HO KWOK KEUNG v. FURNITURE & HOUSEHOLDS SQUARE LTD

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

LABOUR TRIBUNAL APPEAL NO. 113 OF 1996

(Labour Tribunal Claim No.LT1231 of 1996)

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JUDGMENT

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The appeal

1. This is an appeal against the decision of the Presiding Officer of the Labour Tribunal who awarded severance payment to the employee (Claimant) when his contract of employment was terminated by his employer (Defendant). The appeal was brought by the Defendant pursuant to leave granted by Leong J. whose Order was that :-

"Leave to appeal on the question of waiver, i.e. whether the warning letter constituted a waiver of the employee's previous misconduct."

At the beginning of the appeal I raised my concern with Mr Wright, Counsel for the Defendant, that a determination of the question of waiver would not determine the whole of the appeal. Mr Wright then sought leave to appeal generally. I acceded to the request. I treated the hearing both as a hearing of the appeal and also for leave to appeal on matters not covered by the leave granted by Leong, J.

Facts

2. The Claimant worked as a Chief Designer for the Defendant. On 3rd January 1996, he received a warning letter from the Defendant which stated that :-

3. On 15th January 1996, the Claimant received another letter from the Defendant which stated that :-

4. On 18th January 1996, the Claimant received a further letter from the Defendant. The letter stated that :-

5. The Claimant claimed that he had been dismissed by the Defendant and sought severance payment pursuant to s.31B of the Employment Ordinance. The Defendant's case was that the Claimant had been dismissed for cause and it was therefore not liable for the severance payment.

The finding of the Presiding Officer

6. The Defendant in the hearing before the Presiding Officer relied on a number of grounds in justifying the dismissal of the Claimant, namely lateness for work, doing private work, lax working attitudes, taking leave without informing the Defendant until the following day, failing to co-ordinate with other colleagues. The learned Presiding Officer held that :-

"I find that the Defendant has failed to satisfy me on the balance of probabilities that Claimant's performance was so poor that the Defendant could have summarily dismissed him under section 9 of the Employment Ordinance. Nor was I satisfied that any or all of the above allegations were the prime or main reasons for dismissing Claimant."

On the question of redundancy, the Presiding Officer also found that the Defendant had failed to rebut the presumption in s.31Q of the Employment Ordinance ("the Ordinance") which provides that :-

"For the purposes of this part an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy."

She also found that the presumption under s.31B had not been rebutted. Section 31B(2) is as follows :-

Mr Wright submitted that the Presiding Officer erred on both grounds.

Only issue is lateness for work

7. Persistent lateness by the employee has been held to be a sufficient ground for summary dismissal by reason of disobeying a lawful order: see the recent decision of Mrs Justice LePichon in Labour Appeal No.105 of 1995 (Decision dated 1st December 1995).

8. In the application for leave to appeal, the Defendant's solicitor expressly confined his arguments on the lateness for work aspect of the case. I ordered, and this was accepted by Mr Wright, that arguments should be confined to this particular aspect of the finding.

9. The Presiding Officer accepted that the contents of the letter of 3rd January 1996 were truth. She held that :-

"The occasion whereby Claimant came in so late that even the boss had to wait for him to open the office door was a serious matter. However, the issue of the warning letter showed that the company was prepared to forgive him and give him a final chance to improve."

Reading this letter, I do not accept that the Defendant was prepared to forgive the Claimant in the sense of waiving his past misdeeds. On the contrary, this was a clear warning to the Claimant that his employment would be terminated if there was no improvement in his punctuality at work. Regarding the Claimant's lateness after this warning letter, the Presiding Officer at paragraph 6 of her Reasons for Decision ("the Reasons") stated that :-

"None of the DWs could specify the dates and seriousness of Claimant's lateness after the warning letter was issued. Evidence of DW3 showed that Claimant had become more punctual in the latter part when he was dismissed; that before he was dismissed he was more frequently late. Moreover, there was no mention of Claimant's lateness in the letters of 15th and 18th January, 1996 (Exhibits C4 and 5). Given the Company's concern over Claimant's late attendance and the strong wording chosen in the letter dated 3rd January (Exhibit C3), one wondered why the Company did not make similar allegations in the letter of the 18th if Claimant was genuinely dismissed for late attendance. I was not satisfied that Claimant was still late in attendance after the warning letter was issued. I could not exclude the possibility that Claimant had improved after the warning letter was issued."

10. Mr Wright submitted that the evidence clearly show that the Claimant was dismissed on 15th January 1996 when he was given one month to leave the office. On 18th January 1996, he was asked to leave immediately but the dismissal had in fact taken place earlier on 15th January 1996 and the Presiding Officer had confused herself that the Claimant was dismissed on the 18th.

11. The Presiding Officer was right when she said that the burden of proof was on the Defendant to disprove redundancy and to show that the Claimant was dismissed for a cause other than redundancy. I disagree with Mr Wright's submission that the evidence pointed clearly to a dismissal for cause due to the lateness of the Claimant after the warning letter of 3rd January 1996. The evidence was ambiguous. The Presiding Officer referred to the evidence of DW3, Mr Chan Ka Fai that :-

"In the latter part when he was dismissed, he was more punctual. Before he was dismissed, he was more frequently late."

This was a vague statement. Was DW3 referring to the 15th or 18th dismissal? Although the burden of proof was on the Defendant to show that the Claimant was dismissed for cause, the Presiding Officer was also vested with an investigatory role as well. What DW3 said was a clear instance in which the Presiding Officer should seek clarification.

12. During the evidence-in-chief of DW4 i.e. Miss Yan Man Chu (she was described as DW3 in the notes), the Defendant's Representative interjected and said that :-

"We thought he would be embarrassed if he were dismissed summarily. Maggie Tang had spoken to him and let him choose. He chose to leave after one month."

This is another area in which the Presiding Officer should cause further inquiries with the Defendant's Representative and the Claimant. If the Claimant was given one month notice of termination, on the face of it, this was inconsistent with summary dismissal. The Claimant submitted at the appeal that he was told by the Defendant to resign on his own which he refused. The discussion between the parties before the letter was issued was clearly relevant.

13. At page 17 of the notes of proceedings ("the notes"), the Claimant said that after the warning he had not been late.

14. The Claimant did not give evidence at the trial. In his cross-examination of the Defendant's witnesses, he referred briefly to his case. But he never gave his evidence in a complete narrative form. As he had not given evidence himself, he was not cross-examined. No doubt the Defendant carried the burden of proof, but unless its evidence was so totally discredited or unreliable, the circumstances in which the Claimant was not required to give evidence to deal with the matters raised by the Defence must be rare indeed. This is certainly not one of those cases. The hearing was not adversarial but inquisitorial in nature and the investigatory role of the Presiding Officer would require her to hear the evidence of the Claimant as well : this would be in the usual form of evidence in chief and cross-examination.

15. It is clear from the notes that the Presiding Officer had painstakingly covered the many issues raised at the hearing. She had with patience led the parties with their evidence and asked pertinent questions. However, her finding was susceptible to challenge due to the ambiguity of the answers regarding lateness and the other matters which were directly in issue.

16. In my view, the case should be remitted back to the Presiding Officer for her to conduct further enquiries on the question of lateness.

Redundancy

17. On the question of redundancy, Mr Wright submitted that the Presiding Officer's finding that the Defendant had not discharged the presumption that the Claimant was dismissed by reason of redundancy was contrary to the evidence and that no reasonable tribunal properly directing itself could have reached the conclusion as the Presiding Officer did. He referred to the advertisements placed by the Defendant for the post of Chief Designer after the dismissal of the Claimant and the difficulties of finding a replacement because of the location of the Defendant in Sai Kung. He also submitted the manpower position should be considered from the time of the employment of the Claimant.

18. He referred to the incorrect findings by the Tribunal Officer of the evidence. The first of which is in relation to the evidence of DW1. It was put to DW1 that when the Claimant was fired, DW1 told the Claimant that the Retail Department would lay off a lot of people and that the Claimant was just one of them. At paragraph 19 of the Reasons, the Presiding Officer said that DW1 was not sure if he had said anything about lay off of the Operation Department, whereas DW1 at page 9 of the notes stated

that :-

"I am sure I had not said anything about lay off of Operation Department. I had not spoken to him about other departments."

The second aspect is at paragraph 22 of the Reasons in which the Presiding Officer stated that :-

"Furthermore, Claimant was dismissed at a time when the retail market was admittedly slack."

At page 18 of the notes, the evidence of Miss Yan was that :-

"Retail market in February to April is more slack. Our design team is prepared for high season in October. Work is piling up. Promotion became slower because of lower market. We did not reduce manpower because of our wish to reduce the budget."

Mr Wright submitted that such evidence atmost only showed a fluctuating market.

19. What caused me concern regarding the finding on redundancy is at paragraph 22 of the Reasons where the Presiding Officer stated that "On the balance of probabilities, I accept the version of the Claimant on the issue of redundancy". As I have said earlier, the Claimant had not given evidence. Although proceedings in the Labour Tribunal is informal, if reliance was made on what the Claimant said during the cross-examination of the Defendant's witnesses, he should be subject to cross-examination by the other party as well. This was not done and it would be unsafe to make a finding without such evidence being adduced.

20. At the hearing of the appeal, the Claimant informed the court that two other colleagues were dismissed on 15th January 1996 as well. They were Miss Hui of the Shipping Department and Miss Chai of the Personnel Department. The High Court on hearing the appeal is of course not entitled to receive further evidence. However, the Claimant had not given evidence at the hearing. Had he given evidence at the hearing, I have no doubt that this matter would be investigated by the Presiding Officer.

21. The dismissal of two other employees is clearly relevant to the issue whether the Claimant was dismissed for cause or due to redundancy together with other employees. This is another aspect that the Presiding Officer should investigate by hearing further evidence on the dismissal of the other employees and seek discovery of documents from the employers regarding their dismissal.

Conclusion

22. I will first of all grant leave to appeal and secondly, pursuant to s.35(1)(c) of the Labour Tribunal Ordinance, remit the case to the Presiding Officer for her to conduct enquiries along the lines I have indicated. Depending on the outcome of the investigation, she would either affirm or vary the award she had made.

23. As to costs, since I have not allowed or dismissed the appeal but remit the matter back to the Presiding Officer for further inquiries, I will make an order nisi that each of the party will bear its own costs of this appeal.