HUI KING FAI v. THE HONG KONG COUNCIL OF SOCIAL SERVICE

HCLA 9/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 9 OF 2016

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM
NO 1718 OF 2015)

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J U D G M E N T

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Introduction

1. This is an appeal against an award of the Labour Tribunal (“the Tribunal”) dated 12 April 2016 whereby the Tribunal awarded $150,000 against the appellant (leave to appeal has been given in June 2016).  It is resisted by the respondent.

2. The appellant is a federation of non-government social service agencies.  The respondent was employed as its chief officer since July 2007.  She was dismissed on 30 April 2015 with two months’ wages in lieu of notice together with other payments.

3. Her claim in the Tribunal was brought pursuant to Part VIA, Employment Ordinance (Cap 57) (Employment Protection).  The Tribunal’s award was based on s 32P, Cap 57 (Award of compensation) which is one of the provisions in Part VIA thereof.  This sum is the focus of this appeal.

Background

4. Although the appellant’s organizational hierarchy is not entirely clear, it appears that the respondent’s post was part of the top management team, having frequent and/or regular access to, and direct work contacts and/or relationship with, people such as its chairman, business director (the respondent’s direct supervisor), and director of human resources and administration.

5. The scope of the respondent’s duties can be found in the appellant’s offer letter dated 26 June 2007.  In essence:

(a) she was to work with the international and regional networking team;

(b) she would be a member of the senior management team;

(c) her task was to assist her direct supervisor in strategic planning, resources allocation, and the promotion and evaluation of strategic goals;

(d) she would head the functional unit under her direct supervisor and be responsible for the said unit;

(e) as the said unit head, she would provide expertise on (1) exchanges, and collaboration, with social welfare organizations in the Mainland, (2) managing, and sharing, regional and international information, knowledge and good practice, (3) organizing regional or international conferences, seminars and study visits, (4) monitoring the compliance with international conventions regarding social welfare and social development in Hong Kong;

(f) she was to work with the appellant’s standing committee in formulating, implementing and reviewing business plans for the appellant’s strategic objectives;

(g) she would establish and maintain an effective network with local and international strategic partners;

(h) she would undertake any other assignments given by the chief executive (or his representative).

6. The complaints laid out in a complaint letter dated 18 November 2013 from the respondent to the appellant’s chairperson (“the 2013 complaint letter”) may shed light on the deterioration in the employment relationship (the 2013 complaint letter bears a heading “Examples of Unlawful Discrimination and Victimization of Ms Fang, Mr Chua and Relevant Top Management from 2008 to Now”).  Overall, the 2013 complaint letter referred to:

(1)   events giving rise to her complaints during the period from October 2008 to September 2010 (the Tribunal’s reasons for decision dated 29 April 2016 (“the Apr 2016 decision”) appears to regard this as the “first period”: para 25 thereof);

(2)   the settlement agreement of 14 September 2010 (“the 2010 settlement”);

(3)   events giving rise to her complaints during the period from September 2010 to November 2013 (which the Apr 2016 decision described as the “second period”: para 27 thereof).

7. The 2013 complaint letter is about 10 pages long.  There is no need to set out the details for present purpose:

(a)   during the “first period”, the respondent had been discriminated against, bullied and victimized by her direct supervisor, and the other top management members ignored her above complaint;

(b)   further, the respondent was not given her annual salary increment since April 2008 (until after the 2010 settlement);

(c)   during the “second period”, the respondent was further mistreated in that the 2010 settlement was not honoured (her suggested improvements were not followed up; the interest for her back pay was not paid), and that both the scope of work and manpower of her team were wrongly trimmed down as a result of the top management’s trickery and fabrication, unfairness, and victimization (or oppression) of the respondent.

8. According to the Apr 2016 decision, the appellant’s chairman considered he should not handle the 2013 complaint letter himself.  Consequently, an independent committee was set up to look into the complaints.  In a report released on 1 April 2014, the independent committee concluded in effect that:

(1)   there was no breach of the 2010 settlement;

(2)   the respondent’s demand for interest on the back pay for her annual salary increment was not sufficiently justified;

(3)   the complaint of continued discrimination and victimization was unfounded.

(“the 2014 report”)

9. The respondent lodged a claim at the Tribunal in 2014 to claim for the interest for the back pay for her annual salary increment (LBTC 856/2014).  The Tribunal dismissed the claim in September 2014 essentially on the ground that the claim was unfounded.  The respondent’s appeal to the High Court (HCLA 23/2014) and application for leave to appeal to the court of appeal (HCMP 387/2015) were dismissed.

10. The Apr 2016 decision also recorded that the respondent had made a report to the police against the appellant’s witnesses for perjury during the hearing of LBTC 856/2014.

Issues in This Appeal

11. The grounds put forth by the appellant in support of this appeal can be summarized as:

(a)   whether the Tribunal erred in concluding that s 72B(1), Cap 57 was applicable to the respondent’s claim;

(b)   if the answer to sub-para (a) above is in the affirmative, whether the respondent was dismissed for a valid reason (s 32K, Cap 57);

(c)   whether the appellant’s staff manual formed part of the respondent’s employment contract with the appellant.

(para 8, appellant’s skeleton submissions)

12. They will be discussed under the sub-headings below.  For this purpose, it appears more convenient for para 11(b) and (c) above to be discussed together under the same sub-heading.

(a)  S 72B(1), Cap 57

13. The relevant parts of s 72B(1), Cap 57 provide:

“No employer shall terminate … the employment of, … any of his employees by reason of the fact that the employee has –

(a) given evidence, … in any proceeding for the enforcement of this Ordinance;

(b) given information to a public officer in any inquiry made by such officer for the purposes of or in connection with the enforcement of this Ordinance … ” (emphasis supplied).

14. It is undisputed the respondent has commenced LBTC 856/2014 in March 2014, and testified at the hearing thereof in August 2014 (para 9 above).

15. Further to s 72B, the relevant parts of s 32A(1), Cap 57 provides:

“An employee may be granted remedies against his employer under this Part-

(c) where he is dismissed by the employer other than fora valid reason within the meaning of section 32K and in contravention of-

(i) … 72B(1); …” (emphasis supplied).

And s 32A(5) provides:

“For the purposes of subsection (1)(c), an employee shall be entitled to remedies under this Part if and only if-

(b) in relation to a dismissal in contravention of section 72B(1), the employee has done any of the things mentioned in that section within a period of 12 months immediately preceding such dismissal by the employer” (emphasis supplied).

The plain language of s 32A(1)(c)(i) requires two things: the dismissal was (i) without a valid reason, and (ii) in contravention of s 72B(1).

16. Finally, in relation to burden of proof, s 32A(4) stipulates in effect that, for the purpose of s 32A(1)(c):

(1)   it is unnecessary for an employee to prove that the dismissal was by reason of the fact of his doing any of the things mentioned in s 72B(1);

(2)   an employee is taken to have been dismissed without a valid reason unless a valid reason is shown for that dismissal (within the meaning of section 32K).

17. As stated above, the respondent was dismissed in April 2015, and she testified before the Tribunal in August 2014.  The dismissal therefore took place within the 12-month period provided for in s 32A(5)(b), Cap 57.  Such being the case, in accordance with s 32A(4):

(a)   the respondent did not need to prove she was dismissed because she had given evidence before the Tribunal in August 2014 (s 32A(4)(a)(i));

(b)   the appellant had to prove that there was a valid reason for the dismissal.

18. It appears that the Tribunal found that there has been a violation of s 72B(1): para 6, 10, 13 and 14, the Apr 2016 decision:

“Violation of section 72B(1) alone would not entitle the [respondent] for any award under 32N or 32P if the [appellant] could provide a valid reason for it” (I assume for present purpose the last word “it” referred to the dismissal);

“It is clear from the above provisions that … if [the respondent] had [exercised any rights mentioned in 72B(1)] within 12 months before she was dismissed, the [respondent] would be entitled to remedies unless a valid reason was shown by the [appellant]”;

“If [the respondent] had done any of the acts mentioned in section 72B(1) within 12 months immediately preceding such dismissal then she would be entitled to remedies, unless the [appellant] could show that there was valid reason within 32K for the dismissal”;

“As the [respondent] did indeed give evidence in connection of the enforcement of [Cap 57] within the 12 months before she was …, the only issue now for the [Tribunal] to decide is whether the [appellant] had a valid reason to dismiss the [respondent]” (emphasis supplied).

However, the said finding was made apparently before the Tribunal determined the factual issue of why the respondent was dismissed; that issue was set out in para 18 to 66 (in particular para 54 to 66 (under the heading “Analysis of the Evidence”)), the Apr 2016 decision.

19. I am not entirely sure that is a correct way of approaching the matter for the following reasons.

20. First, as stated above, two things are mentioned in s 32A(1)(c)(i): (i) a dismissal for want of a valid reason, and (ii) a dismissal in contravention of s 72B(1).  Theoretically, a dismissal may be caused by:

(1)   both a contravention of s 72B(1) and other than for a valid reason;

(2)   a contravention of s 72B(1) but with a valid reason;

(3)   no contravention of s 72B(1) but other than for a valid reason;

(4)   no contravention of s 72B(1) and with a valid reason.

(Although it would usually be difficult for an employer to persuade a tribunal of fact to accept sub-para (2) or (3) above as a matter of credibility)  An employee will be entitled to the remedies specified by ss 32N and/or 32P except where the dismissal falls within sub-para (4) above.

21. Secondly, a contravention of s 72B(1) does not automatically, or even necessarily, follow from a dismissal even where the dismissed employee has done any of the things mentioned in s 72B(1) within the prescribed period. Although s 32A(4) obviates the need for the dismissed employee to show a causal connection between the two, such a connection is still required in order to establish the contravention.

22. With that in mind, one would expect that ordinarily a tribunal of fact would have to make a finding as to what in fact was the reason of a dismissal before it can properly determine if s 32A(5) has been engaged.

23. Practically, however, where a tribunal of fact has found against an employer as regards whether the employee was dismissed with a valid reason, in most cases it would not be difficult for the tribunal to infer (and find as a fact) that there was such a causal connection (and hence a contravention of s 72B(1)).

24. Considered in such light, even though the approach which the Tribunal appeared to have adopted is not entirely satisfactory, I will assume that the Tribunal has in fact so found despite para 18, 19 and 22 above.

25. The main complaint of the appellant in this regard is that the Tribunal erred in concluding that there was a contravention of s 72B(1).

26. The only factual basis on which the Tribunal’s said conclusion rested is that the respondent has testified during the hearing of LBTC 856/2014: para 12 and 14, the Apr 2016 decision.

27. The appellant argues that the Tribunal should not have so found because LBTC 856/2014 has been dismissed (and hence found by the Tribunal to have no substance).  In essence, the appellant’s argument is that an unmeritorious claim does not constitute one of “the things mentioned in” s 72B(1).

28. I do not accept this to be a valid argument. First, it is important that Part VIA, Cap 57 was intended for the protection of the employee: Thomas Vincent v South China Morning Post Publishers Ltd (2005) 8 HKCFAR 605, para 14 to 15 and 25.  Secondly, the language and purport of some of the provisions in Part VIA shows that the ultimate outcome in some other proceedings should not in itself affect the protection afforded to an employee.  An example of this can be found in s 32A(1)(c), Cap 57 (setting out several contraventions by an employer) the relevant part of which reads:

“…whether or not the employer has been convicted of an offence in respect of the dismissal”.

29. It may be that, where an employee has:

(a)   totally fabricated evidence and/or perjured himself in other (related) proceedings; or

(b)   given totally false information to a public officer; or

(c)   done other acts of a similar nature (and severity),

in proceedings brought by the employee (who was then dismissed) relying on Part VIA, a tribunal of fact may nonetheless be satisfied that the dismissal was not by reason of a contravention of s 72B(1), but because the dismissed employee has committed an actionable wrong against the employer, and thus there is a valid reason for the dismissal.

30. But there is no basis (let alone finding in the Apr 2016 decision) that such has taken place in LTBC 856/2014.  What essentially was found by the courts therein was that there was insufficient legal basis to support the respondent’s claim for interest.

(b)  S 32K (Valid Reason)

31. Five categories of reason have been specified by s 32K, Cap 57 as constituting “valid reasons” for the purpose of Part VIA. The reason relevant to this appeal is any one or more of s 32K(a) (conduct), (c) (genuine operational requirements) and/or (e) (other reasons of substance): para 11, 20, 41 to 49 and 53, and 56 to 57, the Apr 2016 decision.  The Tribunal summed up what it considered to be the gist of the appellant’s reason for the dismissal as follows:

“… the [respondent] was a troublesome employee who complained all the time, and as a result, too much time had been spent on dealing with her complaints; and also since she complained so much, it was obvious that she had lost her trust in the management and thus lost the basis to cooperate. [The appellant’s CEO] said the [independent committee] was also of the view that the [respondent’s] complaints were false and only intended to question the integrity of the top management of the [appellant]” (para 56, the Apr 2016 decision).

32. The Tribunal brushed aside the above reason as nothing more than:

(1)   complaints lodged by the respondent: para 57, 65 and 66, the Apr 2016 decision;

(2)   a difference in perception between the appellant and the respondent as to whether the events which caused the respondent to complain were evidence of her victimization: para 63, the Apr 2016 decision.

33. What the Tribunal considered as important matters which prevented the above from constituting a “valid reason” for the respondent’s dismissal were:

(a)   the respondent’s work ability had not been questioned, and she had in fact been given a “very effective” work appraisal by her direct supervisor: para 60, the Apr 2016 decision;

(b)   the respondent’s complaints were discrete and had not affected her colleagues (which I assume refers to her peers and subordinates): para 52 and 61, the Apr 2016 decision;

(c)   a dismissal based on the respondent’s complaints was in breach of section 6.6(1)(3), appellant’s staff manual (which the Tribunal found to have formed part of the employment contract): para 64 and 65, the Apr 2016 decision.

34. An employee’s work ability (para 33(a) above) would seem to fall within s 32K(b) (capability or qualifications).  But, depending on the circumstances, it may have nothing to do with the employee’s conduct (s 32K(a)), genuine operational requirements (s 32K(c)) or other reasons of substance (s 32K(e)) (para 31 above).

35. While it is true the respondent has lodged more than a few complaints, to say that her dismissal was caused by mere complaints is to overlook the real case put forth by the appellant (loss of trust and loss of basis for cooperation) (para 31 above).  Although the appellant said that there was a loss of trust by the respondent, the testimony given by its witnesses also show:

(1)   difficulties with working with the respondent (the testimony of the appellant’s CEO and her direct supervisor): para 42 and 45, the Apr 2016 decision;

(2)   repeated attacks on the competence and/or integrity of some members of the top management (such as, the CEO had no integrity, unfit to remain in office and should be dismissed, threats to set up another independent panel and/or to report to outside bodies such as the Equal Opportunities Commission and/or the media, if her complaints were not accepted): para 43, the Apr 2016 decision; para 8 to 10, the 2014 report.

In view of the nature of the above complaints, the testimony of the appellant’s witnesses to the effect:

(a)   the respondent was a troublesome employee who complained all the time;

(b)   too much time had to be spent on dealing with her complaints;

(c)   the respondent was very difficult to talk to, and it would not be (operationally) effective if there was a need to talk carefully with her,

should properly be understood as the respondent’s conduct having possibly caused:

(i)    both sides to the employment contract losing trust and confidence in one another;

(j)    some members of the top management finding it very difficult (or even impossible (because personal attacks involving integrity have been made)) to work with the respondent;

(ii)  consequential operational inefficiency (or even disruption).

This should be a matter falling within s 32K(a) and/or (c) and/or (e), Cap 57.

36. In relation to para 35(i) above, that there is an implied contract term of mutual trust and confidence on the part of both contracting parties is trite law:

(1)   Semana Bachicha v Poon Shiu Man [2000] 2 HKLRD 833; CACV 55/2000 (18 July 2000), para 39 to 47;

(2)   Malik v Bank of Credit and Commerce International SA [1998] AC 20, pp 35, 43 and 46.

37. Unfortunately, because the Tribunal has apparently brushed aside the above as nothing more than complaints by the respondent (para 32 above), none of the matters set out in para 35 above have been considered.

38. In this connection, it should be pointed out that there is a statutory duty to investigate on the Tribunal’s part: s 20(3), Labour Tribunal Ordinance (Cap 25); Hong Kong Civil Procedure 2016, Vol 2, para S1/20/1; Chan Suk Bing Angie v Harbour Phoenix Ltd & Another, HCLA46/1991 (21 September 1992); [1992] 2 HKC 459; Le Thi Bich Thuy Kitty v. Sheraton International (Hong Kong) Ltd trading as Sheraton Hong Kong Hotel & Towers, HCLA 34/2004 (4 June 2004); 謝林與陳德偉, HCLA 150/1995 (5 March 1997); 王焯華 v Five Star Wine Ltd, HCLA 35/2001 (30 November 2001); 沈慧玉 v Ailec International (Hong Kong) Ltd, HCLA 122/2002 (4 July 2003); Tong Pun Chung v Top Express Engineering Ltd, HCLA 71/2002 (21 October 2002); Ng Ming v Cheung Wah Investment Co. Ltd, HCLA 10/2003 (13 June 2003); Siu Koon Fung v Shun Shing Construction & Engineering Co Ltd, HCLA 1/2002 (5 July 2002); James Manuel Ho And Another v Grand Pacific Vacation (Hong Kong) Ltd, HCSA 5/2004 (29 July 2005).

39. It is unclear if the Tribunal has accepted, or rejected, the explanations given by one of the appellant’s witnesses (the respondent’s direct supervisor) concerning 3 alleged instances of victimization of the respondent: para 63, the Apr 2016 decision (the witness explained that these were in fact not directed at victimizing the respondent).

40. Insofar as the Tribunal might have rejected the testimony of that witness, the Tribunal ought to have given reasons for doing so, bearing in mind the said testimony cannot be said to be:

(a)   inherently implausible;

(b)   materially inconsistent with the undisputed or indisputable evidence (in fact, it can be regarded as being supported by one of the conclusions of the 2014 report (it is inadequate for the Apr 2016 decision to say (without giving reasons for saying so) the said report was not binding)).

(See, for example, Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd and Others, HCA 3523/2002 (13 August 2005), para 12; 林傳龍對謝巧玩 HCA 1443/2011 (19 December 2014), para 15).

41. Finally, in relation to para 33(c) (and para 11(c) above), whether the appellant’s staff manual formed part of the employment contract is a question of mixed law and fact; and hence a question for the Tribunal.

42. Assuming (but without deciding) section 6.6(1)(3), appellant’s staff manual was, as the Tribunal has found, part of the employment contract:

(a)   the provisions may well be mere policy statements of the appellant (concerning complaints by its member agencies, members of the public and its staff) and do not confer legally enforceable rights;

(b)   in any event, any legally enforceable right to complain must imply an obligation not to abuse such right (here an analogy can perhaps be drawn with a citizen’s constitutional right of access to the courts: see, for example, the observations in Ng Yat Chi v Max Share Ltd And Another (2005) 8 HKCFAR 1 (especially at para 5, 25, 48 and 52)).

None of these seem to have been considered by the Tribunal.

43. By reason of the above matters, I find that there has been misdirection(s) (or non-direction(s)) in the Apr 2016 decision.

44. For completeness, RHC Ord 55 r 7(7) has also been considered.  It is probable that, if the Tribunal had properly directed itself regarding the matters set out in para 18 to 19 and 22, 35 and 37 to 38, 39 to 40 and 42 above, the final conclusions reached in the Apr 2016 decision might well be different.  For this reason, I am satisfied that substantial wrong or miscarriage has thereby been occasioned.

Conclusion

45. The matters set out in para 44 above over which the Tribunal’s erred when directing itself were matters of fact (or mixed law and fact).  The High Court is not empowered to reverse or vary any determination made by the tribunal on questions of fact: s 35(2)(b)(i), Cap 25.

46. In these circumstances, the discretion conferred by s 35(1), Cap 25 ought to be exercised to allow this appeal and remit the respondent’s claim to the Tribunal for a new hearing before another presiding officer regarding the matters set out in para 44 above.  For this reason, the challenged award must be set aside.

Other Matters

47. The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the judgment and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.