HUM MATTHEW TA v. ALLIED WAY SECURITY MANAGEMENT LTD

DCCJ 3869/2019

[2024] HKDC 134

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3869 OF 2019

(Transferred from LBTC 1916/2019)

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JUDGMENT

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INTRODUCTION

1.  This is a wrongful dismissal claim. The plaintiff (“P”) claims against his former employer, the defendant (“D”), for wrongful dismissal of him on 23 October 2018 (“First Incident Date”) but that, if the Court does not accept his primary case, his fallback position is wrongful dismissal of him on 31 October 2018 (“Second Incident Date”). On such basis, he claims for termination payments.

2.  D denies wrongful dismissal. It asserts that it summarily dismissed P on the Second Incident Date with valid reasons.

BACKGROUND

3.  The following background facts are uncontroversial or cannot be seriously disputed in light of the documentary evidence.

4.  D is a company incorporated in Hong Kong in 2012. It is in the business of providing services, including, at the material times, consulting and information technology solution services on cyber-defence and network infrastructure.

5.  Mr Philip Cheng (“Senior Cheng”) has served as D’s Chief Security Officer since 2012. His daughter, Ms Florence Cheng (“Junior Cheng”) is a director of D. Ms Kitty Lee (“Ms Kitty”) is D’s Accounting Manager. Ms Karen Lau (“Ms Lau”) is D’s Human Resources Manager. All of them gave evidence for D at trial.

6.  Mr Henry Wong (“Mr Wong”) was D’s Deputy General Manager from 1 May 2017 to August 2018. Mr Jacky Chan (“Mr Jacky”) was D’s Senior Manager from November 2017 to early August 2018.

7.  In or about April 2017, Mr Bernard Lee (“Mr Lee”) who has been working in the information technology industry for many years, proposed a business plan (“Business Expansion Plan”) to Senior Cheng for the purpose of expanding D’s business into consulting and IT solution services on cybersecurity.

8.  Two companies were set up to implement the Business Expansion Plan: -

(i)  In or around mid-late May 2017, D acquired BlueSky Information Technology (int’l) Company Limited (“BlueSky IT”) from Mr Michael Chan (“Mr Chan”). Additional shares were also allotted to Mr Lee, P and D.

(ii)  On 9 August 2017, Mr Lee incorporated BlueSky Professional Services Limited (“BlueSky PS”) and became its director and Chief Operating Officer. Mr Lee and D were the shareholders of BlueSky PS.

(the two companies, collectively, “Two Companies”)

9.  In or around mid-late May 2017, Mr Lee succeeded to convince P to join D. P was then enjoying a competitive remuneration from working for a company in Singapore when he entered into the employment agreement with D on 13 June 2017 (“Agreement”).

10.  Pursuant to the Agreement, D employed P as its Chief Technology Officer for a term of 2 years, from 1 August 2017 to 31 July 2019. P was assigned to oversee the operations of BlueSky PS. In addition to the “Basic Monthly Salary” of HK$80,000 (under Clause 5 of the Agreement”), P also enjoyed a monthly “housing allowance” initially at HK$15,000 (under Clause 11”), which was increased to HK$25,000 from 30 September 2017. Since then, he had received a total of HK$103,500 per month after deduction of MPF payment.

11.  In or around May 2018, the renovation work of the office in Tai Kok Tsui (“BlueSky Office”) was mostly completed partly according to the design and with the assistance of P. Both BlueSky PS (headed by P) and BlueSky IT (headed by Mr Chan) were assigned an office space for their use therein. The Two Companies started to operate their respective businesses thereat. Some technical staff of D and its subsidiaries also stationed at the office.

12.  Between May and early July 2018, three supporting staff (collectively, “Three Employees”) were employed by BlueSky PS to work under P’s supervision. Mr Lee resigned from all his duties with D and its subsidiaries (other than being shareholders of the relevant companies) in late August 2018.

13.  On the morning of the First Incident Date, at the office (“Friend’s Office”) operated by a common friend of Mr Lee and Senior Cheng, a meeting was held between Senior Cheng and Mr Lee (“First Meeting”), followed by another meeting (“Second Meeting”) (the two meetings, collectively, “Two Meetings”) among P, Senior Cheng and Mr Lee (who left the meeting shortly). The Second Meeting lasted for around 15 minutes and came to an end when P stood up and left.

14.  At or around 4:00 pm on the same day, Junior Cheng and Ms Kitty went to the BlueSky Office and dismissed the Three Employees with immediate effect by serving them with written termination notices and full payments (the whole event, “Staff-Termination Arrangement”). Junior Cheng had no communication with P.

15.  At or around 5:30 pm and close to the logoff time, the Three Employees together with P left the the BlueSky Office. P also took away an internet router (the “Router”) that was in use at the office. It belonged to P. In that evening, P had several WhatsApp exchanges with Mr Chan and Mr Wong.

16.  From 24 to 30 October 2018 (“Absence Period”), P did not attend the BlueSky Office.

17.  On 25 October 2018, P texted Ms Kitty and emailed Senior Cheng asking for payment of the unpaid salary for the month of September (“Unpaid September Salary”).

18.  On 30 October 2018, there were 3 emails exchanged between P and Senior Cheng (collectively, “Final Emails”).

19.  On the Second Incident Date, P attended the BlueSky Office. At or around 4:59 pm, Ms Kitty emailed a written termination notice (“Termination Notice”) to P to summarily dismissed him by reason of: -

(i)  P and the Three Employees being found absent from the BlueSky Office during the last few months, and P was believed to have been out of Hong Kong for non-business purpose (“Pre-Incident Absence Allegation”), but no excusable answer was given by P on the First Incident Date; and

(ii)  P leaving the BlueSky Office on the First Incident Date and only returned to his working space on the Second Incident Date.

In the Termination Notice, P was directed to return the company properties, including software and client list to Mr Chan.

MATERIAL TERMS OF THE AGREEMENT

20.  The Agreement contains the following terms which are relevant to the present case: -

(1)  Clauses 1 and 6 provide the period of employment between 1 August 2017 and 31 July 2019. There is no dispute that the Agreement is a 2-year fixed term contract.

(2)  Clauses 2 and 3 provide that being Chief Technology Officer, his duties are “as set out in the description of your position and as advised to you by the Board of Directors”.

(3)  The other relevant terms are: -

“4. Working Hours

You will be required to work from 9:30 am to 6:30 pm Monday to Friday. Flexible working hour is adoptable”.

8. Annual Leave

You will be entitled to paid leave of 14 working days. Leave will accrue evenly throughout your employment. Any entitlement due to you at time of termination will be paid to you in lieu……

13. Termination

Notwithstanding any other provision of this Agreement, [D] may terminate this Agreement for cause at any time forthwith by notice in writing if [P] becomes bankrupt or makes an arrangement or composition with his creditors generally or becomes of unsound mind or is convicted of a criminal offence or commits an act of gross negligence or moral turpitude or commits a breach of any provision of this Agreement. You may terminate this Agreement by either giving 3 months prior written notice or payment of 3 months salary in lieu.

14. Golden Parachute

In order to induce you to remain in the employ of [D], [D] agrees that you shall receive the severance benefits equivalent to 12 months of salary in the event your employment with the Corporation is terminated “without cause”. For purposes of this Agreement, “without cause” shall mean any other reasons other than (A) End of Contract Period set forth in this Agreement, (B) because of your death, Disability or Retirement, (C) by [D] for Cause, or (D) by you via written notice or payment in lieu.”

P’S CASE

21.  The P’s case runs as follows: -

(i)  On 22 October 2018, P told Mr Lee (who had already resigned from D and its subsidiaries) about the Unpaid September Salary. He was then asked to attend a meeting with Senior Cheng at the Friend’s Office on the First Incident Date.

(ii)  On the First Incident Date, Mr Lee, after discussion with Senior Cheng in the First Meeting, told P that the business operations of BlueSky PS would be shut down, the Three Employees (defined as the “Team” in P’s witness statement) would be let go and asked whether P would accept D’s offer of 3 months’ salary as severance payment (“Offer”). P did not agree.

(iii)  Mr Lee then escorted P to meet Senior Cheng to start the Second Meeting. In the meeting, Senior Cheng repeated the same. P informed him that he was entitled to the Golden Parachute. In P’s words, “it was clear to me from my discussion with [Senior Cheng] that my employment was being immediately terminated by [D].” Mr Lee then left the room. Senior Cheng then raised the Pre-Incident Absence Allegation, which was denied by P. They repeated their respective positions on the Offer. P also mentioned that he would tell the partners that they could not deal with them anymore. Senior Cheng replied that P should do what he had to do. The meeting lasted for about 15 minutes.

(iv)  On the afternoon, Junior Cheng and Ms Kitty went to the BlueSky Office to complete the Staff-Termination Arrangement. Even though Ms Kitty did not serve any written termination notice on P as she did with the Three Employees, she instructed P and the Three Employees to remove their personal belongings and return the company property. P accordingly took away the Router.

(v)  Having been dismissed in the Second Meeting, P had not attended the BlueSky Office after the First Incident Date.

(vi)  On 30 October 2018, through the Final Emails, Senior Cheng “backtracked” from the termination of the Agreement in the Second Meeting and asked P for the reasons of his absence from the BlueSky Office during the Absence Period.

(vii)  On the Second Incident Date, P attended the BlueSky Office and received the Termination Notice.

22.  P contends that his employment was wrongfully terminated without valid reason. Accordingly, he should be entitled to the following payments: -

(i)  HK$1,242,000 being Golden Parachute under Clause 14 (“Golden Parachute”);

(ii)  HK$931,500 being payment in lieu of notice under s 8A of the Employment Ordinance, Cap 57 (“EO”). The length of notice is said to be equivalent to the remaining term of the Agreement, 9 months x HK$103,500.

(iii)  HK$24,104 being unpaid salary plus housing allowance from 24 to 31 October 2018, less amount already paid;

(iv)  HK$2,704.60 being payment of the contractually accrued but unused annual leave pay of 3.5 days, less amount already paid under Clause 8 of the Agreement.

23.  At trial, P specifically confirmed that his claim is premised on his employment being terminated by Senior Cheng orally in the Second Meeting. He does not rely on any implication of BlueSky PS being shut down. Further, Mr Brown, Counsel for P, also sensibly invited this Court merely to focus on the issue of whether D can justify the termination of employment with valid reasons. This Court need not come to a conclusion on P’s complaints of D’s breach of the implied terms of good faith, mutual trust and confidence and anti-avoidance as pleaded in his pleadings (collectively, “P’s Alleged Breach of Implied Terms”), such issues were not further pursued with at trial.

D’S CASE

24.  D denies termination of P’s employment in the Second Meeting. It asserts that Senior Cheng only told P that D would terminate the Three Employees that afternoon. He raised the Pre-Incident Absence Allegation. He only told P that D was considering whether or not to terminate P’s employment but the decision had yet been made.

25.  P was summarily dismissed with cause on the Second Incident Date under clause 13 (“Clause 13”) of the Agreement and under s 9 of EO and accordingly, P is not entitled to the Golden Parachute and payment-in-lieu of notice (collectively, “Termination Payments”).

26.  At the end of the trial, Mr Tam, Counsel for D, reduced and confined the grounds of dismissal to P’s unauthorized absence from work during the Absence Period without valid reason and his removal of the Router. Other allegations as the Pre-Incident Absence Allegation and P’s breach of an implied on-call obligation as grounds of dismissal were abandoned.

27.  D also agrees that if P was terminated in the Second Meeting on the First Incident Date, such dismissal was without cause for the purpose of Clause 13 and Clause 14 and amounts to wrongful dismissal that entitled P to the Termination Payments.

PARTIES’ POSITIONS

28.  Despite a number of issues were raised in the pleadings and a total of 8 factual witnesses were called to give evidence at trial (P, Mr Lee, Mr Wong and Mr Jacky for P and the 4 witnesses for D as set out above), both Counsel, at the end of the trial, sensibly and fairly reduced their issues in dispute and focused on mainly two factual disputes: -

(1)  Whether P was dismissed on the First Incident Date or the Second Incident Date;

(2)  Whether the summary dismissal under s 9 EO and termination with cause under Clause 13 was justified with valid reasons which disentitle P to the Termination Payments.

29.  At the end of the trial, it is clear that, as both parties agreed, many pleaded issues and factual allegations explored at trial do not have any impact on the outcome of this action whether they are decided in one way or another, hence, this Court needs not compare all the evidence between witnesses or decides on their respective credibility.

30.  The credibility issues are further reduced upon D’s abandonment of several grounds of dismissal. The credibility issue concentrates on the question of whether Senior Cheng told P that P was dismissed in the Second Meeting. If he did, D agrees that it was wrongful dismissal. If he did not, the next question is whether the dismissal on the Second Incident Date was justified with valid reasons.

31.  Mr Brown critizies Senior Cheng’s evidence in court was tainted with uncertainties and inconsistencies with his witness statement, and, his explanation for his impaired memory due to his serious illness only indicated his evidence in court is unreliable.

32.  To this, Mr Tam conceded that Senior Cheng’s evidence in his witness statement should be adopted to the extent that during the Second Meeting, Senior Cheng had told P that the Three Employees would be dismissed that afternoon, that P was also suspected of the Pre-Incident Absence Allegation and that D was considering to terminate P’s employement but the decision had yet been made by the top management. Mr Tam makes submissions as if Senior Cheng had also put forward the Offer, P’s claim is still bound to fail for all the evidence points to the inherent improbability and untruthfulness of P’s evidence.

THE LAW

33.  The law dictates that a notice of termination of employment must be clear and unambiguous: Lam Sin Yi Sindy v Leung King Wai William t/a William KW Leung & Co [2020] 5 HKLRD 170

34.  The Court’s approach to the question of how notice of termination of employment should be construed is comprehensively analyzed in the judgment of the English Court of Appeal in Willoughby v CF Capital PLC [2011] IRLR 985 which was cited in Lam Sin Yi Sindy:

“The principles of contract law ordinarily require that a person’s intentions are ascertained not by reference to his subjective intentions but objectively, by reference to how a reasonable man would interpret them. His intentions will therefore be ascertained by reference to a consideration of the words used, whether written or oral, in the context in which he used them.

… The words [of an oral notice of resignation or dismissal] so given may, on the face of it, be clear and unambiguous and may take effect according to their apparent terms. Indeed, the general rule is that they will do so.”

35.  Section 9 of the EO empowers an employer to dismiss an employee without notice or payment in lieu if an employee misconducts himself and such conduct being inconsistent with the due and faithful discharge of his duties (s 9(1)(a)(ii)) or on any other ground on which he would be entitled to terminate the contract without notice at common law (s 9(1)(b)).

36.  Essentially, the burden is on an employer to justify that the employee has disregarded the essential conditions of the contract of service. The test is whether the conduct amounts to a sufficiently serious breach of the contract of employment such as to indicate that the employee no longer intends to be bound by the contract: Ko Hon Yue v Chiu Pik Yuk [2017] 5 HKLRD 510 §43.

37.  With these principles in mind, I turn to consider the disputes between the parties.

ISSUE 1: IF DISMISSAL ON THE FIRST INCIDENT DATE

38.  In light of the concessions made by the parties aforesaid, the factual disputes between the parties on what happened in the Second Meeting boiled down to the question of whether Senior Cheng had said to P that P was being dismissed with immediate effect.

39.  Having considered all the evidence before me and even if taking P’s case to the highest in the sense that D had tight cash flow leading to the delays of payment of salary on various occasions and that Senior Cheng had said that the operations of BlueSky PS would be closed down, this Court does not believe that Senior Cheng had dismissed P orally in the Second Meeting.

The Conversation in the Second Meeting

40.  I should start with P’s own account of the event in §27 of his 1^st witness statement dated 18 May 2021 (“Paragraph 27”), it reads: -

“[Senior Cheng] informed me that the business operations of BlueSky PS were being closed down and its staff were being let go as a costs-saving measure for [D] as BlueSky PS was not generating any revenue. When I enquired about timing, [he] told me that [D]’s finance team would go with a Director to the BlueSky Office to complete the termination formalities later that afternoon after around 3 pm. I told [him] that I would prefer to inform the Team [the Three Employees] personally. [He] then asked me whether I would accept a severance payment of an amount equal to 3 months’ salary. I informed [him] that pursuant to the Employment Contract, I was entitled to a severance payment equal to 12 months’ salary. It was clear to me from my discussion with [Senior Cheng] that my employment was being immediately terminated by [D].”

41.  First, even according to P’s own account of the exchange he had with Senior Cheng in the Second Meeting in Paragraph 27, it is difficult to construe as to how Senior Cheng had clearly and unambiguously terminated his employment orally in that meeting. P was not even able to tell what actually had been said by Senior Cheng to terminate his employment.

42.  I share the view of Mr Tam. What had been said by Senior Cheng was very important to P for it had an immediate destructive impact on his employment and P was from those words that he considered himself being terminated. P also alleged that lawsuits were within his contemplation by that time. Hence, it is unbelievable that he could not tell or he would not have kept a record of what Senior Cheng had actually said to terminate his employment.

43.  At most, P said that Mr Lee had told him that the employment of “the Team” was being terminated and he accordingly considered himself being terminated because he was part of the “Team” and that he was asked to consider the Offer. However, when he was referred to the word “Team” which he had defined to be the Three Employees only (not including him) in his witness statement, he could give no convincing explanation. When being pressed if Mr Lee had said so expressly that D was terminating P, P said he only recalled the gist of the conversation but not the exact specifics.

44.  On the other hand, Mr Lee’s evidence in his witness statement is that, in the First Meeting, Senior Cheng told him that the business operations of BlueSky PS would be closed down and that “the Team and [P] would be let go”. However, under cross-examination, Mr Lee clarified that Senior Cheng had only asked about if P would accept the Offer. He had never said that D was terminating P’s employment (bringing his evidence in line with the pleadings: Amended Reply §6(1).

45.  In court, Mr Lee said that the Two Meetings were all about discussing the closedown of the operations of BlueSky PS and how to implement the process amicably so as to minimize the damage to its staff. He therefore acted as a mediator to assist. He also clarified that he only led P to meet Senior Cheng to start the Second Meeting. He in fact left the meeting room immediately after giving a brief introduction.

46.  As such, when Mr Lee told P what he had been told by Senior Cheng before the Second Meeting, he could not have told P that D was terminating P’s employment (which was not said by Senior Cheng). Further, he did not participate in the discussion between P and Senior Cheng in the Second Meeting. In other words, Mr Lee disavowed all his evidence stated under §23(3), (4) and (5) of his witness statement as well as P’s evidence relating to Mr Lee in the Second Meeting. This seriously undermines P’s evidence. P also admitted under cross-examination that he knew Mr Lee had no authority whatsoever to terminate him.

47.  As to the Second Meeting between P and Senior Cheng, P first gave evidence in court that Senior Cheng did say that P would be let go. Under cross-examination, P backtracked on his answer by explaining that it was P’s “understanding” or that he “implied” from being asked to accept the Offer.

48.  When pressed on, P finally came to admit that Senior Cheng had not said to P that he would be “let go”, but then P dramatically changed his evidence to be “termination” or “cease operation of BlueSky PS”. When P was cross-examined if, by “termination”, he was referring to Senior Cheng saying to P that he was being terminated, P said he could not remember the exact language Senior Cheng said.

49.  I accept Mr Tam’s submission that had Senior Cheng ever said anything along the line of terminating P’s employment or letting go of P in the Second Meeting, P would have recorded those important conversations in his two witness statements instead of just giving ambiguous statements that Senior Cheng dismissed him verbally. Together with Mr Lee’s confirmation that Senior Cheng had not said anything about terminating P tend to support the defence case that Senior Cheng had not said that D was terminating P’s employment or was letting go of P.

50.  On a proper reading of Paragraph 27, P considered himself being terminated because of being told that the business operation of BlueSky PS would be closed down, that the “Team” would be let go and that he was asked if accept the Offer. It also says that Mr Lee was there to witness, which was disproved by Mr Lee in court.

51.  Solely on the reasons set out above, I do not believe that Senior Cheng had orally terminated P. He did not tell P that D was “terminating” P’s employment or P was being “let go”. There had been no clear and unambiguous termination notice served on P orally. P’s allegation that he was immediately dismissed by Senior Cheng in the Second Meeting is unsubstantiated.

The Offer

52.  Second, merely an enquiry as to whether he would accept the Offer could not be regarded as a termination notice. In particular, such offer was immediately rejected by P, who referred to the contractual Golden Parachute, ending up with no agreement having been reached, leaving the issue open with no conclusion. The Agreement nevertheless remained intact and subsisting.

53.  Under cross-examination, P said it for the first time that he had said to Senior Cheng at the Second Meeting that D should either continue with his employment, or terminate him with payment of the Golden Parachute. Allegedly, Senior Cheng responded that neither of them would happen.

54.  Such new allegation is unconvincing. P gave no reasonable explanation for the missing of such material evidence in his witness statement. At any rate, such exchange cannot be regarded as a clear and unambiguous termination notice. Further, if D had already determined to dismiss P no matter whether he would accept the Offer or not, the whole arrangement of having the Two Meetings and the involvement of Mr Lee would be unnecessary. It also runs counter to Mr Lee’s evidence that the whole arrangement aimed at minimizing the damages brought to the staff as Senior Cheng wanted the matter to be resolved amicably.

55.  P admitted that he had not immediately inquired or confirmed with Senior Cheng if he was being dismissed after his rejection of the Offer. It is illogical that he would have left all the matters relating to the termination unsettled but thought himself being immediately dismissed, not even knew whether he would be paid 3 months’ salary as severance payment or the Golden Parachute and the date of payment. In further consideration of his stay in Hong Kong on the strength of a working visa and of his Unpaid September Salary, his failure to ask about his termination arrangement is unreasonable.

Different Treatments

56.  Third, if P had been dismissed in the Second Meeting, there was no reason that he would not have been served with a written termination notice with the termination formalities arranged for him at the Second Meeting or at the latest, together with the Three Employees at the BlueSky Office in one go in that afternoon, so as to achieve the alleged D’s purpose of shutting down the operation of BlueSky PS.

57.  The whole arrangement is in sharp contrast to the treatments to the Three Employees. During the Two Meetings, Senior Cheng specifically said that D was going to terminate the employments of the Three Employees and the formalities were scheduled to take place that afternoon. On the contrary, no termination arrangements or formalities for P were indicated in the Two Meetings.

58.  The different treatments between the Three Employees and P should also have triggered P’s enquiry about what termination arrangement would be made for him. In particular, P alleged that Ms Kitty, after serving the termination notices on the Three Employees, directed the Three Employees and P to remove all their personal belongings from the BlueSky Office and return all company properties.

59.  Coupled with P’s own allegation that he was not given any instructions to work for the following day and was left unclear what he could have usefully done, it is unbelievable that he would not have asked Senior Cheng, Junior Cheng or Ms Kitty for clarification. P’s another allegation that he considered himself being terminated for he had not been told what to do for the following day was expressly not relied on at the end of the trial.

Different Versions of the Event

60.  Fourth, P gave different versions as to when exactly he was being dismissed on the First Incident Date: -

(1)  In the Re-Re-Amended Statement of Claim, no particulars as to the time of the termination was provided. Reading §10 in full, P appears to say that he was dismissed at the Second Meeting.

(2)  In the Amended Reply, it is pleaded that: -

“… The discussion with [Senior Cheng at the Meeting] led [P] to believe that the Employment Agreement was being immediately terminated by [D]”: §6(2).

(3)  In his first witness statement, P similarly gave evidence that it was clear to him from his discussion with Senior Cheng that his employment was being “immediately terminated” by D: §27. However, under cross-examination, P changed his stance and said that “immediately” means he was being terminated “on that day” but not at the Meeting.

(4)  §31 of his witness statement states that: -

“The discussion with [Senior Cheng]at the meeting earlier that day where I was informed that the operations of BlueSky PS were being shut down and that my employment and the employment of the Team [Three Employees] would be terminated, together with the removal of equipment from BlueSky Office as well as the instruction to hand over all company property, and formal termination of the Team, all clearly led me to believe that my fixed term employment with [D] had been terminated on that day and I understood that an official termination letter would be forthcoming…”

Inconsistently, P changed his stance again to say that he only understood himself as being dismissed after he was allegedly instructed to hand over all company property at the BlueSky Office which happened after the Two Meetings and in the late afternoon.

61.  P’s indecisiveness as to when exactly he was being dismissed on the First Incident Date points to the fact that he could not actually refer to any things said by Senior Cheng to terminate his employment, still less of clear and unambiguous termination notice. That is why he could not tell when he was dismissed and what Senior Cheng had said to terminate him.

In The Afternoon

62.  Fifth, attempts have been made by P to rely on some post-meetings acts for proof of P’s alleged termination of employment during the Second Meeting. I am not convinced. P says that right after the Staff-Termination Arrangement, Ms Kitty directed P and the Three Employees to remove their personal belongings from the office and to return the company properties resulting in the return of the company chop of BlueSky PS to D and P’s removal of the Router.

63.  However, the details relating to how Ms Kitty talked to P have not been accounted for. It is also unconvincing that such direction would not have met with P’s immediate enquiry about his termination notice, termination payments and the Unpaid September Salary.

64.  On balance, Ms Kitty’s evidence is more believable that she only instructed the Three Employees to pack up and to return the company property. P’s allegation that he had removed the Router in the presence of both Junior Cheng and Ms Kitty, who did not raise any issues with him, does not advance his case. Under cross-examination, P confessed that he indeed did not know what thoughts or assumption they had in respect of what property at the BlueSky Office belonged to P. When asked whether they would know that P had removed the Router, P answered that he did not know what they knew or did not know.

65.  Purely Ms Kitty making some enquires with Mr Lee on some office equipment (without basic details about their conversations) could not be regarded as solid evidence that Ms Kitty had directed P to remove his belongings or that she knew P had removed all his belongings from the office. I also accept D’s evidence that Ms Kitty and Junior Cheng would not be able to find out the removal of the Router in use or whose properties were taken away or returned to D, when P and the Three Employees left the office together at around the log off time.

Text-Messages In The Evening

66.  Sixth, P’s own WhatsApp messages sent to Mr Wong and Mr Chan in the late evening of the First Incident Date disclosed that he was fully aware that he had not been terminated in the Second Meeting. Some extracts of P’s messages are set out as follows for illustration: -

(1)  P texted Mr Wong on the First Incident Date at 20:34 and 20:35: “Bluesky PS was all fired today. They tried to fire me too, but I argued it was against my contract”; “So they are considering. They may still fire me. If they do I will file a lawsuit.”

(2)  P texted Mr Wong on the First Incident Date at 20:37 and 20:38: “if they terminate me, I do not know what will happen with my visa” and “All I can do is get a lawyer and let them handle it if they terminate me”.

(3)  P texted Mr Wong on the First Incident Date at 20:39: “It‘s ok. Im hoping they won’t terminate me and just keep me on until the end of July. …… I don‘t know what will happen yet, but BSPS is pretty much shut down from [D].”

P was being asked: “if they keep you, they may negotiate with you for a salary cut. Anyway, be cool!”

P replied: “I will see. As far as I am concerned I will abide by my contract terms if they will.”

(4)  P texted Mr Chan on the First Incident Date at 22:13: “They tried to get rid of me, but i argued with a lawsuit for contract violation, so we will see what happens”

(5)  On 30 October 2018, P texted Mr Wong at 12:53: “They haven’t terminated me yet, but they stopped everything that I would be doing so I don’t know what’s going on yet”

[emphasis added]

(collectively, “First Incident Messages”)

67.  In contrast, P texted Mr Wong and Mr Chan on the Second Incident Date respectively at 17:11 and 17:17 to inform them that he had just been terminated:

(6)  “They just terminated me”

(7)  “@Michael Chan I was just terminated too”

68.  Given those messages were written by P in simple English to update his contemporaries on his employment status, I have no reason not to believe them to have reflected the truth of P’s knowledge and thought. Apparently, P was fully aware that he had not been dismissed in the Second Meeting notwithstanding that “BlueSky PS was pretty much shutting down” and “BlueSky PS was all fired today”. It was only until the Second Incident Date that he was actually dismissed.

69.  Attempts have been made by P to interpret such messages in his favour. He explained what he meant was that he had been terminated without written termination notice on the First Incident Date. He was sure about the fact of being terminated but was unsure as to the process and whether it would give rise to a claim where D had not provided the payout.

70.  I am not persuaded. Such explanation is artificial which does not sit well with the clear meanings of those straightforward messages. Those messages obviously show that on the First Incident Date, P was well aware of the fact that his employment had yet been terminated. He would wait to see what would happen in the future. He still had a hope that his employment could continue to run for the full contractual period until the end of July 2019. He even planned ahead as to how to react if he would be asked for a salary cut in future.

71.  P tries to seek support from his last few sentences of his message sent to Mr Wong on 30 October 2018 at 12:53 for proof of his being terminated on the First Incident Date: -

“(P) Ok I am home now so anywhere is ok.

(Wong) On leave?

(P) In limbo, They shut down BSPS.

(Wong) Limbo?

(P) Not sure what I’m supposed to do. They haven’t terminated me yet, but they stopped everything that I would be doing so I don’t know what’s going on yet.

(Wong) So you are not (required to be) attending the office?

(P) I was not told to be. And that they shut down the office. And that I was terminated too. But they never sent me the termination papers. But that was what I was told.”

72.  I am not convinced. These messages were written 7 days after the First Incident Date. The last few sentences are premised on the preceding unambiguous statement that “they haven’t terminated me yet”. In contrast, the last few statements are ambiguous and confusing. They did not tell when and who had told him what. They did not make reference to Senior Cheng or the Second Meeting. They also appear to have mixed up with his own feelings and worries. Such equivocal statements cannot take P’s case any further.

After The First Incident Date

73.  Seventh, the subsequent events further illustrate that P was well aware of the fact that he had not been terminated: -

(1)  Even after the First Incident Date, P continued to use his title and position with D. Even though he said that he did not surrender the email account as he personally paid the web domain, all his emails sent to Senior Cheng on 25 and 30 October 2018 were still sent under “Matthew Hum, CTO and Principal Consultant, Bluesky Information Technology and Professional Services”.

(2)  P had no difficulty in gaining access to the Bluesky Office on the Second Incident Date. Apparently, he had not been denied access and the office and its facilities had been open for his use.

(3)  P did not follow up the termination arrangement with D until 30 October 2018. Instead, he only sent an email to Senior Cheng (“P’s Salary Email”) and a message to Ms Kitty (“P’s Salary Message”) for the Unpaid September Salary on 25 October 2018 (collectively, “Salary Messages”). It is unreasonable that he would not have also asked for the termination arrangement.

30 October 2018: Last Emails

74.  P also seeks support from the Last Emails for proof of his dismissal on the First Incident Date and his demand for formal termination notice. The first one is his email to Senior Cheng on 30 October 2018 at 21:43. The message was started with his acknowledgement of payment for the Unpaid September Salary. He then asked:

“Can you help me understand what my current position is? Last you told me, the Tai Kok Tsui office was closed and I was being terminated, and I informed you I had no choice but to file a lawsuit for contract negligence. As I have not been given official notice in writing, what is the current expectation for me or is there an official decision regarding my termination?”

75.  In response, Senior Cheng wrote:

“I have never told you that the Tai Kwok Tsui office is closed. Indeed Mr Michael Chan and his team are still using the office. You left the office on 23.10.18 and have not returned. May I know the reason. I did tell you that [D] is considering terminate your contract. Is it that caused you not returning to work?

I am endeavoring to get an answer to your case from the top management and will let you know soonest.”

76.  P replied:

“Yes, as you said that Bluesky PS was terminating operations, and you were terminating me this is the reason I have not been back. As BlueSky operations were terminated this meant that we had to clear our items from the office and not return, as is typical when you shut down a company. [Ms Kitty] and [Junior Cheng] also implied that the office was going to be closed, and we needed to clear out items. As representatives of Allied Way I took that as a direct order.

If I am supposed to return I will, but this was not made clear to me. Nor was any insight on what I should be doing now. I have been doing cleanup work contacting the other companies and following up on terminating contracts and non-discloures that we have with other foreign entities, such as Minerva, from home, as I had been told that Bluesky was terminated.

I did not hear that they were considering terminating me, I heard that I was being terminated. Hence I was in limbo as I have not received any paperwork. If I am not being terminated, what should I be working on then? With the team gone and the rest of Bluesky PS out, I am not sure what I should be doing.

Please provide some guidance, as no one else is forthcoming with any information.”

(the 3 messages, collectively, “Last Emails”)

(P’s two messages, collectively, “P’s Last Emails”)

(Senior Cheng’s message, “D’s Last Email”)

77.  Having considered the Last Emails carefully, I accept Mr Tam’s submission that P’s Last Emails are apparently an afterthought, an excuse to justify his absence during the Absence Period.

78.  Such messages are self-contradictory. If P had been terminated in the Second Meeting, the employment relationship strictly cut off there and then. P would not have asked, seven day later, “is there an official decision regarding his termination”. Nor would he ask his former employer to state P’s current position or the current expectation for him. There should be no basis for him to be “in limbo”. His argument that he was put in limbo because he had yet been served with a written termination notice does not lend any support to his case but illustrates that he actually knew he had yet been terminated.

79.  Further, such messages contradicted his First Incident Messages and his past conducts. His allegation that “I did not hear that they were considering terminating me, I heard that I was being terminated.” directly runs counter to his own message to Mr Wong on the First Incident Date at 20:35, “So they are considering. They may still fire me. If they do I will file a lawsuit.”

80.  I do not lose sight of the fact that P’s message to Mr Wong on the First Incident Date at 20:35 is indeed in line with D’s Last Email that Senior Cheng only told P that D “is considering terminate your contract”. It also supports D’s case and Senior Cheng’s evidence in his witness statement that he only told P that D was “considering whether or not to terminate his [P’s] employment”, “[P] then asked about his employment status, to which I replied that the Board of Directors had not made any decision yet.”

81.  Indeed, P’s Last Emails contradicted himself on his firm stance that he had not been terminated in the Second Meeting in the First Incident Messages. He could give no reasonable explanation for such change of position. Given the First Incident Messages were to update his friends on his employment status shortly after the Second Meeting, there is no reason that P would not tell the truth. In contrast, P’s Last Emails were sent to his employer after absence for one whole week. Obviously, P had an incentive to justify his absence by making up an excuse of being terminated in the Second Meeting.

82.  I should not ignore the fact that in the P’s Last Emails, P just said that because the BlueSky operations were terminated, he took it to have “meant that we had to clear out items from the office and not return” and “[Ms Kitty] and [Senior Cheng] also implied that the office was going to be closed, and we needed to clear out our items. As representatives of Allied Way I took that as a direct order.”

83.  Such messages disprove his allegation that he was told and directed by Ms Kitty to remove his belongings from the BlueSky Office on the First Incident Date. Besides, he was fully aware that he just acted as a representative of D in the BlueSky PS and in the BlueSky Office. He differentiated his two roles in the two companies.

SHUTDOWN OF BLUESKY OFFICE

84.  Much has been said that in the circumstances that P had been told that BlueSky PS was being shutdown with the Three Employees gone in the Second Meeting, Senior Cheng must have dismissed P orally by then. That said, P also argues that in the event that he was not terminated in the Second Meeting, his absence from work or his absence at the BlueSky Office was justified because he would have no work to do and no office to attend. Such arguments are unpersuasive.

85.  For the following reasons, even if Senior Cheng had told P that the operations of BlueSky PS was being shutdown, I do not believe that Senior Cheng told him that the BlueSky Office was being shutdown.

86.  First, gathered from all P’s evidence in court and in writing (including the emails), P’s account of what Senior Cheng had told him about the status of BlueSky PS and the BlueSky Office is ambiguous and evasive. There have been different suggestions at different times, including, the BlueSky PS was being shut down, the operations of BlueSky PS would be closed or terminated, the BlueSky Office was being shut down, the operations of the BlueSky Office would be closed or terminated.

87.  Second, there has been no mention of the BlueSky Office being shut down in any of the First Incident Messages. Given Mr Chan shared the BlueSky Office with him, there is no reason that P would not have immediately notified Mr Chan of such important matter in the First Incident Messages. P only first mentioned about the shutdown of the office in his message to Mr Wong on 30 October 2018. He however did not say that that was told by Senior Cheng.

88.  Third, a considerable amount of evidence point to the fact that the BlueSky Office and the Two Companies had not been shut down. It is not disputed that some other D’s subsidiaries, including BlueSky IT and the 5 technical staff working for BlueSky PS, continued working at the BlueSky Office. Further, P could also gain access to BlueSky Office on the Second Incident Date.

89.  Even though P tries to relate his text message to Mr Wong to assert that Mr Chan was terminated on or around 25 October 2018, I do not ignore the Termination Notice and P’s another text message to Mr Chan after his dismissal on the Second Incident Date at 17:24 that P was directed to pass the company properties over to Mr Chan.

90.  Fourth, P’s argument also neglects the fact that he was indeed employed by D as Chief Technology Officer of D. BlueSky PS was just one of his duties. D gave evidence that P had other work duties to discharge as a Chief Technology Officer of D. Mr Jacky also gave evidence that it was P who resolved all the IT problems occurred at the BlueSky Office.

91.  Under cross-examination, P admitted that he was the highest technology executive within D and was responsible for overseeing the entire technology infrastructure of D and all its subsidiaries. He had from time to time rendered services and supports to them. He would also assist BlueSky IT in technical and security issues. He finally agreed that the Board of Directors of D could have assigned other duties to him following the closure of BlueSky PS, as D had done at the commencement of his employment. As illustrated in P’s Last Emails, he was aware that he just acted as a representative of D in the BlueSky PS.

92.  Fifth, Senior Cheng, Junior Cheng and Ms Kitty gave consistent evidence that the Two Companies had never been shut down but were sold in or around March 2019. There are also contemporaneous records for proof of the operation of the BlueSky Office and the Two Companies, including D’s Last Email which mentioned that Mr Chan and his team were still using the BlueSky Office; a cheque from BlueSky IT dated 5 November 2018 which covered the expenses incurred for the period between 11 October 2018 to 5 November 2018.

93.  Thus analyzed, I am not convinced that Senior Cheng had verbally terminated him or told him that the BlueSky Office was being shut down. I find that the BlueSky Office was in operation during the Absence Period. P could report to duty if he chose to.

SHUTDOWN OF BLUESKY PS

94.  For the following reasons, I take the view that Senior Cheng might have told P that the operations of the BlueSky PS would be shut down but he most probably had not said that it would be immediately shutdown necessitating the immediate dismissal of P in the Second Meeting as P seeks to portray. I also do not believe that the dismissal of P was for the purpose of avoiding payment of Termination Payments.

95.  Admittedly, D was disappointed with the performance of BlueSky PS which generated insignificant income. The cash flow was tight and late payments of salary were occasioned. In my view, these are the reasons for the closure of its operation. However, I am slow to accept that the closure was immediate necessitating the immediate dismissal of P or that the dismissal was to avoid payment of Termination Payments.

96.  P seeks to refer to the termination of the Three Employees for reference. Nevertheless, they were given prior warnings on 5 October 2018, followed by a reasonable period of time for improvement of performance and attendance. Eventually, the termination of their employments were compensated in full which did not give rise to any employment disputes or legal actions. The suggestion of D playing tactics for avoiding the Golden Parachute by wrongful dismissal have not made out.

97.  Apparently, D had been considering terminating P’s employment as admitted by Senior Cheng. I am convinced that the decision had yet been finalized. Otherwise, the whole setting of the Two Meetings, the involvement of Mr Lee, the Pre-Incident Absence Allegation needed not be mentioned in the Second Meeting.

98.  Further, Mr Lee’s admission that even after the Second Meeting, he still conducted a meeting in order to develop a relationship with a potential customer for BlueSky PS as well as his aim at protecting the reputation of BlueSky PS demonstrates that D had no plan to immediately shut down BlueSky PS by that time.

99.  On the other hand, P seeks support from P’s Salary Message for proof of his allegation that BlueSky PS was closing down. What happened was on 25 October 2018, P texted Ms Kitty asking for the date of payment of his Unpaid September Salary at 01:25 am. His message met with Ms Kitty’s complaint of his texting her at late night. He then explained that he was working to clean up the hanging foreign contracts and NDA for BlueSky and as they were foreign and therefore had to do at late night.

100.  Under cross-examination, Ms Kitty explained that as she was just an accounting manager, she did not involve in the business aspect and did not understand the implication of P’s message, she just ignored it which did not concern her and did not report it to anyone else.

101.  In my view, P’s evidence does not lend any support to P but undermines his case. If P had been terminated, it is illogical that Senior Cheng would have let an employee, who was summarily dismissed unpleasantly, to do the wrap-up works for D. On the other hand, if P had not been terminated, he would have work to do, but he should have reported his work to his supervisor, Senior Cheng or Junior Cheng (but not the accounting manager) during the Absence Period.

102.  Merely an indication that the BlueSky PS would be shut down in future (without imposing a deadline or any indication of immediate shut down) and the suggestion of the Offer cannot constitute a valid termination notice. In any event, P confirms that he places no reliance on the alleged shutdown of the BlueSky PS as constituting a valid termination notice.

103.  For the reasons set out above, P’s suggestion that the “shutdown of BlueSky PS” had rendered his employment futile necessitating immediate termination of his employment by Senior Cheng in the Second Meeting is unconvincing. I do not believe that he had been led to or he had come to the understanding that he was being terminated in the Second Meeting. Nor do I accept that he had no work to do or he was not required to report to work at the BlueSky Office during the Absence Period.

104.  Besides, P also refers to the fact that he was only paid his salary up to the First Incident Date for proof of his dismissal on the First Incident Date. Such argument is defeated by the evidence of Junior Cheng and Ms Kitty’s that D was entitled to make deductions from wages due to P’s absence during the Absence Period. Indeed, such right is recognized under s 32(2) EO. Their mistake in working out the correct payment for October due to misunderstanding of the contractual terms and EO does not change their intention of not making payment for the Absence Period.

105.  All evidence considered, I form the view that both P and Senior Cheng were not telling the whole truth of what actually happened in the Second Meeting. I believe that the Two Meetings were arranged to inform P of the dismissal of the Three Employees and to make inquiry about the Pre-Incident Absence Incident. D was in the process of arranging shutting down the operation of BlueSky PS as well as considering whether to terminate P’s employment or not. Hence, the Offer was put forward to explore the possibility of achieving an amicable settlement with P. The Offer was rejected. No agreement or conclusion could be reached. The Second Meeting came to an end when P stood up and left. Senior Cheng had not dismissed P at the Second Meeting. P was fully aware of all these without misunderstanding.

ISSUE 2: IF DISMISSAL ON THE SECOND INCIDENT DATE JUSTIFIED

106.  It is not disputed that if P was not dismissed on the First Incident Date, he was summarily dismissed on the Second Incident Date. The issue to be determined is whether his dismissal on the Second Incident Date was justified with valid reason. The burden of proof rests on D.

GROUND 1: P’S UNILATERAL TERMINATION OF THE AGREEMENT

107.  During the Absence Period, P did not attend BlueSky Office. Nor did he have any communication relating to his employment with D (except the Salary Messages and the Last Emails). His reason for absence was that the termination of his employment in the Second Meeting had discharged him from the employment agreement.

108.  On my findings that he was not dismissed in the Second Meeting and that he had full knowledge of such fact as elaborated above, his reason for absence is plainly untrue. It is an excuse made up by him.

109.  In view of P’s whole series of conducts since the First Incident Date ending up with the Last Emails, P had knowingly and wrongly declared and treated D as having repudiated the Agreement (by his allegation of being terminated by Senior Cheng in the Second Meeting) and then purported to accept such repudiation and terminate the Agreement (by his purported reasons for leaving the company and discharging himself from reporting to duties since the First Incident Date). He also communicated his positions to D through P’s Last Emails.

110.  By so doing, P evinced an intention not to be bound by the Agreement. He placed himself in repudiatory breach. His absence during the Absence Period without authorization and P’s Last Emails altogether amount to repudiatory breach of the Agreement which entitled D to dismiss him with cause under Clause 13 of the Agreement as well as summarily dismiss him under s 9 EO.

111.  Mr Brown, in his attractive argument, contends that D should not have dismissed P because of P’s honest belief that he had been dismissed on the First Incident Date. For the reasons aforesaid which I should not repeat, I do not take the view that P was labouring any genuine but mistaken belief that D was purporting to wrongfully dismiss him on the First Incident Date. Nor am I persuaded that he was uncertain as to whether Senior Cheng had dismissed him or not.

112.  P also argues that D should have approached P for his reasons for absence and afforded P an opportunity to clarify his confusion. Such argument plainly ignores the Last E-Mails in that P was offered an opportunity to explain his reason for absence by Senior Cheng. However, the reasons he repeatedly gave is that he was being terminated in the Second Meeting, specifically, he said that he was told by Senior Cheng that “Bluesky PS was terminating operations and you were terminating me this is the reason I have not been back.” and “I heard that I was being terminated.”

113.  Such reasons are factually untrue. Both P and Senior Cheng knew that. Given they were the only 2 persons in the meeting. It is not difficult to understand that Senior Cheng would have considered P “came up with the excuse for his absence” by knowingly and unfaithfully making false accusation of being terminated against Senior Cheng.

114.  In my view, the unauthorized absence for a period of one whole week, followed by a reason tainted with false accusation of being terminated against his superior constitute valid grounds of summary dismissal on the Second Incident Date. I also accept the evidence of Junior Cheng and Ms Kitty that they had made phone calls to P which met with no answer during the Absence Period. In particular, Ms Kitty was demanded by P to give him a reply in the P’s Salary Message.

115.  Unauthorized absence for even just one day may be considered as a serious neglect of duty amounting to repudiation of the employment agreement which justifies summary dismissal: Pak Wang Kwan v Associated Tourist Coach Limited HCLA7/ 2001, unreported 30.11.2001; Ying Kee Safes and Furniture Ltd v Wong Yam Tak [1996] 1 HKC 307.

116.  Viewed in this light, D was also entitled to accept P’s repudiation and terminate the Agreement with cause on the Second Incident Date with the Termination Notice. The Termination Notice did not refer to P being in repudiation of the Agreement or express to be terminating the Agreement on P’s breach does not render the notice invalid: Bill Chao Keh Lung v Don Xia [2004] 2 HKLRD 11 §41(2).

117.  I should add that P was still in repudiation since he was under an obligation to ascertain and confirm if D was truly dismissed him if the position was in doubt: Lam Sin Yi Sindy. He nevertheless made no attempt to clarify his employment status for 7 days.

GROUND 2: UNAUTHORIZED ABSENCE

118.  Solely on Ground 1 aforesaid, P’s claim for Termination Payments shall be dismissed. For completeness sake, I now turn to deal with his alternative argument that if he was not dismissed in the Second Meeting, he should not be considered to have been absence from duty during the Absence Period. P argues that as the BlueSky PS and the BlueSky Office were being shut down, there was no work for him to do and no office for him to attend during the Absence Period.

119.  Such argument is hopeless which completely contradicts his primary case. Not only that he should not be permitted to run two self-contradictory cases, he could not have, in reality, discharged himself from employment for being terminated since the First Incident Date but simultaneously worked diligently and faithfully as an employee under employment in parallel. Having acted on his purported dismissal by D on the First Incident Date, there is plainly no room for P now turn round to argue that he had not absented from work since then. I refuse to accept such artificial argument.

120.  Besides, I should not repeat my findings on the wide scope of P’s duties under his employment with D, the continued operation of D and its subsidiaries, including the Two Companies and the BlueSky Office throughout the Absence Period. P simply neglected his duties owed to D with the responsibility of overseeing the entire technology infrastructure of the group companies.

121.  Further, it was not for an employee to assume there would be no work for him to do. He had a duty to report to duty and make himself available for work. I share the view with Mr Tam that P was not in a position to tell that there was no work for him to do for he did not even show up at the office.

WORKING PLACE

122.  Viewed in this light, P’s another argument that P was not duty-bound to report to duty at the BlueSky Office as it was not specifically written in the Agreement is bound to fail. P did not only absent from the BlueSky Office, there is plainly no solid evidence to challenge D’s evidence that P had neither reported to duty nor performed any work under his employment with D, be that at the BlueSky Office or elsewhere, throughout the Absence Period.

123.  In any event, even though no location of work was specified in the Agreement, clause 3 provides that P was to perform duties as advised by the Board of Directors. D plainly had the power to direct P to work at a reasonable place.

124.  In further consideration of the fact that the BlueSky Office was the registered office of BlueSky PS, that it was set up partly according to the requirements of P knowingly for the purpose of making it the working office of the Two Companies as well as to house the IT teams and equipment of D and its subsidiaries, that a working office therein was assigned for P, that P was used to work at the office since around May 2018, I am not convinced that P was not required to work at the BlueSky Office since or around May 2018 except he was required to work out of the office for business purpose.

125.  Further, it is common fact that in the Second Meeting, Senior Cheng raised the Pre-Incident Absence Allegation and queried whether P had been absent from the BlueSky Office without approval. The Three Employees were dismissed partly due to their absence at the BlueSky Office. It is beyond dispute that P was put on notice that he was not only expected to report to duty at the BlueSky Office, but he was indeed directed and required to do so.

126.  Accordingly, the requirement of P working at the BlueSky Office was made clear to him no later than the Second Meeting. Such fact is further evidenced in the D’s Last Email and the Termination Notice. Throughout the period, P did not dispute that he was not duty-bound to work at the BlueSky Office. Nor did he challenge that Senior Cheng did not act for and on behalf of the Board of Directors of D in dealing with and giving direction to P.

127.  In the circumstances, I form the view that since May 2018, P was aware that he was required to report to work at the BlueSky Office unless he had justified reasons to work out of office. He was also warned that D would not accept unauthorized absence from work at the BlueSky Office which would entail dismissal in the Second Meeting.

WORK DONE

128.  P further argues that he had performed his duties during the Absence Period by informing business partners and vendors of the cessation of the operations of BlueSky PS, cleaning up the hanging foreign contracts and NDAs, making efforts in publishing an interview under the name of BlueSky PS.

129.  Such argument does not stand for reasons elaborated above. After all, it is indeed disproved by P’s own confession in his witness statement that such work was done “as he felt morally obliged to ensure that the business partners and vendors were duly informed” and he “felt like [P’s] reputation was on the line.” Under cross-examination, P further confirmed that such “work” was done entirely out of moral obligation, protection of his own reputation and his personal connections with the vendors. At any rate, P failed to adduce solid evidence for proof of his work throughout the Absence Period. Senior Cheng also emphasized that BlueSky PS had only 1-2 contracts which would not generate any significant work for closing them.

WORKING HOURS

130.  Likewise, P’s another argument that he had complete freedom as to when to work and could work only when he saw fit is unpersuasive. Such interpretation of Clause 4 of the Agreement plainly ignores the clear wordings that P was required to work from 9:30 am to 6:30 pm from Monday to Friday. The adoption of flexible working hour should not be read to render the defaulted working hours wholly redundant.

131.  The whole Clause 4 is under the heading of “Working hours” with the days and times precisely specified altogether giving a total of 45 working hours including lunch hours. The phrase of “Flexible working hour is adoptable” must be intended to give only limited flexibility to the time to report to work but not to the working hours. Otherwise, the whole Clause 4 should just read “flexible working hours” only and no more.

132.  After all, for my analysis set out above, Clause 4 has no application in this case. There is plainly no convincing evidence that P had performed work as an employee under the employment with D during the Absence Period, not to mention that he had worked throughout the Absence Period.

G ROUND 3: REMOVAL OF ROUTER

133.  I also agree that the removal of the Router amounts to a repudiatory breach of the employment, which justifies summary dismissal. There is no dispute that P consciously took away the Router, which had all along been in use in the BlueSky Office. Absence the Router, all wireless internet access at the office was disrupted. In fact, the office was deprived of wireless internet access until 29 October 2018, causing administrative inconvenience to the office.

134.  Given my findings that on the First Incident Date, P was neither being dismissed nor being directed to remove his personal belongings, he could offer no reasonable explanation for his sudden unannounced removal of the Router.

135.  No doubt P absolutely had full legal right to get back his own property at any time as he found fit. The problem does not rest on P getting back his own property but his failure to notify D and to arrange a replacement, apparently with an intent to cause disruption to the operation of the BlueSky Office.

136.  Being the Chief Technology Officer of D who was responsible to the set up and operation of the IT system, P had the duty to ensure safe and smooth operation of the system without disruption. He had knowledge of the consequences caused by the removal of the Router. He had no reason not to notify D nor make arrangement for a substitute router, but suddenly removed the Router unannounced and then absented from work since then, leaving the office deprived of the use of a router, bearing in mind the business nature of D.

137.  The fact is no one realized the removal of the Router until the next day when Mr Chan reported the case to Ms Kitty. Much has been said that the delay of the purchase of the replacement router for several days illustrated that the chaos caused to D was minimal. I have heard the evidence given by Junior Cheng and Ms Kitty on the administrative arrangement. That was the implementation of the instruction that caused the delay.

138.  All matters considered, I am persuaded that P’s removal of the Router was deliberate and calculated to obstruct the operation of the D’s office and its business. Accordingly, he has breached his implied duty to serve his employer faithfully, not to conduct himself in a manner calculated or likely to destroy or damage the trust and confidence between P and D, not to disrupt the operation of the business of D and its subsidiaries. Such acts amount to repudiation of the Agreement that justifies summary dismissal by D.

THE SECOND INCIDENT DATE

139.  I now turn to consider whether P’s appearance at the BlueSky Office on the Second Incident Date amounts to report to duty which entitled him to wages for that day. P gave an account of the event in paragraph 41 of his witness statement. He said that he had attended the BlueSky Office “as I got the impression from my last correspondence with Philip [Senior Cheng] that he wanted me to attend the BlueSky Office.” He however did not say that he attended the office to report to work as an employee.

140.  Coupled with the fact that P has presented himself as being terminated on the First Incident Date throughout the period even during the trial, there is indeed no concrete evidence to suggest that he attended the office to work as an employee on the Second Incident Date.

141.  In all, I take the view that P absented himself from work and failed to discharge his duty as an employee from 24 to 31 October 2018. He had taken and conducted himself as being discharged from his employment since 24 October 2018. His absence from work was unauthorized, unjustified and a repudiatory breach of the Agreement.

142.  On the finding of P having committed a repudiatory breach of the Agreement, I have no hesitation in finding that justifiable grounds of summary dismissal are established. Further, it is well-settled law that unauthorized absence from work without justification constitutes justifiable grounds for summary dismissal, in the sense that P has misconducted himself and inconsistent with the due and faithful discharge of his duties under s 9(1)(a)(ii) of EO.

143.  In light of my findings that P had been in repudiatory breach of the Agreement which justified his immediate dismissal with cause within the meaning of Clause 13 of the Agreement as well as summary dismissal under s 9 of EO, P’s claims for Golden Parachute and wages in lieu of notice shall be dismissed.

GOLDEN PARACHUTE

144.  Before I leave those 2 items of claim, I may very briefly add a few observations on the arguments relating to them for completeness sake. The first one is whether the housing allowance should be included for calculation of the Golden Parachute. I share the view with Mr Brown that it does.

145.  Clause 14 makes reference to “salary”, which has not been specifically defined under the Agreement and is plainly different from “basic monthly salary” under Clause 5. The drafter is aware of the distinction as illustrated in Clause 7, in that the “basic monthly salary” is specifically referred to for the purpose of calculation of MPF payment. Under Clause 14, the use of “salary” instead of “basic monthly salary” is clearly a deliberate choice to cover not only the basic monthly salary but also the housing allowance.

146.  Undoubtedly, the Golden Parachute is purely a contractual entitlement which is not provided under EO, It in itself does not bring in the meaning of s 2 EO. That said, the same word “salary” is also used in Clause 13 which should carry the same meaning as in Clause 14. Clause 13 requires P to pay 3 months’ “salary” for payment in lieu of notice upon resignation. The drafter is assumed to have complied with the EO and accordingly, intended Clause 13 to be consistent with s 6 EO, which effectively brings in the meaning of “wages” under s 2 EO for the purpose of interpreting the word “salary”.

147.  As a result, the word “salary” under Clause 13 will cover both the monthly basic salary and the housing allowance by virtue of the wide definition of “wages” under s 2 EO. Given the same word should share the same meaning under the same Agreement, the “salary” of the Golden Parachute under Clause 14 should cover both basic monthly salary and the housing allowance as Clause 13.

PAYMENT IN LIEU OF NOTICE

148.  I will just briefly deal with the argument on the length of notice period. Under s 8A EO, the statutory damages for wrongful termination of an employment is equivalent to the amount of wages that would have been payable had the contact been terminated by payment in lieu of notice under s 7 EO. Under s 7 EO, the amount depends on the length of notice required to terminate the contact under s 6 EO.

149.  The Agreement is a fixed 2-year term contract but with a built-in right to terminate. Clause 13 provides P with a right of termination with 3 months’ notice or payment in lieu of notice. It also empowers D to terminate with cause. Clause 14 requires D to compensate P with the Golden Parachute in the event that it dismisses P without cause. The events being regarded as termination without cause are specifically defined. Hence, it is clear that both parties have intended that both of them have a right to terminate the agreement, but just that they will have to bear different consequences.

150.  Clause 14 requires D to pay the Golden Parachute upon termination without cause. Such payment is expressly regarded as “severance benefits” which is not cross over with any other clauses and is unarguably a stand-alone contractual entitlement different from payment in lieu of notice.

151.  Being a fixed term contract with a right for D to terminate without cause but silence on the notice period, the Agreement does not fall into either s 6(2)(a) or s 6(2)(b). It should fall into the catch-all provision under s 6(2)(c). However, absent a built-in agreed notice period in the Agreement, the common law should apply to impose a reasonable notice period. Given the senior position of a Chief Technology Officer and making reference to the notice period required for P under Clause 13, I would consider the reasonable notice period to be 3 months.

152.  I have already ruled against the suggestion that the dismissal was for avoiding payment of Termination Payments. Therefore, P’s pleaded issues on D’s breach of the implied obligations of anti-avoidance, mutual trust and confidence, and good faith by dismissing P to avoid payment of Golden Parachute must fail. Fairly and sensibly, such issues were in fact not further pursued with by P during trial. As Mr Brown sensibly agreed, the alleged D’s implied obligations is in no way determinative of any part of P’s claim.

CONCLUSION

153.  Having considered all the evidence and the parties’ submissions, I find that the termination of P’s employment on the Second Incident Date for cause under Clause 13 of the Agreement as well as the summary dismissal under s 9 of the EO is justified with valid reasons.

154.  As to the relief sought, both Counsel have very helpfully prepared the whole set of draft orders which they would invite the Court to make according to the findings of the facts in this case. Given my findings that the dismissal on the Second Incident Date was justified with valid reasons, the parties have helpfully agreed almost the full set of the order to be made in these circumstances, leaving just a few items for adjudication, which I now turn to.

155.  Given the dismissal was justified with valid reasons, D is not liable to pay the Golden Parachute under Clause 14, wages in lieu of notice under EO or any damages for breach of the alleged implied terms.

156.  Upon D’s admission of liability to pay the unpaid portion of housing allowance for the whole month of October 2018, being HK$25,000 - HK$18,906 (partial payment) = HK$6,094, D is liable to pay P the balance of the housing allowance of HK$6,094 (as agreed by both parties).

157.  As to the salary for the month of October 2018, D had already paid HK$60,490, with full deduction of MPF HK$1,500. D is entitled to deduct P’s salary for the period between 24 to 31 October 2018 except 27 and 28 October 2018 (being Saturday and Sunday) owing to his absence from work under s 32(2)(a) of EO. Hence D is only liable to make payment of salary for 2 days, 27 and 28 October 2018, a total of HK$5,065 (HK$80,000 - HK$1,500 MPF) / 31 days x 25 days - part payment HK$60,490 = HK$2,816.

158.  As to the claim for the accrued but unused annual leave pay, D confirmed that it does not dispute P’s entitlement to payment for unpaid accrued annual leave for the current leave year notwithstanding that P was summarily dismissed under s 9 EO. D nevertheless argues that P’s claim on this item shall be dismissed for the reason that he had already received full payment of it.

159.  Mr Tam submitted that under Clause 8 of the Agreement, P was only entitled to a total of 14 days leave for the whole 2-year contract period and that P had already received HK$9,205 for his 3-month employment of the second year, which has already exceeded his entitlement. Hence, P’s claim on this item shall be dismissed, HK$80,000 + HK$25,000 x 12/365 x 1.75 days - HK$9,205. I agree.

ORDER

160.  In summary, D is liable to pay P the balance of the housing allowance of HK$6,094 and the balance of salary of HK$2,816. All other items of claim are dismissed.

161.  I give judgment to P against D in the total sum of HK$8,910 with interest thereon at judgment rate from 31 October 2018 until full payment under s 25A of EO.

COSTS

162.  In determining the issue of costs, I have taken into account of the facts that D has succeeded in defending most of P’s claim, P was only awarded an insignificant sum, both parties have made concessions on some issues in dispute and the time taken on dealing with those issues.

163.  Having taking into account of all the relevant factors, I make an order nisi that P do pay half of D’s costs of this action, including all costs reserved, with certificate for Counsel, to be taxed if not agreed.

164.  This costs order nisi shall become absolute in the absence of an application to vary by summons within 14 days.

165.  I thank both Counsel for their able assistance.