MAK YAM KEUNG and Others v. FULLCHARM KNITTERS LTD.

1997, No.LTA2

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

(Labour Tribunal Appeal No. 2 of 1997)
(CLAIM NO.E4536 of 1995)

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J U D G M E N T

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1. This is an appeal against the decision of the Labour Tribunal in making an award in favour of the four Claimants for wages in lieu of notice, annual leave pay, statutory holiday pay and in addition, severance payment for the 1^st and 2^nd Claimants against the Appellant Fullcharm Knitters Limited. The Appellant contends that the learned Presiding Officer had erred in law in holding that, contrary to the weight of the evidence before her, the Claimants were employees of the Appellant. The issues before me on appeal are these : was the learned Tribunal Officer entitled to make the findings as she did on the evidence before her and did she apply the law wrongly to the set of facts she found?

Background

2. The Appellant was a garment factory and there was a section in its operation which was responsible for ironing work. The Claimants had been workers in that section with the 1^st Respondent having the longest service and he was responsible for coordinating the duties of other workers in that section. It is not in dispute that the factory started to move part of its operation into mainland China since about 1990 and there was a gradual decrease of ironing work. By early 1995 there were no longer any regular work except certain sample-ironing. The Claimants approached the Labour Department for assistance in respect of the issues of severance pay and wages in lieu of notice of termination. It was the Appellant's case that the Claimants were never employees of the company. The Claimants then commenced legal action against the company and the case was heard by Ms Mary Yuen in the Labour Tribunal.

The Law

3. From pages 2 to 5 of the Reasons for Award, the learned Presiding Officer reminded herself of the law applicable by firstly referring to the case of Market Investigation Ltd. v Minister of Social Security [1969] 2 QB 173 in which the dicta of Cooke J. was approved by the Privy Council decision in the Hong Kong case of Lee Ting Sang v Chung Chi Keung [1990] 2 WLR 1173. The learned Presiding Officer, after citing the passage of the judgment of Cooke J. appearing in pp 184-185, went on to remind herself of the recent Hong Kong case of Cheng Yuen v The Royal Hong Kong Golf Club [1997] HKLRD 219. The decision of the Hong Kong Court of Appeal in holding that the respondent, a golf caddie was not an employee, was affirmed by the Privy Council.

4. There is clearly no single conclusive test for deciding the true relationship between the Appellant and the Respondents. The learned Presiding Officer very correctly listed the eight relevant factors summarized by the learned editors of the 27^th edition of Chitty on Contract Vol. II 37-008 and proceeded to analyze the evidence before her. In paragraph 11 of her reasons she stated :

"It was clear that there was no single paramount test in the determination of the relationship. Rather it was a finding of mixed fact and law dependent upon all the circumstances and the relating factors surrounding the relationship between the parties."

I do not think there could have been a better approach than that which was adopted by the learned Presiding Officer and any criticism from the Appellant that she had erred in law is without merit.

The Findings

5. At the Appeal, counsel for the Appellant sought to demonstrate, by reference to the evidence that no reasonable tribunal could have come to the conclusion as that of the learned Presiding Officer. In approaching the evidence, one must bear in mind that a presiding officer, more often than not, has to face a profusion of contradicting contentions and allegations from the unrepresented parties. The law does not require the presiding officer to approach the evidence with surgical precision and make a finding which is a mathematical certainty. It would have been indeed impossible under any circumstances. In the present case it would be sufficient for me to say that the learned Presiding Officer had analyzed the evidence before the Tribunal meticulously and at the end of which she observed :

"In the light of the various indicia and balancing one against another I came to the conclusion and ruled in favour of an employee/employer relationship between the Appellant and the Respondents for the purpose of the Employment Ordinance.

On the evidence there was no dispute that the Appellant had moved the major part of its operation to China ... This was a clear case of redundancy as well as laid off."

6. It has always been the case of the Appellant that the workers of the ironing section had never been employees of the Respondent. Had this in fact been the case, the reason why the ironing section in particular had to be an independent department not within the organization of the company had never been satisfactorily explained to the learned Presiding Officer by the Respondent in the court below.

7. According to the Appellant, the 1st Respondent had never been treated otherwise than as a sub-contractor. But in the letter dated 23 January 1990 issued by the Appellant to the 1st Respondent, it was stated by the Respondent in the clearest possible terms that the 1st Respondent was an employee of the company. The letter was for production by the 1st Respondent to the Chinese authorities on the occasion when he returned to China to get married. It is also not in dispute that there was another letter issued to one of the other respondents confirming his employee status for the purpose of seeking education allowance. The letters were descriptions of the parties' relationship at different times for the records of a third party and they are documentary admissions by the Appellant which had never been retracted.

8. In my view, the insistence of the Appellant that the Respondents were subcontractors could best be explained, in the light of the fact that since about 1990, that the Appellant was relocating the business operation to mainland China. Any such contention by the Appellant on the status of the Respondents was only a step to avoid the liability of having to make payments under the Employment Ordinance in the eventuality of either a laid off or constructive dismissal of the Respondents.

9. On the ground of appeal that no reasonable tribunal would have come to the conclusion as the learned Presiding Offer did on the evidence before her, I think the approach of this court can best be summed up by reference to the judgment of Clough J.A. in Chan Kwok-kin v Mok Kwan-hing & Anor. [1991] 1 HKLR 631 at page 634 :

"In accordance with well-settled principles this court must not interfere with the Judge's evaluation of the facts and impose a second opinion if the case is a borderline one where it would be reasonable for similarly instructed minds to come to different conclusions. On the other hand, this court is obliged to interfere if it concludes that, as Lord Radcliffe observed in Edwards v Bairstow [1956] AC 14 ... '... the only reasonable conclusion on the facts found is inconsistent with the determination come to ...' "

10. I cannot subscribe to the Appellant's contention that the evidence before the learned Presiding Officer could only support a finding which is adverse to the Claimants' case. Having considered and analyzed the evidence before her in the degree of detail as she did, I am of the view that the learned Presiding Officer had come to a reasoned and logical conclusion based on the facts which she had found to be proved. That being the case, I do not think that it is a finding which can be disturbed.

Computation of Quantum

11. The calculation of the daily wages were based on the records kept by the 1st Respondent. The Appellant was granted a two-week adjournment so that the accuracy of the figures could be checked. At the resumed hearing, the Tribunal record shows that the Appellant did not challenge the validity of the figures except maintaining that the 1^st Respondent was an independent sub-contractor. As there was no contrary evidence to that which was adduced by the 1^st Respondent, the learned Presiding Officer proceeded with her computation on the items of the award on the information before her. Again I can see no valid reason to criticize this course of action.

12. For the reasons given, the appeal is dismissed with costs. The Respondents' own costs to be taxed in accordance with Legal Aid Regulations.