MAIZE PETER ANDREW v. INTERNATIONAL CHINA CONCERN LTD

HCLA 48/2024

[2025] HKCFI 1231

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 48 OF 2024

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1973 OF 2024)

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DECISION

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Introduction and Background

1.  This is an application for leave to appeal against the Decision of Deputy Presiding Officer Grace Chan (“the Tribunal”) dated 23 December 2024, for which the Reasons for Decision was given on 14 February 2025 (“Reasons”), by the Claimant (“C”) by an Application for Leave to Appeal on Point of Law dated 30 December 2024 (“the Application”).

2.  C was employed by the Defendant (“D”) as CEO of D from 1 April 2017.  By email dated 18 December 2023, C was informed that C was made redundant and given 4 weeks’ notice.  His last working day was 17 January 2024.  C filed a claim in the Labour Tribunal to claim: (a) annual leave pay in the sum of HK$107,213.99, being 27 days untaken annual leave (“the AL claim”); and (b) damages for loss of income from 18 January 2024 to 30 June 2024 in the sum of HK$469,034.53 (“the Wrongful Dismissal claim”). 

3.  In respect of the AL claim, there is no dispute that C had 27 days untaken annual leave but D’s case is that they could not be carried forward.  Under the terms of C’s employment contract, annual leave cannot be carried forward.  However, C’s case is that according to the Policy Manual of D as at April 2022 (“the Policy”), annual leave can be carried forward and accumulated up to 40 days.  The Tribunal did not accept C’s argument that the Policy had been implemented simply because it had been circulated.  The Tribunal accordingly held that C had failed to prove the AL Claim.  See Reasons, §§45-51.

4.  As for the Wrongful Dismissal claim, C claimed that D had presented a fictitious reason to terminate him by reason of redundancy and therefore his termination was unreasonable and in breach of mutual trust and confidence.  In particular, C argued that D had no financial crisis.  On the other hand, D’s evidence was that the founder of D, who was an employee of D, took up the extra role of CEO of Hong Kong without being paid any additional remuneration.  The Tribunal held that the evidence supports the finding on the balance of probabilities that C’s dismissal was mainly attributable to redundancy and therefore he was not unreasonably or wrongfully dismissed.  See Reasons, §§24-33.

The Applicable Legal Principles

5.  Under s.32 of the Labour Tribunal Ordinance, Cap.25, a party may apply for leave to appeal against the Tribunal’s award, order or determination only on the grounds that it is erroneous in point of law, or outside the jurisdiction of the Tribunal.

6.  An applicant for leave has to show that the intended appeal is arguable: see Chan Kwok Hung v Hotel Panorama Co Ltd (unrep) HCLA 30/2009, 19 November 2009 per Chu J (as she then was) at §13.

7.  An appeal on a question of law lies only in limited circumstances.  A decision may be quashed if it is based on a finding of fact or inference from facts which is perverse or irrational, or there was no evidence in support of it, or it was made by reference to irrelevant factors or without regard to relevant factors.  It is not necessary to identify a specific error or law; if the decision cannot be supported the court will infer that the decision-making authority misunderstood or overlooked relevant evidence or misdirected itself in law.  In an appeal on law only, the appellate court must bear in mind what scope the circumstances provide for reasonable minds to differ as to the conclusion to be drawn from primary facts found.  But if the appellate court regards the contrary conclusion as the true and only reasonable one, the appellate court is duty-bound to substitute the contrary conclusion for the one reached by the fact-finding tribunal.  See Kwong Mile Services Limited and Commissioner of Inland Revenue [2004] 3 HKLRD 168 per Bokhary PJ at §§31-37.

Discussion

8.  C relied on 4 grounds in the Application.  C has also orally elaborated on those grounds at the hearing before me by reading out a prepared statement.

9.  The first ground relates to the AL Claim. Essentially, C submitted that the Tribunal erred in accepting D’s contention that the Policy had not been approved when in the email from D to C on 17 January 2024, it acknowledged that D would follow the Policy, which was valid and implemented, and offered compensation of the unused annual leave of 27 days.  The relevant part of that email reads:

“Please note that the Termination Notice has been updated, per your request, to include the allotment of 27 x Days of unused Annual Leave that you have accrued over the last 6 years (since 2018). This is per the ICC Policy Manual, which is in conflict with your ICC Contract (which does not allow you to accrue leave over multiple years). In an effort of good will and generosity, the Board wants you to have this extra income, as part of your redundancy/severance package.”

10.  It is not apparent from the Reasons whether the Tribunal took into consideration this email and if so, why notwithstanding this email took the view that C had not proved his entitlement to the carrying forward of accrued annual leave.  I take the view that this first ground of appeal is reasonably arguable.  

11.  The second ground essentially seeks to challenge the Tribunal’s finding that C was dismissed by reason of redundancy under s.31B of the Employment Ordinance, Cap.57 (“EO”).  Firstly, C submitted that D’s argument that the position in Hong Kong was eliminated and the role of CEO was moved to another location is untenable.  As I read the Reasons, properly understood, the Tribunal did not base its decision on s.31B(2) of EO that D has ceased or intend to cease business in Hong Kong or that the requirements of that business to carry work in Hong Kong have ceased or diminished.  Rather, the Tribunal relied upon the fact that C’s responsibilities and role was taken up and replaced by the founder with no additional remuneration and that amounts to redundancy (see Reasons, §§30-32). Although C informed me that the case referred to by the Tribunal at §31 was not one relied upon by the parties and was only first brought up by the Tribunal in the Reasons, C did not submit that there was no such case or the case did not support the proposition of law relied upon by the Tribunal.  On that basis, it cannot be contended that the Tribunal erred in law.

12.  Secondly, C submitted that there was no financial crisis at that time and D had failed to provide proof the redundancy was for operational requirements at that time.  C submitted that the Tribunal had neglected to have regard to relevant evidence on the financial health of D and should have asked D to produce the final budget and other relevant documents.  As the Tribunal correctly noted, by reference to s.31Q of EO which provides “…an employee who have been dismissed by the employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy”, it is for C to prove redundancy not D (see Reasons, §§22-23). Furthermore, the threshold to appeal against a finding of fact is high.  I am of the view that C cannot satisfy me that the Tribunal had reached a decision which no judge/decision maker could have made.  I do not find this ground to be arguable.

13.  The third ground is related to the second ground.  C submitted that the reason for termination was not true and therefore his dismissal was unreasonable and he was entitled to terminal payment.  As I do not find that there is arguable grounds against the finding that the reason for dismissal was by reason of redundancy, this ground is also not arguable.

14.  The fourth ground is that the Tribunal erred in law by failing to consider the violation of mutual trust and confidence prior to the termination of C’s employment including the hiring of investigator said to be to disparage C, acts “done behind his back” in breach of the duty of mutual trust and confidence etc, all culminating in the termination of his employment. 

15.  It was asserted in the Application that C had “clearly stated that a breach of this trust took place over an extended period prior to the date of termination”.  However, from the Statement by Claimant, under the heading “Events leading to the termination and reasons for the claims”, it is plain that C has only ever complained about the decision to make him redundant (or to the termination of his employment with D) which had deprived him of income which he claimed he reasonably expected.  In the explanation of loss of income, it was expressly stated: “The damages I am seeking are based on the future income that I expected to receive when I announced my retirement in November, 2023.  In my resignation letter, I notified the Board of Directors that my last day of work would be June 30, 2024.  However, my employment was terminated effective January 17, 2024.  The amount of income that I would have received by continued employment from January 18 to June 30 is HK$469,034.53.”  It is clear therefore that the damages claimed by C relates only to the loss of income consequential to the termination rather than for any breach of duties prior to the termination of his employment.  Thus this ground which complains that the Tribunal failed to take into alleged violation of mutual trust and confidence prior to the termination is not reasonably arguable.  I see no arguable error for the Tribunal to find that the matters complained of did not have any legal relevance to the claims and disputes in this case (see Reasons, §43).

16.  Accordingly, I would only grant leave to appeal in respect of the first ground.

17.  Costs of this application shall be in the cause of the appeal.