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CACV 122/2007
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 122 OF 2007
(ON APPEAL FROM HCLA NO. 7 OF 2006)
______________
BETWEEN
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NGAN YU CHIU
（顏雨朝）
|
Claimant |
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and |
|
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NEW WORLD FIRST BUS SERVICES LIMITED |
Defendant |
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（新世界第一巴士服務有限公司） |
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______________
Before: Hon Tang VP, Cheung JA and Lam J in Court
Date of Hearing: 9 November2007
Date of Judgment: 27 November2007
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JUDGMENT
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Hon Tang VP:
1. The claimant was employed by the defendant as a bus driver in 1999.
2. By a Certificate of Assessment under section 16F of the Employees’ Compensation Ordinance, Cap. 282 (“the Ordinance”), issued by the Employees’ Compensation (Ordinary Assessment) Board (“the Board”) dated 26 May 2005, he was found as of 12 May 2005 to be suffering from “neck injury resulting in neck pain and stiffness” and his loss of earning capacity permanently caused by the injury was assessed at 2%.
3. In the Section 16F Certificate, the periods of absence from duty necessary as a result of the injury were stated to be:
| “from由 |
to至 |
| |
from由 |
to至 |
| 09/07/2003 |
11/07/2003 |
| |
27/07/2003 |
17/08/2003 |
| 28/08/2003 |
18/03/2004 |
| |
27/03/2004 |
29/03/2004 |
| 03/04/2004 |
03/04/2004 |
| |
14/04/2004 |
16/04/2004 |
| 22/04/2004 |
26/04/2004 |
| |
06/05/2004 |
06/05/2004 |
| 19/05/2004 |
27/05/2004 |
| |
04/06/2004 |
24/09/2004 |
| 02/10/2004 |
12/05/2005 |
| |
|
” |
4. The claimant was dissatisfied with the assessment and objected to it under section 16G of the Ordinance (“section 16G”). The objection related both to the periods of sick leave as well as the degree of his permanent loss of earning capacity.
5. On 22 September 2005, the Board issued a Certificate of Review of Assessment under Section 16G(3).
6. The degree of permanent loss of earning capacity remained assessed at 2%.
7. However, the claimant was given 3 additional periods of absence from duty as follows:
| “from由 |
to至 |
| |
from由 |
to至 |
| … |
… |
| |
01/06/2005 |
10/06/2005 |
| 23/06/2005 |
25/06/2005 |
| |
05/07/2005 |
10/07/2005” |
8. In the meantime, on 31 May 2005, the claimant requested that he be allowed to resume work. The defendant refused to permit him to resume work unless he could provide a medical certificate certifying that he was fit to do so. That the claimant was unable to do.
9. As a result, the claimant brought a claim against the defendant in the Labour Tribunal. It was implicit in the Labour Tribunal decision that because the claimant was not allowed to resume work, he had been constructively dismissed on 31 May 2005. There was no appeal from the awards which flew from that implicit finding, presumably, because it was thought that they were based on a decision on the facts.
10. However, the claimant’s claim under section 32P of the Employments Ordinance, Cap. 57 was dismissed because the Labour Tribunal Officer was of the view that under section 48 the defendant was entitled to terminate the contract of employment upon the issue of the section 16F certificate. In his decision dated 28 March 2006, the Labour Tribunal Officer said:
“5. 本席對僱員補償條例第48條的詮釋為僱主不得向僱員發出有關的終止合約通知直至根據該條所述之16F或16G(3)評估證明書向僱員、僱主及發出該等證明書（以最早出具為準）。本席認為因評估證明書（法庭文件C-9）日期為2005年5月26日根據僱員補償條例第16F條出具所以裁定被告公司在2005年5月31日解僱申索人不構成有違反僱員補償條例第48條而不需就僱傭條例第32P規定下作出評估。”
The parties have proceeded on the basis that the section 16F certificate was received by the defendant on 30 May 2005 and that on the same day, or in any event, prior to the constructive dismissal on the 31 May 2005, the defendant had notice of the claimant’s section 16G objection.
11. The claimant was dissatisfied with the decision that no compensation was payable by the defendant under section 32P, and appealed.
12. The appeal was allowed by Yam J on 3 April 2007. Leave was given by me on 18 July 2007 to appeal to this court. The issue in this appeal is, under what circumstances, if at all, on the proper construction of section 48, an employer was entitled to terminate the employment of the employee in respect of whom a section 16F certificate had been issued.
13. The appeal turned on the interpretation of section 48, in particular, section 48(1)(iii) of the Ordinance. Section 48 provides:
| “(1) |
An employer shall not, without the consent of the Commissioner- |
| |
(a) |
terminate the contract of service or apprenticeship of an employee who has suffered incapacity in circumstances which entitle him to compensation under this Ordinance; or |
| |
(b) |
give notice to the employee of such termination, before- |
| |
|
(i) |
the Commissioner has issued a certificate under section 16A(2), to the employer and the employee; or |
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|
(ii) |
the employer has entered into an agreement under section 16CA(1), with the injured employee; or |
| |
|
(iii) |
an Ordinary Assessment Board or a Special Assessment Board, as the case may be, has issued a certificate under section 16F or 16G(3), to the employee, the employer and the Commissioner, |
| whichever occurs first. |
| (1A) |
Further to subsection (1), an employer shall not, without the consent of the Commissioner- |
| |
(a) |
terminate the contract of service or apprenticeship of an employee who has suffered temporary incapacity for a period not exceeding 3 days in circumstances which entitle him to compensation under this Ordinance; or |
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(b) |
give notice to the employee of such termination, before- |
| |
|
(i) |
the period of temporary incapacity has expired; and |
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|
(ii) |
the compensation has been paid under section 10 to the employee or to the Court.” |
14. Shortly stated, the issue in this appeal is, under what circumstances is an employer entitled to terminate the employment of the employee under section 48(1)(iii). Since the claimant’s contract had been terminated we are concerned with section 48(1)(a) rather than section 48(1)(b) but nothing turns on this.
15. Mr Paul Lam, appearing for the defendant, submitted that the employer was entitled to terminate the contract of service upon the issuance of the Section 16F Certificate by the Board.
16. Mr Tim Kwok, who appeared for the claimant in the appeal, submitted that since the purpose of section 48 was to afford employment protection to the injured worker before his claim for compensation was completely resolved, the defendant was not entitled to terminate the contract of service before the date of issue of the review certificate under section 16G(3).
17. It seemed to have been the learned judge’s conclusion that under section 48(1)(iii), an employer was not entitled to terminate the contract of service even after the Board had issued a section 16F certificate if the employer had notice that an objection under section 16G(1) had been lodged. In that event the contract of service might not be terminated until after the issue of the certificate under section 16G(3).
18. It is common ground that the termination of the contract of service by an employer under section 48 would not affect the right of the employee to compensation under the ordinance. The employee’s right to compensation, e.g. in case of permanent total incapacity is covered by section 7, compensation in the case of permanent partial incapacity by section 9, and compensation in case of temporary incapacity by section 10.
19. Section 48 was originally added by Ordinance No. 55 of 1969, section 26 as follows:
| “48. |
(1) |
An employer shall not, without the consent of the Commissioner, terminate the contract of service or apprenticeship of a workman who has suffered incapacity in circumstances which entitle him to compensation under the provisions of this Ordinance until either- |
| |
|
(a) |
the workman has been certified by a medical practitioner as fit to resume the work for which he was employed at the time of the accident; or |
| |
|
(b) |
compensation for permanent incapacity, whether total or partial, becomes payable to the workman under the provisions of this Ordinance. |
| |
(2) |
Any employer who contravenes any of the provisions of subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine of two thousand dollars.” |
20. In the explanatory memorandum to the Workman’s Compensation (Amendment) Bill 1969 it was said:
“Clause 26. The proposed section 36A prevents an employer, except with the consent of the Commissioner, from terminating a contract of service or apprenticeship during the incapacity of a worker in respect of which he is entitled to compensation until either the workman is certified fit to resume work or compensation for permanent incapacity becomes payable.”
The proposed section 36A became section 48. I will refer to this as the 1969 section 48.
21. The reason for the amendment was further explained at the second reading by Mr R. M. Hetherington, the Commissioner for Labour on 22 October 1969:
“It is reasonable that a workman, who has suffered injury by accident and becomes fit, after treatment, to resume his employment, should not be liable to have his employment terminated during treatment. Clause 26 introduces a new section to maintain the continuity of an injured workman’s employment until found either fit to resume work or to have suffered permanent incapacity. The provision does not impose any obligation on the employer to pay wages during absence from work on account of industrial injury.”
22. It is important to note that the purpose of section 48 was to provide a measure of security of employment to an employee. It is a protection, without which, many an employee who suffered from temporary incapacity might find that he would have no job to go back to when he was fit again. The measure of protection might be limited but common sense tells one that it is nevertheless a meaningful protection. That is because absent section 48 an employer might find it more convenient to terminate the employment of an employee who was suffering from temporary incapacity (paying him the statutory compensation, if any) and replace him immediately. In that case even on full recovery the employee would have no job to return to.
23. However, the limited scope of the protection should be noted. The employment could be terminated as soon as the employee was fit to resume his former work. See 1969 section 48(1)(a). Moreover, section 48 was never intended to give security of tenure to an employee who suffered from any degree of permanent incapacity. The employee would be left to his compensation under the relevant section of the ordinance. That being the case, it makes sense that when it became known that compensation for permanent disability, whether partial or permanent, was payable, the employer should be able to terminate the contract of service. See 1969 section 48(1)(b).
24. The next material amendment was by section 30 of Ordinance No. 76 of 1982. As amended section 48 read as follows:
| “‘(1) |
An employer shall not, without the consent of the Commissioner - |
| |
(a) |
terminate the contract of service or apprenticeship of an employee who has suffered incapacity in circumstances which entitle him to compensation under this Ordinance; or |
| |
(b) |
give notice to the employer of such termination, before- |
| |
|
(i) |
where the employees suffers temporary incapacity only, the date certified by a medical practitioner or registered dentist as the date on which the period of temporary incapacity ceased or will cease; or |
| |
|
(ii) |
where the employee suffers permanent incapacity, the date of issue to the employer of the relevant certificate of assessment under section 16F or, where any objection to the assessment is made under section 16G(1), the date of issue to the employee of the relevant certificate under section 16G(3) or of a further certificate under section 16F, as the case may be.’ |
I will refer to this as the 1982 section 48.
25. The relevant Explanatory Memorandum stated:
“41. Clause 30 amends section 48 (protection against termination of contract of service during incapacity) to clarify the employer’s obligations and to increase the maximum penalty for contravention from $2,000 to $5,000.”
26. Mr Lam has informed us that this section was not specifically mentioned in the proceedings of the Legislative Council.
27. There is nothing in the 1982 section 48 to show that the legislature intended any change of purpose.
28. Mr Lam pointed to some differences between the 1982 section 48(1)(ii) and the current section 48(1)(iii), in particular, the following words in the 1982 section 48(1)(ii) “where an objection to the assessment is made under section 16G(1), the date of issue to the employee of the relevant certificate under section 16G(3) or of a further certificate under section 16F, as the case may be”.
29. The reference to the date of issue of section 16F to the employee simply fixed the time from which his employment could be terminated. It does not support Mr Lam’s submission that the reference to the date of issue of the relevant certificate to the employee signified that the relevant objection was one lodged by the employer. Nor would I regard the omission of the reference to “an objection to the assessment is made under section 16G(1)” as significant, since a certificate under section 16G(3) could only be issued after objection under section 16G(1).
30. The current version was introduced as clause 15 of Employees’ Compensation (Amendment) (No 2) Bill 1994. The relevant Explanatory Memorandum stated that:
“(k) to clarify, in section 48, the circumstances under which an employer may terminate the employment of an injured employee (clause 15).”
Again, Mr Lam informed us this section was not specifically mentioned in the proceedings of the Legislative Council.
31. Under the current section 48, an employer could, without the consent of commissioner, terminate a service of employment under any of the events stated in section 48(1)(i), (ii) and (iii) “whichever occurs first”.
32. Section 48(1)(i) refers to a certificate issued by the Commissioner under section 16A(2). Under section 16A(2), the Commissioner may assess compensation under subsection 1 and issue a certificate “in such form as he may specify stating the amount of compensation and details of the assessment, and shall retain one copy of the certificate for his records”. Section 16A(1) provides:
| “(1) |
Where- |
| |
(a) |
a claim for compensation arises in respect of an accident causing injury to an employee that results in temporary incapacity, whether total or partial; or |
| |
(b) |
a claim for compensation arises in respect of an accident causing injury to an employee that results in loss of earning capacity as assessed under section 16D(5), 16E(8) or (9), 16G(2) or 16GA(1), the Commissioner may assess the compensation payable under sections 7, 9 and 10. |
| (1A) |
Compensation shall not be assessed by the Commissioner under subsection (1) unless claim for compensation arises within 24 months after the happening of the accident.” |
33. Although the Commissioner might issue a certificate under section 16A(2) after a certificate had been issued under section 16F or 16G(3), that was unlikely to be what was in contemplation because the certificate under section 16F or section 16G(3) would have predated the certificate under section 16A(2).
34. Section 48(1)(ii) refers to an agreement under section 16CA(1). Under section 16CA(1), an employer and an employee may agree compensation in respect of an accident causing injury to “an employee that results in temporary incapacity, whether total or partial, for period exceeding 3 days but not exceeding 7 days”.
35. As for section 48(1)(iii), the certificate under section 16G(3) must be later in time than the certificate under section 16F.
36. The events in section 48(1)(i), (ii) and (iii) are essentially mutually exclusive, so the words “whichever occurs first” probably added little to section 48.
37. Mr Tim Kwok drew our attention to another difference between 1982 version and the current version of the ordinance, namely, that under the current version the Board is required to assess the period of absence from duty necessary as a result of the injury.
38. Section 16D(4) and (5) provide:
| “(4) |
The Commissioner may refer to an Ordinary Assessment Board any claim for compensation for an injury to an employee of which he has notice if in the opinion of the Commissioner such injury is likely to result in permanent total or partial incapacity. |
| (5) |
In respect of a claim referred to it under subsection (4), an Ordinary Assessment Board shall- |
| |
(a) |
subject to subsection (6), assess the percentage of the loss of earning capacity permanently caused by the injury in accordance with this Ordinance; and |
| |
(b) |
assess the period of absence from duty necessary as a result of the injury.” |
39. It is relevant to note that under section 16D(4) the Commissioner may refer any claim for compensation to the Board if in his opinion, the injury was likely to “result in permanent total or partial incapacity”. It is reasonable to conclude that the primary function of the Board was to assess loss of earning capacity arising out of permanent disabilities. In any event, I do not detect in the expansion in the scope of the Board any indication that the original purpose of the section has been replaced or expanded.
40. I turn now to the construction of section 48(1)(iii).
41. Breach of section 48(1) carries criminal liability. Under section 48(2), any employer who contravenes subsection (1) “shall be guilty of an offence and shall be liable on conviction to a fine at Level 6”.
42. There is also civil consequence under section 32P(1) of the Employment Ordinance, Cap. 57 under which:
| “(1) |
Subject to section 32M, the court or Labour Tribunal may, whether or not it has made an award of terminal payments under section 32O, make an award of compensation to be payable to the employee by the employer as it considers just and appropriate in the circumstances if- |
| …… |
|
|
| |
(b) |
the employee is dismissed by the employer in contravention of … section 48 of the Employees’ Compensation Ordinance (Cap 282), whether or not the employer has been convicted of the offence in respect of the dismissal.” |
43. I bear in mind the words of the Chief Justice in Town Planning Board v Society For The Protection of The Harbour Ltd [2004] 7 HKCFAR 1 at 13I-14D:
“29. … In construing a statute, the courts should adopt an interpretation which is consistent with and gives effect to the legislative purpose. An interpretation which is inconsistent with and does not serve that purpose should be avoided. …”
44. Having regard to the penal consequence of a breach of section 48, I also bear in mind the important legal principles that the law should be certain and predictable and that a person should not be penalized except under clear law. See Bennion, Statutory Interpretation (4th edn, 2002) at sections 266 and 271.
45. Effectively, Mr Tim Kwok’s submission is that since under section 16G(1), an objection may be lodged to an assessment by the Board:
“… by the employer or the employee in writing to the Commissioner within 14 days after the date of issue to him of the relevant certificate under section 16F, or within a further time that the Commissioner, in the circumstances of any particular case, thinks fit, stating the ground of the objection, …”
either the employer may not terminate the contract of employment until after the expiration of 14 days or that the employer may not terminate the contract for employment upon receipt of notice of an objection. That is so, whether the objection was lodged within 14 days or the Commissioner had given an extension of time to make an objection.
46. Mr Kwok submitted that if the employer could terminate the contract of employment upon the issuance of Section 16F Certificate regardless of an objection under section 16G, the reference to the section 16G certificate in section 48(1)(iii) would be redundant. I agree. I must strive to give effect to every word in the section. The presumption against tautology is strong and only in the rarest of cases would the court be entitled to disregard any word in a statute. I am satisfied that this is not such a case.
47. However I do not agree that one could give a different interpretation to section 48 according to whether the court is concerned with the criminal prosecution of an employer or a claim by an employee for compensation under section 32P of the Employment Ordinance.
48. Nor do I agree with Mr Tim Kwok’s submission that the purpose of section 48 was to afford employment protection to the employee until his claim for compensation was completed resolved. It will be recalled that his contract of service may be terminated under section 48(1)(i) after the Commissioner has issued a certificate under section 16A(2). That is so notwithstanding that under section 16A(3), an objection may be made within 14 days of the issue of the certificate. Moreover, the court may cancel the section 16A(2) certificate as well as the section 16A(5) certificate issued after objection made under section 16A(3). Moreover, under section 18(1), an appeal lies “to the District Court from any decision or assessment of the Commissioner, an Ordinary Assessment Board or a Special Assessment Board under section 16A, 16D, 16E, 16G or 16GA”. So I agree with Mr Paul Lam that the purpose of section 48 was not to forbid termination until final resolution of a claim for compensation.
49. In this regard, it is important to recall that the termination of the contract does not in any way prejudice the right of an employee to compensation for permanent or temporary disability.
50. As noted, the claimant appealed against the assessment of temporary incapacity as being too short, and the period of temporary incapacity appeared to have been increased in the section 16G(3) certificate. The claimant was entitled to compensation for such period under section 10 of the ordinance.
51. The question in the appeal is whether in the case of an employee who has been certified (under section 16F) to be suffering from permanent disability, the presence of such temporary incapacity should prohibit the employer from terminating the contract of employment.
52. Mr Lam argued that the language of 1982 section 48 supports the submission that the employer would be entitled to terminate a contract of employment under section 16F unless if the employer were to object against the Section 16F Certificate. That is because if the employer took the view that there was no permanent disability, but there was temporary disability, then the employer should not been entitled to terminate. This argument was based in part on his submission (which I have not accepted) that the language of the 1982 section 48 signified that the relevant objection was one made by the employment.
53. I have the advantage of reading Cheung JA’s judgment in draft. Unfortunately, I am unable to agree with his construction. His construction requires more redrafting of section 48(1)(iii) than is required to give effect to the purpose of section 48 which I have endeavoured to identify.
54. I also have had the advantage of reading the judgment of Lam J in draft. I note that he postulated 6 possible constructions of section 48(1)(iii).
55. I agree with Lam J that the first 4 constructions should be rejected. Lam J’s 5th and 6th constructions are:
“(e) A construction enjoining an employer to wait until the issue of a Section 16G(3) certificate if he does not terminate before an objection has been made under Section 16G(1);
(f) A construction enjoining an employer to wait until the issue of a Section 16G(3) certificate if he does not terminate before he is notified of an objection under Section 16G(1).”
56. The construction, which I would put on section 48(1)(iii) is that an employer must wait for the issue of a section 16G(3) certificate if he had notice that the employee had objected to the section 16F certificate on the basis that not only was he not suffering from any permanent disability, he had not recovered from his temporary incapacity. I would add that an employer may not terminate the employment if he himself objects to the section 16F certificate on the basis that there was no permanent disability when the temporary incapacity had not ended. Such interpretation gives effect to every word in section 48(1)(iii). It is consistent with and gives effect to the purpose of section 48.
57. I appreciate that this construction is far from perfect. But it provides the necessary balance between the requirement that a penal provision should be read in favour of the defendant and the need to give effect to every word in a provision.
58. If my construction does not accord with the intention of the legislature, no doubt the law can be clarified by amendment. I express no view on what the law should be, that is a matter for democratic decision.
59. It follows that I would allow the appeal.
Hon Cheung JA:
The respondent’s position
60. In the Court below the respondent’s case on section 48(1) was that the employer is entitled to terminate the contract as soon as a section 16F certificate is issued. In the appeal its case is that while the employer is entitled to determine the contract as soon as the section 16F certificate is issued, it may also be entitled, if it so chooses, to terminate the contract after it, but not the employee, has objected to the section 16F certificate and obtained the section 16G certificate.
61. I disagree with the respondent because in both situations it has ignored the clear wording of section 48(1).
My approach
62. I will approach the construction by looking at the current version of section 48(1) first and construe its meaning accordingly. I will then see if this construction is wrong in the light of the legislative history of the section which has been referred to this Court.
The starting point
63. The starting point is that section 48(1)(iii) expressly refers to two events, namely,
a) the Ordinary Assessment Board issuing the section 16F certificate and
b) the Special Assessment Board issuing the section 16G(3) certificate.
The relevant provisions
64. For the purpose of this appeal, the relevant parts of the ECO relating to the operation of the two Boards and the two types of certificates are as follows :
1) Under section 2 of ECO, an employee may suffer from the following two types of incapacity :
(1) total incapacity which could be temporary or permanent; and
(2) partial incapacity which could be temporary or permanent.
2) Compensation is provided for in the ECO for both types of incapacities : permanent total incapacity (section 7), permanent partial incapacity (section 9) and temporary total or partial incapacity (section 10).
3) Permanent incapacity (total) is compensated by a lump sum equation : section 7(1); permanent incapacity (partial) is compensated by a percentage of the lump sum equation : section 9(1).
4) Temporary incapacity is awarded by periodical payment of 4/5 of the monthly salary (section 10(1)) for a period of 24 months or 36 months (section 10(5)). An absent from duty certificate (sick leave certificate) issued by the doctor or Ordinary Assessment Board or Special Assessment Board shall be deemed to be the period of total temporary incapacity : section 10(2).
5) The Commissioner for Labour (‘the Commissioner’) may assess the compensation arising from temporary and permanent incapacity : section 16A(1).
6) The reference to loss of earning capacity in section 16A(1)(b) is relevant to permanent incapacity : see section 7(3) and section 9(1).
7) The Commissioner may refer to an Ordinary Assessment Board any claim for compensation for an injury to an employee of which he has notice, if in his opinion such injury is likely to result in permanent total or partial incapacity : section 16D(4);
8) The Ordinary Assessment Board will then assess the percentage of the loss of earning capacity permanently caused by the injury and the period of absence from duty necessary as a result of the injury : section 16D(5).
9) After the Ordinary Assessment Board has made an assessment under section 16D(5), it shall issue the section 16F certificate of assessment to the employer, employee and the Commissioner : section 16F.
10) The employer or employee may in writing to the Commissioner make objection to the assessment by the Ordinary Assessment Board within 14 days after the date of issue to him of the section 16F certificate or within such further time as the Commissioner may allow : section 16G(1).
11) The objector is required to serve the notice of objection on either the employer or employee, depending on who raises the objection : section 16G(1).
12) The Commissioner may then refer the objection to the Special Assessment Board : section 16G(1A).
13) The Special Assessment Board shall then review the assessment and it may confirm or vary the assessment : section 16G(2).
14) The Special Assessment Board shall after the review issue to the employer, employee and Commissioner a section 16G(3) certificate : section 16G(3).
15) Upon the issue of the section 16G(3) certificate, the section 16F certificate shall be cancelled : section 16G(4). As a matter of fact, the section 16F certificate was rendered void when the Commissioner received the section 16G(1) objection and referred the matter to the Special Assessment Board : section 16G(1A).
My construction
65. A review of the legislation shows clearly that both the employer and employee are entitled to make objections to the section 16F certificate as of right. This being the case I just do not see why an employer can terminate the contract as soon as a section 16F certificate is issued or restricts the termination of the contract only if the employer decides to raise the objection but not when the employee decides to do so.
66. Further I do not see any justifiable reason why the objection must be restricted to the issue of permanent disability because the Boards are also required to assess the period of absence from duty necessary as a result of the injury which is related to the temporary incapacity claim.
67. In my view the clear purpose of section 48(1) when read in the context of the above legislative provisions is to ensure that the assessment process, which includes the assessment by the Ordinary Assessment Board and when objection is raised by the review assessment of the Special Assessment Board, is complete before the employee’s contract can be terminated.
68. In construing section 48(1) in this manner, one is not adding any words to the section at all. The reference to the two Boards and the two types of certificates clearly requires a construction by reference to the relevant sections I have referred to earlier.
69. Further in my view there is no uncertainty involved with this construction. The employee has a statutory period of 14 days to lodge the objection. Hence during the 14 day period the employer is not entitled to terminate the contract. If after this period, the employer does not receive any notice of objection, the employer can then proceed to terminate the contract. Bearing in mind that the objection can be served on the 14th day and there is no statutory requirement on the mode of service, it means the notice of objection may be served by post. In which case section 8 of the Interpretation and General Clauses Ordinance (Cap. 1) will apply, namely, the notice is deemed to have been effected at the time at which the notice would be delivered in the ordinary course of post. Again one is not reading additional words into section 48(1) : the laws of Hong Kong govern the operation of this section.
70. Section 48(1) of course provides a power on the Commissioner to extend time generally for the parties to raise objection but this does not mean that the employer will be left in a state of uncertainty. Until such time as the Commissioner grants the extension, the party who wishes to raise objections to the section 16F certificate must observe the statutory time limit of 14 days. This means the general extension of time must be read down as far as the employer’s entitlement to terminate the contract after the 14 day statutory period is concerned. In other words the employer is entitled to terminate the contract after the 14 day period subject to the provision on the time for effecting the notice.
71. In so far as the criminal sanction of section 48(2) is concerned, my view is that my construction of section 48(1) is sufficiently certain to satisfy the requirement of certainty for criminal penalty. Even if the Commissioner granted the extension after the employer terminated the contract at the expiration of the 14 day period, the question of intention to commit the crime or mens rea must be a strong argument assuming that prosecution will somehow be initiated in such an extreme situation.
Legislative history
72. Section 36A of the Workmen’s Compensation Ordinance 1969 Edition provided that the employer cannot without of the Commissioner terminate the contract until either
| ‘(a) |
the workman has been certified by a medical practitioner as fit to resume the work for which he was employed at the time of the accident; or |
| (b) |
compensation for permanent incapacity, whether total or partial, becomes payable to the workman under the provisions of this Ordinance.’ |
73. Even if the legislative intent of this provision can be imported to the current regime, the mechanism relating to objection and review under the current section 48(1) must be given effect to.
74. The former section 48(1) contained in the 1983 Edition of the ECO provided for the following restriction, namely
| ‘(i) |
where the employee suffers temporary incapacity only, the date certified by a medical practitioner or registered dentist as the date on which the period of temporary incapacity ceased or will cease; or |
| (ii) |
where the employee suffers permanent incapacity, the date of issue to the employer of the relevant certificate of assessment under section 16F or, where an objection to the assessment is made under section 16G(1), the date of issue to the employee of the relevant certificate under section 16G(3) or of a further certificate under section 16F, as the case may be.’ |
75. Again I do not consider that the change will vitiate the meaning I have placed on the current section 48(1) because both the Ordinary Assessment Board and Special Assessment Board have to consider both the percentage of the loss of earning capacity caused by permanent disability and the period of absence from duty as a result of the injury. The omission of the words ‘where an objection to the assessment is made under section 16G(1)’ in the current section 48(1) again will have no impact on the construction because these words are clearly superfluous in view of the mechanism by which the section 16G(3) certificate is to be obtained.
Conclusion
76. The interpretation I have advanced is more restrictive than the one adopted by Yam J. in terms of time. But in any event the appeal should be dismissed with costs to the employee because in this case the employer had notice of the objection by the employee to the section 16F certificate at the time when it terminated the contract of employment. As a result the basis for seeking compensation has been established.
Hon Lam J:
77. This appeal concerns the proper construction of Section 48(1)(iii) of the Employees’ Compensation Ordinance [“ECO”] Cap.282. In my view, all three limbs after the word “before” in subsection (1), viz. the three limbs respectively identified as (i), (ii) and (iii), apply to both scenarios set out in (a) and (b) in that subsection. We are dealing with a case where the Claimant was held to be constructively dismissed by the Defendant on 31 May 2005, hence a case covered by (a) rather than (b). Although the reasons for such finding are not clear, parties agreed that it must be treated as binding for the purpose of this appeal.
78. In the present context, the issue is whether by virtue of the objection of the Claimant to the assessment by the Board filed on 30 May 2005, the Defendant was prevented by Section 48(1) of the ECO from dismissing the Claimant on 31 May 2005 even though a certificate under Section 16F of the ECO had been issued by the Ordinary Assessment Board on 26 May 2005.
79. It is also accepted by the Defendant that on 31 May 2005 when the constructive dismissal occurred, it had notice of the objection of the Claimant.
80. For our purposes, the relevant parts of Section 48(1)(iii) read as follows,
“An employer shall not, without the consent of the Commissioner terminate the contract of service … of an employee who has suffered incapacity in circumstances which entitle him to compensation under this Ordinance … before an Ordinary Assessment Board or a Special Assessment Board, as the case may be, has issued a certificate under section 16F or 16G(3), to the employee, the employer and the Commissioner.”
81. It is common ground between the parties that the phase “whichever occurs first” at the end of sub-section (1) has no bearing for present purposes. Mr Lam quite properly and fairly accepted that that phase only designates the earlier of the events in (i) or (ii) or (iii) as the determining event for the embargo on dismissal imposed on the employer. It does not apply internally to the two events identified in limb (iii). Otherwise, since a certificate under Section 16F always precedes a certificate under Section 16G(3), the reference to the latter certificate would be otiose. I therefore make no reference to this phase in my recital of the relevant parts of the section for present purposes.
82. At the court below, Yam J held that in a scenario where there is an objection, the issue of the certificate under Section 16F should not be the end of the embargo period. His Lordship held that the embargo continued to run until the issue of the certificate under Section 16G(3).
83. An objection can be made by the employer or the employee within 14 days after the issue of the Section 16F certificate or within a further time the Commissioner thinks fit: see Section 16G(1).
84. Thus, there might well be cases where an employer has terminated the employment after the issue of Section 16F certificate even before he learnt about an objection being made by his employee. An employee may decide to make an objection only after the employer has exercised his then lawful right to terminate the employment.
85. On Yam J’s construction, such employer would have acted in contravention of Section 48(1) even though he was acting perfectly in accordance with the section at the time when he terminated the employment. In other words, his act of termination is rendered unlawful by reason of some subsequent events, viz. the objection made by the employee and a certificate issued by the Board under Section 16G(3). Under Section 48(2), the contravention is an offence and the employer is liable to a fine at level 6.
86. Assuming an employer seeks advice from his lawyer regarding when would it be safe for him to terminate the contract of service after the issue of a Section 16F certificate, if the law is construed in accordance with Yam J’s approach, the answer is that one can never be 100% sure. As mentioned, though the usual objection period is 14 days, there is no limit to the extension of time that could be granted by the Commissioner. There could be cases where an employee may not immediately realize that he is still suffering from some latent problems arising from the injuries sustained in an accident which may affect his temporary or permanent earning capacity that are not apparent at the time of the original assessment. When such problems become apparent, he might wish to apply for a review of the assessment. Even though the longer the time lapse the less likely for this to occur, I do not think one can safely exclude such possibility. There could also be other cases where the Commissioner might deem it just to grant an extension of time to an employee. Hence, one cannot tell an employer that he can safely terminate the employment after 14 days from the date of the Section 16F certificate.
87. In other words, an employer would subject to an uncertainty as regards the legality of a termination effected after the issue of a Section 16F certificate unless he withholds such decision until the right of review under Section 16G has been exhausted. Even if his employee does not exercise the right of objection immediately, he can still be at risk for an indefinite period. From the employer’s point of view, the only solution is to make an objection himself. That would lead to a Section 16G(3) certificate and definitely stop the restriction period under Section 48(1)(iii). But it would be unreasonable to require an employer to make an objection even though he has no disagreement with the assessment under the original certificate. It would be a wasteful exercise. Further, the net effect of this approach is to render the reference to Section 16F certificate in Section 48(1)(iii) practically otiose.
88. Unless the language used in the legislation clearly mandates this to be the result, I do not believe the legislature intended to achieve such consequence by Section 48(1)(iii). Even though the ECO is primarily for the protection of employees injured in the course of employment, it is still necessary to balance the interest of the employer against that of the employee in the embargo on an employer’s right to terminate the employment. I think the dicta of Lord Hoffmann in Johnson v Unisys Ltd [2003] 1 AC 518 at p.539F-G (cited in another context by Bokhary PJ in Lisbeth Enterprises Ltd v Mandy Luk (2006) 9 HKCFAR 131 at 136) is equally apposite in the present context,
“Employment law requires a balancing of the interests of employers and employees, with proper regard not only to the individual dignity and worth of the employees but also to the general economic interest.”
89. In the course of counsel’s submissions, attempts were made to identify the rationale behind Section 48(1). Whilst it is plain that the general purpose is to maintain the continuity of an injured employee’s employment until he was either fit to resume work or it was clear that he has suffered permanent incapacity (see the Hansard for the second reading of the Workmen’s Compensation (Amendment) Bill 1969 on 22 October 1969 at p.113), it is not that clear as to why, putting aside the possibility of consent of the Commissioner for an earlier termination, it is necessary to wait for the issue of the Section 16G(3) certificate before the embargo is lifted in all cases. There can be instances where the review is about the assessment of permanent loss of earning capacity and has nothing to do with the question of period of temporary incapacity. The decision of the Board upon review is not final. There could be an appeal to the District Court, see Section 18. Further, there can be a review of a Section 16F certificate under Section 16GA. Yet there is no reference to a certificate under Section 16GA(4) in Section 48(1)(iii).
90. The lifting of the embargo would not affect an employee’s right to periodic payments under Section 10 if the period of temporary incapacity is increased upon review and extended beyond the termination of the employment.
91. The scheme under the ECO is meant to provide a simple and prompt solution to problems arisen from employee suffering injury in the course of his employment. In line with such spirit, the extent of the embargo under Section 48(1) must be determinable by reference to a readily identifiable point in time and the dates of the issue of the respective certificates are indeed convenient reference points. Unfortunately, due to the uncertainty regarding the timing for the exercise of a right to object, the reference to a Section 16G(3) certificate creates uncertainty and injustice from an employer’s point of view.
92. However, given that there is a reference to Section 16G(3) in Section 48(1)(iii), one must give effect to it instead of adopting a construction that would render such reference otiose.
93. I can discern six alternative constructions based on the submissions and discussions at the hearing,
(a) The construction of Yam J, supported by Mr Kwok for the Claimant: so long as there is an objection, irrespective of the knowledge or state of affairs at the date of purported termination, the relevant date is the date of the Section 16G(3) certificate;
(b) Mr Lam’s construction: the reference to Section 16G(3) certificate should be read as referring only to cases where an employer raises an objection under Section 16G and has no application to cases where an employee raises an objection;
(c) A construction giving an exclusively disjunctive meaning to the word “or” between the reference to Section 16F and 16G(3). This construction was adopted by the Tribunal. It would render the reference to Section 16G(3) otiose since a certificate under Section 16F always precedes one under Section 16G(3);
(d) A construction enjoining an employer to wait for the 14 days primary objection period before he could rely on a Section 16F certificate to terminate;
(e) A construction enjoining an employer to wait until the issue of a Section 16G(3) certificate if he does not terminate before an objection has been made under Section 16G(1);
(f) A construction enjoining an employer to wait until the issue of a Section 16G(3) certificate if he does not terminate before he is notified of an objection under Section 16G(1).
94. I rule out construction (c) because it would render the reference to Section 16G(3) in Section 48(1)(iii) otiose.
95. Unless the wordings of the legislation exclude all other construction, I would rule out construction (a) because it would create uncertainty and injustice for employer canvassed above.
96. Regarding construction (b), it stems from the concern regarding the uncertainty and injustice that may cause to an employer under construction (a). However, constructions (d), (e) and (f) can also solve the problem. The question is amongst these four competing construction, which is most in line with the wordings of Section 48(1)(iii) reading in the context of the ECO as a whole.
97. With respect to Mr Lam, given the change in the structure of Section 48(1) under the 1995 amendments, I do not think one can derive support for construction (b) by referring to the wordings in the 1982 version of the section. On the current wordings of Section 48(1)(iii), I do not see any justification for confining the reference to Section 16G(3) to a review occasioned by objection coming from the employer.
98. Regarding construction (d), I cannot see why there should be a waiting period of 14 days before an employer can rely on a Section 16F certificate. As mentioned, the 14 days period is not conclusive to the exercise of right of objection. Sensible though this position might be, I cannot see myself through a construction adopting part of Section 16G(1) on the objection period but discarding another part. Hence, this result cannot be achieved by reading Section 48(1)(iii) together with Section 16G(1). On the other hand, if one were to adopt the full formula for the objection period under Section 16G(1), viz. including the possibility of extension of time by the Commissioner, it would create the same kind of uncertainty and injustice for an employer as that arisen under construction (a).
99. Before I consider construction (e) and (f), it is helpful to highlight three points in respect of Section 48(1)(iii). First, the embargo is imposed upon an employer only. There is no corresponding embargo imposed upon the employee. Though the underlying assumption is that the employee is under temporary incapacity and thus usually unable to work during the embargo period, there is nothing to stop him from terminating the employment if he wishes to do so for some reasons (e.g. if he gets a job with a better offer or better prospect taking into account of his injuries and likelihood of recovery). Hence, the state of mind of the employer should be the primary focus for the purpose of Section 48(1)(iii).
100. Second, termination is a one-off event instead of a continuing state of affairs. In general, one should determine the validity or legality of a particular act with reference to the prevalent circumstances when the act is committed. In the present context, the relevant act is the termination of the contract of employment by the employer. Fairness dictates that the validity and legality of the termination should be adjudicated by reference to the position as at the date of termination.
101. Third, there will not be any certificate under Section 16G(3) unless there is an objection made under Section 16G(1). Hence, in the 1982 version, the reference to the Section 16G(3) certificate was preceded by the pre-condition “where any objection to the assessment is made under Section 16G(1)” in Section 48(1)(ii). This pre-condition is omitted in the current version of Section 48(1)(iii) but in my judgment, it must be implicit. Otherwise, it does not make sense to refer to a Section 16G(3) certificate.
102. It follows that the proper application of Section 48(1)(iii) requires an examination of the situation on the date of termination as known to the employer. If the employer were not aware of any objection under Section 16G(1) when he exercises the right of termination, the reference to Section 16G(3) in Section 48(1)(iii) is irrelevant. This supports construction (f).
103. This construction requires the reading of the reference to Section 16G(3) with this implicit pre-condition: “where the employer is aware of an objection under Section 16G(1)”. I am of the view that this is a fair implication given the three points I made above. Furthermore, I do not think this construction does violence to the language used in Section 48(1)(iii). To the contrary, I believe it is giving effect to the legislative intent by restricting the application of the reference to Section 16G(3) to its proper scope. A similar approach was adopted by the Court of Final Appeal in Ho Choi Wan v Hong Kong Housing Authority (2005) 8 HKCFAR 628 at 664I to 665C.
104. Construction (f) will achieve a just and certain result. There is a concern that such construction will hasten the termination of the employment by some employers as soon as a Section 16F certificate is issued. A couple of points can be made regarding such concern. First, in most cases, a notice of termination has to be given. If an employee made an objection under Section 16G(1) after the service of the notice of termination, an employer may be obliged to withdraw the notice of termination: the failure to withdraw the notice may amount to termination in contravention of Section 48(1)(a) even though the earlier giving of notice does not contravene Section 48(1)(b), c.f. Section 15(1)(b) of the Employment Ordinance. I only put this on a tentative basis since the point has not been argued before us.
105. Second, an employer who takes advantage of the time gap between a Section 16F certificate and his notice of Section 16G(1) objection to terminate is likely to terminate the employment in any event.
106. Third, I understand that as a matter of practice the Board would not make any assessment until the condition of an employee has been stabilized. Even though there could be cases where the period of temporary incapacity may increase upon review, it is unlikely that the adjustment would have any significant impact on the monetary entitlement of an employee. In any event, the employee would not suffer any prejudice in terms of periodical payments under Section 10.
107. I prefer construction (f) to construction (a).
108. In the present case, the Defendant was aware of the objection under Section 16G(1) at the time of the constructive dismissal. Hence, it is subject to the embargo under Section 48(1)(iii). The appeal should therefore be dismissed.
109. Since the case will be remitted back to the Tribunal for consideration of an award under Section 32P of the Employment Ordinance, I should add that the Tribunal needs to consider Section 32P(2) together with Section 32A(1)(c) and Section 32K. Though the issue of constructive dismissal cannot be re-opened, there has not been any consideration of the other issues raised in these statutory provisions at any stage. The Tribunal had dismissed the Section 32P claim on an incorrect interpretation of Section 48(1)(iii). Yam J had allowed the appeal and remitted the matter back to the Tribunal. When the Tribunal comes to deal with the matter again, I cannot see why it is not necessary to consider the other issues relevant to a Section 32P claim.
Hon Tang VP:
110. By a majority the appeal is dismissed with costs. The respondent’s costs are to be taxed in accordance with legal aid regulations. The matter is remitted to the Labour Tribunal for assessment of compensation under section 32P of the Employment Ordinance.
(Robert Tang)
Vice-President |
(Peter Cheung)
Justice of Appeal |
(M H Lam)
Judge of the Court of First Instance |
Mr. Paul Lam, instructed by Messrs Woo, Kwan, Lee & Lo for the Defendant.
Mr. Tim Kwok, instructed by Messrs Au Yeung, Cheng, Ho & Tin assigned by Director of Legal Aid for the Claimant.
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