CHAN TUNG HING v. WOO FOOK CHEUNG AND OTHERS

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APPEAL NO.121 OF 1996

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JUDGMENT

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1. This is an appeal against an Award of the Labour Tribunal in Claim No.E773 of 1996. After hearing the claim for arrears of wages by the 15 Claimants the learned Presiding Officer found that the Appellant Chan Tung Hing trading as （榮利棚業） was jointly and severally liable with the 2nd Respondent Hung Wai Construction & Engineering Co. Ltd. to pay to the 15 Claimants (the 1st Respondents) the respective sums as stated in the Award dated 14 August 1996.

2. There is no dispute that the 2nd Respondent Hung Wai was liable to all the Claimants as the principal contractor of the building site. The issue in this court is whether the learned Presiding Officer had erred in law in finding that the Appellant was a sub-contractor of the 2nd Respondent.

3. There are basically two grounds of appeal. The first was that the learned Presiding Officer had erred in adding the 2nd Respondent as a party in the action without application from either the Claimants or the 1st Respondents. The second ground was that there was no evidence before the learned Presiding Officer to support his findings that the Appellant was a sub-contractor of the 2nd Respondent.

4. On the first ground it is clear from the notes of proceedings kept by the learned Presiding Officer that in the court appearance on 29 February 1996 the representative of Hung Wai Construction informed the Court that Hung Wai was not the employer of the Claimants and that the present Appellant was. I bear in mind that under the provisions of s.20 of the Labour Tribunal Ordinance the hearing of a claim is to be conducted in an informal manner and the Presiding Officer is under a duty to investigate any matter which he considered to be relevant to the claim. Upon the contention of Hung Wai no doubt the learned Presiding Officer must have in his mind s.43C of the Employment Ordinance which provides for the liability of a principal contractor to pay the wages of employees of a sub-contractor. There was clear evidence before the Tribunal that the Appellant could be a sub-contractor. It therefore became necessary for him to determine the true relationship between them as both may be liable for the claim. Under such circumstances the decision of the Presiding Officer to join the Appellant as the 2nd Defendant cannot be faulted. Indeed I would be surprised if the Presiding Officer had decided to leave Appellant out of the action. I find that there is no substance in this ground of the appeal.

5. The hearing lasted for some two and a half days at the end of which the learned Presiding Officer found that:

"           ... all 3 parties have come to a contractual relationship that the Claimants be employed by the 2nd Defendant who in term (sic) arrange the Claimants to work at the site in issue. Accordingly I concluded the 2nd Defendant was principally liable to pay the arrears of the wages and the 1st Defendant is also liable to pay the arrears of wages under s.43C of the Employment Ordinance."

The Appellant contends that there was no such evidence before the Presiding Officer to enable him to come to such a conclusion and that the evidence could only support a finding that the 1st Defendant was the direct employer of the Claimants.

6. The Presiding Officer's finding was based primarily on a draft contract exhibited as Exhibit D-10. The document was prepared by the 1st Defendant and the Appellant was named and referred to as a sub-contractor. Although the draft document had not been signed by the parties, there is undisputed evidence, according to the learned Presiding Officer, that the parties had acted upon it and such activities were consistent with the relationship of that between a main contractor and a sub-contractor.

7. He found that on 14 November 1995 the 1st Defendant made a payment of $20,000 to the Appellant who in turn paid it over to the Claimants as their wages (Exhibit D-11). Subsequent activities of the parties reinforced his view: invoices had been issued by the Appellant to the 1st Defendant for payment of works performed (Exhibit D-6 and D-7) and letters of complaint were issued by the 1st Defendant to the Appellant for defective works (Exhibit D-12).

8. Based on the evidence before him the learned Presiding Officer was entitled to make the findings as he did and his conclusion that the Appellant was a sub-contractor of Hung Wai could not be faulted in any way.

9. The appeal is dismissed with costs.