DOCK BRIAN v. PACIFIC GOURMET HOLDINGS LTD

HCLA 14/2021

[2021] HKCFI 3780

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 14 OF 2021

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 3110 OF 2021)

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D E C I S I O N

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A. Introduction

1.  The claimant (“Employee”) was employed by the defendant (“Employer”) as a member of food service staff from 16 December 2016 until his employment was terminated on 30 April 2021.  After termination, he lodged a claim with the Labour Tribunal claiming against the Employer a sum of approximately $142,700 under the Employment Ordinance Cap 57 (“EO”).

2.  By order dated 23 September 2021, the Presiding Officer, Ms Eleanor Yeung (“PO”), adjourned the claim sine die with liberty to restore, on the basis that the Tribunal had no jurisdiction to hear the claim.  The Employee later applied for restoration of his claim which was heard on 18 October 2021 by the same PO, and led to a decision posted to the Employee in an envelope post-marked 20 October 2021.  The PO maintained the original order (“Decision”).  The written reasons (“Reasons”) for the Decision were given on 11 November 2021.

3.  By Form 14 dated 26 October 2021, the Employee now seeks leave to appeal against the Decision under section 32 of the Labour Tribunal Ordinance Cap 25 (“LTO”), on the basis that the Decision was made under an error of law.

4.  The Employee was represented by Counsel Mr John Wright in the hearing on 9 December 2021.  At the conclusion of the hearing, I reserved my decision.  This is the Decision.

B.     Background Facts

5.  The Employee claims that he was dismissed because in March 2021 he refused to sign an agreement to increase his work hours from 9 to 10.  On 1 April 2021, he was given a one-month notice of the termination of employment.  No reason for termination was given up to his last day on 30 April 2021.  He claims that he was dismissed with no valid reason or by reason of redundancy which entitled him to severance payment, terminal payment and/or damages under the EO.

6.  At the same time the Employee was given a pay cheque for his last month’s salary and accrued holiday pay, he was also asked to sign a document dated 28 April 2021 (“28/4/2021 Document”) which stated that:

I checked the above calculation and hereby confirmed the final payment of my remuneration is correct and also confirmed there is no other outstanding amount owing to me by the company.

7.  In his statement filed with the Tribunal, the Employee said that (1) he had taken legal advice that the 28/4/2021 Document was a waiver which sought to extinguish his rights under the EO and is void under section 70 of the EO; and (2) he was also advised that, in common law, payment of a lesser sum could not discharge a greater debt.  In the hearing on 23 September 2021, he further said that when he was asked to sign that document, a staff member of the Employer deliberately covered the relevant sentences quoted above (but that point was not pursued or relied upon by Mr Wright before me).

C.     The Decision

8.  The Tribunal’s rationale for ordering the adjournment of the claim sine die for want of jurisdiction is to be found in §6 of the Reasons:

This Tribunal pointed out that the 28/4/2021 Document was prima face a valid settlement agreement.  This Tribunal has no jurisdiction to declare void and set aside a settlement agreement.  Unless and until it is declared void and set aside by a higher court, the existence of settlement agreement prevents the Tribunal from adjudicating on the matters settled.  See Minarni v Ho Ho Fan Ivy [2018] HKCFI 852 at §§9-10 (as per Madam Justice Wong) and Poon Kwok Leung Lenny v Swett (China) Limited, HCLA 19/2012, unreported, 19 December 2012 at §§12D [sic] and 15 (as per Madam Justice Au-Yeung).

9.  From this short paragraph, it appears that the PO was of the view that (1) the 28/4/2021 Document, being a valid settlement agreement, has the effect of preventing the Employee from claiming under the EO, such that (2) the 28/4/2021 Document would have to be declared void/set aside first before the Employee could proceed with his claim in the Tribunal, and that (3) the Tribunal has no jurisdiction to declare a settlement agreement void or to set it aside.

D.     Intended grounds of appeal

10.  Under section 32(1) of the LTO, a party may apply to the Court of First Instance (“CFI”) for leave to appeal against the decision of the Tribunal on the grounds that the decision is either erroneous in point of law or outside the jurisdiction of the Tribunal.  The burden falls on the applicant seeking leave to show that the intended appeal is arguable: see, for example, Chan Kwok Hung v Hotel Panorama Co Ltd (unreported, HCLA 30/2009, 19 November 2009, §13).

11.  Mr Wright relied on the error of law limb. He submitted that the PO made two such errors: (1) the PO erred in ruling that the Tribunal had no jurisdiction over the claim, and (2) the PO erred in ruling that the 28/4/2021 Document, unless set aside, could defeat the Employee’s claim under the EO.  The two grounds are intertwined; the effect of the 28/4/2021 Document was the basis leading to the PO’s conclusion that the Tribunal had no jurisdiction over the claim.

E.     The Tribunal’s Jurisdiction

12.  The Employee’s claim for a monetary award comprised three heads: (1) severance payment of $65,589.04, (2) terminal payment of $65,589.04 or to be assessed, and (3) damages of HK$77,100 as an alternative to terminal payment.

13.  Head (1) is claimed on the basis that he was dismissed by reason of redundancy which would entitle him to a severance payment.  This head is based on Part VA, sections 31B(1)(a) and 31G of the EO.

14.  Head (2) and Head (3) are claimed on the basis that he was dismissed other than for a valid reason which would entitle him to a terminal payment and, if not, to monetary compensation (termed as “damages” by the Employee).  These two heads are based on Part VIA, sections 32A(1)(c), 32M, 32O and 32P of the EO.

15.  Claims based on Parts VA and VIA of the EO are expressly listed in the Schedule to the LTO and so on the face of it fall within the Tribunal’s jurisdiction pursuant to sections 7(1) and 7(2) of the LTO.  The relevant paragraphs are §§4 and 7 of the Schedule, which provide:

4.     Any question as to – (a) the right of an employee to severance payment under Part VA of the Employment Ordinance (Cap. 57); or (b) the amount of such payment, other than a claim specified in the Schedule to the Minor Employment Claims Adjudication Board Ordinance (Cap. 453).

7.     A claim for remedies under Part VIA of the Employment Ordinance (Cap. 57).

16.  However, it is settled that claims can be excluded on certain bases including that the relief sought includes non-monetary awards such as injunctive relief.

F.     Is there an Arguable Ground of Appeal?

17.  The PO considered that the 28/4/2021 Document had somehow taken the claim outside of the Tribunal’s jurisdiction.  The approach seems to have been that existence of the 28/4/2021 Document has turned the Employee’s claim into one that makes it necessary for the Employee to seek some non-monetary relief.

18.  Indeed, from §6 of the Reasons (quoted above), it seems that the PO thought that the 28/4/2021 Document had made it necessary for the Employee to seek relief which the Tribunal had no power to order, namely declaratory relief that the 28/4/2021 Document is void and an order to set it aside.  This itself seems to have been premised on the assumptions that the 28/4/2021 Document was (a) a “settlement agreement” and (b) effective in disentitling the Employee from what he may otherwise be entitled to claim under the EO.  As already stated, this demonstrates the intertwining of the two errors of law suggested by Mr Wright.

19.  I agree that it is at least strongly arguable that there was an error of law.

20.  The starting point is that the Tribunal has jurisdiction over “any question as to … the right of an employee to severance payment under Part VA of the [EO]” and over “a claim for remedies under Part VIA of the [EO]”.

21.  In this case, Employee sought monetary relief under Parts VA and VIA of the EO.  He did not seek and does not need to seek a declaration that the 28/4/2021 Document was void or that it be set aside.  Whilst he referenced the 28/4/2021 Document (which he admittedly signed) and said that it should not have the effect of defeating his claim under the EO, this was really a reply in anticipation of one part of the defence that the Employer had already mentioned in correspondence.

22.  In view of such a possible defence, the PO would have to decide if the defence could be made out.  But this is part and parcel of the wider inquiry of whether the Employee’s claim under the EO could ultimately succeed.  It is to be remembered that the Tribunal acts inquisitorially.  Whether the claim has somehow been “settled” or is otherwise barred is simply one of the “any question[s]” as to the Employee’s right to a severance payment under Part VA, and an issue arising on his claim for remedies under Part VIA of the EO.

23.  Indeed, it seems to me to there is also the prior question as to what was the proper effect of the 28/4/2021.  Though the PO described it as a “settlement agreement”, there was no analysis by her as to why it might be properly described as settling or compromising a claim, and if so what claim, or perhaps amounts to a waiver of a claim, and if so what claim – even before considering whether that was legally possible under the EO (and in particular in light of section 70).

24.  That such a question might arise on the claim is not the same as saying that the Employee had to seek the relief of setting aside the 28/4/2021 Document or declaring it void.  The 28/4/20221 Document contains no ingredients which the Employee must prove in order to establish his claim under Parts VA and VIA of the EO.  Rather, it might be a necessary ingredient to the Employer’s defence that the Employee is disentitled from making further claim under the EO or otherwise.  If pleading rules were applicable in the Tribunal, the Employee would not have to include in his prayer a claim to any declaratory relief or a setting aside order to complete his monetary claim.

25.  As to the two authorities relied upon by the PO to support the Decision, and with respect to the two Judges, I think it is at least reasonably arguable that their decisions (even assuming they were on facts on all fours with the facts in this case) were wrongly decided.  Nor do I think the cases were argued in the way Mr Wright has identified in this case.

26.  It is at least strongly arguable that the Tribunal does have jurisdiction to hear the claim, and even that there are necessary questions that must be determined in the exercise of that jurisdiction which relate to the proper effect of the 28/4/2021.  I would grant leave to appeal on this ground.

27.  I can also note the other points which can be distilled from Mr Wright’s submissions on why the PO erred in finding that the 28/4/2021 Document had the effect of preventing the Employee from making further claims:

 (1)     The 28/4/2021 Document is not supported by fresh consideration since the cheque received by the Employee was only the performance of the Employer’s existing duty owed to the Employee;

 (2)     The 28/4/2021 Document was void under section 70 of the EO for purporting to extinguish the Employee’s rights under Parts VA and VIA;

 (3)     Under the common law, the 28/4/2021 Document, being a private agreement between parties, would not trump statutory protections provided by the EO.

28.  These three points seem to me to be properly arguable within the appeal, and they may be points on which firm guidance can be given.

G.     Postscript

29.  Even if the PO is correct that the Tribunal has no jurisdiction over the claim, I think the adjournment of it sine die is also rather problematic.

30.  If there really is no jurisdiction, it might be asked what is being adjourned.  Ordinarily, a finding that there is no jurisdiction in respect of a claim would lead to the dismissal of the claim.  What the PO seems to have in mind is the possibility that the claim over which the Tribunal thinks it (currently) has no jurisdiction might later, at some indeterminate future time, become a claim over which the Tribunal would have jurisdiction.

31.  Nor does the approach of putting a claim ‘on ice’, and sending the claimant off to another court to seek resolution of one underlying issue on the claim, seem consistent with the intention that the Tribunal be a simple forum for litigants in person.

32.  Of course, if the Employee were to file a writ action claiming under Parts VA and VIA of the EO, the higher courts would have no option but to strike it out since the Tribunal has exclusive jurisdiction over the claim. The only way for the District Court or CFI to assume jurisdiction is under a transfer made by the Tribunal under section 10 of the LTO.  But if the Tribunal has no jurisdiction over the claim, there is nothing that can be transferred.  On the other hand, if there is something to be transferred, there must be jurisdiction, so the Tribunal could just go ahead and decide the claim.

H.     Conclusion

33.  Leave to appeal under section 32 of the LTO is granted.  I reserve the appeal to myself.

34.  Costs reserved to the appeal.