SIT ANDREW v. OTS CAPITAL MANAGEMENT LTD

HCLA 20/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 20 OF 2016

(ON APPEAL FROM LBTC 2155 OF 2015)

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D EC I S I O N

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Introduction

1.  This is an application of Mr Sit for leave to appeal against a decision of Mr Andy Cheng, Presiding Officer of the Labour Tribunal (“the Tribunal”) dated 5 August 2016 (“the Decision”) whereby the Presiding Officer, after a review hearing held on 29 April 2016, 24 June 2016 and 15 July 2016, maintained his dismissal of the major part of Mr Sit’s claim against OTS Capital Management Limited (“the Company”) on 26 February 2016 after a 3-day trial. Mr Sit was also ordered to pay the Company a sum of HK$5,470.00 with interest to be released out of the account of the Tribunal into which Mr Sit had previously paid.

2.  Mr Sit wishes to appeal against this part of the Decision only. For completeness, the Presiding Officer also allowed Mr Sit’s claim of annual leave pay in the sum of HK$411.87.   

3.  This application is made under section 32(1) of the Labour Tribunal Ordinance, Cap 25.  It is not in dispute that such an application can only succeed on the grounds that the awards/orders of the presiding officer are either erroneous in point of law or outside the jurisdiction of the Tribunal. Accordingly, challenges as to findings of credibility and facts are not within the permissible ambit of appeals from the Tribunal.

The claim

4.  Mr Sit assumed the post of Chief Operating Officer of the Company, which carried on the business in investment management in Hong Kong. His employment started on 29 December 2014 and was terminated on 31 May 2015. His monthly salary stated in the written employment agreement dated 27 December 2014 was HK$96,875. The work hours were stated to be from 9 a.m. to 6:00 p.m. with an one-hour lunch break between 12:00 p.m. to 2:00 p.m.. It was expressly provided that the Company reserved its right to vary these hours.

5.  The underlying complaint of Mr Sit is that the Company unilaterally varied the employment agreement by its 75% reduction of Mr Sit’s monthly salary to HK$23,007.81 from March 2015 onwards. Mr Sit claims that this constituted the wrongful termination of the employment agreement by the Company.

6.  Mr Sit claimed wages in lieu of notice in the sum of HK$96,842.63, arrears of wages in the sum of HK$327,968.75, annual leave pay and relocation allowance in the sum of HK$54,000. Mr Sit at the hearing confirms that his application concerns his claim in respect of arrears of wages and wages in lieu of notice only.

7.  Mr Sit testified before the Tribunal that on 26 February 2015, there was a meeting with the two founders of the Company and one Mr Xun who was one of the directors of the Company (“the Meeting”). A variation of the employment agreement had been discussed and it was suggested by the founders that the salary of Mr Sit and Mr Xun should be reduced by 75% in consideration of lesser work hours. Mr Sit’s evidence was that he kept silent throughout without any expression of his alleged agreement to the proposed variation.

8.  On the other hand, both Mr Xun and Mr Hsu, one of the founders, testified for the Company. Mr Xun maintained that during the Meeting both Mr Sit and he agreed to the pay cut. Mr Hsu recalled clearly that the other founder expressly asked Mr Sit and Mr Xun whether the proposed reduction was fine with them. He heard Mr Sit’s positive reply.

Analysis

9.  Whether Mr Sit actually agreed to the pay cut at the Meeting is clearly a question of fact. The Presiding Officer preferred the evidence of Mr Hsu and Mr Xun whom he found to be honest and reliable. He also found their testimony supported by contemporaneous documents in the form of emails sent to them with reference to the pay cut (the one dated 27 February 2015) after the Meeting. Mr Sit accepted did not raise any objection to the contents of such emails at all. He further accepted the reduced salary payments without demur until May 2015.

10.  It is noteworthy that the Presiding Officer was not impressed with the evidence of Mr Sit and concluded that he was not an honest witness.

11.  The factual finding that Mr Sit did agree to the pay cut was certainly open to the Presiding Officer on the evidence available to the Tribunal. The Presiding Officer after hearing Mr Sit and all other witnesses for the Company and looking at the evidence in the round was well entitled to conclude that the defence evidence is more credible. In the Decision, the reasons for his factual conclusion are fully elaborated. I can see no basis to interfere with his finding at all.

12.  Mr Sit impressed that his silence and initial acceptance of the pay cut could not be held against him. He further maintained that after the Meeting, contrary to the alleged reduction of his work hours he actually worked almost the same hours. Thus, he maintains that there was no agreement to vary the terms of the employment agreement at all.

13.  I cannot accept his submission. The Presiding Officer was clearly entitled to take into account his silence and initial acceptance of the pay cut in his consideration as to whether an agreement had been reached to vary the employment agreement at the Meeting. They pointed to the actual conclusion of the agreement and the parties’ performance of the same.

14.  The Presiding Officer was well aware of the conflicting evidence concerning Mr Sit’s actual work hours after the agreement to vary was allegedly reached. I agree with his analysis. Mr Sit was merely given liberty to work lesser hours but if he so wished he could certainly keep the same hours or even work longer hours. The pay cut was the direct result of the poor start of the business of the Company. There must be incentive for him to work harder so as to improve the business of the Company. The Presiding Officer very fairly accepted his allegation that he worked more or less the same hours but this is of marginal relevance to the core factual issue as to the existence of the agreement to vary only.

Conclusion and Order

15.  For the reasons given above, I cannot accept that Mr Sit is able to show that the Presiding Officer erred in law or that his factual findings were perverse and/or irrational. The authorities cited by him have no relevance to his application at all. Mr Sit’s application for leave to appeal must fail and I dismiss it accordingly.

16.  I make no order as to costs.