LAM SIN YI SINDY v. LEUNG KING WAI WILLIAM t/a WILLIAM KW LEUNG & CO

HCME 4/2019

[2020] HKCFI 2525

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MINOR EMPLOYMENT CLAIMS APPEAL NO 4 OF 2019

(ON APPEAL FROM MINOR EMPLOYMENT CLAIMS

ADJUDICATION BOARD APPEAL NO MB 0444 OF 2019(B))

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J U D G M E N T

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Background

1.  On 28 May 2020, this Court granted leave to the Claimant (“Employee”) to appeal against the Decision of the Adjudicating Officer of the Minor Employment Claims Adjudication Board (“Board”) of 4 November 2019 (“Decision”), by which the Board dismissed the Employee’s claim against the Defendant (“Employer”).  The question of law on which leave to appeal was granted is whether, in determining the facts and construing whether the words and actions of the Employee constituted resignation, the Board should have considered the entire context and circumstances of the dialogue between the Employer and the Employee, and not merely the literal meaning of the words used.

2.  The Employee was represented by solicitors and Counsel (acting pro bono) on the Appeal, which was dealt with by paper disposal with submissions filed and served on behalf of both the Employee and the Employer.

Facts

3.  On 8 August 2019, the Employee commenced employment with the Employer, trading as a firm of solicitors, as secretary. The contract of employment specified a probation period of 3 months, during which the employment may be terminated by either party by service of 7 days’ prior notice.

4.  In the afternoon of 18 September 2019, the Employee submitted to the human resources and administrative manager (“Manager”) of the Employer a leave application form, to take “no pay leave” for half a day on 19 September 2019, from 9 am to 1 pm (“Leave Application”).  The Employee stated in her evidence that this was in order to take her mother to see a doctor, and that the Leave Application had been approved by the Manager. When the matter came to the attention of the Employer in the morning of 19 September 2019, the Employer sent a message by Whatsapp to a group including the Manager and the Employee at 10:48 am, stating that he had not approved the Leave Application which had only been made on one day’s notice.  The Employer further stated that the firm would never approve leave applications short of 7 days’ notice, unless there was evidence to prove an emergency.  The Employer also stated curtly in the message that employees of the firm were employed to work, and not to take leave without reasons, and informed the Employee that there should not be any further exceptions in the future.

5.  The message at 10:48 am was shortly followed by another message at 10:50 am (“10:50 Message”), by which the Employer stated to the Employee:

“I am now considering whether you have absented from work without cause. If yes, you have to leave immediately! （我正在考慮你是否曠工。是的話你就要立即離開!）”

6.  The Employer also stated to the Manager, in the same Whatsapp group, at 10:56 am that the Employee was still in her probation period, and that a week’s notice was required (“10:56 Message”).

7.  At 1:57 pm, the Employee responded to the Employer’s message in the Whatsapp group, in what the Board referred to as a lengthy response (“1:57 Message”).  In the 1:57 Message, the Employee stated that she had only taken half a day of no pay leave, and pointed out that the Employer had instructed before that leave applications should be made to the Manager, for the Manager to submit to the Employer for signature.  The Employee queried in the 1:57 Message whether 7 days’ notice was required even for no pay leave, and finally asked, rhetorically, whether the Employer was treating her as being absent without cause, and that she was to leave immediately.  She stated that it was up to the Employer to use any alleged fault to dismiss her, that she had been prepared to return to work in the afternoon, but it did not matter if she should return to pack her things, to return her card and to take her pay cheque.  She pointed out that the Employer could arrange for other members of staff to monitor her packing.

8.  As recorded in the Decision, the Employee’s evidence was that she returned to the office at approximately 2 pm, with the intention of seeking clarification from the Defendant, but was prevented from doing so by the Manager and the receptionist of the firm (“Receptionist”). The Employee was informed that the Defendant was not in the office, and she was asked to pack her personal belongings, return the keys to the office and to cancel her computer password.  The Employee’s personal belongings were checked, before she was permitted to leave the office.  The Employee claimed in her evidence that the Manager and Receptionist had consoled her, saying that being dismissed was a minor matter and she should not be unhappy.  The Employee further claimed in her evidence that before she left, she had asked the Manager whether she was being told to leave because she had been absent from work without cause, and the Manager had indicated that the Defendant would have to be consulted on this.

9.  The Employee did not return to work thereafter, and discovered on 25 September 2019 that the Defendant had, in making payment of her wages for September 2019, deducted a sum of $4,316.67 as payment in lieu of 7 days’ notice which the Defendant claimed he was entitled to do.

Procedural history

10.  The trial before the Board took place on 4 November 2019, in the absence of the Defendant, who indicated to the Board through the Manager at the hearing that he could not attend the trial due to work engagements.  The Defendant did not seek an adjournment of the hearing, nor was any Defence, witness statement or documents filed.

11.  The Board considered the evidence, and expressed the view that the testimony of the Employee contradicted the records of the Whatsapp messages produced.  The Board pointed out that the Employee had made a lengthy response to the Employer by the 1:57 Message, which was inconsistent with the Employee’s claim that she had not made any reply before returning to the office.

12.  The Board found that at a time when the Employer was still considering whether the Employee had absented from work without cause, and before any decision was made by the Employer in that regard, the Employee had herself indicated that she would return to the office to pack, return the keys and to collect her pay cheque. The Board stated that although the Employee had not used the word “resign” in her Whatsapp messages, the contents of her messages and her conduct had demonstrated her termination of the employment.  The Board referred to the Whatsapp message from the Manager at 6:50 pm on 25 September 2019, by which the Manager had informed the Employee that the Defendant had not expressly stated that the Employee was dismissed.

13.  The Board considered that even if the Employee had believed that the Defendant had summarily dismissed her on 19 September 2019 by the 10:50 Message and the 10:56 Message (which referred to the requirement of one week’s notice), the Defendant had only intended by the 10:56 Message to give the Employee 7 days’ notice, and not immediate notice of termination. The Board considered that there was no evidence to show that the Defendant had decided that the Employee had absented herself from work for no cause.

14.  On the above bases, the Board found that the Whatsapp records clearly showed that the Defendant had not summarily dismissed the Employee on 19 September 2019, and that to the contrary, it was the Employee who had resigned from her employment by stating in the 1:57 Message that she would pack her personal belongings and by her actual conduct.  The Board found that since the Employee had failed to give the 7 days’ notice of termination required under the employment contract, the Employer was entitled to deduct the 7 days’ wages, and the Employee’s claim was rejected.

15.  Leave having been granted on 28 May 2020 for the Employee to appeal against the Decision on the question of law identified, the Employee filed her Notice of Originating Motion (“Motion”) for the Appeal on 26 June 2020, seeking an order for the case to be remitted to the Board for retrial by a different adjudicating officer.  The Employee was still acting in person at the time.  The Motion was scheduled for hearing on 9 September 2020.

16.  Upon being served with the Motion, the Employer informed the Court and the Employee on 28 August 2020 that he agreed to the setting aside of the Decision, for the matter to be remitted to the Board for further directions and/or reconsideration, with costs of the Appeal to be reserved.  The Court informed the parties on 28 August 2020 that, in view of the lack of opposition from the Employer, the Court proposed to set aside the Decision and to order the case to be remitted to the Board for directions to be issued for a new hearing and consideration by another adjudicating officer, with costs of the application for leave to appeal to be paid by the Employer.

17.  The Employer objected to the Court’s proposal on the question of costs.  Solicitors who had by then been instructed to act for the Employee on pro bono basis proposed paper disposal, in lieu of a hearing on the Appeal, for submissions to be made for the Employee on the disposal of the Appeal.

18.  In accordance with the directions of the Court, submissions on the Appeal were filed on behalf of the Employee and the Employer, on 3 September 2020, 7 September 2020 and 8 September 2020.

Merits

19.  On behalf of the Employee, Counsel has helpfully referred to a line of cases which show the courts’ approach to the question of how notices of termination of employment by employers and employees should be considered and properly construed.  These, together with the authorities cited in paragraph 9 of this Court’s decision dated 28 May 2020 on granting leave to appeal, demonstrate that as in any type of contract, the question of whether there is repudiation of contract is fact-sensitive and must be considered in the entire context of the case, bearing in mind the relationship between the parties, the conduct constituting breach, and whether there is evidence of unequivocal conduct which demonstrates the intention of the party said to be in breach no longer to be bound, and to treat the contract as irrevocably discharged.  The need to find clear and unequivocal conduct and words which evince an intention to treat the contract as terminated is particularly difficult when the relationship terminated is one which is personal, such as that between an employer and employee, and when the termination is charged with emotions and takes places in circumstances in which impulsive words and heated arguments are often exchanged.

20.  The authorities were comprehensively analyzed in the judgment of the English Court of Appeal in Willoughby v CF Capital PLC [2011] IRLR 985.  At paragraph 26 of the judgment of Lord Justice Rimer, it was stated:

“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.  The authorities recognize, however, an exception to that general rule: namely, that the circumstances in which the notice is purportedly given are sufficiently special that it will or may not take such effect.  For example, the words of notice may be the outcome of an acrimonious exchange between employer and employee and may be uttered in the heat of the moment such that there may be a real question as to whether they were really intended to mean what they appeared to say.  In such circumstances it will or may be appropriate for the recipient of such a notice to take time before accepting it in order to ascertain whether the notice was in fact intended to terminate the employment.  If he does not do so and, for example, simply (and wrongly) accepts an employee’s purported resignation at face value and treats the employment as at an end, he may find himself on the receipt of a claim for unfair or wrongful dismissal.”

21.  Lord Justice Rimer in Willoughby referred to the decision in Martin v Yeomen Aggregates Ltd [1983] IRLR 49, in which case an employer had given an oral dismissal during an argument with the employee, but within 5 minutes and having realized that the dismissal was in breach of an agreed disciplinary procedure such that he was not authorized to do what he had purportedly done, the employer withdrew the dismissal.  It was held that there had been no dismissal, on the ground that the words were used by the employer in the heat of the moment and had been withdrawn almost immediately, Kilner Brown J observing in the judgment that it is a matter of plain common sense, vital to industrial relations, that either an employer or an employee should be given the opportunity of recanting from words spoken in the heat of the moment.

22.  Sovereign House Security Services Ltd v Savage [1989] IRLR 115 raised a similar question as to whether certain words uttered by an employee evinced an intention to resign.  The decisions of the tribunal and of the Court of Appeal in the case highlighted the fact that words used by an employee in the heat of the moment should not be accepted at face value by the employer.  May LJ made it clear in his judgment that where unambiguous words of resignation are used by the employee and are so understood by the employer, the tribunal should not be astute to find otherwise than that the employee had in truth resigned.  However, in other cases:

“there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee himself or herself, to entitle the tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight”.

23.  The “special circumstances” exception was explained by Wood J in Kwik-Fit (GB) Ltd v Lineham [1992] IRLR 156, and referred to at paragraph 36 of the judgment of Lord Justice Rimer in Willoughby:

“… If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment, personalities constitute an important consideration. Words may be spoken or actions expressed in anger or in the heat of the moment or under extreme pressure (‘being jostled into a decision’ and indeed the intellectual make-up of an employee will be relevant (see Barclay [1983] IRLR 313). These we refer to as ‘special circumstances’. Where ‘special circumstances’ arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employer’s risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the ‘special circumstances’ the intention to resign was not the correct interpretation when the facts are judged objectively.” (Emphases added)

24.  The authorities were applied in the decision of the Fair Work Commission in Bupa Aged Care Australia Pty Ltd (t/as Bupa Aged Care Mosman) v Tavassoli [2017] 271 IR 245.  In that case, the Commission referred to Sovereign House Security Services, Kwik-Fit (GB) Ltd and the line of cases dealing with the “special circumstances” which render an apparent indication of resignation on the part of the employee ineffective, unless the employer obtains confirmation of the employee’s intention to resign after a reasonable period.  The Commission concluded that these cases concerning “special circumstances” are focused on situations where the mental or emotional state of the employee causes the employee to communicate a resignation, but without truly intending to resign, ultimately rendering such “resignation” to be “legally ineffective”.

25.  By consenting, very reasonably, to the setting aside of the Decision, the Defendant does not appear to contest the principles set out in the authorities.  He argued, however, that on appeal, this Court should remit the matter for retrial by the Board.  On the other hand, Counsel for the Employee argued that a remission is not necessary, and the Court should simply decide the question of law, and find that the only reasonable conclusion on the evidence before the Board is that there had been no resignation by the Employee and that she had been dismissed instead by the Employer.

26.  From the line of cases referred to in the earlier parts of this Decision, it is clear that in deciding whether or not the Employee had resigned on 19 September 2019, it was necessary for the Board to consider not only the words used by the Employee in the 1:57 Message itself, but to consider the entire context in which the Whatsapp messages were exchanged between the Employer and the Employee, and to construe whether the Employee’s words and conduct were sufficiently unambiguous, to evince a clear intention to resign and to terminate the employment.  As the courts have indicated in the cases, words may have been exchanged in the heat of the moment, during emotive exchanges or by impulsive responses in the course of an argument between the employer and the employee.

27.  The Board clearly failed to have taken into account the circumstances in which the Whatsapp messages were exchanged between the Employer and the Employee, between 10:48 am and 1:57 pm of 19 September 2019.  The Employee was obviously indignant and felt aggrieved by the fact that she had submitted the Leave Application the day before, but was accused in the morning of 19 September 2019 to have taken unauthorized leave, and to be informed that 7 days’ notice was required before she could take half day of unpaid leave, to take her mother to see the doctor in the morning.  The Employer’s curt 10:50 Message could have been sent by the Employer in the heat of the moment as well, but the Employee would naturally have found the 10:50 Message offensive, and interpreted it to be notice of instant dismissal by the Employer.  Her query as to whether she was being dismissed, and her claim, in the 1:57 Message, that “it would not matter” if she returned to the office in the afternoon to pack her belongings and to take her pay cheque, was obviously an impulsive statement expressed in her moment of anger. The 1:57 Message stated at the end:

“第三，噉你係咪當我曠工？要我即日走？欲加之罪 何患無辭，你用咩罪名炒我隨得你。我本來預咗下晝係返嚟做嘢嘅，冇所謂我現在下晝返嚟係執嘢還卡同攞票，你可以安排同事睇住我執，保障雙方。”

28.  Even if the Employee had been mistaken in her belief that the Employer had dismissed her by the 10:50 Message and the 10:56 Message, the Employer did not, through the Manager and the Receptionist, correct the Employee’s belief or understanding, nor give the Employee any opportunity to clarify her own intentions, upon her return to the office in the afternoon.  She was simply told to pack, and to leave.

29.  Objectively read, in the context of the events of the morning, the Employee’s statement that it did not matter, if she should leave, could not be properly and reasonably construed by the Employer as resignation.  It was in any event ambiguous, in all the circumstances.  The findings made by the Board that the Employee had resigned, by her 1:57 Message and her subsequent conduct, were made under an error in the interpretation and application of the law.

Disposition of the Appeal

30.  Having properly considered the submissions made by Counsel on behalf of the Employee, I agree that a remission of the case for reconsideration by the Board is unnecessary.  All the facts and evidence had been presented to the Board at the hearing on 4 November 2019.  The Employer had not deemed it necessary to file either a Statement of Defence or evidence in opposition to the Employee’s claim made in the action before the Board.  The Employer did not personally attend the hearing, but sent a representative, and he chose not to seek an adjournment of the trial, to file evidence or otherwise.

31.  I cannot see what further facts are required to be presented as evidence on the question of whether the Employee had resigned on 19 September 2019, which the Employer had purported to accept by asking the Employee to pack her personal belongings, return the key to the office and the password to the computer, and thereafter, making payment of the wages due and deduction of the 7 days’ wages.

32.  As Counsel pointed out on behalf of the Employee, the Employer was not even in the office when the Employee returned to pack her personal belongings under the supervision of the Manager and Receptionist.  No further communication was exchanged between the Employer and the Employee on 19 September 2019, or thereafter, apart from the collection of wages.  All the Whatsapp messages exchanged between the Employer, the Manager and the Employee had been produced to the Board in evidence.  The question of the Employee’s resignation, and/or the Employer’s purported dismissal, is to be construed from the contents of the Whatsapp messages exchanged and the conduct of the Employee upon her return to the office after 1:57 pm, which evidence was already before the Board.

33.  I accept the submissions of the Employee (made in reliance on Chok Kin Ming v Equal Opportunities Commission [2017] 2 HKLRD 521), that in the light of the evidence, the only reasonable and legitimate conclusion is that there was no unambiguous resignation by the Employee on 19 September 2019, and that there was no effective acceptance of any repudiation of contract by the Employee.  Instead, by requiring the Employee to leave, she was effectively dismissed.

34.  The Employer submits that the Employee only sought, in the Motion, to remit the matter to the Board, and that there has been no amendment to the Motion in relation to the relief sought.  In this regard, Counsel for the Employee has referred to the decision of DHCJ To (as he then was) in Guido Ferrando v Hua Dao Shipping (Far East) Limited, unreported, HCLA 44/2007, 31 October 2008.  There, the learned judge held that section 35B of the Labour Tribunal Ordinance (identical in provision to section 32 (1) of the Minor Employment Claims Adjudication Board Ordinance) gives the Court of First Instance the power, on an appeal, to either allow or dismiss the appeal or to remit the matter to the tribunal with directions.  The power of the Court under the statute is not fettered in any way by the absence of relief sought in the Motion.

35.  I respectfully agree with the learned judge. The Court has the jurisdiction and power under section 32 (1) and (2) of the Ordinance to allow the appeal, and to draw any inference of fact.  By allowing the Appeal, this Court only reverses the erroneous finding on law made by the Board, that the Employee had resigned. There is no finding of primary fact made by the Board, which is reversed.

36.  I accordingly allow the Appeal under section 32 (1) (a) of the Minor Employment Claims Adjudication Board Ordinance, and order that the Employer should repay to the Employee the sum of $4,316.67 wrongly deducted from her wages.

37.  Further, I bear in mind the observations and reminders made by the Court in Ali Shoukat v Hang Seng Bank Limited, unreported, HCLA 112/2004, 20 June 2005 that the purpose of the establishment of the Board is to provide a speedy, efficient and cheap means of adjudication of employment claims.  I doubt whether a remission of the case to the Board is either costs‑effective or efficient, bearing in mind the amount involved, the fact that the Employer had not even defended the original action, and significantly, that all the necessary evidence is already before the Court for construction and determination of the question of law.

38.  Since the Employee has succeeded on her appeal, I see no reason to depart from the general rule that she should be paid her costs of the application for leave to appeal and of the appeal (if any).