LI MIJIANG v. HOILUNG GROUP INTERNATIONAL LTD

HCLA 47/2024

[2025] HKCFI 3206

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 47 OF 2024

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 805 OF 2023)

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J U D G M E N T

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A. Introduction

1.  On 8 November 2024, a deputy adjudicator (the “Deputy Adjudicator”) of the Labour Tribunal allowed the Claimant’s claims in these proceedings. The Defendant was ordered to pay the Claimant (i) an aggregate sum of HK$300,580.96; and (ii) costs of HK$16,567.10.

2.  On 27 February 2025, I granted leave to appeal in favour of the Defendant on the following questions (see [2025] HKCFI 895):-

“(1) Did the Deputy Adjudicator err in failing to investigate the issue as to whether the Claimant was employed by “深圳海龍精密股份有限公司”(the “Shenzhen Company”) as opposed to the Defendant? (“Question 1”),

(2) Did the Deputy Adjudicator err in failing to investigate the issue as to whether the 2021 Agreement (if in existence) and the 2022 Agreement were void and/or unenforceable by reason of illegality? (“Question 2”);

(3) Did the Deputy Adjudicator err in failing to investigate the issue as to whether the Claimant’s employment was terminated by reason of his own resignation? (“Question 3”)”

3.  This is the substantive hearing in respect of the Defendant’s appeal.

B.  Material Background

B1.  The Claimant’s Case

4.  The Claimant alleged that he was the Defendant’s employee.

5.  The Claimant’s case can be summarized as follows:-

(1)  On 1 August 2021, he signed an employment agreement with the Defendant (the “2021 Agreement”), under which his monthly salary was HK$40,000. However, he did not retain a copy of the 2021 Agreement.

(2)  On 1 January 2022, he signed another employment agreement with the Defendant (the “2022 Agreement”). Whilst his monthly salary was reduced to HK$28,000, he was given shares or interests in the Defendant.

(3)  On 10 December 2022, he terminated the employment with the Defendant pursuant to section 10A of the Employment Ordinance (Cap.57) on the ground that the Defendant failed to pay his salaries for August to October 2021 and October to November 2022 within one month.

(4)  In the premises, the Claimant claims against the Defendant for wages in lieu of notice, arrears of wages, underpayment of wages, annual leave pay, statutory holiday pay, expenses and the value of the share option.

B2.  The Defendant’s Case

6.  The Defendant’s case can be summarized as follows:-

(1)  The 2021 Agreement did not exist at all.

(2)  On 1 August 2021, the Claimant started working for the Shenzhen Company. On 3 January 2022, the Claimant was promoted and became the general manager of the Shenzhen Company.

(3)  Whilst the Claimant and the Defendant signed the 2022 Agreement, the same was never performed. The Claimant never worked in Hong Kong. Although he was assigned to work in a company related to the Defendant in Anhui named “海龍精密機械科技（安徽）有限公司” (the “Anhui Company”), he never reported for duties.

(4)  On 24 September 2022, the Claimant voluntarily tendered his resignation on the ground of excessive stress. His employment was terminated on 31 October 2022.

C.  The Deputy Adjudicator’s Findings

7.  The Deputy Adjudicator accepted the Claimant’s case that (i) he was employed by the Defendant; and (ii) his employment was terminated by reason of the Defendant’s failure to pay wages in a timely manner.

8.  As stated in her reasons for judgment (the “Reasons for Judgment”), the crucial matters that the Deputy Adjudicator took into account were as follows:-

(1)  The payment records showed that the Claimant received monthly sums in RMB that were equivalent to HK$40,000. Thus, it could be inferred that the 2021 Agreement existed, and the Claimant was employed by the Defendant at the time.

(2)  The payment records showed that after February 2022, the Claimant received monthly sums in RMB that were equivalent to HK$28,000. Thus, it could be inferred that the 2022 Agreement was performed, and the Claimant was continuously employed by the Defendant at the time.

(3)  Whilst the Defendant’s Mr Zhu was unable to provide credible explanations regarding the payments, he also failed to provide documentary evidence to substantiate his allegation that the payments made to the Claimant were personal loans.

(4)  There was no documentary evidence showing that the Claimant was requested to work for the Defendant’s subsidiary in Anhui. This was inherently improbable.

(5)  The Defendant’s witnesses gave inconsistent evidence.

(6)  There was ample documentary evidence showing that the Claimant was an employee. For instance:-

(a)  The Defendant issued a letter dated 10 August 2021 confirming that the Claimant had been employed by the Defendant’s China office since February 2020.

(b)  The emails and WeChat messages show the Claimant discussed work matters with the Defendant’s Mr. Zhu.

9.  In these premises, the Deputy Adjudicator (i) allowed the Claimant’s claims against the Defendant to the extent of HK$300,580.96; and (ii) awarded costs (of HK$16,567.10) in favour of the Claimant.

D.  Legal Principles

10.  In Mak Wai Man v Richfield Realty Ltd (HCLA 28/2015, 30 October 2015) at para 16, B Chu J stated:-

“(1) Under s 32 of the Labour Tribunal Ordinance, a party may only apply for leave to appeal on the ground that the award of the Tribunal is erroneous on point of law or outside its jurisdiction;

(2) The threshold onus of an application for leave is to show that the intended appeal has arguable grounds;

(3) Apart from errors of law, leave will also be granted if the Tribunal’s determination (a) was made without regard to relevant factors, (b) was made without evidence, or (c) there was failure to discharge the statutory duty to investigate and such failure has given rise to injustice, in that a fair and proper determination of the claim cannot be attained.” (emphasis added)

11.  Under section 20(3) of the Labour Tribunal Ordinance (Cap.25), a presiding officer shall investigate any matter which he or she may consider relevant to the claim, whether or not it has been raised by a party.

12.  It is trite that the proceedings in Labour Tribunal are inquisitorial in nature. Thus, a presiding officer would err in law if he or she fails to discharge the duty to investigate properly. It is open to the Court of First Instance to consider if the presiding officer had discharged such duty by investigating the relevant matters which ought to have been investigated: see Chan Suk Bing Angie v Harbour Phoenix Ltd [1992] 2 HKC 459, at pp 462B-C and 462F-G (per DHCJ Jerome Chan (as he then was)); and Poon Shing Hin v Li Wai Chun Transportation Co Ltd [2024] HKCFI 2564 at para 26 (per Wilson Chan J)

E.  Deliberation

E1.  Question 1

13.  As evidenced by her Reasons for Judgment, the Deputy Adjudicator extensively considered the question of whether the Claimant was an employee. However, the Deputy Adjudicator did not consider whether the Claimant was employed by the Shenzhen Company rather than the Defendant. I have carefully considered the Reasons for Judgment. It does not appear that the Deputy Adjudicator had addressed the issue at all.

14.  In this connection, there is ample documentary evidence showing that the employment relationship was between the Claimant and the Shenzhen Company. For instance:-

(1)  The Claimant and the Shenzhen Company signed an employment agreement (勞動合同) dated 1 August 2021. It was provided that the Claimant was employed as a quality control manager of the Shenzhen Company, and his place of employment was Shenzhen.

(2)  On 2 January 2022, the Shenzhen Company issued a letter of appointment (任命書). This document shows that the Claimant was appointed as the Shenzhen Company’s general manager on 3 January 2022.

(3)  The Defendant produced a list titled “深圳市社會保險歷年參保繳費明細表”. This document bears the chop of the public authority in Shenzhen. It shows that the Shenzhen Company paid the insurance expenses relating to the Claimant’s employment during the period from August 2021 to November 2022.

15.  Meanwhile, the Claimant made the following admissions in his evidence:-

(1)  He did sign the employment agreement (勞動合同) dated 1 August 2021.

(2)  He did receive the said letter of appointment (任命書) dated 2 January 2022.

(3)  He worked at the Shenzhen Company.

(4)  He did receive salaries from the Shenzhen Company.

(5)  He claimed reimbursements from the Shenzhen Company.

(6)  He took leave based on the public holidays in the Mainland.

16.  In his submissions, Mr Jackson Chow (for the Defendant) further pointed out that the Immigrant Department never granted the Claimant (who was not a Hong Kong resident) permission to work in Hong Kong and no application was made to the Immigration Department at all. In the circumstances, it was inherently unlikely the parties would have agreed that there be an employment relationship between the Claimant and the Defendant in Hong Kong.

17.  I see the force of Mr Chow’s submissions.

18.  In this submissions, the Claimant mentioned, among other things, that (i) the Defendant, the Shenzhen Company and the Anhui Company were controlled by Mr Marcus Zhu; (ii) his name card contained the addresses of the Defendant, the Shenzhen Company and the Anhui Company; (iii) he received salaries; and (iv) he reported to Mr Marcus Zhu and liaised with him regarding work matters.

19.  In my view, the matters mentioned in paragraphs 14 to 16 above show that whilst the Claimant was undoubtedly an employee, it appears that he was employed by the Shenzhen Company in Shenzhen, not the Defendant in Hong Kong. Meanwhile, the matters relied on by the Claimant do not conclusively show that he was the Defendant’s employee.

20.  However, the Deputy Adjudicator did not investigate the matters mentioned in paragraphs 14 to 16 above at the trial; nor did she address, analyze and/or discuss these matters in her Reasons for Judgment.

21.  I am of the view that the Deputy Adjudicator erred in failing to discharge the duty to investigate. Had the Deputy Adjudicator carried out a proper investigation and canvassed the issues in question, she might have come to a different conclusion.

22.  In the premises, I answer Question 1 in favour of the Defendant. This is ipso facto an adequate reason for allowing the Defendant’s appeal and setting aside the Deputy Adjudicator’s order dated 8 November 2024.

E2.  Question 2

23.  The Deputy Adjudicator’s conclusion is premised on the assumption that the 2021 Agreement and the 2022 Agreement were valid and enforceable.

24.  In this connection:-

(1)  The 2022 Agreement provided that (i) the places of the Claimant’s employment were the Mainland, Hong Kong and Singapore; and (ii) the parties’ contractual relationship was subject to the provisions of the Employment Ordinance and the Mandatory Provident Fund Schemes Ordinance.

(2)  It is obvious the parties envisaged that a substantial part of the Claimant’s employment duties would be performed in Hong Kong. This was why clauses 15 and 16 of the 2022 Agreement provided that:-

(a)  When typhoon signal no 8 or above was hoisted, no wages would be deducted during the period, but the Claimant was required to resume duty if the typhoon signal was lowered no less than 2 hours before the close of working hours.

(b)  The Claimant was not required to work when black rainstorm warning was hoisted and no wages would be deducted during the period, but the Claimant was required to resume duty if the black rainstorm warning was cancelled no less than 2 hours before the close of working hours.

25.  As pointed out, the Claimant was not a Hong Kong resident, and the Immigration Department never granted permissions for the Claimant to take up employment in Hong Kong.

26.  In my view, it is, to say the least, arguable that the 2021 Agreement (if in existence) and the 2022 Agreement were void and/or unenforceable by reason of illegality. I am unable to see how a person who is not a Hong Kong resident may take up regular employment in Hong Kong without the Immigration Department’s approval.

27.  The Deputy Adjudicator did not investigate the issue of illegality at the trial; nor did she address, analyze and/or discuss the same in her Reasons for Judgment.

28.  I am of the view the Deputy Adjudicator erred in failing to discharge the duty to investigate.

29.  I answer Question 2 in favour of the Defendant. This is an additional reason for allowing the Defendant’s appeal and setting aside the Deputy Adjudicator’s order dated 8 November 2024.

E3.  Question 3

30.  The Deputy Adjudicator accepted the Claimant’s case that he terminated the employment on the ground that he did not receive the salaries for August to October 2021 and October to November 2022 within one month. As such, the Claimant was entitled to rely on section 10A of the Employment Ordinance.

31.  However, as evidenced by a resignation form titled “海龍廠離職申請書”, on 24 September 2022, the Claimant tendered resignation on the ground of excessive stress (工作壓力大), and his employment came to an end on 24 October 2022.

32.  Further, as the Claimant admitted in an email to Mr Marcus Zhu dated 26 October 2022, he tendered resignation on 25 September 2022, and as Mr Zhu was not in Shenzhen at the time, he sent the resignation document to him via WeChat.

33.  The aforesaid documentary evidence amply demonstrates that the Claimant voluntarily resigned. It was not the case that the Claimant left the employment on the ground that his salaries for August to October 2021 and October to November 2022 were not paid within one month.

34.  The Claimant alleges that his resignation had not been accepted as the Shenzhen Company’s legal representative and/or directors did not pass any resolution. Whilst it is doubtful as to whether such a formalities requirement existed, it appears to me that the Claimant’s assertion is not consistent with his own case that he was employed by the Defendant in Hong Kong.

35.  In any event, the Deputy Adjudicator did not address, analyze and/or discuss the matter as well as the effect and/or implication of the aforesaid documentary evidence in the Reasons for Judgment; nor did she carry out a proper investigation at the trial.

36.  I am of the view the Deputy Adjudicator erred in failing to discharge the duty to investigate.

37.  I answer Question 3 in favour of the Defendant. This is another reason for allowing the Defendant’s appeal and setting aside the Deputy Adjudicator’s order dated 8 November 2024.

F.  Conclusion and Disposition

38.  For all the above reasons, I am of the view that the Deputy Adjudicator failed to discharge the duties to investigate the issues under the three Questions before the Court.

39.  Accordingly, I allow the Defendant’s appeal and set aside the Deputy Adjudicator’s order dated 8 November 2024.

40.  I further order that the present case be remitted to the Labour Tribunal for retrial before a different adjudicator, who shall investigate and address the following issues:-

“(1) Whether the Claimant was employed by the Shenzhen Company as opposed to the Defendant?

(2) Whether the 2021 Agreement (if in existence) and the 2022 Agreement were void and/or unenforceable by reason of illegality?

(3) Whether the Claimant’s employment was terminated by reason of his own resignation?”

41.  As regards costs, I am of the view that the Claimant could not be blamed in regard to the Deputy Adjudicator’s failure to carry out the duty to investigate. In my view, it would be fair to order that the costs of the present appeal be in the cause of the retrial in the Labour Tribunal.

42.  I make a costs order to such effect.

43.  I thank Mr Jackson Chow for his helpful assistance.