TSO MAN WAH v. GOLDEN SAND (HOLDINGS) LTD

HCLA141/2003

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 141 OF 2003

(ON APPEAL FROM LABOUR TRIBUNAL

CLAIM NO. 4285 OF 2003)

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 J U D G M E N T

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1.  This is an appeal by the 2nd Defendant, Golden Sand (Holdings) Limited, against the award of the Presiding Officer in Labour Tribunal Case No. 4285/2003, made on 8 October 2003, subsequently confirmed on 5 November 2003, upon review. 

2.  By that award, the Presiding Officer awarded in favour of the Claimant, against both the 1st and 2nd Defendants jointly, the total sum of $20,383.66.  The basis on which the Presiding Officer made an award against both the 1st and 2nd Defendants seemed to be that, according to the finding of the Presiding Officer, both the 1st and 2nd Defendants were the employers of the Claimant.  This is set out in paragraph 7 of the Presiding Officer’s Chinese reasons for decision, where the Presiding Officer said this: 

“有關誰是答辯人的僱主方面，本席注意到兩名被告人皆能對答辯人的工作有相當的控制，就算是在第一被告人中，沒有任何職位的，曹文俊（譯音）也能對答辯人給予指示。上訴人更對答辯人有著發薪及強積金方面的僱主應負之責任，加上蔡比辛（譯音）小姐所說的，上訴人在雲石業務於行政方面之參與。本席認為上訴人與第一被告人是在他們共同經營的雲石業務中僱用答辯人的，他們同樣是答辯人的僱主。”

3.  This Court granted leave to appeal on 12 March 2004 on two grounds.  I would not read out the grounds at this stage.  But in the course of today’s hearing, a third ground was added and leave was granted for that to be added on condition that the Appellant shall file an amended form 14 by 4 pm tomorrow. 

4.  Before the case was set down for a proper appeal hearing, there was a callover hearing on 4 May 2004.  During the course of that callover hearing, the Claimant indicated to the Court that he did not intend to oppose the appeal and therefore he does not attend today’s hearing. 

5.  In today’s hearing, Mr Wong, counsel for the Appellant, relies, initially, strongly on the facts that in the written contract of employment, the 1st Defendant was named as the employer.  He has taken me to two employment contracts.  The first one is a contract appearing at page 89 to 91 of the appeal bundle, and the second one is a contract called “New Employment Contract” appearing at page 85 to 88 of the bundle.  In both of those, the name of the employer was the 1st Defendant.  Also, the request for variation of the contract, which subsequently led to the termination of the employment, was also made in the name of the 1st Defendant.  My attention was also drawn to the respective provisions in these contracts under which the employer has reserved the right to second the employee to work for other companies within the same group (see clause 4 in the first contract and clause 5 in the second contract).  Mr Wong submitted that since the Claimant had signed these agreements, he should be bound by the terms of these agreements, and, given that the contracts provided that the 1st Defendant was the employer, there is no basis to say the 2nd Defendant was a co-employer. 

6.  However, it seems to me it is a question of fact as to who was, or were, the employers of the Claimant.  Of course the contract is a piece of evidence that the Presiding Officer must pay regard to but, in my judgment, the Presiding Officer did have the contractual documents in mind because he referred to the contract in paragraph 1 of his reasons for decision.  So I do not think it can be suggested that the Presiding Officer ignored the contract when he assessed the situation before giving his decision.  If one looks at the contract, there is no reference to the 2nd Defendant as the employer.  But the Presiding Officer referred to various other matters in coming to his finding that the 2nd Defendant was a co-employer.  One thing which must have bothered the Presiding Officer very much at the time when he reached his conclusion is the fact that the salary of the Claimant had all along been paid by the 2nd Defendant.  The Mandatory Provident Fund was also contributed by the 2nd Defendant.  So there are various matters that the Presiding Officer was entitled to take into account in making a finding as to the identity of the employers.  It seems to me that, in paragraph 1 of his judgment, the Presiding Officer has all these matters in his mind. 

7.  Subject to what I have to say with regard to other grounds below, I think, ultimately, it is a question of fact and the Presiding Officer did refer to all relevant factual matters in coming to a finding.  Of course the finding as to who were the employers is not a pure finding of primary facts as such.  The primary facts are that, in the contracts, the 1st Defendant was stated to be the employer and, on the other hand, the salaries and the Mandatory Provident Fund were contributed by the 2nd Defendant.  The Presiding Officer also referred to the fact of instructions being given to the Claimant by the 2nd Defendant.  This is a matter that I have to refer back to later on but, on the whole, it is a question of fact, and subject to what I say as to the other two grounds, I do not think the Presiding Officer committed any error of law as suggested in ground 1 of the grounds of appeal. 

8.  I move on to deal with the other grounds.  The second ground of appeal deals with the Presiding Officer’s finding that the Appellant had control over the Claimant’s work.  The Presiding Officer seems to be under the impression that PW2, Mr Tso Man-chun, held no positions with the 1st Defendant.  He says so in terms in paragraph 7 of his reasons for decision.  To some extent, he might have been confused due to the evidence of Mr Tso at the beginning of his testimony that, at the time of the trial, he held no position in the 1st Defendant.  But the situation appears to be different at the time when these events took place.  According to the annual returns placed before the Tribunal which Mr Wong has taken me to, Mr Tso was actually a director of the 1st Defendant at the time when the Claimant worked for the 1st Defendant.  So there was a misunderstanding of the evidence on the part of the Presiding Officer in paragraph 7 of his reasons for decision.  With that error, it undermines the finding of secondary fact that the 2nd Defendant was a co-employer of the Claimant. 

9.  As regards the payment of the salaries, I accept, prima facie, this is also a piece of evidence of employment.  In other words, the one who paid the salary is prima facie the employer.  Of course it is a question which depends on the whole circumstances of the case.  In a situation where there is a group of companies, the company who issues the cheque for payment of salaries may not be the true employer.  It depends on the arrangement within the group. 

10.  Some explanation has been offered by the witnesses called by the defence to establish that it is due to internal arrangement that the salaries payable by the 1st Defendant to his employees were paid by the 2nd Defendant.  The Presiding Officer rejected that evidence on the ground of credibility.  This is something that cannot be appealed against.  So if the matter stopped there, this Court cannot intervene in terms of the Presiding Officer’s reliance on the fact that there had been payment of salaries by the 2nd Defendant to the Claimant as indication of employment by the 2nd Defendant. 

11.  However, there is a document, which the Presiding Officer did not refer to, which seems to be of some significance.  In the exhibit bundle at page 151, there is a payroll for the group and it can be seen that, in the payroll, the employees’ names were divided into different categories, depending on the name of their employer.  According to that payroll, the Claimant was under the employment of the 1st Defendant.  So this is a document which seems to support the 2nd Defendant’s version.  Unfortunately, it has not been referred to by the Presiding Officer and probably it had escaped his attention.  This is the document relied upon by Mr Wong in his third grounds of appeal. 

12.  Given the payroll document and the mistake about the control exercise over the Claimant by the 2nd Defendant in terms of Tso Man-chun as referred to earlier, I am of the view that the Presiding Officer’s finding in paragraph 7 of his reasons for decision is tainted by errors of law and this Court is duty bound to set it aside.  So I will allow the appeal and set aside the award of the Presiding Officer against the 2nd Defendant.

13.  Since the Claimant has indicated that he would not oppose the appeal on 12 May 2004, and having regard to the payroll and also bearing in mind that the award against the 1st Defendant still stands, I do not think it is a case that I should remit the case to the Labour Tribunal for re-trial.  I do not think it will serve any useful purpose.  Bearing this in mind, I would dismiss the claim against the 2nd Defendant.