NG AI KHENG, JASMINE v. THE OPEN UNIVERSITY OF HONG KONG

CACV 257/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 257 OF 2005

(ON APPEAL FROM HCA NO. 9801 OF 2000)

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J U D G M E N T

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Hon Tang JA (giving the judgment of the Court):

1.  The plaintiff was on 11 January 1995 employed by the defendant, then known as the Open Learning Institute of Hong Kong, as a lecturer in the School of Business Administration, under a 2-year gratuity bearing contract.

2.  By letter dated 4 July 1996, she was offered re-appointment “on superannuation term with effect from 11 January 1997”, which provided that:-

“(a) You shall receive superannuation benefit, if any, as defined under the Superannuation Scheme approved by the OLI Council in lieu of contract gratuity.  Subject to Section 17 of the ‘Staff Rules & Procedures 1994’, a booklet titled ‘Standard Chartered Provident Plan for the Full-time Permanent and Superannuable Employees’ which describes the basic provisions of the Scheme for OLI’s staff is attached for your reference.”

3.  That offer was accepted by her on 12 July 1996.

4.  Following new staff structures consequent upon the conversion of the Open Learning Institute into the Open University of Hong Kong (“the defendant”) in 1997.  She was offered new terms of employment by letter dated 16 June 1997.  That offer was accepted by her on 20 June 1997.

5.  The letter of 16 June 1997 shall be referred to as the employment letter.

6.  By the employment letter, she was offered to be employed as an Assistant Professor with effect from 1 August 1997:

“… on the employment terms and conditions contained in this letter and in the attached document, namely, ‘THE OPEN UNIVERSITY OF HONG KONG – TERMS AND CONDITIONS OF SERVICE’ (‘TERMS AND CONDITIONS OF SERVICE’).”

7.  The employment letter went on to provide:

“Should there be any discrepancies between the ‘TERMS AND CONDITIONS OF SERVICE’ and this letter, the latter should prevail.”

8.  On 1 June 2000, the plaintiff’s employment was terminated.  In fact, the plaintiff was offered and accepted the alternative of resignation.  However, in this appeal, the parties have proceeded on the basis of a termination by the defendant.  By letter dated 1 June 2000, which gave the plaintiff 3 months’ wages in lieu of notice, relying on Clause 8 of the Terms and Conditions of Service (“Terms”) which provides as follows:

“8.     Termination of Service

Other than contract expiry, dismissal or retirement, employment of a staff member with the University may be terminated at any time by either party upon giving to the other party written notice as follows:

(i)	Vice-President, Dean, Centre Director, Unit Head	6 months
(ii)	All Other Academic & Administrative Staff	3 months
(iii)	Technical, Secretarial, Clerical & Minor Staff	1 month

(Note:     For staff on probation, there is no requirement to provide any notice period in the first month of probation.)

The University reserves the right to pay the staff member wages in lieu of notice.”

9.  The defendant was dissatisfied with her treatment and commenced proceedings in the Labour Tribunal, namely, LBTC 4852/2000, on 27 June 2000.

10.  By order dated 5 October 2000, the plaintiff’s claim was transferred to the Court of First Instance.

11.  Essentially the plaintiff’s claim was for damages for wrongful dismissal.  There was also a subsidiary claim for loss of personal properties.

12.  The wrongful dismissal claim depended essentially on whether the termination of the contract of employment was lawful.

13.  The plaintiff’s case is that the defendant was not entitled to dismiss her except for cause.

14.  The defendant relied not only on the 3 months’ wages in lieu of notice but also that it was entitled to dismiss her for cause.

15.  We would deal first with the termination by notice or wages in lieu.

Termination with wages in lieu of notice

16.  The plaintiff’s case is straightforward.  She said she was employed on superannuation terms, and that meant that she had tenure in the sense that she could only be dismissed for cause.

17.  It is unnecessary to go beyond what the judge said about ‘tenure’in para. 11 of his judgment:

“11.   The best description of tenure was given by Professor Danny Wong, who gave evidence for the Defendant.  He was at the time the Dean in charge of academic matters.  He explained it as connoting that the person holding tenure [a term more commonly used in North America] would expect to have a long term future at the University.  He or she would have a position for life.  The reason for such an advantageous term of employment is that it protects academic freedom so that somebody having tenure will know that if his or her views are out of step with those of her colleagues or of the University authorities he or she cannot be removed for such a reason.”

18.  But whether the plaintiff had ‘tenure’ must depend on the terms of her contract of employment.

19.  The plaintiff does not dispute that.  She submitted that being employed on superannuation terms meant that she had tenure in the sense that she could only be dismissed for cause, and insofar Clause 8 of the Terms was inconsistent with it, it was superseded by the employment letter, which expressly provided:

“You will continue to serve on superannuation.”

20.  However, Clause 18 of the Terms deals specifically with superannuation benefits and provides as follows:

“18.   Superannuation Benefits

Staff who are appointed on superannuation terms are eligible to join the Provident Plan established by the University on non-contributory basis from the date of appointment on superannuation terms.”

……

Details of the Provident Plan are contained in a booklet distributed to the relevant staff concerned.”

21.  The booklet is the Standard Chartered Provident Plan for the Full-Time Permanent and Superannuable Employees (“the Plan”).

22.  Clause 3 of that Plan provides that:

“All full-time permanent and superannuable employees shall automatically become Members of the Plan.”

23.  And “Member” is defined as:

“… a person employed by the University on a full-time permanent and superannuable basis and does not include persons employed on a temporary basis or on a fixed term contract basis.”

24.  Clause 6.2 of the Plan is important and reads:

“6.2   Benefits

You will be entitled to the credit balance in your Savings Member’s Account in any one of the following situations:-

(a)   When you retire on attaining the normal retirement age of 60.

(b)   When you retire with the consent of the University due to ill-health as certified by a Registered Medical Practitioner approved by the University.

(c)   When you remain in service with the consent of the University after attaining the normal retirement age of 60 and retire subsequently.

(d)   On your death, whereupon the benefit will be paid to the beneficiary or beneficiaries nominated by you.

Upon termination of your employment for reason other than any of the above, you will receive the benefit equal to a percentage of your Savings Member’s Account according to the following schedule:-

 

No. of Completed Years of Plan Service	Percentage before 1st Oct. 1994	Percentage w.e.f. 1st Oct. 1994
Less than 2 years	Nil	Nil
2 years	50%	65%
3 years	60%	70%
4 years	70%	75%
5 years	75%	80%
6 years	80%	85%
7 years	85%	90%
8 years	90%	95%
9 years	95%	95%
10 years of more	100%	100%

You will not be entitled to the benefits if you are dismissed on the following grounds:-

(a) wilfully disobeying a lawful and reasonable orders;

(b) misconducting yourself;

(c) being guilty of fraud or dishonesty;

(d) being habitually neglectful in your duties; or

(e) upon any other ground on which the University would be entitled to terminate your contract of employment without prior notice.”

25.  The plaintiff submitted that if employment on superannuation terms did not carry with it security of tenure, it would make little sense for a staff member to agree to being employed on such terms.

26.  She submitted that, as pleaded by her in her Reply, the staff member would be financially worse off by agreeing to be employed on such basis as follows:

“… By opting superannuation term, the Plaintiff in fact had been financially worse off when compared with an extension of another two-year contract.  In particular,

(a) a two-year fixed contract bears a gratuity of 25% of basic salary but a superannuation contract would earn a provident fund of only 15% of the basic salary;

(b) it takes the Plaintiff 10 years before the superannuation benefits would be ‘break even’ as compared to the benefits under a fixed term contract (Clause 18 of the Terms and Conditions);

(c) the Plaintiff’s superannuation benefits will be partially forfeited upon the Plaintiff’s early leaving (of less than 10 years) the Defendant;

(d) the superannuation benefits were receivable only upon her leaving of the University or retirement age; and

(e) all the Plaintiff’s accrued superannuation benefits will be forfeited upon misconduct.”

27.  There is force in this submission.  However, it is not determinative of the question whether the employment contract permitted termination by notice.

28.  She submitted that in order to understand the meaning of “employment under superannuation terms”, one should look at the Staff Handbook (“the Handbook”) which was published in October 1999 as well as Guidelines on Contract Renewal, Crossing of Efficiency Bar and Upgrade for Academic and Administrative Staff (“the Guidelines”) issued by the Management Board of the defendant.

29.  The plaintiff drew particular attention to Clause 3.4.2 of the Handbook:

“3.4.2   Superannuation Terms

If you are employed on superannuation terms, your service is meant to be required on a long-term basis and you are eligible to join the Provident Plan established by the University on non-contributory basis from the date of appointment on superannuation terms.  However, your employment shall be subject to termination on a good cause for which the University shall be entitled to terminate your employment.  Details regarding the Provident Plan benefits under the superannuation terms of service can be found in the ‘TERMS AND CONDITIONS OF SERVICE’ and the Standard Chartered Provident Plan booklet.”

30.  The plaintiff submitted that Clause 3.4.2 shows quite clearly that her employment could only be terminated for cause.  In other words, Clause 3.4.2 provided an exhaustive statement of circumstances under which her contract of employment could be terminated.

31.  So far as the Guidelines are concerned, she relied in particular on Clauses 9 and 10:

“Superannuation

9. Confirmation to superannuation is important personnel decision.  Before the University granting superannuation to staff which will be a long-term commitment, the long-term need of the School/Centre/Unit must be substantiated.  The quality of the staff member must also be ascertained beyond reasonable doubt.

10. Normally superannuation for an academic staff will only be considered in the fourth year of service although that exceptions may be approved.  For administrative staff, confirmation to superannuation will be considered in the second or fourth year depending on the level of appointment and the readiness of the staff.  The above requisite length of service refers to the staff member’s total years of service at the University regardless of the ranks and nature of posts (i.e., establishment or supernumerary held).”

32.  She submitted that Clause 9 supported her case because it referred to a “long-term commitment” and that to offer employment on superannuation terms was an important decision such that:

“… The quality of the staff member must also be ascertained beyond reasonable doubt.”

33.  It may be that it was the plaintiff’s expectation that given employment on superannuation terms, she could look forward to long-term employment by the defendant.  Certainly her service would not be subject to periodical review in the sense that it would not need to be renewed periodically.

34.  However, the judge did not regard the Handbook as part of the contract of employment, nor that it assisted in the interpretation of the contract of employment.

35.  First, because the Handbook only came into existence in October 1999, 2 years after the employment letter.  Secondly, the Handbook in its Foreword made it clear that it was:

“… not intended to serve any contractual purposes.” (para. 18 of the judgment)

36.  Thirdly, most importantly, Clause 3.12 of the Handbook provides:

“3.12 Termination of Service

You may terminate your service by giving to the University in writing the notice required, or by payment of wages in lieu of notice where appropriate.  The University may also be entitled to terminate your employment by written notice or payment of wages in lieu of notice.

However, the University may terminate your service by summary dismissal in writing at any time without notice or payment in lieu of notice on any ground on which the University would be entitled to terminate your service without notice or payment of wages in lieu.

The ‘TERMS AND CONDITIONS OF SERVICE’ contains further details regarding termination of service and provision of benefits in such circumstances.  Please refer to the Standard Chartered Provident Plan booklet for payment of superannuation benefits.”

37.  As the judge said and we respectfully agree:

“The passage speaks for itself.  This point cannot possibly succeed.” (para. 19 of the judgment)

38.  However, we would add, the fact that the Handbook was not intended to serve any contractual purposes should militate against reading into Clause 3.4.2 the implication that her employment could only be terminated for cause.  We do not believe Clause 3.4.2 was intended to be or could be read as an exhaustive statement of the circumstances under which employment under superannuation terms could be terminated.

39.  As for the Guidelines, the plaintiff relied on in particular the word ‘tenure’ appearing in para. 4:

“4. In addition to the performance rating, other factors may also be crucial in considering a staff member’s tenure at OUHK.  Because of the University’s financial self-sufficiency commitment, the future human resource needs of the School/Centre/Unit where the staff member belongs should be taken into consideration.” (our emphasis)

40.  However, as the judge said:

“…But perhaps more significantly, it is very plain that the expression tenure in the Guidelines is intended to and does mean the course of employment or as the Dictionary puts it, the “holding of an office” rather than security of tenure.  Even clearer is the fact that this expression as used in the Guidelines refers to the employment of all staff, be they on contract or on superannuation terms.  Not that it really matters, because the question of interpretation is for me, but Professor Danny Wong also was clear that in the Guidelines the word referred to the employment of a person rather than security of tenure.  This point is so untenable that it should never have been relied on by the Plaintiff.”

41.  Again, we respectfully agree.

42.  The plaintiff submitted that the consensus understanding of the staff members of the defendant was that, a person employed on superannuation terms is entitled to security of tenure.  There is no evidence that that was so.  The plaintiff’s case is based on contract and the answer must be found there.

43.  The plaintiff submitted that security of tenure is desirable in that it enhances academic freedom.  But, security of tenure may not be the only way in which academic freedom can be safeguarded.

44.  Moreover, as the judge has explained in paras. 15 to 17 of his judgment, there is nothing in the Plan itself to support the plaintiff’s case. 

45.  The table of benefits in Clause 6.2 can apply to a termination of the contract of employment by notice, whereas the benefits would be entirely forfeited, if a staff was dismissed:

“(e)    upon any other ground on which the University would be entitled to terminate the contract of employment without prior notice.”

46.  That is sufficient to deal with this part of the appeal.  But in case this matter should go further, we go on to consider whether the defendant was entitled to dismiss the plaintiff for cause.

Dismissal for cause

47.  The plaintiff submitted, that the respondent having terminated her employment by notice, it was not entitled to rely on dismissal for cause.  The judge rejected this argument and we agree.

48.  Boston Deep Sea Fishing & Ice Company v Ansell [1888] 39 Ch D339, is a case where at the time of the dismissal the company had not known of the receipt of a commission by the defendant.  It was held by the court that the receipt of the commission was sufficient cause for dismissal, and that could justify the dismissal although it was not given as a ground for the dismissal at the material time.

49.  According to Cotton LJ:

“… It was immaterial whether that (the receipt of the commission) was known at the time (of dismissal) … ” (at 352)

50.  Here the plaintiff sued the defendant for the wrongful termination of her employment contract.  Thus, the issue is whether the termination was wrongful.

51.  We believe it is indisputable that the defendant must be entitled to rely on good cause not known to it at the time of the termination of the contract.  In other words, the fact that a contract had been purportedly terminated by notice would not by itself preclude a subsequent reliance on dismissal for cause.

52.  In the circumstances of this case, we do not see why the defendant could not rely on good cause known to it at the time of the termination of the contract.

53.  The plaintiff has raised other technical arguments against dismissal for cause.

54.  First, the defendant was not entitled to terminate her contract of employment without invoking the disciplinary procedures set out in Part 7 of the Terms.

55.  We respectfully agree with the judge that:

“Plainly, the right to terminate employment is in no way affected by the disciplinary procedures.”

56.  And that is because:

“… Sub-clause A of Clause 27, in its material parts, is as follows:

‘Disciplinary action is separate from and without prejudice to the University’s right to terminate the employment contract of any staff member with or without notice in accordance with the Laws of Hong Kong and/or these ‘Terms and Conditions of Service’ and/or any applicable terms of the contract.’

Plainly, the right to terminate employment is in no way affected by the disciplinary procedures.  These procedures need not be exercised as a pre-condition to any dismissal.  Sub-clause B which the Plaintiff specifically relies on relates only to the procedure and penalties, which need to be followed and which may be imposed respectively if the Disciplinary procedure is to be used.  Sub-clause B in no way assists as to whether this procedure has to be undergone before a termination can be validly directed.  This aspect of the Plaintiff’s case must therefore also fail.” (para. 25 of the judgment)

57.  Secondly, the plaintiff sought to rely on Article 35 of the Basic Law, she referred us to the The Open University of Hong Kong Ordinance, Cap. 1145 and cases such as New World Development Co Ltd and Others v The Stock Exchange of Hong Kong Ltd [2005] 2 HKLRD 612 and Dr Ip Kay Lo Vincent v The Hong Kong Medical Council [2003] 3 HKLRD 851.

58.  She submitted that:

“The disciplinary committee are performing judicial functions and is a court within the meaning of Article 35 of the Basic Law; failure of the defendant to let the plaintiff to access to disciplinary procedures/committee and therefore breach Article 35 of the Basic Law.”

59.  This shows a fundamental misunderstanding of the position.

60.  Here, the court is not concerned with the performance of a disciplinary committee convened to inquire into the conduct of the plaintiff.  The court is concerned with whether the defendant was entitled to summarily dismiss the plaintiff for cause without resorting to any form of disciplinary proceedings.

61.  Article 35 of the Basic Law is not engaged.  Nor are cases, such as Thomas v University of Bradford [1987] 1 AC 795, relevant.  As the headnotes in Thomas made clear there the lecturer was not relying upon a contractual obligation apart from the obligation of the University to comply with its own domestic laws.  Here, we are required to decide whether contractually, the plaintiff could be dismissed for cause by the defendant without first invoking its disciplinary procedures.  This turns on the construction of the employment contract and must be within the jurisdiction of the court.

62.  We turn to consider another submission of the plaintiff, namely that the judge has applied the wrong standard of proof.  She submitted that given the seriousness of the allegations against her, the allegations should be proved beyond reasonable doubt or to such a standard as is practically indistinguishable from it.  She relied on Dr Lai King Shing v The Medical Council Of Hong Kong [1995] 2 HKLR 465.

63.  We are not concerned with the disciplinary proceedings.  The standard of proof is that applicable in civil cases.  The applicable standard can be found in the judgment of the Court of Final Appeal in HKSAR v Lee Ming Tee and Anor [2003] 6 HKCFAR 336, namely, the more serious the allegation, the stronger should be the evidence before the court concludes that the allegation is proved.

64.  We have no doubt that the judge has applied the correct standard of proof.

65.  We turn to consider the good cause relied on.  In essence it boils down to one, namely the alleged deception in relation to the TMA monitoring forms.

66.  The judge dealt with this in paras. 44 to 55 of his judgment.  We agree with his conclusions.

67.  We can commence with the letter dated 28 April 2000 from the Head of Human Resources Unit, Mr Jack Fan, to the plaintiff.  The letter reads as follows:

“Dear Dr Ng,

The Dean of Business & Administration has submitted a report on your performance in your capacity as Assistant Professor in the School of Business & Administration.  To ensure a fair hearing, I write to invite you to respond in writing to those findings given in the attached Appendix.  You may wish to submit any evidences you consider appropriate or necessary.

If you wish to respond, please let me have your submission within 10 days from the date of this letter.”

68.  For the present purpose, we need only refer to B) in the Appendix:

B)	Monitoring of assignment marking
	Performed no monitoring work of assignment marking for some courses but implied in the Course Reports submitted to the Dean that the work had been done.	Failed to perform monitoring work for the following courses: · B380 (Apr 1998 & Apr 1999) · B381 (Apr 1997 & Oct 1998) · B384 (April 1999) · B480 (Oct 1998) Implied in the Course Reports that the monitoring work had been done.

69.  The plaintiff’s reply is dated 8 May 2000, and in relation to B), this is what she said:

“Claim B: Performing no TMA monitoring work

Response: I am afraid there was no April 1997 presentation but we did have a October 1997 presentation for course B381.  The TMA monitoring forms of the following presentation:-

B380 April 99 presentation
B381 October 98 and (part of) October 97 presentations
B384 April 99 presentation
B480 October 98 presentation

are attached for your verifications (See Attachment 3: TMA monitoring forms).  Note that, due to the moving of my offices twice in the past one and a half years, some of the TMA monitoring forms may have been lost.  I apologise for the inconvenience caused.”

70.  As the judge said, 47 TMA monitoring forms in all had been attached by her, but:

“… The difficulty about the TMA forms submitted is that all, save for 3 of the 47, were dated either 1998 or 1999, nevertheless the forms used were Version 3 forms which first came in the circulation after January 2000.  The dates had been corrected by her.  An analysis of the monitor scores showed that it was the same as the tutor marks and the comments appeared to be perfunctory with remarks such as ‘Great Job!’ or ‘Good Work’.”  (para. 47 of the judgment)

71.  The TMA monitoring forms came in triplicates, the plaintiff should keep the pink copy, the white copy should be sent to the tutors, and the green copies to the registry.  The registry had no record that the plaintiff had filed any of these TMA monitoring forms.

72.  The plaintiff disputed that before us.  However, when she was asked why, if she had sent the TMA forms to the registry, in the letter of 8 May 2000, she had not said so, since that would have relieved her of the burden of preparing the forms once again, she was unable to provide any explanation.

73.  The next event is her interview on 30 May 2000 with the president of the defendant.  According to the judge:

“52.   Following the submission of her 8 May report, the Plaintiff was called to a meeting on 30 May 2000 with the President of the Defendant.  The evidence is that she maintained her case that she had completed the monitoring tasks and returned the TMA forms within 2 to 4 weeks of having received her assignments.  When confronted with the fact that she had used Version 3 forms to do this work before those forms had come into existence she was unable to provide an explanation.”

74.  Anyway, the plaintiff claimed that, she was given a further opportunity to explain, and she did so by letter of 1 June 2000.  There, she said:

“Of all the miscellaneous and trivial forms of a course co-ordination’s job, I thought the TMA monitoring forms were merely one of them.  In these years, no one had also ever requested me for the TMA monitoring forms.  I therefore thought that they were not important and they were thrown away during the moving of my office (I moved my office twice).  Given the fact that the monitoring work was actually performed (which was reinforced by my email confirmations and countersigned by all tutors of all courses and no feedback of any inconsistency with reference to tutors’ marking in the past years made by the EEs or anybody), it was just that the monitoring forms of the past few years had been thrown away.  However, since the students’ records were still there, I therefore refilled and backdated the TMA monitoring form when asked to respond to OUHK’s allegations.  I understand that this may not be an appropriate way to prove my past performances, the act definitely was not my intention to deceive the University in anyway.  This is especially so when the information contained in the TMA monitoring forms were found to be true.”

75.  So her explanation was that since she still had the students’ records, she:

“… refilled and backdated the TMA monitoring form when asked to respond to OUHK’s allegations.”

76.  We note in passing that the statement that “In these years, no one had also ever requested me for the TMA monitoring forms” suggests that she had not sent any copy to the registry.

77.  At the trial she told the judge under cross-examination that the 47 TMA monitoring forms had been compiled from computer records which had since been deleted.  This explanation was presumably given to explain how she could have “refilled” the TMA forms from the students’ records.

78.  The judge said:

“… This was a version that she gave for the first time under cross-examination in Court.” (para. 54 of the judgment)

79.  He concluded at para. 55:

“To make matters worse, she was prepared to lie to the President on 1 June and now to me in the course of the trial as to how she came to make use of the Version 3 forms.”

80.  On the clear evidence before the judge, some of which we have dealt with above, we are of the view that there was strong evidence on which the judge could properly conclude that the serious allegation of dishonesty made against the plaintiff has been established.

81.  The plaintiff submitted that the judge has overlooked evidence which supported her case, namely, that TMA forms were indeed prepared by her at the material times, although they had since been lost.  She referred us to, e.g. an e-mail from one of the tutors, sent on 3 March 2000, against which, according to the plaintiff, several tutors had signed their names under the words “Acknowledged by”.  She submitted that since the body of the e-mail contained the following remark:

“3.     TMA monitoring

Total of 5 TMA monitoring forms were received in each course.”,

the tutors must be regarded as having acknowledged that.

82.  None of the tutors was called.  On such evidence, we cannot say that the judge was wrong in any way.

83.  Since the judge regarded this ground alone justified dismissal for cause and we agree, we will not go on to consider the other causes relied on.

Loss of properties

84.  As for the claim for loss of personal properties.  The judge concluded that:

“There is simply no merit in this part of the claim at all.”

85.  We agree.

Conclusion

86.  It follows from the above that the appeal is dismissed and we make an order nisi that the respondent is to have the costs of the appeal, to be taxed if not agreed.