FIRST FIT CO. LTD. v. LAM YAU AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

LABOUR TRIBUNAL APPEAL NO. 4 OF 1990

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J U D G M E N T

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1. This is an appeal from a decision of the Labour Tribunal made on the 18th January, 1990. There were two Claimants before the tribunal, Mr. Lam Yau (C1) and Mr. Lam Wing Kan (C2). The Defendants to the Claim were Fok Lee Construction Co. Ltd (D1) First Fit Co. Ltd (D2) and Chan Kwok Chuen (D3).

2. The case of the Claimants was that they had been employed as painters on a building site by D3, who had abandoned the site owing the claimants arrears of wages. D3 was a sub-contractor from D2, which took over D3's workers and completed the job, but D2 did not pay the claimants the money they claimed to be owed by D3.

3. With the assistance of the Labour Department, the Claimants, giving the requisite statutory notice, brought a claim for arrears of wages against D3 as their former employer. They also claimed against D1 as principal sub-contractor and D2 as superior sub-contractor. This was because by virtue of s.43C (1) of the Employment Ordinance, both a superior sub-contractor and a principal sub-contractor are jointly and severally liable for unpaid wages due to a sub-contractor.

4. The Claimants appeared at the hearing of the claim, as did representatives of D1 and D2. D3 was absent though he had notice of the hearing. No party was represented by a barrister or solicitor, since s.23 (2) of the Labour Tribunal Ordinance Cap. 25 provides that no barrister or solicitor, unless he is acting on his own behalf as a Claimant or Defendant, shall have a right of audience before the Tribunal.

5. The presiding officer proceeded with the hearing in the absence of D3 as he was entitled to do by virtue of s.21 of the Labour Tribunal Ordinance.

6. It was common ground that D1 and D2 were respectively superior and principal sub-contractor. In its Statement of Defence, D1 said:

"... we have no knowledge of any contract signed between ourselves and Mr. Chan Kwok Chuen this equally apply of course to his employed labourers the Claimants, Mr. Lam Yau and Mr. Lam Wing Kan who are not known to us.

As concern payment to First Fit Co. Ltd., we have already paid all necessary and payable payments to First Fit Co. Ltd. except the retention money held up by the Government.

Under such circumstances, we do not think we are liable to pay to the Claimants for what they have claimed."

In a "Letter of Defence" D2 said:

"Chan Kwok Chuen (sub sub-contractor) is the painting contractor who sub-contracted the work from First Fit Co. Ltd. (sub-contractor) for the secondary school in districts numbers 92 and 103, Ma On Shan, Shatin. Our company does not have any record regarding the details of (1) Lam Yau and (2) Lam Wing Kan. It is because the Claimants do not have any employment relationships with our company".

S. 19 of the Labour Tribunal Ordinance provides that "the presiding officer shall keep a summary of the evidence, submissions or statements made or given and of any point of Law raised at the hearing and of his decision on such point of Law."

7. It appears from the presiding officer's notes of proceedings that at the outset the representative of D1 said:

"We have no knowledge of Claimant's relationship with D3."

8. The presiding officer asked if D1 had received the statutory notice and D1's representative replied.

"Yes but we could only liaise with D2".

9. The representative for D2 then said:

"We acknowledge that Claimants did work at site. But we don't know if Claimants were paid. Why did they work for D3 for so long and not press for payment. We won't pay."

Mr. P. H. Wong, counsel who appeared for the Appellant (D2) at the hearing of the appeal submitted, in effect, that three things should at that stage have been apparent to the presiding officer, viz:

1. D1 and D2 were under the mistaken impression that since they had no contractual relationship with the Claimants, they were not liable for any wages due to the Claimants from D3.

2. There was an issue as to the nature of any contractual relationships which may have existed between the Claimants and D3, i.e. as to whether the Claimants were employees or independent contractors.

3. There was an issue as to whether any wages were in fact due from D3 to the Claimants.

10. Mr. Wong further submitted that his client was entitled to feel aggrieved because the presiding officer according to the note of proceedings refrained from pointing out to the Defendants they were mistaken in their view of the legal position, but later said in his written decision:

"The First Defendant's evidence went no more than to say that they had no knowledge about the Claimants' work. The Second Defendants' evidence was also along the same vein. In these circumstances, none of the Defendant put up any valid defence in Law or in fact and the Claimants were effectively put to strict proof. The First and Second Defendants chose to ignore the provisions in Part IXA of the Employment Ordinance, cap. 57."

Section 43C (1) appears in Part IXA and Mr. Wong submitted that the presiding officer had that provision in mind when he spoke of the Defendants choosing to ignore Part IXA. There is nothing in the record to show that s.43C (1) was ever explained to the Defendants or even mentioned to them. If the provision was not drawn to their attention and explained to them it is difficult to see how it could be said that they had chosen to ignore it. Had the presiding officer explained the efect of s.43C (1) it may be that the Defendants would have realised the need to challenge the evidence of fact.

So far as the factual issues were concerned, it was submitted that, if the presiding officer realised, as he apparently did, that the Claimants had been put to strict proof, he was under a duty to enquire into the matter and not leave the Defendants to fend for themselves. The proper procedure to be followed according to Mr. Wong was not adversarial but rather inquisitorial. Section 20 of the Labour Tribunal Ordinance provides as follows:

"20	(1) The hearing of a claim shall be conducted in an informal manner.
	(2) The presiding officer may subpoena witnesses, order the production of any document, record, book of account or other exhibit and put to a party or witness such questions as he may think fit.
	(3) The presiding officer shall investigate any matter which he may consider relevant to the claim, whether or not it has been raised by a party."

11. It was pointed out on behalf of D2 that the extent of the enquiry may be judged from the note of the evidence given for the Claimants. According to that note C1 alone gave evidence. A statement compiled with the assistance of the Labour Department was read out (the record is silent as to who read it out). C1 confirmed that it was all true and correct and produced it as an exhibit. He then said he had served the statutory notice on D1 and produced a copy with a recorded delivery slip. That was the evidence in chief. The representatives of D1 and D2 were advised of their right to cross-examine but that is apparently as far as the advice went. They asked no questions.

12. It appears that the presiding officer did not take it upon himself to test the evidence of C1 by questioning him as to the nature of his contractual relationship with D3. Nor did he ask why it was that C1, a painter earning wages at a daily rate, allowed the arrears to build up between 19 July 1989 and 19 August 1989 to a total of $9,600 and why it was not until the 11th September 1989 that the statutory notice was signed and delivered.

13. The presiding officer in his written reasons for his award said:

"The First Claimant gave evidence for himself and the Second Claimant. Having carefully observed his demeanour and considered his evidence, I found that he told the truth."

Now the record does not purport to be a verbatim record but it does suggest that the Claimant may have said very little indeed. His demeanour might have been of rather more assistance if he had been asked some questions as to the issues of fact which were at least hinted at by the Defendants.

14. The reasons for the award continue as follows:

"The Second Defendant's concession that the Claimants worked for them at the site also tended to support the allegation that the Claimants had worked there earlier. I found as a fact that the claimants did work for the Third Defendant between 15th July 1989 and 19th August 1989 and had wages accrued in arrears as they claimed."

This finding assumed that the Claimants had worked as employees of D3, though the issue of their relationship with D3 had allegedly been raised at the outset.

15. The essence of the appellant's complaint is to be found at page 3 of the written submissions tendered by the Wong, where it is said that: "What the learned presiding officer did was to conduct the hearing as though it were a hearing before an ordinary court of Law."

16. The note of the proceedings and the written reasons for the award lead this court to the conclusion that the presiding officer did so conduct the hearing and that he misdirected himself as to the nature of the proceedings, so that he failed to play an inquisitorial role. The title "presiding officer" is somewhat misleading, for it tends to suggest that the role of the bearer of that title is to sit above the arena and watch the combatants fight it out, limiting himself to ensuring obedience to the rules of combat and declaring the winner. Such is the tradition of our adversarial system, but the legislature in its wisdom has decreed that the procedure of the tribunal is different from that of the courts in many ways. Lawyers are not allowed to participate as advocates. The hearing shall be conducted in an informal manner. The presiding officer may put to a party or a witness such questions as he shall think fit. He shall investigate any matter which he may consider relevant to the claim, whether or not it has been raised by a party. Furthermore, (s.27) unsworn evidence may be allowed and the rules of evidence shall not apply.

17. A presiding officer must enter the arena, dispense with formality and make such enquiries as will enable him to define the legal and factual issues which he needs to decide in order to do justice between the parties. He is assisted in that task but not relieved from it by the statutory procedure for inquiries by a tribunal officer.This is provided for in s.14 of the Labour Tribunal Ordinance.

18. Once the issues are defined, the presiding officer is under a duty to make such enquiries as will enable him to decide those issues. He is free from the restrictions of the rules of evidence and he has ample power to obtain and examine any document he may reasonably consider to be relevant, to summon withnesses and examine them, on oath or otherwise. What he must not do is to sit back as an observer and leave it to the parties, deprived as they are of legal representation, to conduct the proceedings on their own without giving his guidance and taking a hand, where necessary. If justice is to be done, he must act in an inquisitorial role.

19. The inquisitorial function places great responsibility on the presiding officer. Since the law denies to the parties the services of advocates, he must ensure that the evidence is properly tested and consider all matters which appear to be relevant, whether the parties raise them or not.

20. In the present case, Mr. Wong asks that the case be remitted to the Labour Tribunal with appropriate directions. His client, according to him, wishes to see the Claimant's evidence tested by cross-examination; there is a question whether they were the only painters left unpaid and, if so, why, as well as the question why the arrears were allowed to accumulate.

21. I order that the award of wages and costs against the Appellant be set aside and direct that the case be remitted to the Labour Tribunal for hearing de novo by another presiding officer. It may well be that the claimants will succeed at the rehearing but if the present award were left to stand, the Appellant would have a genuine sense of grievance.

22. Though the matter has not been raised on appeal, I note that the presiding officer appears to have awarded costs without any enquiry into the question as to what costs were incurred.

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