HKSAR v. S. SPACE DESIGN (HK) CO LTD

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 615 OF 1997

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J U D G M E N T

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1. The Appellant, an incorporated company, appeals against its conviction at Eastern Magistracy on the 19th May 1997 for an offence of terminating the employment of an employee after she had given notice of her intention to take maternity leave, contrary to sections 15(1) and 15(4) of the Employment Ordinance, Cap. 57.

Section 15(1) of the Ordinance is as follows:

"Subject to sub-Section (1A), no employer shall terminate a contract of employment of a female employee under Section 6 or 7 during the period from the date on which she gives notice under Section 12(4) or (8); or of her confinement where she subsequently gives notice under Section 12(5), to the date on which she is due to return to work on the expiry of her maternity leave or the date of cessation of her pregnancy otherwise than by reasons of her confinement."

2. Sub-Section (4) provides that a breach of sub-Section (1) is an offence and imposes a certain level of penalty.

3. It can be seen from the terms of Section 15(1) that the provision on its face prohibits the termination of a pregnant employee's contract under Section 6 or 7 of the Ordinance. Section 6 provides for the termination of an employee's contract by either party by notice and further provides for the period of notice to be given. Section 7 provides for the termination of the employee's contract by either party without notice, but with payment made by the terminating party in lieu of notice and further provides as to the calculation of that payment.

4. The grounds of appeal advanced by the Appellant are:-

5. Firstly, that the prosecution failed to prove an essential ingredient of the offence, namely that the Defendant terminated the contract of employment of the female employee under Section 6 or Section 7 of the Ordinance.

6. Secondly, that the magistrate erred in law, firstly by applying the "mischief rule" as a method of statutory interpretation, and secondly, by finding that an award of compensation made by the Labour Tribunal in favour of the employee brought Sections 6 and 7 into play "indirectly".

7. Thirdly, that the magistrate interrupted and cross-examined the defence witnesses and in so doing, ...(i) indicated his disbelief of their evidence before the close of the defence case, and in so far as is relevant to this judgement, .... (v), made comments of a hostile and sarcastic nature in relation to their evidence.

8. Fourthly, that in all the circumstances, the conviction is unsafe and unsatisfactory.

9. Grounds 1 and 2 are interrelated and I will deal with them together. It was common ground at trial that the Appellant company had not attempted to terminate the employment of the dismissed employee pursuant to the provisions of Section 6 or Section 7 of the Ordinance but had instead dismissed her summarily on the grounds that she was not satisfactorily performing her duties as an employee. That summary dismissal, it seems to have been accepted, was either pursuant to Section 9(a) of the Ordinance which sets out specific provisions relating to the employee's misconducting himself in his employment which, if satisfied, allows the employer to dismiss him, or pursuant to the employer's rights of summary dismissal at common law which are preserved by Section 9(b) of the Ordinance.

10. The magistrate, in his statement of findings, came to the conclusion that there was no basis in fact for the appellant to have terminated the employment of the employee because of her work performance being unsatisfactory. He accepted the employee's evidence to the effect that she had performed her duty satisfactorily. He rejected the evidence called on behalf of the appellant to the contrary. His findings of fact in this regard are not challenged by the Appellant.

11. The magistrate, in his findings, goes on to deal with the law. At paragraph 13, he said, inter alia, of Section 15(1):

"The Section was designed to protect employees from being dismissed under Section 6 and 7, namely by notice or payment of wages in lieu of notice. In this case, the method of dismissal was by summary dismissal based on PW1 that is the employee's misconduct. So at first sight, the instant offence appeared not to be appropriate."

With that statement of the law the Appellant takes no issue. The magistrate immediately goes on as follows:

"However, looking at Section 15 it is necessary to apply the so called Mischief Rule of statutory interpretation and look at what mischief the law was trying to prevent."

12. With this statement the Appellant takes issue. Mr. Plowman S.C. submitted on behalf of the Appellant that there was no scope for the application of what the magistrate calls the Mischief Rule. He says that rule or principle of statutory interpretation has or should have effect only when the legislation under consideration is ambiguous, and that the legislation in this case is in no way ambiguous.

13. In Johnson v. Moreton [1980] AC 37, the court adopted earlier statements contained in, firstly, Vacher and Sons Limited v. The London Society of Compositors [1913] AC at p. 107 to the effect that

"If the language of a statute is plain, admitting of only one meaning, the legislature must be taken to have meant and intended what it has plainly expressed and whatever it has in clear terms enacted must be enforced even though it should lead to absurd or mischief results."

14. And secondly, in Gladstone v. Bowen [1962] QB at p. 384 to the effect that

"the courts have no power to fill in a gap in a statute even if satisfied that it had been overlooked by the legislature and that if the legislature had been aware of the gap would have filled it in."

15. Thirdly, that if the words of a statue are capable, without being distorted, of more than one meaning the court should prefer the meaning which leads to a sensible and just result complying with the statutory objective and reject the meaning which leads to absurdity or injustice and is repugnant to the statutory objective: Stock v. Frank Jones [1978] 1 WLR at p. 231.

16. Those principles as stated are in my view correct. The true and proper approach of a court in dealing with the meaning of a statutory provision before it is to, firstly, look at the terms of the relevant provision.

17. If those terms are clear and unequivocal then the court need go no further. If in applying the clear and unambiguous terms of the legislation, some absurdity may result, then that is a matter for the legislature to cure. Though no doubt a court would adopt whatever procedural means it could to avoid unfairness. If on looking at the legislation, its terms, on a fair and plain reading, are found to be ambiguous or equivocal then the court then and only then should apply the principle referred to by the learned magistrate as the Mischief Rule in determining what the true intention of the legislature was in passing the statutory provision in question.

18. On the face of Section 15(1), its terms are plain and unambiguous. It specifically prohibits the termination of the employees contract of employment under Section 6 or Section 7 of the Ordinance. There is simply no ambiguity there.

19. That being so the principle expounded in Vachers case (supra) and adopted in Johnson v. Morton (supra) applies and the court need have gone no further.

20. In any event, I am happy the legislature may well have meant Section 15(1) to apply only to contractual terminations pursuant to Section 6 and Section 7 and that it is not an absurdity that it does not apply to Section 9 and summary dismissals.

21. The purpose of Section 15(1) is to prevent an employer dismissing a pregnant employee simply because she is pregnant by using the provisions of Section 6 and Section 7 which gives him a right to dismiss employees generally and without cause. By omitting Section 9 from the provision of Section 15(1), I am sure that the legislature may have intended to preserve the employer's right to dismiss, for cause, employees who were in breach of their duties as employees and who conceivably could be damaging the employer's business or who otherwise had offended against the employer or his business. The scope of an employee's misbehaviour is potentially so wide in Section 9 that the legislature may well, in balancing both the employer and the employee's interests, have deemed it inappropriate for inclusion in Section 15(1).

22. Accordingly, through the operation of sub-Section 4, in my view, an offence only comes into being pursuant to Section 15(1), given proof of the other required elements of Section 15(1), if the employer terminates the employee's contract of employment only under either Section 6 or Section 7 of the Ordinance. And I have no doubt that, on its plain terms, the termination of the employee's contract pursuant to Section 6 or Section 7 is a necessary element of the offence created by Section 15(1) through Section 15(4).

23. There was no evidence whatsoever before the magistrate that the Appellant had terminated the employee's contract pursuant to Section 6 or Section 7 of the Ordinance and in his oral reasons for verdict the magistrate said that he accepted the contract was not terminated by way of Section 6 or Section 7 of the Ordinance. Accordingly, even though, oddly, the charge did not particularise the termination of contract pursuant of Section 6 or Section 7 of the Ordnance an omission which, however, could have been cured by amendment even in this court, there was at the end of the day no proof of an essential element of the offence.

24. In his statement of findings, however, the magistrate proceeds by purported use of the Mischief Rule to import into his findings of fact a finding of fact that the dismissal of the employee was, constructively, pursuant to Section 6 or Section 7 of the Ordinance. In those findings, the magistrate says concerning Section 15

"that the mischief that Section 15 is trying to prevent is to protect employees from being dismissed after notice of maternity leave has been submitted whilst allowing them to be dismissed by other ways, provided these other ways, presumably Section 9 and common law will reasonably and fairly be established and not just used as a vehicle to avoid legal liabilities. That is why the mechanism of law is such that should the employer fail to establish his case for summary dismissal, the employee will be entitled to compensation."

25. As a general statement of the purpose of the legislation I do not think this portion of the magistrate's findings can be faulted, and the magistrate obviously appreciate contracts can be terminated pursuant to provisions other than Section 6 or Section 7 of the Ordinance.

26. He then goes on to find that the purported termination of the employee's contract in the case before him was a mere vehicle to evade the law and that it was a wrongful termination.

27. He says that this finding was supported by the fact that

"the Appellant company had to compensate PW1, that is the employee, (presumably before the Labour Tribunal as set out in the admitted facts of the case) and such compensation included wages in lieu of notice, so bringing Section 6 and 7 into play indirectly."

28. He thereby seemingly imports into the facts of the case before him a constructive termination of the employee's contract under Section 6 and Section 7 when those facts plainly, and as previously accepted by him, established that the termination was not pursuant to Section 6 or Section 7 of the Ordinance.

29. Leaving aside the question as to whether the learned magistrate could ever be right to base a finding of fact in the criminal proceedings before him on facts found before and by another tribunal, it is most certainly not the case that that tribunal's calculation of the compensation payable to the employee for wrongful dismissal under Section 9, by partial reference to the same matters included in Section 6 and Section 7 of the Ordinance, can be taken as importing into the facts of the criminal case before the magistrate a constructive termination of contract pursuant to Section 6 or Section 7 of the Ordinance.

30. There is simply no basis on the facts before the magistrate, or the law applicable to those facts, for such a finding. There is no provision anywhere in Chapter 57 or any where else as far as I am aware that a wrongful dismissal pursuant to Section 9 of the Ordinance, that is a wrongful summary dismissal, is deemed to be a dismissal pursuant to Section 6 or Section 7 of the Ordinance.

31. To import such an implied provision into the terms of Section 15 is to usurp the function of the legislature.

32. In short, the magistrate's finding that the dismissal, although apparently pursuant to Section 9(a) and Section 9(b) of the Ordinance, is to be constructively regarded as a termination of contract pursuant to either Section 6 or Section 7 is wrong in law.

33. Accordingly, I am satisfied that the Appellant has made out both Grounds 1 and Grounds 2(i) and (ii) of its Grounds of appeal and thereby Ground 4 and its conviction is quashed and sentence set aside.

34. I further add that had I not allowed this appeal for the reasons I have given on Grounds 1 and 2, I would have done so on the Appellant's Ground 3.

35. It is fair to say that particularly regarding DW1, the first defence witness, who was the assistant general manager of the Appellant, the magistrate interrupted his evidence to the extent that he conducted a significant part of both examination in chief and cross-examination of the witness. Many of these interruptions were to clarify matters given in evidence, but a significant number were either to contradict the witness or to belittle him.

36. Typical examples are, firstly, as to the contents of a form the witness was being questioned about,

"So you, so now in addition to playing doctor you are playing lawyer as well. Just now by looking at somebody's face you know somebody has not done something. And now you know what is not going to be accepted by the court, amazing."

37. Earlier the magistrate in response to the same witness's evidence that he had not thought the dismissed employee had been as sick on a particular occasion as she said she had been commented:

"Since when you become a doctor. Answer; since when you had become a doctor."

38. And when the witness said he could now recall a person whom the employee had quarrelled with commented:

"now you have the fantastic memory recall system, only a minute ago you could not remember and now you can remember. How nice."

39. One more example. When commenting on the bad English contained in the document made by the witness, the magistrate said to the witness,

"no matter what the outcome of this case is, I think you ought to go to Sogo and buy yourself an English dictionary. Do you get a staff discount."

40. The witness's company, the Appellant, was apparently related to Sogo.

41. All in all, the magistrates comments contained considerable sarcasm and could give no other impression than that he disbelieved the witness. Other defence witnesses were treated on occasion in a similar manner but not as frequently so. There is no doubt on the transcript of evidence provided the learned magistrate went too far into the arena.

42. I have no doubt given the magistrate's experience and thorough approach to the evidence he wished only to arrive at a proper decision. Indeed, his findings that the defence witnesses before him were not worthy of belief are not challenged.

43. Unfortunately in dealing with those witnesses, in the defence case, he went further than intervening merely to clarify the evidence and from the contents and tone of his questions and comments, showed at an early stage of the defence case that he simply did not believe the defence witnesses or accept its case.

44. The Appellant has in my judgment made out the third ground of appeal also.