KAM HUNG INDUSTRIES CO LTD v. LAM MING SUN AND OTHERS

IN THE HIGH COURT OF JUSTICE

HONG KONG

LABOUR TRIBUNAL APPIAL NO. 61 OF 1986

(Claim No. 2468 of 1986)

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J U D G M E N T

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1. This is an appeal under Part VI of the Labour Tribunal Ordinance by employers, Kam Hung Industries Co. Ltd., being dissatisfied with an award made against them on a hearing. They say that the matter is erroneous in point of law.

2. The Tribunal (Mr. Yeung who was the acting Presiding Officer) gave on 12th August, 1986 reasons for decision and I have been referred to the evidence which has been given in this case and various exhibits. Let me say straightaway that I thought the decision which has been given by Mr. Yeung in this case has been very carefully drafted and clearly sets out the factors relevant to the determination apart from one minor matter which I shall deal with, He sets out the law and deals with the matter, if I may say so, in a precise and careful manner and I am grateful for these reasons which have been given. In view of that it is not really necessary to refer to all of the various factors.

3. These three pieceworkers employed in making toys started their employment in the middle of 1983 through to 1984 and on 19th March, 1986 the company issued a notice to them. They have been working apparently normally up to 19th March, that is normal for pieceworkers to work, which as one knows the hours of work fluctuate as it is seasonal work. On that date a notice was served which diminished substantially their hours of operation doom to three days a week, seven hours a day and on 19th April the same three days a week for this particular shift down to five hours, both substantial reductions to what had been going on before.

4. The Tribunal took those matters into account and also took into account other evidence given by the factory manager Mr. Lee Kwok-ming, one aspect of which is an important matter, in my judgment. The factory manager confirmed that the workers had been asked to work a less number of hours on every alternative day as there was a lack of orders but he also confirmed works were undertaken by other outside companies, as it was the appellant's practice apparently to book work which otherwise could be carried out by their workers into outside companies' hands, and not unnaturally these and ether workers were dissatisfied with the conduct of their employers.

5. The Presiding officer asked himself a correct question in formulating the test as to whether or not there had been constructive dismissal and, if I may say se, I wholeheartedly agree with his approach. I think it is a careful decision.

6. In this Court, however, it is criticized on the basis that he failed to consider two factors: firstly, the normal earning capacity of the workers. It has been suggested that he did not consider it. I think really Mr. Lam was meaning he did not properly consider that matter because there is found at page 47 of the bundle this paragraph:

"The facts of the present case indicated that the Respondents if provided with sufficient work to do would make a monthly earning of over $5,000."

7. Mr, Lam criticizes that and he says: "When you look at certain exhibits which the Presiding Officer had in front of him, the earnings were not actually $5,000, they were a bit less," Well, they may have been on average a bit less, some of the workers may have been earning a bit more. But what is happening here, simply in this paragraph, is that the Presiding Officer is making an approximate estimate of the general earnings. In my judgment, looking at the facts myself, there has been a substantial reduction in the earnings of these workers. The conduct of the employer clearly fell within that category of conduct which one classifies as repudiatory and, in my judgment, they clearly repudiated this contract. This appeal really is, in my judgment, quite hopeless on those issues. I therefore find that there has been no error of law at all by the Tribunal

8. Insofar as the 3rd Respondent is concerned, however, for whom Miss Cissy Lam appears, there is a separate point taken by Mr. Lam on behalf of the appellant. In this instance, the facts are that after the last notice the workers left in May. However, the 3rd Respondent came back to work and that is referred to at page 44 of the reasons for decision when the Presiding Officer says:

"So far as the 3rd Respondent is concerned, unlike the 1st and 2nd Respondents, he returned to work for the Appellant together with other workers on 5th May, 1986 after the matter was reported to the Labour Department. But after working for two days, the 3rd Respondent stopped again as he did not have sufficient work and he was not feeling toe well. There was evidence to show that for the two days he was only provided work for 2-3 hours."

9. Mr. Lam says that I ought to send the matter back, which I have get power to do under the Ordinance for further finding as to whether or not by his return to work the 3rd Respondent was affirming his contract of employment and although the employer had repudiated the agreement, nevertheless it may be that this had net been accepted by the 3rd Respondent because he was going back to see what would happen and then he left. Mr. Lam says that there is insufficient evidence at the moment for me to make a decision, because it is net known whether it was the illness that caused him to stay away, or whether it was the insufficiency of work and he has also referred me to the passage in the agreed statement of facts prepared by the Tribunal Officer which shows (para. 2(b)) that in July apparently the officer may be recording that the Respondent was still in the employ of the defendant.

10. I am not quite sure whether that is so but it may be so. In those circumstances, I think it is only fair that I should send this matter back. Whether it will make any alteration to the decision in this case is obviously a matter of further argument and it may be that authorities will be referred to. I can see no prejudice caused to the 3rd Respondent. He e is legally aided and if there is another hearing and the employer loses, then he will, of. course, have to pay all the costs straightaway. But Mr. Lam, nevertheless, wants to send back and I intend, therefore, to send the matter back on that short and limited point. The appropriate direction will be made by me after I hear further argument from Counsel.

11. There is a secondary point which is raised by the employers as to the quantum awarded by the Tribunal. Insofar as the amount of wages in lieu of notice, the Tribunal, awarded 26 days. Mr. Lam, on behalf of the employers, says that period is too great as it should only be 7 days. At page 50 of the decision the Presiding Officer says that when the employees were interviewed nothing was mentioned about the length of notice required, but there was an employment card which is exhibited at D4 which, he records, says that for the period of probation 7 days prior notice must be given; and that when the employee wants to leave the employment voluntarily 7 days prior notice must be given, but there is no provision for the length of notice required for the employer.

12. It is clear, however, that when one looks at the document D4 and the English translation of that document, provision is made in there for the length of notice required by the employer, namely 7 days, However, at page 51 of his decision the Presiding Officer said this:

"In any event, the workers' evidence is that such employment cards were signed by them after they had started their employment and no one explained to them the contents of such employment card when they signed them of which evidence the Tribunal accepts;

13. That is a factual recitation en the evidence which I, of course, am not permitted to look behind. Clearly evidence was given and the Tribunal came to that decision. It is important to note that by virtue of section 6 of the Employment Ordinance the length of notice required to terminate contracts of employment is prescribed, in the case of a contract which is deemed by virtue of section 5 to be a contract for one month renewable from month to month, the notice is not less than one month.

14. The important distinction is in section 2(a) and (b), in 2(a) the contract itself does not make provision for the length of notice, When these people were employed, nothing had been said about the length of notice required to terminate the contract and clearly, therefore, this was a situation which was deemed, by virtue of section 50), to be a contract for one month renewable from month to month and, therefore, the statutory period of notice was one month.

15. The mere fact that the employers provided a card which is subsequently signed by the employees but not brought to their attention at the time their contract of employment starts does not, in my judgment, assist the employers. I would go somewhat further than the Tribunal in this case by saying that not only did the evidence show, as I accept, that the employment cards were signed after they started their employment, but clearly the statutory provisions with regard to the termination of the contract then prevailed and these employers should have given one month of notice to terminate.

16. The fact that the Presiding Officer has made an error at the bottom of page 50 is neither here nor there. It is an error which is somewhat regrettable but clearly it is not the factor which influenced his mind.

17. I, at any rate, look at the matter, if necessary, afresh on the facts he has found and on the law, In my judgment, the correct length of notice for this employment was one month. The period of time required for the quantum awarded under this head was correctly assessed by the Tribunal at 26 days and therefore on that point also the appellant fails.