LET’ SPA CO LTD v. WONG KIT YEE

HCLA 20-24/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 20 OF 2017

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1226 OF 2016)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 21 OF 2017

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1413 OF 2016)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 22 OF 2017

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1908 OF 2016)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 23 OF 2017

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1909 OF 2016)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 24 OF 2017

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 2796 OF 2016)

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D E C I S I O N

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INTRODUCTION

1.   I have before me 5 applications by (i) Let’s Spa Company Limited (“the Employer”) and (ii) Let’s Spa Cube Company Limited (“Let’s Spa Cube”), a company apparently associated with the Employer, seeking leave to appeal against the following awards made by Mr David Chum, Presiding Officer of the Labour Tribunal, on 14 September 2017:-

(1)   LBTC 1226/2016: the Presiding Officer dismissed the Employer’s claim against the employee (Ms Wong Kit Yee) for payment in lieu of notice upon the latter’s termination of employment contract, and upheld Ms Wong’s counterclaim for arrears of wages in the sum of HK$3,666.66;

(2)   LBTC 1413/2016: the Presiding Officer dismissed the Employer’s claim against the employee (Ms Chan Ka Man Catherine) for “damages”, and upheld Ms Catherine Chan’s counterclaim for arrears of wages in the sum of HK$22,000.00;

(3)   LBTC 1908/2016: the Presiding Officer dismissed the Employer’s claim against the employee (Ms Chan Ka Yee) for payment in lieu of notice upon the latter’s termination of employment contract, and upheld Ms Chan Ka Yee’s counterclaim for wrongful deduction of wages, arrears of wages and payment in lieu of notice in the total sum of HK$40,184.00;

(4)   LBTC 1909/2016: the Presiding Officer dismissed the Employer’s claim against the employee (Ms Cheng Kot Pui) for “damages”, and upheld Ms Cheng’s counterclaim for arrears of wages and overtime pay in the total sum of HK$8,820.36; and

(5)   LBTC 2796/2016: the Presiding Officer (i) dismissed the Employer’s counterclaim against the employee (Ms Liu Huan Huan) for “damages”, and (ii) upheld Ms Liu’s claim against the Employer for arrears of wages and commission in the total sum of HK$26,037.41 but dismissed her claim for attendance allowance against Let’s Spa Cube for which she had been transferred to work. 

2.   For reasons which I shall explain below, the applications for leave to appeal are refused.

PROPOSED GROUNDS OF APPEAL IN HCLA 20, 21, 22 AND 23/2017

3.  The basic facts relevant to the proposed grounds of appeal have been set out in the Presiding Officer’s two written Reasons for Award, one in relation to LBTC 1226, 1413, 1908 and 1909/2016 and the other in relation to LBTC 2796/2016, both dated 23 November 2017, and it is not necessary to set them out again in this decision.

4.  In Mr Kenwick Yam’s first skeleton submissions on behalf of the Employer dated 30 November 2017 in relation to these 4 cases, 2 proposed grounds of appeal were originally raised.

5.  Ground 1 relates to a complaint that the Presiding Officer did not allow Ms April Tang, a witness of the Employer, to give evidence at the trial.  At the hearing on 5 December 2017, Mr Yam informed the court that this ground of appeal was abandoned.  It is not therefore necessary for me to further consider it.

6.  Ground 2 relates to a complaint that the Presiding Officer failed to discharge his statutory duty to investigate.  Mr Yam complains of two matters in particular.

7.  First, it is said that Mrs Chung, a witness of the Employer, was not physically fit to give evidence and her admission that Ms Chan Ka Yee (the defendant in LTBC 1908/2016) had not been fully paid her wages for the months of September and October 2015 should not have been accepted or relied upon by the Presiding Officer.

8.  At the hearing on 5 December 2017, Mr Yam informed this court of the following:-

(1) Mrs Chung originally attended the Labour Tribunal on 6 July 2017 to give evidence.

(2) In the course of giving evidence on 6 July 2017, Mrs Chung felt ill and asked for an adjournment, which was granted by the Presiding Officer.

(3) Mrs Chung then attended Queen Elizabeth Hospital in the afternoon on the same day. She was admitted to the hospital and discharged in the morning of 7 July 2017.

(4) Mrs Chung returned to the Labour Tribunal in the afternoon of 7 July 2017 to continue giving her evidence.  She informed the Presiding Officer that she was not feeling well, but the Employer did not ask for any adjournment.  In the course of her evidence on 7 July 2017, she made the admission that Ms Chan Ka Yee had not been fully paid her wages for the months of September and October 2015.

9.  Pausing here, I should also mention that, in the Discharge Slip issued by Queen Elizabeth Hospital handed up by Mr Yam to the court at the hearing, it is stated that Mrs Chung was diagnosed to be suffering from “Chest pain”, and she was given Paracetamol (Panadol) for 3 days.

10.  Although it has often been said that a presiding officer has a duty to investigate, what the presiding officer is required to do in any particular case depends on the circumstances and involves an exercise of discretion.  Unless it is clear that substantial injustice has been caused to a party, the court should not readily intervene in the discharge of such duty on the part of the presiding officer. In particular, the court should be astute to ensure that an appellant is not permitted, under the guise of a complaint that the presiding officer has failed to discharge his duty to investigate, to challenge findings of fact made by the presiding officer, or seek a re-run of the case in the High Court.

11.  In the present case, as recorded in paragraph 23 of the Presiding Officer’s Reasons for Award, Mrs Chung admitted at least twice that Ms Chan Ka Yee had not been fully paid her wages for the months of September and October 2015.  The Presiding Officer’s finding that Ms Chan Ka Yee’s wages for those months were not fully paid did not rest solely on Mrs Chung’s admission.  There was also evidence from Ms Chan Ka Yee to that effect.  More importantly, if the Employer had fully paid Ms Chan Ka Yee’s wages for those months, one would normally expect the Employer to have little difficulty in producing documentary evidence to prove the payment.   No such evidence was produced by the Employer. Also, the Discharge Slip of Mrs Chung does not show that she was suffering from any serious illness which would affect her ability to give evidence. Lastly, the Employer did not ask for an adjournment of the hearing on 7 July 2017.  Overall, I do not consider that any substantial injustice has been caused to the Employer by the Presiding Officer’s reliance on the admission made by Mrs Chung that Ms Chan Ka Yee’s wages for the months of September and October 2015 were not fully paid, or that the Presiding Officer failed to discharge his duty to investigate in relation to this matter.

12.  The second matter complained of by Mr Yam relates to the Presiding Officer’s finding that two particular clauses in the employment contracts of Ms Catherine Chan (the defendant in LBTC 1413/2016) and Ms Cheng (the defendant in LBTC 1909/2016) respectively relied upon by the Employer in its claim for damages were penal in nature and therefore unenforceable.

13.  The two clauses in question have been set out in paragraph 14 of the Presiding Officer’s Reasons for Award and do not have to be repeated here.  They effectively provide that:-

(1)   upon the Employer’s termination of the employment contract, the Employer is required to pay to the employee one month’s wages in lieu of notice; and

(2)   on the other hand, upon the employee’s termination of the employment contract, the employee is required to pay to the Employer as compensation the contractual wages for the remaining term or duration of the employment.

14.  The Presiding Officer considered the two clauses to be penal in nature, pointing out that the compensation required to be paid by the employee to the Employer upon her termination of the employment contract did not represent any genuine pre-estimate of the damages that the Employer might suffer in consequence of an early termination of the contract, or relate to any amount which would have been payable by the employee to the Employer had the contract been fully performed (see paragraph 18 of the Reasons for Award).  It seems to me that the Presiding Officer came to a correct conclusion as a matter of law that the two clauses are penal in nature and therefore unenforceable.

15.  Mr Yam submits that the Presiding Officer failed to investigate whether the clauses reflected or represented a genuine pre‑estimate of the damages which the Employer might suffer as a result of an early termination of the employment contract.  Mr Yam has not, however, identified any particular matter which the Presiding Officer ought to have investigated, or show how a different conclusion might have been reached had the Presiding Officer carried out such investigation.  In my view, this complaint about failure to investigate has plainly no substance.

16.  On 4 December 2017, Mr Yam lodged his supplemental skeleton submissions in relation to HCLA 20-23/2017.  Two points are raised in those supplemental submissions.

17.  The first point relates to Ground 1 which, as earlier mentioned, was abandoned by Mr Yam (see paragraph 2 of the supplemental skeleton submissions).

18.  The second point relates to a complaint that the Presiding Officer, having reached the conclusion that Ms Cheng (the defendant in LBTC 1909/2016) could not rely on Section 10 of the Employment Ordinance (Cap 57) or common law to terminate her employment contract, failed to consider whether “in such circumstances, it is appropriate for the Tribunal to order [Ms Cheng] to terminate her contract by payment in lieu to [the Employer]” (see paragraph 3 of the supplemental skeleton submissions).  My views are as follows:-

(1)   It is obvious that the Presiding Officer could not have ordered Ms Cheng to “terminate her contract”, whether by making a payment in lieu of notice or otherwise, because the contract had already been terminated.

(2)   If the true point proposed to be raised is that Ms Cheng should have been ordered to make a payment in lieu of notice to the Employer, this contention was not raised in the Employer’s Form 14 (Application for Leave to Appeal on Point of Law) dated 26 September 2017.

(3)   It is clear from paragraphs 44 to 50 of the Reasons for Award that, subject to the claim for damages based on the termination provision in Ms Cheng’s employment contract (which, as earlier mentioned, the Presiding Officer decided was a penalty clause and therefore unenforceable), the Employer did not dispute Ms Cheng’s claim for arrears of wages and overtime pay in the total sum of HK$8,820.36.  Further, apart from the said claim for damages, the Employer did not advance any other basis to contend that Ms Cheng was liable to make any payment to the Employer as a result of her termination of the employment contract.

(4)   In all the circumstances, I do not consider that the Presiding Officer could be criticised for not considering whether Ms Cheng was liable to make any payment in lieu of notice to the Employer.

PROPOSED GROUNDS OF APPEAL IN HCLA 24/2017

19.  In Mr Yam’s skeleton submissions dated 30 November 2017, 2 proposed grounds of appeal are raised.  Both relate to the same point, namely, that the Presiding Officer failed to consider all relevant and material evidence, or discharge his duty to investigate, in relation to a clause in the employment contract of Ms Liu providing for certain payment to be made to the Employer upon her termination of the employment contract.

20.  The clause in question has been set out in paragraph 16 of the Presiding Officer’s Reasons for Award and does not have to be repeated here.  As in relation to the other two clauses mentioned in paragraph 13 above, it provided, effectively, that:-

(1)   upon the Employer’s termination of the employment contract, the Employer is required to pay to the employee one month’s wages in lieu of notice; and

(2)   on the other hand, upon the employee’s termination of the employment contract, the employee is required to pay to the Employer as compensation the contractual wages for the remaining term or duration of the employment.

21.  The Presiding Officer reached the conclusion that it was a penalty clause as in the other two cases.  Mr Yam complains that the Presiding Officer failed to consider (i) the actual loss suffered by the Employer, and (ii) whether the amount payable by the employee under the aforesaid clause was a genuine pre-estimate of the likely damages which might be suffered by the Employer upon an early termination of the employment.  It is accepted, however, by Mr Yam that that materials and calculation which the Employer put forward before the Presiding Officer as evidence of its “loss or damage” were only adduced in closing submissions and were therefore rejected by the Presiding Officer. Moreover, even if those materials and calculation are taken at their face value, they only show the eventual loss or damage allegedly suffered by the Employer as a result of the early termination of the employment contract.   In no way do they represent or reflect any genuine pre‑estimate of the damages which the Employer might suffer as a result of an early termination of the employment contract.  Mr Yam has not identified any other matter which it is contended the Presiding Officer ought to have investigated, or showed how a different conclusion might have been reached had the Presiding Officer carried out such investigation.  In all, I do not consider that this proposed ground of appeal has any reasonable prospect of success.

CONCLUSION

22.  Under Section 32(1) of the Labour Tribunal Ordinance (Cap 25), the Court of First Instance has power to grant leave to appeal against an award, order or determination by the tribunal only on the grounds that it is (i) erroneous in point of law, or (ii) outside the jurisdiction of the tribunal.  There is no suggestion that the Presiding Officer has no jurisdiction to make the relevant awards.  The only question is whether they are erroneous in point of law.  For the reasons mentioned above, I am not satisfied that the awards made by the Presiding Officer are erroneous in point of law.

23.  Accordingly, the 5 applications for leave to appeal are dismissed, with no order as to costs.