HUNT MELANIE ANNE v. ASIA TELEVISION LTD.

HCLA 11/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO.11 OF 1998

(On appeal from Labour Tribunal Claim No. LT4532 of 1997)

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J U D G E M E N T

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The appellant claimed before the Labour Tribunal a total of $508,567 comprising (a) balance of wages in lieu of notice (b) severance payment, (c) commission for 1996 and (d) commission for 1997. By its decision dated 15 April 1998, the Tribunal dismissed the entire claim.

2. On appeal, the facts of the case are not in dispute. Indeed, both parties are adamant that the appeal should be decided on the basis of the primary facts as found by the learned Presiding Officer. In this regard, the facts of the case cannot be simpler. The appellant had worked for the respondent for some time before 1997 as a Senior Sales Executive. There was a letter of appointment which constituted or evidenced the terms of employment. In addition, the appellant had signed a "commission scheme" for each year. The "commission scheme" fixed the rate of commission for each year ending the 31st December of the year. With effect from 1st January 1997, the appellant was transferred to another department and became designated as Senior Executive - Public Relations. After the transfer, the appellant was never invited to sign a new "commission scheme". But the appellant continued to report to the Deputy Chief Executive Officer after her transfer to the Public Relations Department. It is also accepted that the appellant continued to liaise with customers.

3. Paragraphs 14 to 18 in the Reasons for Decision reveal how the learned Presiding Officer dealt with the evidence and the issues before him:-

"14. The crux of the case was whether the Claimant would still be entitled to commission after her transfer to PR with effect from 1/1/97. I ruled that the Claimant should not be entitled to any commission since her transfer for the following reasons:

a) The last commission scheme (Exh.D8) was signed by the Claimant on 13/2/96 which expired on 31/12/96. There was no further scheme signed in relation to commission. I did not accept the Claimant's argument this was administrative error.

b) According to the evidence of Mr. Jermyn Lynn (DW2), no staff in PR should be entitled to commission. He could think of no exception. He was involved in CNBC news project because of his experience but he did not think he should then be entitled to commission.

c) According to the evidence of Mr. LAI Kam-chuen (DW1), a sales executive would only be entitled to commission if there was such a scheme as Exh. D8.

d) I noted the affidavit by the DCEO claiming that he had promised the Claimant that the terms and conditions remain the same after her transfer. However, in view of what DW1 and DW2 had said, coupled with the absence of relevant document, I did not accept what the DCEO claimed in Exh. C12 which clearly contradicted the practice of the Defendant. I also relied on my comment in paragraph 11.

e) I accepted that the Claimant might have a mixed role after her transfer to PR. As what DW2 had said in his evidence that he called upon the Claimant to assist in some projects because she got the experience. However, that did not automatically make the Claimant entitling to commission.

15. For item (a), balance of wages in lieu of notice, as I ruled that the Claimant should not be entitled to any commission in 1997 after her transfer, the Defendant should therefore only be required to pay the wages which should have been accrued to the Claimant during the period of notice as required by S.6 which the Defendant had done. This claim is therefore dismissed.

16. For item (b), severance payment, I also dismissed this claim for the following reasons:-

a) I accepted DW1's evidence that there was a new recruit, Mr. Barry Wu, was employed after the Claimant was dismissed from the Defendant (see Exh. B3). According to DW2's evidence, there was also another person, Ms Jacquereen Hung, recruited to his section to deal with the English media in 1997.

b) Exh. D17 indicated that there was no substantial fluctuation of manpower both in the PR and the Sales and Marketing Department of the Defendant during the period from 1/1/97 to 31/12/97.

c) As confirmed by the DCEO in Exh. C12, the transfer of the Claimant was an administrative act which made more sense as the Claimant was the only one in the Business Development Department in Kowloon at that time. Presumably this is in accordance with the power set out in the letter of employment, Exh. D5, that the Defendant could designate the Claimant to different post from time to time. In addition, the manpower in the other Business Development Department on Hong Kong side had not diminished (see Exh. D17). I did not think this could attribute any element of severance to the dismissal of the Claimant from PR six months later.

d) I also accepted DW1's evidence that the Defendant was not satisfied with the Claimant's performance and dismissed her by giving one wages in lieu of notice.

17. As for (c), the commission for the year 1996, the Claimant argued that she should be entitled to the commission due to the increase in total contract sum in the MTV project as shown in Exhibit C14. All those contracts were signed by Mr. Victor Sze. The additional amount of $250,000 in Exh. C14(6) was three months after the original contract in C14(1). Even if she had been given commission out of this contract before, there was no evidence to link the increase with her work. In the absence of any report as required by the first paragraph of Exh. D8, I found that the evidence in support of this claim was too vague for me to rely on. I dismissed this claim.

18. As for (d), the commission for the year 1997, there was no report which supported the Claimant's work. Exh. B6 clearly showed that there was another person who was responsible for the three main contracts the Claimant alleged she was responsible. None of the contracts produced as Exh. C15(1) to C15(3) were signed. I could not find any clue that it was due to the work of the Claimant. According to her evidence in paragraph 5(g), she had no idea if there was any concrete contract arising from her work. Again in paragraph 9(c), she said she stayed in contact with clients but the budget was not finalised. Besides, I had ruled that she should not be entitled to any commission after her transfer albeit she might have assisted in some of the projects (see paragraph 14). In the circumstances, I dismissed this claim also."

4. Mr. Chua for the appellant sought to convince the court that, on any view, the court is bound to allow the appeal. Counsel suggested that there was a catalogue of errors of law committed by the Tribunal. Even though I have given much thought to it, I do not think I am able to summarize the salient points in Mr. Chua's arguments. The best I can do, and I think in fairness to all parties concerned, is to reproduce the relevant parts of Mr. Chua's skeleton arguments and append my views in square brackets to those parts point by point:-

"Conclusions inconsistent with findings of primary fact

5.1 The Tribunal drew several conclusions, which were not only unsupported by its findings of primary fact, but which pointed in the opposite direction, having regard to the evidence of the Defendant's witnesses, which the Tribunal accepted that:-

(a) There was no change in the terms of the Plaintiff's employment, following her transfer from one department to another (paras 7(m), 14(e) Decision).

[In Paragraph 7(m) of the Reasons for Decision, the Tribunal referred to the evidence of one witness who stated that the witness "did not think there was any change of the terms of employment in relation to the Claimant. The Defendant could transfer the Claimant to other departments." This piece of evidence was obviously given in the context of the claim for severance payment. The Tribunal accepted this evidence, without doubt, in the same context.

In the context of the claim for commission for 1997, the Tribunal found that the last commission scheme was signed by the appellant on 13th February 1996 and had expired on 31st December 1996. There was no further scheme signed in relation to commission. See Paragraph 14(a) of the Reasons for Decision. Leaving aside the question of whether the Tribunal's decision is correct, the decision in relation to commission is not inconsistent with a finding of no change in the terms of employment in the context of claim for severance payment.]

(b) The Plaintiff had previously received commission, including in the year 1995 and 1996.

[On the other hand, the appellant had signed "commission scheme" for 1995 and 1996, but not 1997. It cannot be said that the Tribunal's decision not to award commission is inconsistent with the evidence or unsupported by evidence.]

(c) The Plaintiff's role before and after her transfer to the P.R. Department in 1/97 included seeking new business opportunities and clients, and maintaining relations with existing clients. In particular:-

(i) She continued to have contact with numerous clients following her transfer in 1/97 (paras 7(1), 14(e) of Decision) (tab 10) - which was not adequately explained by a "handover" of several months.

(ii) There was no inconsistency between being in the P.R. Department, and a sales and marketing function (cf para. 11 Decision).

[As the learned Presiding Officer observed in Paragraph 14(e) of the Reasons for Decision, these do not automatically entitle the appellant to commission. It is immediately apparent from Paragraph 18 of the Reasons for Decision that another ground for rejecting commission for 1997 was that there was insufficient proof that the appellant's efforts generated business giving rise to commission.]

(d) Every sale executive should have signed a commission scheme (para 7(b) Decision).

[It is difficult to see what is the point for the appellant here.]

(e) The Plaintiff developed several new clients after she joined the P.R. Department, for instance in relation to the Standard Chartered Marathon (para 8(c) Decision).

[This is falling into arguments in circles. If the parties had not agreed on commission, the respondent is bound to pay commission despite gratuitous efforts by the appellant to bring in business. Moreover, the Tribunal in Paragraph 18 of the Reasons for Decision found and held that there was insufficient proof of the appellant's efforts resulting in increased business for the respondent.]

Erroneous reasoning

5.2 The Tribunal also erred in law in that its reasoning was fundamentally flawed:-

(a) There was no finding that the parties agreed to vary the terms of her employment as to the payment of commission, whether orally or in writing. As such:-

(i) On well established principles, the Defendant was not entitled to unilaterally vary the terms of her employment, without the Plaintiff's consent;

[This case, in relation to commission, was not decided on the basis that the respondent was entitled to unilaterally vary the terms of employment. It is unfair to mis-state the basis of the Tribunal's decision. This case was decided on the bases that an employee cannot unilaterally demand payment of remuneration which had not been agreed and which had not been earned.]

(ii) It was not necessary for the Plaintiff to sign a commission scheme as the payment of commission had already been agreed. The absence of a signed commission scheme for 1997 was relevant if at all, to the quantum of commission, not liability; and was consistent with an administrative error;

(iii) Not signing a commission scheme for 1997 cannot preclude entitlement to commission where she generated and/or increased one or more accounts during her employment in the P.R. Department in 1997;

[These two small paragraphs merely assert the appellant's case. The Tribunal, for the reasons it has given, ruled against the appellant both on law and on the evidence. There is nothing in logic or on principle to suggest that the assertions in these two paragraphs are absolutely correct. The appellant does not even begin to show, by logic or authority, that the Tribunal's reasoning is erroneous.]

(iv) The tribunal erred in trying the matter on the documents, and placing excessive reliance on the absence of a signed commission scheme for 1997.

[This matter was not tried on documents. The Tribunal heard a number of witnesses. In other parts of his arguments, counsel for the appellant charged the Tribunal with relying excessively on the evidence of those witnesses.

It is ironic that the appellant further charged the Tribunal with not relying on the affidavit of a "witness" who was not available for cross-examination.

In principle, the question of how much weight to be given to a particular piece of documentary evidence or witness is a matter for the trial court. It is trite law that an appellate court cannot without good cause substitute its own assessment of the evidence for that of the trial court. Counsel for the appellant contended that the appellate court cannot look at the original or source evidence. If that is correct, the appellate court cannot even say whether the evidence was such that the trial court gave too much weight to it.]

(b) It was irrelevant that one or more employees in the P.R. Department were not entitled to commission:-

(i) The issue before the Tribunal was the terms of the Plaintiff's employment not that of other employees, particularly having regard to para 5.1(a) above.

(ii) It is common for different employees in an orgainisation to have different terms of employment, having regard to the circumstances in question. For instance, their experience, expertise, and salary.

[The appellant was entitled to assert that she was an exceptional case, but the respondent was also entitled to plead that the appellant was not an exception. Faced with such issue, the Tribunal was certainly proper and doing its duty to look into all relevant factors and circumstances before deciding whether the respondent organization made exceptions and, if no exception had been made, what were the appellant's entitlements in the general scheme of things.]

(c) As to the D.C.E.O.'s role:-

(i) It was common ground that only the D.C.E.O. had 1st hand knowledge (apart from the Plaintiff) of her work, and that she only need report to him after her transfer to the P.R. Department (Decision para 7(g)).

(ii) There was no finding that DW1 or DW2 had 1st hand knowledge of the terms of her employment, or her job status, but to the contrary (Decision paras 7(d), (m), and 8).

(iii) Notwithstanding these matters, the Tribunal erred in disregarding the affidavit evidence of the D.C.E.O. Mr. Stephen Li who was not cross-examined because of his medical condition (Plaintiff's Skeleton p3) (tab 13).

[The fact that a witness has direct, first hand knowledge does not necessarily mean that that person is incapable of giving unreliable evidence. It is always open to a court or Tribunal to reject or give little weight to the evidence of witnesses who should have the best knowledge. The tribunal did give reasons for not relying so much on the evidence of the D.C.E.O. The reasons given are not perverse to law, logic or common sense.

Even if the Tribunal should have ignored the evidence of DW1 and DW2 relating to the terms of employment or the work of the appellant, there was sufficient indisputable facts for the Tribunal to come to the decisions as it did.]

(iv) There was no finding by the Tribunal that he had any vested interest.

[This is neither here nor there. The evidence of an "independent witness" who has no vested interest has been rejected in many trials. The Tribunal rejected the evidence of the D.C.E.O. for reasons it has stated. Those reasons are not the ones that an appellate court in these circumstances can or should over-ride.]

(d) The Tribunal also failed to appreciate the necessary time lag between:-

(i) The Plaintiff developing business with new or existing clients, and any resulting contracts concluded by those clients with the Defendant; and

(ii) Payments made by those clients under such contracts.

Hence, commission could be received for 1996 (or other years) after the year end, or the date of an employee's departure. An entitlement would depend on an accrued right to commission, not an artificial cut off date for the year end, or that of an employee's departure (see also para. 6.1 below).

[The Tribunal did not reject the claim for commission on the lapse of time per se. In relation to claims for commission for work done before the signed "commission scheme" for 1996 expired and for work done in 1997 without a signed "commission scheme", the Tribunal, as pointed out before, rejected them also on the ground that there was insufficient proof of work done. See Paragraphs 17 and 18 of the Reasons for Decision. It is not fair to attribute false reasons for decision to the Tribunal.]

(e) For entitlement to commission, it was unnecessary for the plaintiff to personally sign a contract with a client she had successfully solicited (cf para 9 of Decision). Other employees could sign such contracts (para 17 of Decision), and she did not necessarily have authority to sign these (Skeleton Argument p4 (tab 13).

[Again, the point is that the appellant could not overcome the hurdle of proof of work done that would merit commission.]

Findings from facts with no probative value

5.3 The Tribunal also erred for the reasons above, and having regard to the following:-

(a) Neither DW1 or DW2 had 1st hand knowledge of the Plaintiff's work in the P.R. Department, and she need not report to them, but to the D.C.E.O. (Decision para 7(g), (1)), (M), and 8).

[The point here has been made in Para. 5.2(c). The point has been dismissed for reasons given under that item.]

(b) The fact the D.C.E.O. may not have instructed personnel to issue a commission scheme in 1997 for the Plaintiff, was consistent with an administrative error. This accords with his evidence in support of her claim (para. 11 Decision)."

[The appellant's case, to overcome the hurdle of lack of cover by a signed "commission scheme", was that there had been an administrative error. That ironically, underlines the point that the appellant should have signed "commission scheme" in the normal arrangement of things. Of course, it was open for the Tribunal to accept the appellant's explanation that there was an administrative error. But the Tribunal, having considered all the evidence, rejected that explanation. It is not an error of law to reject a claimant's case. It is an error of law only if the rejection of the case is based a faulty reasoning or mistake about the law. The appellant has not shown that the Tribunal laboured under faulty reasoning or mistaken knowledge of the law.]

5. In a nutshell, the strength of the appellant's case put at its highest might persuade a different judge or Presiding Officer to arrive at conclusions on the evidence different from those reached by the learned Presiding Officer in this case. However, suggestions that the learned Presiding Officer erred in law are not sufficiently made out. The decision of the Tribunal is not inconsistent with or perverse to the evidence properly evaluated.

6. In the premises, the appeal was dismissed with costs to the respondent to be taxed if not agreed. And I ordered that the appellant's own costs be taxed in accordance with Legal Aid Regulations.