costs.  If the costs were not incurred in May 2014, it was not clear why the Adjudication Officer suddenly wanted to make such an order for costs. Again, in breach of the duty to give reasons, the Adjudication Officer failed to identify the evidentiary basis for when and how they were incurred.  Ground D is substantiated.

38.  All the grounds of appeal have been made out.  The appeal ought to be allowed.  The matter should be remitted to the Board for re-trial.

OTHER MATTERS

39.  I would say a few words about the way the Adjudication Officer treated the employer as a party.  Scandalous attacks on her character (particularly in the last 2 paragraphs of the Decision) were made without identifying the evidence or explaining the reasons.  The matters alluded to in paragraphs 24 and 26(c) (describing the employer as “mean”) above were but 2 examples.

40.  The worst comment was that the Board found the employer to be “a dishonest and treacherous person who seemed always ready to betray her employees and flout the law.”  The evidentiary basis for this scandalous comment was lacking.  The Decision never identified any employee other than the claimant, never identified what made the employer dishonest or treacherous, never explained the relevance of the employer’s conduct to those other employees (if any) to this case and what law had been flouted. 

41.  If the Adjudication Officer meant that the employer repeatedly used the employee’s non-appearance on 12 August as an excuse to treat the claim as abandoned, there was legal justification for the employer to do so, as explained in paragraphs 29-34 above.  It did not justify that worst comment.

42.  The Adjudication Officer’s scandalous comments on the employer were irrational and exhibited an apparent bias that compromised the impartiality of the Board.  The case ought to be remitted back to the Board for trial by another adjudication officer.

COSTS

43.  I have considered Mr Lau’s submission on costs.  The employee has not participated in the proceedings before the Board since the hearing on 12 August 2014.  The procedural errors were those of the Board alone for which she should not be liable.

CONCLUSION

44.  I order as follows:

(1) The appeal is allowed and the award dated 1 December 2014 is set aside.  Consequent upon that, the May award is also set aside.

(2) The case is remitted to the Board for re-trial before a different adjudication officer.

(3) There should be no order as to costs.

45.  I thank Mr Lau for his assistance.