TREASURE COAST LTD. v. NIO SOANG TEK

HCLA 95/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 95 OF 2000

(ON APPEAL FROM LBTC 3022 OF 2000)

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J U D G M E N T

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Introduction:

1. This is an appeal against the decision of the Presiding Officer of the Labour Tribunal. The facts as found by the Presiding Officer are as follows. The Respondent was employed by the Appellant as its overseas representative in the Philippines on 31 March 1994. His duty was to handle goods shipped to the Appellant's shipping agent, Silver Duck Shipping Corporation (hereinafter called "Silver Duck"). His salary was remitted by the Appellant to him in the Philippines. He tendered resignation in January and again in November 1996 because of the poor working and political environment there but was persuaded to stay by the Appellant's director, Mr Cheung. In December 1999, he related to Cheung Silver Duck's demand for payment of outstanding agency fees in the amount of US$700,000. Then on 28 December 1999 and again on the following day, Cheung telephoned him and scolded him. His salary for December was not remitted to him. He enquired from the Appellant's staff in Hong Kong about his salary and telephoned Cheung, but to no avail. He returned to Hong Kong on 18 February 2000 but was not allowed access into the Appellant's company. He filed a claim with the Labour Tribunal and was awarded $125,129 as wages in lieu of notice, arrears of wages, end of year payment and severance pay.

1st Ground : Whether the Presiding Officer failed to investigate the Respondent's employment with Silver Duck:

2. The Appellant's case is that the Respondent's resignation in November 1996 was accepted and since then he was employed by Silver Duck. Cheung produced an employment contract dated 5 May 1999 signed by the Respondent and Silver Duck in support of his allegation. In rejecting his evidence, the Presiding Officer said that if the Respondent had been employed by Silver Duck since November 1996, there was no reason why the parties would have waited until May 1999 before signing the employment contract. He accepted the Respondent's evidence that there was in fact no underlying contract between the Respondent and Silver Duck and that the document was signed solely to facilitate the Respondent's application for visa with the Philippines authorities.

3. The Appellant's first ground of appeal is that the Presiding Officer overlooked the Respondent's Alien Employment Permit issued on 20 June 1997 which had been renewed twice and on the last occasion on 18 May 1999, presumably on the strength of the employment contract. The Alien Employment Permit shows that the Respondent was employed by Silver Duck as a general manager and the employment contract spelt out in detail the terms of his employment. Counsel for the Appellant therefore submits that in the light of these documents it is incumbent on the Presiding Officer to investigate the true relationship between Silver Duck and the Respondent and between Silver Duck and the Appellant and to investigate if the Respondent was paid 15,000 Philippines Peso a month by Silver Duck.

4. In reply, counsel for the Respondent refers to page 36L of the transcript in which Cheung while referring to his agency agreement with Silver Duck mentioned in passing that since entering into the employment contract, the Respondent represented Silver Duck but prior to that as the Respondent did not have employment permit he did not take up the work. Hence counsel submits the point had been adequately canvassed by the Presiding Officer. With respect, I do not think this answers the complaint. The Presiding Officer queried why the employment contract was not signed earlier. The fact is there were indeed documentary exhibits showing that, as early as June 1997, the Respondent had been issued an Alien Employment Permit showing that he worked for Silver Duck. It is apparent that when making his comments, the Presiding Officer has not addressed his mind to the Alien Employment Permit.

5. In the light of the evidence, the issue that can properly be raised because of the Presiding Officer's comment is not whether he has failed to investigate the tripartite relation between the parties and Silver Duck but whether he has properly evaluated the evidence. In my view, his inquisitorial duty is not an absolute one. He has no duty to look into every possible defence for a defendant. He cannot act as if he were the defendant's solicitor. He is only bound to investigate matters which he considers relevant and to the depth which he considers appropriate. From the transcript, it is obvious that the Presiding Officer was alive to the tripartite relation of the parties and Silver Duck and to the nature of the defence that was pleaded. He did not consider it necessary to investigate this tripartite relation to the depth beyond that which he has already reached. Nor do I think he need to go any further. The issue is simply whether the Appellant was the Respondent's employer. Even as at this hearing, it is not clear what benefit such investigation could bring to the defence.

6. The real issue as I have pointed out above is whether, despite the blemish in his reasoning, the Presiding Officer has properly evaluated the evidence and reached the correct conclusion. In my view, the evidence in support of the Presiding Officer's finding is overwhelming. Firstly and most importantly, the Respondent's monthly salary was remitted to him by the Appellant. The remittance advice from Hong Kong Bank proved conclusively that about HK$20,000 was remitted to the Respondent every month. According to the employment contract with Silver Duck, the Respondent's salary was just 15,000 Philippines Peso (about HK$2,500). This is just one eighth of what was being remitted every month to the Respondent. Thus when the employment contract is tested against the uncontrovertible remittance advice, the irresistible conclusion is that the contract was bogus. Next, Cheung said that the Appellant paid Silver Duck one to two million dollars every month and the remittance to the Respondent was set off from the agency fees payable. Whether the Respondent's salary was HK$20,000 or 15,000 Philippines Peso, it is a negligible fraction of the agency fees payable. The Respondent worked and lived in the Philippines. Would it not be more convenient for Silver Duck, if it were his employer, to pay him directly there and then? Why should the parties agree to go through the trouble of remitting his salary from an outside source, thereby incurring time, inconvenience and bank charges? Why should the parties take the trouble of setting off at the expense of more accounting work? In my view, the Appellant's explanation is blatantly untrue. If the Presiding Officer was satisfied that the employment contract was bogus, it would be a futile exercise to investigate if the Respondent received 15,000 Philippines Peso from Silver Duck every month.

7. Secondly, the Appellant purchased life insurance policy for the Respondent in Hong Kong. Cheung explained that it was a mistake and the Appellant had similarly purchased policies for employees who had resigned two to three years ago. Such explanation cannot hold true in the light of the policy. In the policy, it is stated that the Respondent joined the Appellant company on 7 March 1994 and joined the scheme on 1 August 1997. I accept that an employer could have negligently renewed the policy of an employee who has resigned. But on the Appellant's case, the Respondent had resigned in November 1996. Yet, almost a year after he had left and for no reason, the Appellant purchased a fresh insurance policy for him when he was no longer on the Appellant's staff list. It defies common sense to accept such an explanation.

8. Thirdly, the Appellant also purchased a medical insurance policy for the Respondent. Again Cheung offered the same explanation. That by itself is incredible for reasons as explained above. Even worse is that the explanation is inconsistent with the one stated in the statement of defence. According to the statement of defence, the policy was purchased at the request of Silver Duck. That allegation is not supported by any written instruction from Silver Duck or other documentary proof.

9. Fourthly, just a year before the incident, the Appellant wrote to the Hong Kong Immigration Department and certified that the Respondent was its shipping officer. The certificate gave details of the Respondent's date of first employment as 31 March 1994, which is consistent with the undisputed fact. It also certified that his monthly salary was HK$20,000, which is consistent with the telegraphic transfer advice from Hong Kong Bank. This certificate has every ring of truth in it whereas the employment contract with Silver Duck has been shown to be obviously bogus.

10. I think there is ample evidence to support the Presiding Officer's finding that the Appellant was the Respondent's employer. Not only is the evidence overwhelming, but it is also compelling. I am satisfied that the Presiding Officer has properly evaluated the evidence and reached the right conclusion. The complaint of the Presiding Officer's failure to investigate is just a guise in an attempt to challenge the Presiding Officer's finding of fact, which is usually not permissible. This ground of appeal must fail.

2nd Ground: Whether the Presiding Officer erred in finding the certificate of employment issued by Silver Duck credible:

11. Counsel criticized the Presiding Officer's reliance on a certificate of employment dated 1 February 2000 issued by Silver Duck. The certificate purports to certify that the Respondent was an employee of the Appellant; that he was honest, responsible, hardworking and cooperative; that he showed extraordinary skill in his work and that he has been cleared from all obligations, financial or otherwise. Counsel submits that the Presiding Officer failed to consider the likelihood that Silver Duck had its own interest to serve in issuing the certificate. As at the date of the certificate, the Respondent's employment has been terminated. Understandably, his relation with the Appellant must be poor. In view of the above, counsel submits, the Appellant would not have authorized the issue of the certificate. Counsel also submits that as the letter certifying that the Respondent has been cleared from all obligations, it could only have been issued by an employer.

12. I am satisfied that the Presiding Officer is aware of the element of self interest as it is the Appellant's case that the Respondent was an employee of Silver Duck. I do not think counsel's criticism is fair. It is true that the certificate purports to certify what would normally be certified by an employer and on the Presiding Officer's finding, Silver Duck could not be in that position to so certify. Most probably, the issue of the certificate had not been properly authorized by the Appellant. However, that does not mean the writer, Mr Santos, who has a long working relation with the Respondent, cannot give evidence as to the Respondent's character and as to his employment in Philippines. The strict rules of evidence do not apply in the hearing in the Labour Tribunal and it is permissible for the Presiding Officer to receive hearsay evidence. In finding the certificate credible, the Presiding Officer is saying no more than that he accepts what was said by Santos as credible, as if Santos had been in the witness box giving evidence. Assessment of credibility of witnesses and finding of fact are matters solely within the realm of the Presiding Officer. I do not think it appropriate to interfere. In my view, there is ample evidence in support of the finding that the Respondent was employed by the Appellant. The Presiding Officer's finding that the certificate is credible is unnecessary but could not have been faulted.

13. Counsel also submits that if the Respondent was not an employee of Silver Duck, he would not be minded to remind Cheung of the outstanding agency fees due to Silver Duck. He criticized the Presiding Officer for failing to deal with this aspect of the evidence. Though this point has not been covered by the Presiding Officer in his judgment, the Respondent has actually given an explanation at the hearing. The Respondent was the representative of the Appellant at the time and was stationed in the Philippines working with Silver Duck looking after the Appellant's interest. He was told by Mr Valdes of Silver Duck to relate the message to the Appellant. It is only natural that he passed on Silver Duck's concern about non payment of its agency fees and its threat not to handle the Appellant's cargo if the fees were not paid. In fact he would be failing in his duty if he did not. This is so obvious that the Presiding Officer could reasonably be excused for not having mentioned this in his judgment. I think there is no merit in this ground of appeal.

3rd Ground : Whether the Presiding Officer failed to evaluate the evidence on the alleged dismissal of the Respondent:

14. On the facts, the Respondent was not formally told of his dismissal. He was scolded with foul language by Cheung and was not paid his salary and he could not get in touch with his employer since. He was told by Valdes that Cheung had intimidated over the telephone to dismiss him. Counsel accused the Respondent of changing his evidence under cross examination and said that his dismissal was revealed in a telephone conference with Cheung, Cheung's secretary and Valdes. I think this is a misunderstanding of the evidence. It was put to the Respondent in cross examination that Cheung could not speak English and would not have told Valdes of his intention to dismiss the Respondent. It was in that context the Respondent replied that the conversation was in the form of a telephone conference with Cheung's secretary acting as interpreter. I think no criticism could arise from that.

15. Counsel's main attack under this ground is that it was not open to the Presiding Officer to accept the Respondent's evidence about the circumstances of his dismissal on 28 and 29 December 1999 without exploring the Appellant's version of events of those two days. In fact, the Appellant's version of events has been fully put to the Respondent by Cheung in the course of his cross examination. The Appellant's case as put by Cheung is that the telephone conversation with Valdes never occurred as Cheung could not speak English and Valdes could not speak Cantonese and that he never spoke to Cheung since he left the Appellant's employment in November 1996. To the first allegation, the Respondent replied that the telephone conversation was in the form of telephone conference with Cheung's secretary acting as interpreter. The Respondent disagreed with the second allegation. Thus the parties' dispute was fully set out before the Presiding Officer.

16. However, counsel complains that Cheung only put his case while cross examining the Respondent and the Presiding Officer failed in discharging his inquisitorial duty by canvassing the issue with Cheung when he gave evidence. Counsel referred to the case of Wan Hung Shu v Li Chun Yam [1993] HKC 714 in which Rhind J allowed an appeal by the employer for the Presiding Officer's failure to investigate from the foreman of the claimant who was present when the claimant was dismissed about the circumstances of the dismissal. I think Wan Hung Shu v Li Chun Yam can be readily distinguished from the present case. In that case, the Presiding Officer failed to investigate from a witness who was available and who could give material evidence about the circumstances of the dismissal. In the present case, the witness, Mr Cheung, has already stated his version of the events, albeit not in the course of giving evidence. The evidence he would give would be a mere denial that the three telephone conversation occurred. As stated above, the facts and the dispute of the parties were fairly and squarely set out before the Presiding Officer. There is nothing for the Presiding Officer to make inquiries on. Even at the hearing of the appeal, there is not the slightest suggestion that had Cheung been asked he would have given another credible account which could have caused the Presiding Officer to come to a different conclusion.

17. The failure to canvass an issue with a witness or a party while he was giving evidence might have some bearing in a formal hearing, but not in the hearing before the Labour Tribunal because section 20 of the Labour Tribunal Ordinance provides that the hearing in the tribunal is informal. This informality is amplified in section 27 which expressly provides (1) that the tribunal may at any time during the hearing of a claim allow a witness or a party to give evidence on oath or unsworn and (2) that the rules of evidence shall not apply to proceedings in the tribunal which may receive any evidence it considers relevant. As the hearing is informal, the Presiding Officer is at liberty to make his own rules of procedure if none is provided by the Ordinance. He may call witnesses in any order and recall a witness. He may receive hearsay evidence which is otherwise not admissible. He may, as section 27(1) provides, receive evidence from a witness or a party on oath or unsworn. Accordingly he was entitled to treat what Cheung put to the Respondent as part of his unsworn evidence, provided what was said has all the qualities of a piece of evidence. On the fact, what Cheung put to the Respondent was not of the nature of a suggestion to test the Respondent's credibility or memory. It was seriously put to the Respondent as allegations of fact that he had never spoken to the Respondent since November 1996 or to Valdes because he could not speak English. What he put was intended to be part of his case that he had never intimated his intention to dismiss the Respondent and had never in fact so dismissed him. The allegations were put in the course of cross examination in judicial proceedings and not an instinctive outburst of the spleen. He must have seriously intended that his allegation would be believed and acted on by the Presiding Officer. In my view, the case that he put in cross examination has all the qualities that a piece of evidence should have and the Presiding Officer was entitled to receive that as part of the Appellant's evidence although not made under oath. There is no merit in this ground of appeal.

4th Ground: Whether the Respondent's waiver of double pay entitlement for 1998 affects his right to double pay for 1999:

18. Counsel submits that the Presiding Officer, having accepted that the Respondent had waived his right to double pay in 1998, should find there was a change in the terms of employment accepted by the Respondent so that he was not entitled to double pay in 1999. The Presiding Officer has expressly found that the Respondent waived his right to double pay in 1998 because of the Appellant's financial condition and that the waiver did not amount to a change of employment condition accepted by the Respondent. Hence he awarded the Respondent's claim for double pay for 1999. This is a finding of fact by the Presiding Officer. I can see no reason to interfere.

Conclusion:

19. There is no merit in any of the grounds of appeal. The appeal is therefore dismissed with costs to the Respondent, to be taxed if not agreed. The Respondent's own costs shall be taxed in accordance with Legal Aid Regulations.