CHU WING v. QUALI-HING ENTERPRISE

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APPEAL NO. 21 OF 1993

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J U D G M E N T

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1. This is an appeal by the Claimant (employee) against the decision of the Labour Tribunal granting some of his claims but dismissing others.

2. The appellant was employed by the respondent (employer) as a storekeeper responsible for taking care of the store house and mixing materials. The appellant said that he commenced working for the respondent on 1st March 1990 whereas the respondent alleged that it should be 1st May 1991. It was not disputed that the appellant's wages were $9,500 per month with a meal allowance of $10 per day. The period of notice of termination was also not in dispute and that was to be one month. The appellant also alleged that there was a double pay to which he was entitled which was equivalent to two months' salary. The respondent, however, said that any double pay was discretionary and payable according to the performance of the appellant. The appellant alleged that the employment was terminated on 31st December 1992 whereas the respondent said that the contract was terminated at the end of November and that he had given notice to the appellant. There was a written agreement between the appellant and respondent which was dated 2nd January 1993 whereby the respondent agreed to pay the appellant one month and 20 days salary in settlement of the appellant's claims. The appellant was given two cheques in the sum of $9,500 and $6,333.30. These two cheques were, however, dishonoured because the respondent alleged that the appellant had failed to complete his work before he left resulting in a loss to the respondent. The respondent, therefore, wanted to have a deduction from the agreed sum of compensation. The appellant then took his claims to the Labour Tribunal claiming first, wages in lieu of notice; second, annual leave payment; third, double pay and fourth, severance payment.

3. The case was tried before the Labour Tribunal and it appears the Presiding Officer gave judgment immediately at the end of the trial. Since some parts of this judgment had led to confusion, I think I should set it out in full.

"Judgment :

In this case both parties agreed to terminate the employment contract evidenced by a written agreement dated 2-1-93. But as the Defendant reneged on this agreement, I would treat this agreement not binding on both parties and I have to consider if dismissal was justified.

Commencement of Employment:

I found for the claim (sic) when he said he commenced work on 1-3-90.

Termination of Agreement:

Although the Defendant alleged he was dissatisfied with Claimant's performance, he admitted on the day of dismissible (sic) there was really no particular triggering reason for dismissal. Therefore I found Defendant had to pay wages in lieu of notice.

Date of Termination: 31-12-92

I found for Claimant, since what he said was more consistent with what had happened subsequently i.e. written agreement for discontinuation of contract of employment of 2-1-93.

Payment: (A) Annual leave $2,060.00

Severance Payment:

(B) Claimant worked for less than 24 months, under Section 31B not entitled to Severance Payment.

(C) In the absence of expressed agreement, Claimant not entitled to double pay. Having evaluated the evidence I do not find such evidence.

(D) Severance $18,436.00 Total $20,496.00"

4. Upon the appellant's appeal, the Presiding Officer prepared a Corrigendum. He said that he had made a mistake in making an award for severance payment. He said:

"It is clear in my reasoning (P.5) that I had accepted that there being not triggering reason for immediate dismissal of the Claimant, the Defendant would have to pay Wages in lieu of notice. Further, as I found (P.5) the Claimant have worked for less than 24 months, I ruled that the Claimant was not entitled to severance payment."

5. He added that he had inadvertently substituted the severance payment ($18,436) for the wages in lieu of notice ($8,186), thereby inflating the award by $10,250.

6. In this appeal, Counsel submitted that it was clear that the Presiding Officer held that the appellant was entitled to wages in lieu of notice and annual leave pay. Counsel further pointed out that since the Presiding Officer had expressly found (on p.13 of the Bundle) that the commencement of employment was 1st March 1990 and that the date of termination was 31st December 1992, the period of employment was 34 months and the Presiding Officer was clearly wrong in his calculation when he said the appellant had worked for less than 24 months (p.14 of Bundle). Counsel submitted that since the appellant has worked for more than 24 months, it followed that the appellant should also be entitled to severance payment. Counsel argued that, therefore, the award of severance payment was correct and should remain. With regard to the dismissal of the claim on double pay, Counsel submitted that the Presiding Officer had failed to investigate into the matter as he was obliged under the statute to do so. He was wrong to simply say that there was no evidence of an express agreement with regard to double pay and to reject the appellant's claim.

7. The respondent was unrepresented and argued before me that the Presiding Officer had accepted that the date of commencement of employment was 1st May 1991 and the dated of termination was 30th November 1992. He submitted that the appellant should not be entitled to wages in lieu of notice or severance pay. Furthermore, he denied that there was a reduction in his staff which might point to redundancy. He said that there was no agreement on payment of double pay. He sought to produce before me documents to substantiate that his business was started only on 1st May 1991 and therefore it was not correct to say that the appellant was employed by him since 1st March 1990.The documents appeared to be a copy of the application for business registration and a certificate of registration. He admitted that the appellant had however worked under him prior to 1st May 1991 but was employed by a partnership between himself and the appellant's son. The respondent informed me that when he was before the Presiding Officer, he was not permitted to adduce this evidence and that the Presiding Officer told him that that was sufficient. He said that he was not satisfied with some of the awards made by the Presiding Officer.

8. Although the Presiding Officer did not say so expressly, I think it was quite clear under the paragraph headed "Termination of Agreement" that the had found that there was no good reason for dismissing the appellant. The respondent's allegation that the appellant had failed to lock the filter of a machine resulting in some loss to the respondent was clearly rejected as the Presiding Officer had made no award on the counterclaim which I can only take as having been dismissed. Although the Presiding Officer had found that the respondent had to pay wages in lieu of notice, he did not make any award in his judgment. He attempted to do so in the corrigendum. I accept that this was an inadvertent mistake on his part. In any event, I think there is sufficient evidence to support this finding. The respondent's allegation that the appellant was guilty of several mistakes must have been rejected by the Presiding Officer. I do not think I can challenge his finding. Similarly, I think the Presiding Officer was also entitled to come to the conclusion that the date of employment was 31st December 1992. In any event, I think he was right in accepting the appellant's evidence. The written agreement dated 2nd January 1993 was clearly inconsistent with the respondent's allegation that he had terminated the contract of employment at the end of November 1992. It was more consistant with a termination at the end of December. In these circumstances, I would accept that there was an omission on the part of the Presiding Officer. His award should have included $8,186 as wages in lieu of notice.

9. The annual leave payment was not disputed by the respondent. It was in fact paid. I think that should stand.

10. As far as the claim for double pay is concerned, I do not agree with the Presiding Officer that in the absence of express agreement, an employee was not entitled to double pay. There must be various factors to be considered in deciding whether the employee is entitled to double pay or not. These include whether there are any express agreement, implied agreement, trade practice or tradition and previous payments. It is clear from the notice of proceeding that the Presiding Officer did not investigate into these as he was obliged to do. He should have done so instead of saying that he did not find such evidence (of an express agreement). I think that the claim for double pay should be remitted to the tribunal for reconsideration.

11. With regard to the claim for severance payment, the matter is slightly more complicated. I accept that the Presiding Officer had made a clear Statement that the commencement of employment was 1st March 1990. However, I am not sure I am satisfied with such a bald statement. I am concerned for a number of reasons. First, the Presiding Officer did not go further to explain how he arrived at this conclusion, whether he accepted the appellant's evidence or that of the respondent and if so way he preferred one and not the other.

12. Second, the evidence adduced at the trial was not that clear. There were, of course, the statements made by the appellant and the respondent each alleging that the commencement date was 1st March 1990 and 1st May 1991 respectively. Then the evidence at the trial was not satisfactory. On page 10 of Bundle, it said that the respondent affirmed and read out his statement in court. He was also recorded to have said that he "started employment on 1-5-91. (I) started business in April 1991". After his short evidence, it appears from the record the appellant said "no". This might perhaps have referred to no cross-examination by the respondent. The record which followed showed that the court asked "When did you start working?" That presumably was a question for the appellant although the respondent was then supposed to be still giving evidence. And the answer appeared to be "Between 4-5-90." Then followed another question from the court and another answer regarding termination of the employment. The record showed that the respondent asked the question "You started the employment on 1-5-91?" and a letter was produced to the appellant. This presumably was the application form appearing on page 19 of the Bundle. The answer, presumably that of the appellant, said: "This is my signature but the date may not be correct." The form which was headed "Qualification" was in fact a form containing details of the appellant. At the right hand bottom corner of that form the date was stated to be 30th April 1991 with the words "Date of Commencement of Employment is 1st May 1991". It seems from the record that the evidence of the appellant was not that unequivocal with regard to the actual date of commencement. No explanation as to why that form was so dated and so stated.

13. Third, I have some doubt whether the Presiding Officer was merely wrong in calculation when he said on page 14 of the Bundle that the appellant had worked for less than 24 months. This is because in his corrigendum, he repeated that by saying "As I found (P.5) the Claimant had worked for less than 24 months, I ruled that the Claimant was not entitled to severance payment." This statement is certainly quite clear, although one cannot say whether it was another mistake or not. In fact that "finding" did not appear on page 5 but page 7 of his notes which was page 14 of the Bundle. Faced with such statements, I do not think one can be sure what the Presiding Officer intended to say. I cannot really say that the repeated statements that the appellant had worked for less than 24 months were merely a mistake on calculation and not a mistake in stating the appropriate finding. Bearing in mind, that the Presiding Officer did not appear to give any reason as to why he accepted 1st March 1990 and not 1st May 1991 as the commencement date of the employment, I think the matter of severance payment should be reconsidered and investigated further. It should be remitted to the tribunal.

14. In view of the way in which the Presiding Officer dealt with the issues and stated his findings, I do not think both parties would have confidence as to whether these two issues, i.e. the double pay and the severance payment, could be properly dealt with by the same Presiding Officer. It is understandable that he gave judgment immediately at the end of the trial. However, the reasons given on pages 13 and 14 of the Bundle are clearly very sketchy. Upon the appellant lodging a notice of appeal, I should think that the Presiding Officer should have prepared a more proper and detailed Reasons for his decision rather than a mere corrigendum which added to some of the confusion. In these circumstances, I agree that the retrial on the two issues should be heard before another Presiding Officer.

15. I would, therefore, allow the appeal in part and vary the awards of the Presiding Officer to the effect that the respondent do pay to the appellant $8,186 as wages in lieu of notice and $2,060 as annual leave payment. I would also order that the question of double pay and severance payment be remitted for retrial before another Presiding Officer. The respondent should pay 2/3rd of the appellant's costs of this appeal.