YAM MEI CHING v. TELE-ART LTD.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APP. NO. 38/93

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J U D G M E N T

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1. This is an appeal against the decision of the Labour Tribunal giving an award in favour of the respondent (the claimant) against the appellant (the defendant) for wages in lieu of notice and long service payment.

2. The respondent was first employed by the appellant in 1981 in the store department. For about seven or eight years prior to April 1993, her main responsibility was to make a record of in-coming and out-going stock by making entries in a computer and also to carry out auditing work thereof. After she returned to work from maternity leave in April 1993, she was asked to do extra work the nature of which was in dispute. She said that she could not cope with such work. She talked to her superior but was told to continue. She therefore referred the matter to the Labour Department and was advised to leave the employment. She lodged a claim against the appellant for wages in lieu of notice and severance payment or alternatively long service payment. The Presiding Officer upheld her claim.

3. According to the respondent, for the last seven of eight years, prior to her maternity leave, her work involved wholly of making entries in the computer, that is, desk work. She did not have to take any physical delivery of the goods or stock. She complained that since 1991, the appellant had been dismissing its staff because of computerisation and that at least five staff members were dismissed at the end of 1991. She also said that there were originally herself and another staff doing the same type of work but that other person had already been dismissed. She said that after her return from maternity leave, she was asked to do the work of a godown keeper, that her original work was undertaken by the section heads and that there was no one else to replace her in the original post. She said that in the new job, she had to do the counting of the goods or stock when they were delivered by the male staff. She had to examine them before moving them to particular places in the godown for storage. She said that she had never seen those goods before. They were bulky. And although she could ask someone else to help her as a favour, she had to move the goods herself to the designated places. She said that such new work involved physical work with which she could not cope. One of her former colleagues also gave evidence on her behalf. She confirmed that the previous work did not have to involve taking delivery of the goods. At first she and the respondent were in the same section. However she was subsequently transferred to another section.

4. The appellant's case was that the respondent was not given a new job but was only given extra duty. The respondent had always been a storekeeper. There was a change of system whereby the respondent was not only asked to do the computer work but also to accept delivery, count the items and move the goods around. In other words, previously there were staff doing the delivery work, the counting and moving of the items and other staff making entries of such records in the computer. After the change of system, each person was to take delivery, count the items, move the goods and make entries into his computer. It was estimated that for the respondent, the extra duty only involved about 1/3 of the working time and the respondent continued to work on the computer for the remaining 2/3 of her time. There was also another person employed to take over the respondent's previous work. A worker also gave evidence on behalf of the appellant. He was responsible for taking delivery. He said that after taking a delivery of goods, he would take them to the respective sections. There the goods were counted in the presence of the staff and after counting, taken to appointed or designated places. He said that while it would not be necessary for the staff at the store department to carry the goods, the staff in the store would have to stack them up. In other words, he confirmed to some extent that the person working at the store department had to at least stack up the goods. However, he added that if he was requested, he would also come up to help.

5. In a very short (and probably impromptu) judgment, the Presiding Officer gave judgment for the respondent. He said:-

"It is not in dispute that after her maternity leave, the claimant was given extra duty, namely that of the stock keeper. Claimant alleged that her work involved physical movement which is different from her former duties as a computer data processor. She claimed that in effect she had been given a new job she could not handle and was constructively dismissed.

I found that even on Defendant's admission, the new post involved some physical movement and that would in effect make it very difficult to continue working. I found she was dismissed constructively.

On the question of lay-off, I found that the Defendant in a admitting by its witnesses there was no one to replace Claimant's previous post."

6. Counsel for the appellant argued that the Presiding Officer had failed to discharge his statutory duty to investigate all matters which were relevant to the claim, particularly the question of redundancy. Counsel relied on the case of Chan Suk Bing, Angie v. Harbour Phoenix Limited, Labour Tribunal Appeal No. 46 of 1991. Counsel submitted that the Presiding Officer was wrong to hold that there was an admission by the appellant's witnesses to the effect that there was no one to replace the respondent in her previous post. He said that that admission, appearing on page 8 of the Notes of Proceedings, was clearly a qualified one which was preceded by a conflicting answer in the earlier part of the evidence. He argued that the Presiding Officer was also wrong in failing to call the boy who was said to replace the respondent. Counsel also submitted that the Presiding Officer had wrongly applied the test relating to redundancy under s.31B(2)(b) of the Employment Ordinance, Cap.57 when he was dealing with long service payment. It was also submitted that the Presiding Officer had obviously shown concern over the physical condition of the respondent but had failed to consider or consider adequately the provisions of s.31R(1)(a)(ii) and s.10(aa) of the Employment Ordinance which required the production of a proper medical certificate before she was entitled to terminate the contract of employment without notice or payment in lieu of notice. Finally, counsel argued that the Presiding Officer had failed to indicate how the award for long service payment had been arrived at. In any event, he was wrong to base the monthly wages of the respondent as $8,000 when it should have been $7,150.

7. The first and main issue in this case is whether the respondent was constructively dismissed by the appellant. The law is quite clear. A contracting party cannot unilaterally change the terms of the contract significantly without the consent or agreement of the other party. If there is a material variation of the contractual terms, the other party is entitled to treat this as a wrongful repudiation of the contract. He can accept the repudiation and regard the whole contract as at an end. The same applies to a contract of employment. If the worker's nature of work had been materially and significantly changed unilaterally by the employer, the worker is, in my view, entitled to treat the employer as having repudiated the contract. He can accept such repudiation and put an end to the employment. He would be regarded as having been constructively dismissed. The question in this case is whether there had been a material or significant change in the nature of work of the respondent after her return from maternity leave.

8. It was suggested that the respondent had all along been employed as a storekeeper or godown keeper and that the work which she was asked to do after her maternity leave was an extra duty. I do not think the name of the post is all that important. It is the nature of the work which matters. Furthermore, whatever the respondent was first employed to do in 1981, it is quite clear that for the last seven or eight years before her maternity leave, she had been asked to work exclusively at the computer. It was basically desk work. She did not have to take delivery of the goods, or to move them, or to count them, or to stack them up. After her return to work, she had to do all these. The evidence on this part of the case was overwhelming. Both CW2, her former colleague and DW2 testified to this effect. Some of the goods were bulky while others were smaller. Although there was evidence that if the respondent could not manage, she could request for help from other male staff, it is clear that the respondent was indeed required to count, examine, move the goods and stack them up in designated places. There was of course the evidence that such heavy work only occupied 1/3 of the respondent's working time, but the Presiding Officer had apparently rejected that. It seems that it was not disputed that the work which the respondent was asked to do after her return to work did involve some physical movement of the goods. Before then, she was not required to do so and had not done so. In my view, based on such evidence, a reasonable tribunal is entitled to come to the conclusion that there was a material or significant change in the nature of work the respondent was required to do after her return from leave. I do not think the Presiding Officer could be accused of not investigating on this issue; a total of four workers, including the respondent, having testified before him on this issue. I think he was entitled to conclude that there had been a constructive dismissal.

9. This is a case of unilateral variation of the nature of work by the employer. I do not think s.10(aa) of the Employment Ordinance was ever invoked or applicable. It is not a case where a worker having been working at a post for some time suddenly found himself incapable of continuing because of physical unfitness. If that was the case, the proper medical certificate might be necessary. In the present case, I do not think the lack of medical certificate was relevant.

10. Since the respondent was constructively dismissed, she was rightly entitled to, as the Presiding Officer decided, wages in lieu of notice.

11. In the judgment which was rather brief, the Presiding Officer referred to "lay-off". This might suggest that he was making an award for severance payment. But there is no clear finding as to that. He also found that the appellant had to pay $60,889, but did not specify what it was for. However, the award appearing on page 3 of the Notes of Proceedings stated that this amount was for long service payment and not severance payment. Even if the award was for the latter, I do not understand why there was a reference to "lay-off". If the award he had made had been for severance payment by reason of redundancy, I think counsel's criticism would be valid. The appellant's "admission" that there was no one to replace the respondent in respect of a post which had been cancelled, was clearly not unequivocal. This was because earlier on the same page of the Notes of Proceedings, there was not only a denial of that but there was also reference to the employment of a boy in place of the respondent. Although there was the allegation by the respondent that the appellant had been dismissing people since 1991, I do not think there was any real evidence to support that. The other person who was doing the same work as the respondent was clearly still working with the appellant and not dismissed. In other words, there is evidence both supporting as well as rebutting the allegation of redundancy. In the absence of a specific finding by the Presiding Officer, I do not think I can say that the appellant had or had not rebutted the presumption in favour of redundancy. If it had been an award for severance payment, I should think that the Presiding Officer should have investigated further into the issue and made a more specific finding. As it turned out, his award was for long service payment. I would therefore approach it as an award for that purpose and not for severance payment by reason of redundancy.

12. The respondent was clearly under 41 years of age but had a service of more than 10 years. In view of the finding of constructive dismissal, she was clearly entitled to long service payment under s.31R(1). However, I agree with counsel for the appellant that the Presiding Officer had clearly failed to set out the basis on which he arrived at the figures of wages in lieu of notice and long service payment. He simply followed the figures claimed by the respondent. However, in doing so, the Presiding Officer was clearly in error. The respondent claimed that her monthly salary was $7,150 with another $900 as a discretionary bonus. While she claimed $7,150 as wages in lieu of notice, she however adopted $8,000 for the purpose of calculating severance payment or long service payment. The Presiding Officer, in making the award, had apparently accepted these two figures lock, stock and barrel without giving the matter any thought at all. These two figures are of course inconsistent with one another. I should think that if the Presiding Officer had accepted (as he apparently did) $7,150 as the monthly wages, that should be the figure to be adopted in calculating long service payment. The respondent had worked for the appellant from 10th November 1981 to 15th April 1993, a total of 137 months. Applying the provisions of s.30V(1)(a), the long service payment should be $7,150 x 2/3 x 137/12 giving $54,419.44. That , I think, should be the correct figure. With respect, the Presiding Officer was wrong in blindly accepting the figures claimed by the respondent. In the circumstances, I would dismiss the appeal with regard to the wages in lieu of notice, but would allow in part the appeal against the long service payment and vary the award to $54,419.44. I would also make an order nisi that there should be no order as to costs in this appeal.

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