CHUNG HOI YIN AGGIE v. THE GENERAL OF THE SALVATION ARMY

HCLA 16/2023

[2025] HKCFI 3680

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 16 OF 2023

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 2803 OF 2022)

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JUDGMENT

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I.  INTRODUCTION

1.  By his Decision handed down on 3 January 2024 ([2024] HKCFI 50), Fung J granted leave to the Defendant to appeal against the Judgment of the Labour Tribunal (the “LT’s Judgment”) made by Deputy Presiding Officer Ms Chan Pui Shan (the “Learned Officer”) on 10 May 2023. This is the appeal.

II.  BACKGROUND

2.  Since 2005, the Defendant had employed the Claimant as a registered contract social worker. By letter dated 30 March 2020 issued to the Claimant, the Defendant wrote:-

“閣下於合約期間工作表達到本軍要求，現被續聘為救世軍新界西綜合服務／屯門東青少年綜合服務之合約隊長，合約期由二〇二〇年四月一日至二〇二一年三月三十一日止。

…

隨函附上合約隊長之聘用條件…”

3.  The “聘用條件” enclosed therewith (the “Employment Contract”) contained, among others, the following terms:-

“1. 職銜：隊長

性質：合約僱員

…

4. 職位概要：

隊長主要職務是協助高級主任領導及管理有關之服務小隊，並且掌握及回應社區需要，提供優質專業服務予青少年及其家庭。

…

10. 行為守則：

(i) 按照救世軍社會報務部的宗旨，提供優質服務，以「服務對象需要」為本，重視責任承擔和服務交代。

(ii) 經常留意和遵守救世軍及香港政政府所頒行的最新的服務守則：包括服務質素標準、職業安全、衛生、環境保護等。

(iii) 須自覺遵守社會工作專業守則。

…

12. 其他聘用條件，請參閱以下文件

(i) 合約僱員手冊 (2013 年5 月1日修訂）

(ii) 員工工作評核表

本人經詳細閱讀救世軍在聘書和以上列出之僱用條件，充份了解其內容，並同意遵守所載各項。

僱員簽署：…” (emphasis added)

4.  On or shortly before 1 April 2020, the Claimant accepted the Employment Contract. The total sum of the above documents is that the terms of the Employment Contract started on 1 April 2020 and expired on 31 March 2021.

5.  “合約僱員手冊 (2013 年5 月1日修訂）” referred to in Clause 12(i) of the Employment Contract (the “Handbook”) contained, among others, the following terms:-

“服務質素11. 僱員須遵行本軍要求的服務質素標準，提供優質服務。

…

續約

40. 上級須於僱員台約屆滿前與僱員進行工作評核以決定是否續約。續約與否，續約的年期及條件將按僱員工作表現水平及崗位狀況等作決定。

辭職及解僱

辭職／解僱通知41.僱員辭職，須提前4星期通知本軍。本軍解僱僱員，亦需如期發出通知。

受僱未滿l個月之僱員不需要通知期，本軍於首月與僱員終止僱傭合約時須給予7天通知期。

42.僱員如未能按照規定提前通知而自行離職，即須以等量薪金代替通知期，償還救世軍。”

6.  The “服務質素標準”, mentioned both in Clause 10(ii) of the Employment Contract and paragraph 11 of the Handbook, included the Service Quality Standards agreed between the Social Welfare Department of the Hong Kong Government and the Defendant. Service Quality Standard 5 (the “SQS 5”), concerning human resources, provided that:-

“	救世軍社會服務部 制訂職員合約政策及程序

…

程 序

4. 關於續約處理，本部將於員工合約到期前兩個月透過人力資源管理電腦系統向高級主任／單位主管發出通告。高級主任／單位主管需在合約到期前六星期向總經理提交有關員工的工作評核表及續約與否的建議,相關的批准權限如下…

5. 本部人力資源組於台約到期前或後四星期內向有關員工發出續聘書，終止合約通知書則於合約到期前兩個月(適用於高級主任或以上) 或二十八天發出。”

7.  By the end of the Employment Contract, that is, 31 March 2021, the Claimant had been and was still on sick leave, and the Defendant renewed the Employment Contract six times by notices, specifically stating the renewal periods to be:-

(1)  “由二〇二一年四月一日至二〇二一年六月三十日止” (“from 1 April 2021 to 30 June 2021”);

(2)  “由二〇二一年七月一日至二〇二一年九月三十日止” (“from 1 July 2021 to 30 September 2021”);

(3)  “由二〇二一年十月一日至二〇二一年十二月三十一日止” (“from 1 October 2021 to 31 December 2021”);

(4)  “由二〇二二年一月一日至二〇二二年三月三十一日止” (“from 1 January 2022 to 31 March 2022”);

(5)  “由二〇二二年四月一日至二〇二二年六月三十日止” (“from 1 April 2022 to 30 June 2022”); and

(6)  “由二〇二二年七月一日至二〇二二年九月三十日止” (“from 1 July 2022 to 30 September 2022”).

8.  The Employment Contract, not further renewed, eventually expired on 30 September 2022. On 30 September 2022, the Defendant notified the Claimant that there would be no further renewal, when the Claimant was still on sick leave.

III.  LT’S JUDGMENT

9.  In the Labour Tribunal, the Claimant claimed that:-

(1)  SQS 5 (and thus Clause 5 of Appendix 6 thereto) formed part of the Employment Contract;

(2)  By clause 5 of Appendix 6 to SQS 5, the Defendant was required to give 28 days’ notice for termination of the employment;

(3)  The Defendant did not give any notice of termination of the employment; and

(4)  Therefore, the Defendant dismissed the Claimant without valid reasons.

10.  Based on the above claim, the Claimant sought (1) 28 days wages in lieu of notice of termination of employment; (2) compensation arising from the termination of employment; and (3) compensation upon dismissal under section 32P of the Employment Ordinance (the “Ordinance”).

11.  The Defendant denied that Clause 5 of Appendix 6 to SQS 5 formed part of the Employment Contract. The Defendant’s position was that the employment under the Employment Contract was fixed and remained fixed after renewal. Therefore, the Defendant contended that it was not required to give any notice of termination, given that the employment automatically expired on 30 September 2022. The Defendant further contended that the Claimant should not be entitled to the compensation awarded to her, which would arise only from wrongful dismissal, but not from expiry of a fixed-term employment.

12.  At §20 of the LT’s Judgment, the Learned Officer identified the following issues for her determination:-

(1)  Whether SQS 5 formed part of the Employment Contract;

(2)  If it did not, whether the expiry of the fixed-term employment should be regarded as dismissal; and

(3)  If it should be, whether there were proper grounds for the dismissal.

13.  The Learned Officer found that SQS 5 formed part of the Employment Contract such that it required the Defendant to give the Claimant 28 days’ notice, that the termination was therefore a dismissal, and that there were no proper grounds for the dismissal. The Learned Officer awarded 28 days’ wages, and compensation for wrongful dismissal under section 32P of the Ordinance. The Learned Officer seemed to say that the compensation arising from the wrongful dismissal was included in her award of the section 32P compensation, and therefore, did not award any such compensation separately (see §52 of the LT’s Judgment).

IV.  GROUNDS OF APPEAL

14.  On 3 January 2024, Fung J granted leave to appeal on the following grounds:-

(1)  Ground 1: the Learned Officer erred in law in holding that SQS 5 formed part of the Employment Contract, which should have been construed as no more than guidelines for the human resources department of the Defendant to follow;

(2)  Ground 2: the Learned Officer erred in law in construing that Clause 5 of SQS 5 conferred a contractual right on the Claimant to receive 28 days’ notice or payment in lieu, given that the employment under the Employment Contract was a fixed-term employment;

(3)  Ground 3: the Learned Officer erred in law in holding that the Claimant was dismissed upon the expiry of the fixed-term employment;

(4)  Ground 4: for section 32P compensation, the Learned Officer erred in law in failing to investigate whether the Claimant was dismissed within or outside her statutory entitlement of sick leave allowance as provided by section 33(4B) of the Ordinance and/or in failing to adjourn the issue of compensation under section 32P until the determination of the Claimant’s employee compensation claim which would determine her statutory entitlement of sick leave allowance; and

(5)  Ground 5: the Learned Officer should have found that there were proper grounds for the dismissal, if the termination was a dismissal.

V.  GROUNDS 1 AND 2

15.  I shall deal with both Grounds 1 and 2 together, as they both concern whether SQS 5 formed part of the Employment Contract. The question arising from Grounds 1 and 2 is, in essence, whether SQS 5 formed part of the Employment Contract. With respect to Mr Jason Kung, counsel for the Claimant, I do not quite follow his submissions that Grounds 1 and 2 should be limited to whether SQS 5 was apt to be a contractual term. I disagree with him that Ground 1 in particular was formulated so narrowly as to be based on the so-called “aptness” test mentioned in Kwan Ka Man Blanche v Esprit Retail (Hong Kong) Ltd [2004] 4 HKC 378 at §15. Neither Ground 1 nor Ground 2 even uses the word “apt” or “aptness”.

16.  The general legal principles in relation to contractual construction are well established. In summary, the construction is a unitary exercise starting with the ordinary and natural meaning of the words and bearing in mind the purpose, context and factual matrix known to the parties, the quality of the drafting and the commercial common sense: see Eminent Investments (Asia Pacific) Ltd v DIO Corp (2020) 23 HKCFAR 487 at §§43-44 per Ribeiro PJ and Lord Collins NPJ. I would add that “aptness” in Kwan Ka Man Blanche v Esprit Retail (Hong Kong) Ltd, supra is in my view the same as common sense. However, at the same time, I should bear in mind that the Court is not to rewrite the contract in question based on aptness or reasonableness. Aptness and commercial common sense are factors, among others, the Court has to consider to ascertain the parties’ intention objectively.

17.  As pointed out by Mr Earl Deng, counsel for the Defendant, employment contracts receive no special treatment. The same general legal principles apply to construction of an employment contract. Of course, the employment relationship is part of the context and factual matrix known to the parties, and this has to be taken into account in the unitary exercise: see Egner David Parks & Ors v Cathay Pacific Airways Ltd & Anor [2023] HKCFI 3126 at §§82-83 per DHCJ Jonathan Chang SC.

18.  In the present case, in my view, the mere reference to SQS does not necessarily mean that the whole SQS was contractually incorporated. One has to consider the context and purpose of the Employment Contract as well. The following matters are relevant:-

(1)  the Employment Contract was mainly a unilateral communication of what the Claimant would be expected what to do;

(2)  the heading of Clause 10 of the Employment was “行為守則”;

(3)  the purpose of Clause 10 was to require the Claimant to provide services up to a certain quality;

(4)  the side heading of Clause 11 of the Handbook was “服務質素”, like the heading of Clause 10 of the Employment;

(5)  the purpose of Clause 11 of the Handbook was to require the Claimant to provide services up to a certain quality;

(6)  SQS 5 was about “人力資源” (human resources), nothing about the quality of services provided by the Claimant, the Defendant or any of the Defendant’s employees.

19.  Against the above matters, in my view, Clause 10 clearly created contractual obligations for the Claimant to comply with in respect of her conduct and quality of her service, but not for the Defendant. The references to the SQS here were to ensure that the Claimant’s conduct and service would be up to the standards set out in the SQS insofar as the SQS concerned standards of services. However, SQS 5 did not concern such quality, and therefore would not be apt to form part of the Employment Contract. In the circumstances, I take the view that SQS 5 did not form part of the Employment Contract. If there is any breach of SQS 5, there may be consequence for the Defendant as between the Defendant and the Social Welfare Department, which could choose not to renew contracts with the Defendant. But this would be a matter for the Social Welfare Department. As between the Claimant and the Defendant, SQS 5 at most constituted some non-binding guidelines for the Defendant to follow.

20.  Mr Kung, for the Claimant, submits that the present case bears resemblance to Ko Hon Yue v Chiu Pik Yuk (2012) 15 HKCFAR 72, where the Court of Final Appeal held at §65 that the procedures for non-renewal of a fixed-term contract should also be applied so that the fixed-term contract did not terminate by effluxion of time. With respect, that case does not help the Claimant. In my view, that case is materially different from the present case. As can be seen at §65, one material clause the Court of Final Appeal relied upon there was Appendix 17 of the contract there, which provided that:-

“If the teacher after receiving the warning letter still shows no improvement after an appropriate period, normally not less than one month, and the Management Committee intends to dismiss him or not to renew his contract after the date of expiry, the Supervisor shall so inform the Director.”

21.  Mr Kung submits that Clause 5 of Appendix 6, Appendices 7 and 8 to SQS 5 contained similar terms. On my view that the incorporation of SQS only created obligations on the Claimant but not the Defendant, and so SQS 5 did not form part of the Employment Contract, there was no such term here in the present case.

22.  Mr Kung also submits that properly construed, the Employment Contract was not a fixed-term contract but was meant to be automatically renewable. With respect, I am unable to accept such submissions in the light of the clear wording used in each renewal notice as set out in §7 above. In support his submissions, Mr Kung relied on Clause 5 of Appendix 6 to the SQS, the apparent equivalence between “dismissal” and “non-renewal” in Appendix 7 to the SQS and appraisal for renewal or non-renewal in Appendix 8 to the SQS. However, such reliance cannot be maintained upon my finding that SQS 5 did not form part of the Employment Contract in the first place, while it is clear to me that the fixed-term was part of the Employment Contract.

23.  In any event, Appendix 7 to the SQS would be applicable only when there were disciplinary proceedings, and Appendix 8 to the SQS would be applicable only when there were appraisals. In my view, contrary to Mr Kung’s submissions, a fixed-term contract could be not renewed not only for disciplinary matter or unsatisfactory appraisal of performance, but also for resources or needs. When there were not enough resources, or in the first place, the position was made for a temporary event or purpose, I see no reason why the Defendant would still have to renew such fixed-term contracts even without any disciplinary matter or unsatisfactory appraisal of performance. Therefore, even if Appendices 7 and 8 would be part of the Employment Contract, I would not think that they would lead to construing the term under the Employment Contract to be non-fixed term or fixed-term subject to automatic renewals.

24.  It remains for me to deal with Mr Kung’s submissions that a witness for the Claimant below, Mr Yip Hing Lung, gave evidence that he had never encountered any circumstance where a contract was not renewed without appraisal of performance. The Learned Officer did not seem to have considered his evidence. In any event, I would understand why – Mr Yip Hing Lung was the Chairman of the trade union of Salvation Army who had never been involved in the Human Resources Department of the Defendant or responsible for personnel matters, and so his evidence was of little value, if any.

25.  To conclude, in my view, with respect, the Learned Officer erred in law in holding that SQS 5 formed part of the Employment Contract. I allow Grounds 1 and 2.

VI.  GROUND 3

26.  Termination of a fixed-term employment by effluxion of the fixed-term is not a dismissal: see Demery v Cathay Pacific Airways Ltd [2010] 4 HKLRD 99 at §§22 and 27 per Suffiad J; Suen Hung Shan v Wong & Ouyang (HK) Ltd [2023] HKCFI 3006 at §62 per DHCJ H Au-Yeung (as he then was). Therefore, in the present case, there was no dismissal, and without any dismissal, I do not see any ground for section 32P compensation, and I do not see any need to investigate whether the Claimant was or was not on the statutory sickness allowance.

27.  Insofar as there is any argument that the word used in section 33 of the Ordinance is “terminate” but not “dismiss”, I reject such argument as semantic without regard to the context – the word “terminate” is used in sentences like “an employer shall not terminate…” (section 33(4B)) and “An employer who terminates…” (section 33(4BAA)). It refers to a contract terminated by the employer, but a contract terminates upon the expiry of the term of the contract itself.

28.  In other words, with respect, the Learned Officer erred in law in holding that the termination of the Employment Contract was a dismissal and in awarding compensation based on dismissal. I allow Ground 3.

VII.  GROUND 4

29.  Given my view above, Ground 4 is not necessary. Suffice to say that the Learned Officer’s duty to investigate is not unlimited. In my view, the Learned Officer’s directions made on 11 April 2023 and the supplemental witness statements filed pursuant to the directions were for the purpose of investigating whether the medical leave was statutory or not.

30.  Also, in respect of the Defendant’s submissions that the Learned Officer should have adjourned the hearing pending the determination of the Claimant’s employee compensation claim (in which the length of the statutory medical leave was in question), I agree with Mr Kung that it was a case-management decision which I would not think appropriate to interfere in the present circumstances: see Tang Yisu v Sunguard Security Company Ltd [2023] HKCFI 3116 at §§3.4, 4.2, 4.3 and 4.4 and [2024] HKCFI 1882 at §2.1 per DHCJ Jonathan Wong.

31.  I would reject Ground 4.

VIII.  GROUND 5

32.  Again, given my view above, Ground 5 is not necessary. I should only point out that Ground 5 is more a ground on the Learned Officer’s factual finding of whether there were valid grounds for the dismissal (if it were a dismissal). It does not seem to me that the Learned Officer’s finding, having heard and considered the evidence, is so wrong as to constitute any error of law.

33.  I would reject Ground 5.

IX.  CONCLUSION

34.  Grounds 1 and 2 above are established on the construction of the Employment Contract. There is no need to hear any or any further evidence on this question of law. In the circumstances, I allow the appeal, that is, the Claimant’s claim should have been dismissed. I therefore set aside the Learned Officer’s Award, and dismiss the Claimant’s claim.

35.  I make a costs order nisi that the Claimant should pay the Defendant costs of the appeal (including the costs of the application for leave to appeal before Fung J), to be summarily assessed on paper. For the summary assessment, the Defendant shall lodge and serve a statement of costs within 3 days upon the costs order nisi becoming absolute, and the Claimant shall lodge and serve a list of objections within 7 days thereafter. The Claimant’s own costs shall be taxed in accordance with Legal Aid Regulations.

36.  It remains for me to thank counsel for their assistance.