HUNG WING KAM v. K.L. SERVICES LTD

IN THE SUPREME COURT OF HONG KONG

LABOUR TRIBUNAL APPEAL NO. 124 OF 1996

(on appeal from Labour Tribunal Claim No.LT 709/96)

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JUDGMENT

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The appeal

1. This is an appeal against the decision of the Presiding Officer who made an award in favour of the employee ("Claimant") for wage in lieu of notice of termination and long service payment.

Facts

2. The defence of the employer ("Defendant") is that the Claimant was dismissed for cause.

3. The Claimant joined the Defendant as a receptionist in 1990. After a series of promotion, she became a shipping supervisor in 1992. In mid 1995 she was asked by Mr Chow Chir Chieh ("Mr Chow"), a Director of the Defendant to keep a register of the colleagues who took the keys to the sample room which was located on the 11th floor of the Defendant's premises. The Claimant was to check before she left work whether the sample room had been locked. She was not told that she had to accompany the colleagues to the sample room.

4. A set of regulations (Exhibit D3) for the use of the sample room was issued to all the staff. Clause 4 stated that:

"Whenever employees enter the 11^th Floor, they must register with Hung Wing Kam before collecting the keys, and after use return them to Hung Wing Kam."

5. On 5^th March 1996 a colleague asked the Claimant for the keys to the sample room. After she had used the keys, she left them with the receptionist instead of returning them to the Claimant. The Claimant was not aware of this and the matter was discovered by Mr Chow who had a discussion with the Claimant.

6. According to the Claimant, Mr Chow asked her to guarantee for the safety of the keys. She said she would try her best because her work place was on the 10^th Floor whereas the sample room was on the 11^th Floor, she could hardly supervise what happened on the 11th Floor. Mr Chow was very unhappy and said he would arrange another colleague to manage the keys. On the same day, the Claimant received a memo informing her she would be demoted to shipping clerk and another colleague would be promoted to take her job.

7. On the next day, i.e. 6^th March, she was told that her salary would be deducted. After consulting the Labour Department, the Claimant on 7^th March informed Mr Leung Siu Ming ("Mr Leung") of the Defendant that the Defendant could not reduce her salary. Mr Leung then said the salary would be the same. After 10 minutes, Mr Leung told her that the Defendant had decided that she either had to be demoted or resign. The Claimant refused. In the afternoon she was dismissed. The letter of termination dated 7^th March 1996 stated that-

"Refer to your neglect of your duties and refuse the director's order, we would like to terminate the employment with you with immediately effect without any compensation."

8. Mr Leung said that the Claimant was summarily dismissed because she failed to obey the Company's order to supervise the borrower of keys to return the keys to her. Mr Chow said -

The decision

9. The Presiding Officer found that the Defendant failed to discharge the burden of showing that the Claimant was dismissed for cause. He found that the Defendant's witnesses did not tell the whole truth on the reason of dismissal. He found that the Claimant had replied to Mr Chow that she would try her best to ensure that the keys would be returned when the question of keys was dismissed.

Burden of proof

10. The first ground relied upon in the application for leave to appeal was that the Presiding Officer had adopted the wrong burden of proof. This point, however, is not actively pursued by Mr Ng, counsel for the Defendant, who did not appear at the application for leave. There is a long line of cases which said that the burden is with the employee to show that he has not been dismissed for cause - To Kin Wan v. Shui Hing Co. Ltd. [1985]1 HKC 239; Oceanic Universal Garment Manufacturers Co. Ltd. v. Keung Man Lan [1987] 1 HKC 27 So Ching v. Kwan Hang Ching [1987] 2 HKC 297 Wyldbore v. Bayubay [1987] 2 HKC 304.

I disagree with this view. Section 9 is in the clearest possible terms -

(b) on any other ground on which he would be entitled to terminate the contract without notice at common law."

The burden of proof is on the employer because it is for him to establish that the termination is in accordance with s.9. I further note that in To Kin Wah the learned judge was dealing with a s.31D situation. In any event, I would respectfully adopt the reasoning of Rhind J. in Wan Hung Shu v. Li Chun Yam [1993] 2 HKC 714 and Deputy Judge Findlay (as he then was) in Chow Koon Sing v. Fan Kok Choy (Labour Tribunal Appeal No.26 of 1989) where they declined to follow the To Kin Wah line of cases.

Letter of 5^th March 1996

11. The Presiding Officer having seen and examined the evidence of the parties accepted the evidence of the Claimant. He accepted that the Claimant told Mr Chow that she would try her best to ensure that the keys would be returned. If such is the finding, then there was no refusal to obey the orders of the Defendant.

12. The Defendant argued that this finding is faulted because on 5^th March 1996 the Claimant signed a letter which stated that :

"Refer to the fact that you are unable to proceed with the company policy to manage the sample room located on 11^th Floor, you are require to confirm the above is true and correct. Please sign this letter to confirm."

13. The Defendant said the Presiding Officer had not made inquiries with the parties on this letter. This letter was referred to the Defence and witness statement of Mr Chow. Mr Ng said that the Defendant had raised this point at the hearing but for reasons unknown, this matter was not dealt with in the notes of proceedings. On this point, I must say that if parties, particularly those legally represented, wished to challenge the accuracy of the transcript, then they should lodge, before the hearing of the appeal, an affidavit setting out the omission in the transcript so that the Presiding Officer and the other side could be invited to comment on it. This was not done in the present case. The notes of proceeding did not refer to the letter of 5th March 1996 and I could only act upon the record.

14. The Claimant at the hearing produced her statements of 27^th July 1996 (Exh.C5) in which she explained the circumstances she signed the letter of 5^th March 1996. She said that she was initially reluctant to sign this letter. It was only after she was told of her transfer to another job and after assurance by Mr Leung that she would not be dismissed then she signed the letter.

15. It is unfortunate that there is no finding of fact on this letter. This letter obviously has a bearing on the assessment of evidence. Unless the parties are asked to deal with this issue in their oral evidence, it would not be possible for the Presiding Officer to decide this issue on the statements alone. It is too important an issue not to make any express finding because while the Claimant said she told Mr Chow that she would try her best to manage the sample room, on the same day she signed a document saying she was unable to proceed with the company policy. It may well be that upon hearing the evidence, the Presiding Officer would still accept her evidence but until this has been done, the finding is susceptible to challenge.

16. Having given this matter further consideration, I come to the view that the investigatory function of the Presiding Officer regarding this letter has not been discharged and the case should be remitted to the Presiding Officer for further inquiry.

Habitual neglect of duty

17. Likewise the issue regarding the habitual neglect of duty should be inquired by the Presiding Officer. This issue was raised expressly in the Defence and Mr Chow's statement. On 11^th December 1995, a warning letter was issued by the Defendant to the Claimant -

"          Re : first warning letter

          Please be informed that you had responsible for the stock record not recognize with the stock stored in ware house, we are very disappointed in your neglect of warehouse management, please pay attention to manager the warehouse, we are looking forward your improvement."

The Claimant explained in her witness statement that this document was issued because her colleagues did not give her an accurate record of the goods sold, hence there was a discrepancy between "the actual store and her register".

18. This is a matter that oral evidence should be heard and a finding of fact is required. This is not done. This matter is required to be resolved because of the finding that "the demotion and reduction of salary was no more than an excuse to show D's (Defendant) dissatisfaction on C's (Claimant) refusal to comply with D's additional request and sack her". The Claimant's previous neglect of duty would be a relevant factor in deciding whether the dismissal was justified or was motivated by other purposes. The Presiding Officer should conduct a further inquiry on this issue.

Attitude of the Claimant

19. The Defendant also argued that the Presiding Officer had not investigated the matter regarding the attitude of the Claimant which was a matter relied upon by the Defendant. From the evidence, Mr Leung's complaint about the Claimant's attitude was in relation to her response to Mr Chow in the discussion about the safe keeping of the keys. It was part and parcel of the evidence on whether the Claimant had disobeyed the order. It is understandable that in view of the finding of the Presiding Officer there was no further finding by him on this issue. Such further finding is not necessary.

No obligation to obey order?

20. The Defendant also complained that the Presiding Officer was wrong to find that the Claimant was not obliged to obey the order of the Defendant regarding the keys. He found that it was an extra responsibility newly imposed on the Claimant. Assuming it was an extra order, if it was lawful, then the Claimant should comply with this order. In my view, the Presiding Officer was wrong to find that the Claimant was not obliged to obey this order.

Conclusion

21. The case is remitted back to the Presiding Officer for him to conduct further inquiries on the issues I have mentioned earlier. As to costs, as I have not allowed or dismissed the appeal, the costs order nisi is that each party shall bear its own costs.

22. There is a matter I have to raise regarding the attendance by parties before the Labour Tribunal. This does not concern the Presiding Officer who tried this case. The parties went through two "for mention" hearings in May and July 1996 before another Presiding Officer before their case was eventually heard on 13^th August 1996. From the notes, the parties' attempt to negotiate had already broken down by noon on the first day. The trial should then commence in July 1996. To list the second hearing as another "for mention" hearing would simply be a waste of time. Certainly by noon of the second attendance when the parties informed the other Presiding Officer that there was no settlement, the hearing should proceed there and then without a further adjournment. The inconvenience to the parties is just too apparent. I hope such steps would not be repeated in the future.