NG AI KHENG, JASMINE v. THE OPEN UNIVERSITY OF HONG KONG

HCA 9801/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9801 OF 2000

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JUDGMENT

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Introduction

1.  The Plaintiff, Dr Jasmine Ng, brings this action against the Defendant, the Open University of Hong Kong, claiming damages for wrongful dismissal and for the wrongful disposal of items of personal property that belonged to her.  As will emerge presently the background to the termination of the Plaintiff’s employment by the Defendant was that the Dean and the Head of her Department had become very dissatisfied with her performance on a number of grounds which are said to justify her dismissal.  This will, of necessity, require a careful consideration by me of all the evidence relied on by the Defendant that is said to support its case of bad conduct by the Plaintiff to determine whether such grounds did in fact exist which would justify her dismissal on the basis of such misconduct.  Without in any way resiling from this position the Defendant has also pleaded other grounds which are said to make the termination of the Plaintiff’s employment lawful under the terms of her contract and which do not require an examination of her conduct.  Put simply, it is said that the Defendant was entitled to determine the Plaintiff’s employment, as of right, upon giving her 3 months notice or payment in lieu of notice which is what it did.  The correctness of that proposition must turn on a true construction of her contract of employment, together with the handbooks and guidelines that are referred to in it which, to varying extents, are incorporated by reference, into her contract.

2.  A decision favouring the Defendant’s interpretation of the contract on this basis would be finally determinative of this part of the action in its favour and would remove the necessity of my making a finding as to whether her alleged misconduct would have been, in any event, sufficient to justify her dismissal on that basis.  If I were to decide in favour of the Defendant on the ground that it was entitled to determine the Plaintiff’s employment with notice or with payment in lieu of such notice I will, nevertheless, in the event of an appeal, still have to go on and come to a determination as to whether the Plaintiff’s alleged misconduct has been made out on the evidence and whether such misconduct, as is proved, would have justified her dismissal.

3.  The Defendant also pleads an additional ground which it says defeats the Plaintiff’s claim, which is that, in any event, the Plaintiff chose to resign thereby preventing her from now bringing this action.  This plea also calls for, in its proper place, a decision by me.

4.  Lastly, there is a claim for loss of the Plaintiff’s personal property by the Defendant which she left in her room, in the days following the termination of her employment, when she was given a certain number of days to remove her belongings.  Apart from some physical items, such as books and files, the Defendant also claims in respect of research data, kept by her on her University supplied computer, which has been erased.  This dispute turns very much on an evaluation of the evidence as to precisely what she had been told about how long she would have to remove her personal effects from her room.  This must therefore turn on the credibility of the witnesses who have spoken to these matters, which I will come to after I have decided the main issue concerning the lawfulness, or otherwise, of the termination of her contract of employment.

The relevant terms of the Contract of Employment

5.  This aspect is very much a question of law, in respect of which the Plaintiff has had to suffer the disadvantage of having to conduct her own case, although it is very clear to me that she has done so with legal assistance in the background, whereas the Defendant has had the benefit of leading and junior counsel as well as, of course, solicitors.  Notwithstanding this apparent inequality of arms the Plaintiff, who has shown herself to be a person of considerable intelligence and oral fluency has addressed sustained legal argument on the proper construction of her terms of employment and Mr Y. L. Wong S. C. has been very careful in addressing me, on behalf of the Defendant, to draw to my attention any matters of law that might tend to favour the Plaintiff’s position whilst, of course, urging upon me everything that could possibly be said for the Defendant.  I consider therefore that I have been provided with the full extent of the arguments going both ways.  For this I am grateful to the Plaintiff for her assistance in which she has done her best, and I hope, she won’t mind me saying so, to Mr Wong and to his junior Mr McLeish for their obvious mastery of both law and fact which has made my task very much easier than it could have been.

6.  The starting point to this enquiry is, perhaps a little curiously, the finishing point which is 1 June 2000 being the date on which the Defendant wrote to the Plaintiff giving her 3 months payment in lieu of notice terminating her employment with it [see D/22/1094].  This letter purported to terminate her employment with immediate effect in accordance with section 7 Employment Ordinance, the effect of which I must come to presently.  The relevant terms of this letter for present purposes is as follows:

“	I regret to inform you that having considered your response to your Dean’s report on your unsatisfactory performance, the management has decided to terminate your employment with immediate effect in accordance with section 7 Employment Ordinance … the University shall pay you the following:
	(a)	Wages for 1 June 2000
	(b)	Three months wages in lieu of notice
	(c)	Wages in lieu of annual leave accrued up to 1 June 2000 …”

The amount paid to her set out at D/25/1099 was $320,307.52.  Having been presented with this letter the Plaintiff was then given the option of resigning which she purported to do on the same day.  Her letter of resignation is at D/23/1096.  I ought to set it out here in full:

“	According to the President of OUHK, there is no appeal channel or panel on the allegations made against me dated 28 April 2000 and 30 May 2000.  The statement (of no appeal channel or panel) was further reconfirmed by Ms. Gwenny Tsui of the HRU.  The President of OUHK claimed that two options were given to me until 7.00 p.m. today.  They are:
	a.	to send in my resignation letter to OUHK by 7.00 p.m. today or;
	b.	be terminated by the OUHK with immediate effect.
	Given such a short notice without room for consideration and for my clean employment record, I have no choice but to choose the option of resigning at this stage.  Thank you for you attention.”

This letter is the basis for the Defendant’s case that having resigned the Plaintiff can have no claim against it.  The Plaintiff’s case is that her “resignation” was forced on her and gives rise to a case of constructive dismissal by which she accepted the Defendant’s repudiatory breach of contract by virtue of their wrongful termination of her employment.  In respect of her resignation, the Defendant’s case is that this was an option given to her to avoid the stigma of dismissal so as not to place difficulties in her way in obtaining other employment after leaving the Defendant.

7.  Mr Wong seeks to analyse the matter in this way.  He says that the ultimate question therefore is whether the Defendant was entitled to determine the Plaintiff’s employment by payment in lieu of notice without showing cause.  If it did there can be no breach of contract and therefore no constructive dismissal.  In my judgment that analysis is the correct one.

8.  The Contract of Employment comprises a number of elements.  Firstly the letter of employment dated 16 June 1997 [C/3/30] together with the “Open University of Hong Kong – Terms and Conditions” which came with it [C1/1] and which are said to be incorporated insofar as any of its terms were not inconsistent with it and, the Plaintiff’s acceptance of the contract by her letter to the University dated 20 June 1997 [C/4/32].  It is right to say that the Plaintiff submits that other documents either form part of the Contract or are to be viewed as aids to interpreting it.  To this aspect I will need to return in due course.

9.  Mr Wong starts with Clause 8 of the Terms and Conditions.  It provides as follows:-

“	Clause 8 of the Terms and Conditions [C/1/6]:
“	Other than contract expiry, dismissal or retirement, employment of a staff member may be terminated at any time by either party upon giving to the other party written notice as follows:
	(i)	Vice President, Dean, Centre Director, Unit Head	6 months
	(ii)	All other Academic and Administrative Staff	3 months
	(iii)	Technical, Secretarial, Clerical & Minor Staff	1 month
“	…… The University reserves the right to pay the staff member wages in lieu of notice.
“	…… The University reserves the right with respect to each staff member to dismiss him with immediate effect without prior notice or payment in lieu of notice by dismissing the staff member in writing for any of the following causes at any time in accordance with Section 9 of the Employment Ordinance. ….”

From this, Mr Wong contends that these terms are plain enough and consistent with the Employment letter at C/3/30 which, not surprisingly, provides that the contract of employment will be subject to any legislation or sub-ordinate legislation which has the effect of constituting the University or purporting to govern the conduct of the University, its employees or Council.  This would therefore include termination by notice and payment in lieu of notice, (sections 6, 7, 8, 8A) and summary dismissal under section 9.  In this matter the University has cited section 7 in its letter of termination.  In such circumstances, Mr Wong submits that it was, as a matter of construction, open to the University to determine the Plaintiff’s employment with it in this way, which it did by means of the letter of 1 June, the relevant part of which I have already drawn attention to.  The significance of the Plaintiff’s misconduct provided the background against which that decision was taken.

10.  The real contest on this part of the case, which is raised fairly and squarely by the Plaintiff, is that by the time of her dismissal she was employed on superannuation terms, the significance of which has caused some debate in the course of the evidence and in the parties submissions.  Her point is that by being on superannuation terms, she had what is referred to sometimes as tenure which means that she could only be dismissed for good cause.  If she is correct then the Defendant was not entitled to avail itself of the termination on notice provisions [or as they did, payment in lieu of notice] and therefore it would have to discharge, what she would say, is the heavy burden of showing that her alleged misconduct amounted to “good cause”.

11.  The best description of tenure was given by Professor Danny Wong, who gave evidence for the Defendant.  He was at the time the Dean in charge of academic matters.  He explained it as connoting that the person holding tenure [a term more commonly used in North America] would expect to have a long term future at the University.  He or she would have a position for life.  The reason for such an advantageous term of employment is that it protects academic freedom so that somebody having tenure will know that if his or her views are out of step with those of her colleagues or of the University authorities he or she cannot be removed for such a reason.

12.  It is convenient to observe here that the Defendant will only appoint a candidate to superannuation terms if that person’s performance is deemed of sufficiently high quality to merit such an appointment. In the Plaintiff’s case that recommendation was made after she had been employed on contract terms for a few years with the Defendant.  She relies on the fact of having superannuation terms conferred on her in two ways.  Firstly, for the reasons that I am currently considering and also in a more general way that she was obviously somebody who had been highly thought of and which therefore would go to strengthen her case that she had not been guilty of any misconduct.  This is an aspect to which I will turn to later in the judgment.

13.  Mr Wong’s reply to the Plaintiff’s argument on superannuation is to say that at this university superannuation terms amount to a completely different concept to tenure as explained by Professor Wong, who was certainly not seeking to provide an interpretation of what superannuation meant at this University.

14.  One can see from her letter of employment, after she had been selected for superannuation terms,that she was to enter at Point B8 on the salary scale and to continue to serve on superannuation terms.  Mr Wong has analysed the difference between fixed term contract employment [which she had previously been engaged on] and superannuation terms and he submits that the only difference between the two is that superannuation brings with it the right to join the Defendant’s Provident Fund scheme whereas, a fixed term contract only brought with it an end of contract gratuity.

Clause 18 of the “Terms and Conditions [C/1/13] in its material terms provides as follows:

“	Staff who are appointed on superannuation terms are eligible to join the Provident Plan … from the date of appointment on superannuation terms.
	Details … are contained in a booklet distributed to the relevant staff concerned.
	(i)	The vesting scale is as follows:
		Superannuation Service (Year)　 Vesting Scale (%) <2 0 2 65 3 70 … …
	(ii)	Forfeited benefits from early leavers will be used to enhance the life insurance coverage for superannuation staff from 36 months to 48 months salary on the accrued superannuation benefit, whichever is the greater, upon the death or permanent total disability of the staff.”

The difference between contract and superannuation terms is that if a contract employee resigns before finishing his contract the gratuity is forfeited [Clause 8 of Terms and Conditions].  Nevertheless, a superannuation employee will start to accumulate his benefits from the date of his appointment on those terms and upon termination by notice or payment in lieu (but not following summary dismissal) the employee will be entitled to the Provident Fund accumulated by him up to that time, based on the number of years of service.  All of this is clearly stated in the handbook of the Standard Chartered Bank, under whose management the Provident Plan is made available and operated.  Clause 6.2 [E/2/28] governs the position:

“	Upon termination of your employment for reasons other than any of the above [i.e. retirement and death], you will receive the benefit equal to a percentage of your Saving’s Member’s Account according to the following schedule: (based on years of service).  You will not be entitled to the benefits if you are dismissed on the following grounds:
	(a)	wilfully disobeys a lawful or reasonable order;
	(b)	misconducting yourself;
	(c)	being guilty of fraud or dishonestly;
	(d)	being habitually neglectful in your duties; or
	(e)	upon any other ground on which the University would be entitled to terminate your contract without notice.”

15.  What Mr Wong gets from this is that if a member of staff on superannuation terms is dismissed with cause he will not be entitled to any of the provident fund benefits that he will have accumulated during the course of his employment on those terms.  If he is not terminated for cause, that is to say by notice or payment in lieu, then the provident fund benefits accumulated by him can be taken based on his years of service.

16.  It must follow from this, says Mr Wong, that the Plaintiff’s case that those on superannuation terms can only be dismissed for cause cannot succeed.  To make any sense, the Plaintiff’s case has to completely ignore the Provident Plan’s detailed provisions and calculations as to the taking of accrued benefits by reference to years’ of service.  If she is right and termination can only be for cause then these calculations, designed to operate for cases of termination with notice, would be unnecessary and meaningless.

17.  In my judgment Mr Wong’s analysis must be the correct one and the Plaintiff’s completely erroneous and based on a misunderstanding or misreading of the relevant provisions.  Superannuation terms leave unaffected the provisions in the Terms and Conditions which regulate how employment may be terminated, including of course, Clause 8 (above) which sets out the provisions as to termination.

18.  In coming to this conclusion I have not ignored the Plaintiff’s submission that the Staff Handbook is relevant in interpreting the effects of employment on superannuation terms.  She places particular reliance on Clause 3.4.2 [C/5/52] which is in these terms:

“

If you are employed on superannuation terms, your service is meant to be required on a long-term basis and you are eligible to join the Provident Plan established by the University on non-contributory basis from the date of appointment on superannuation terms.  However, your employment shall be subject to termination on a good cause for which the University shall be entitled to terminate your employment.  Details regarding the Provident Plan benefits under the superannuation terms of service can be found in the “TERMS AND CONDITIONS OF SERVICE” and the Standard Chartered Provident Plan booklet.”

This, according to the Amended Statement of Claim, paragraphs 5(4) [A/1/2-3], amounts to an express or implied term of her contract of employment.  As Mr Wong has demonstrated, on a number of grounds, this plea is a bad one and unsustainable.  Firstly, the Handbook relied on by the Plaintiff was issued in October 1999 [C5/34] over two years after the Plaintiff had signed her contract of employment in June 1997.  The previous Staff Handbook did not contain the equivalent to Clause 3.4.2, which is not surprising because Superannuation Terms had yet to be introduced.  Mr Wong submits, therefore, that the Handbook cannot assist the Plaintiff particularly where it is well established that statements or events occurring after a contract is entered into cannot be used to interpret the contract.  Reference is made to the speech of Lord Reid in Whitworth Street Estates v. Miller (1970) AC 583 @ 603D-F and also to the Court of Appeal decision in Robertson and Anr. v British Gas Corporation (1983)IRLR at paragraph 17 per Ackner L. J. (as he then was).  If this is not sufficient to defeat the plea then Mr Wong submits that the Handbook is not a contractual document.  It says so in its foreward which states that it only serves to provide general information about the University and is not intended to serve any contractual purpose [C/5/34].  This statement sufficiently prevents, in my judgment, the Handbook serving any contractual purpose either by express or implied incorporation into the contract or for interpretative purposes.

19.  Thirdly, even if the Handbook somehow had any effect on the issues that I am currently deciding it seems to me that the statement in the Handbook (supra) that the Defendant is entitled to terminate for good cause does not and is not intended to circumscribe or in anyway limit its grounds for termination.  The same clause refers to the terms and conditions of service and the Provident Plan booklet which contains the part to terminate by notice or payment in lieu without cause.  The matter is really put beyond doubt, and this is Mr Wong’s fourth point, by Clause 3.12 of the same Handbook [C/5/56] which covers “Termination of Service”.  Its significance is such that I ought to reproduce it here in full:

“	You may terminate your service by giving to the University in writing the notice required, or by payment of wages in lieu of notice where appropriate.  The University may also be entitled to terminate your employment by written notice or payment of wages in lieu of notice.
	However, the University may terminate your service by summary dismissal in writing at any time without notice or payment in lieu of notice on any ground on which the University would be entitled to terminate your service without notice or payment of wages in lieu.
	The ‘TERMS AND CONDITIONS OF SERVICE’ contains further details regarding termination of service and provision of benefits in such circumstances.  Please refer to the Standard Chartered Provident Plan booklet for payment of superannuation benefits.”

The passage speaks for itself.  This point cannot possibly succeed.

20.  Similar arguments were rejected by Chu J. in her decision in the Plaintiff’s appeal from Master Yuen’s refusal to reverse the DLA’s decision not to give the Plaintiff legal aid to prosecute this action.  [See HCAL 46/2003 paras. 54-62].  I am in respectful agreement with Chu J.’s reasoning in coming to her conclusion on the Plaintiff arguments before her.

21.  Undaunted by any difficulties that may appear to stand in her way, the Plaintiff also submits that a term can be implied in her contract on superannuation terms to the effect that she can only be dismissed for good cause, this to be inferred from all the circumstances.  In order to imply a term five conditions need to be present.  (i) The term must be reasonable and equitable; (ii) It must be necessary to give the contract business efficacy – the corollary being that no term will be implied if the contract is effective without it; (iii) It must be so obvious that it goes without saying; (iv) It must be capable of clear expression and, (v) It must not contradict any express terms of the contract.  These conditions all emerge from the decision of the CFA in Kensland Realty Ltd v Whale View Investment Ltd and Anr. (2001) 4 HKCFAR 381 @ 392.  It seems very plain that this contention by the Plaintiff must fall at every hurdle.

22.  Another, miscellaneous type of plea is that the Guidelines on Contract Renewal [E/15a/137-1], Performance Management Handbook [E/15/95] and Clause 3.1 of the Staff Handbook [C/5/51] also have a bearing on this matter.  These documents are pleaded in the amended Reply in Bundle A.

23.  Mr Wong rightly draws attention to the fact that none of these documents have or can be incorporated into the contract of employment either expressly or by implication.  The Guidelines dated 17 February 1998 post-date the contract.  The Plaintiff has also latched onto the expression tenure which appears in the Guidelines which she says means life-long employment.  Apart from the fact that this expression does not appear in the Plaintiff’s letter of employment nor in the terms and conditions of service, the Guidelines do not form part of the contract.  But perhaps more significantly, it is very plain that the expression tenure in the Guidelines is intended to and does mean the course of employment or as the Dictionary puts it, the “holding of an office” rather than security of tenure.  Even clearer is the fact that this expression as used in the Guidelines refers to the employment of all staff, be they on contract or on superannuation terms.  Not that it really matters, because the question of interpretation is for me, but Professor Danny Wong also was clear that in the Guidelines the word referred to the employment of a person rather than security of tenure.  This point is so untenable that it should never have been relied on by the Plaintiff.

24.  A point has been raised as to whether the Defendant, having exercised its right to terminate the Plaintiff’s employment without cause by giving notice or making a payment in lieu, is required to justify the exercise of that right.  It is clear from the Privy Council’s decision in Reda v Flag Ltd (2002) IRLR 747 and applied in this Court by Mr Recorder E. Chan S. C. in Sun Zhonggua v. BOC Group Ltd (2003) 2 HKC 239 @ para. 14, that no such obligation exists.  It also makes no difference if the power to terminate has been exercised pursuant to section 6 and 7 of the Employment Ordinance or, the express terms of the contract itself.  Accordingly, I am satisfied that the right to dismiss has been validly exercised.

25.  The Plaintiff in seeking to impugn the validity of the means adopted to dismiss her has complained that the Defendant did not first invoke the disciplinary procedures which appear in the Terms and Conditions.  She relies on Clause 27B.  If anything, this merely serves to reinforce the point that the Defendant had the right to terminate on notice or payment in lieu without first resorting to disciplinary procedures.  Sub-clause A of Clause 27, in its material parts, is as follows:

“	Disciplinary action is separate from and without prejudice to the University’s right to terminate the employment contract of any staff member with or without notice in accordance with the Laws of Hong Kong and/or these “Terms and Conditions of Service” and/or any applicable terms of the contract.”

Plainly, the right to terminate employment is in no way affected by the disciplinary procedures.  These procedures need not be exercised as a pre-condition to any dismissal.  Sub-clause B which the Plaintiff specifically relies on relates only to the procedure and penalties, which need to be followed and which may be imposed respectively if the Disciplinary procedure is to be used.  Sub-clause B in no way assists as to whether this procedure has to be undergone before a termination can be validly directed.  This aspect of the Plaintiff’s case must therefore also fail.

The Result

26.  For all these reasons the Defendant was entitled to terminate the Plaintiff’s employment by payment in lieu of notice in the way that it did by its letter to her on 1 June 2000 (See para.6 supra).  The consequence of this conclusion therefore is that her claim for damages for wrongful dismissal must fail and that there must be judgment to the Defendant on this part of the case.

27.  In the course of the argument I raised with the parties whether I should stop at this point of the enquiry if I were to reach a decision favourable to the Defendant.  I raised it because the Plaintiff would not then be put at risk of my finding the allegations of misconduct against her proved if I were to go on in order to come to a decision as to whether the Defendant had, in any event, good cause to dismiss her.  Such an adverse finding “on the facts” would undoubtedly have a harmful effect on the Plaintiff’s future employment prospects.  My judgment would be published and readily available to any prospective employer wishing to know the full circumstances of the termination of her employment.  Unsurprisingly, she has asked me not to go beyond the issue that I have just ruled on in the Defendant’s favour which has drawn this part of the action to a close.  Nevertheless, Mr Wong, not for any vindictive purpose, says that I should also determine this aspect of the case.  He says that this is essential in the event of an appeal.  If he were to lose the decision that I have just made in his favour on appeal, he would then wish to rely on any favourable finding, if that were the case, on the question of good cause as a fallback position, otherwise the Court of Appeal might have to remit the matter back to me to say what my findings are or, worse still, order a re-trial.  I agree with Mr Wong that in this case, which has been so hard fought by the Plaintiff, that I should provide a judgment on all the material aspects of the pleaded cases, whatever the consequences may be for either party.  I do so for the reasons given by Mr Wong.  I am afraid that these are the risks of litigation which both sides must bear.

Termination with cause

28.  This part of the case now becomes purely academic where I have already held that the dismissal by payment in lieu of notice was lawful.  Nevertheless, I had raised with Mr Wong the question of whether the Defendant could also rely on a dismissal with cause where it had purported to dismiss on the basis that it was contractually able to do that under the notice provisions with which the first part of this judgment has been concerned.  Can it pick and choose or, is it restricted to the selected ground which appears in its letter of dismissal?

29.  The Plaintiff had submitted that this was a matter going to jurisdiction.  She said I could not entertain this “alternative” ground of dismissal for cause.  The Defendant has provided one ground [dismissal with notice] it cannot go beyond that.  I have already ruled the submission misconceived.  I have jurisdiction to hear what the Defendant wishes to say and I must rule on it in the usual way.

30.  Mr Wong submits that the Defendant is not precluded from also relying on its right to terminate with cause provided the conduct that is to be relied on existed at the time that the dismissal was made.  He relies on the case of Ridgway v Hungerford Market Company (1835) 3A & E 171, 177, 178, 180 and on Boston Deep Sea Fishing & Ice Company v Ansell (1888) 39 Ch. D339, at 352 for the proposition that if a party refuses to perform a contract and gives no reason or an insufficient reason for his refusal but if there were facts of the time of his refusal which would have provided a good reason, even if he was not aware of them, he may later use those facts to justify his refusal.  In terms of an employment case therefore, an employer may use after acquired facts which were present at the time to justify the dismissal of the employee which he did not use at the time as a reason for dismissing the employee or, to justify the dismissal at the time.

31.  As a proposition of law this, in my judgment, is correct.  Nevertheless, the position differs here because the facts were known to the Defendant.  Is it bound by its “kinder” election based on the notice provisions so as to prevent it from raising misconduct at this stage?

32.  Mr Wong submits that there is no inconsistency between opting for a contractual right to terminate by making a payment in lieu of notice pursuant to section 7 of the Employment Ordinance and the Defendant’s right to terminate for cause.  Reliance is placed on the fact that the letter of dismissal also referred to the Plaintiff’s misconduct in these terms:

“	… having considered your response to your Dean’s report on your unsatisfactory performance … ” [D/22/1094]

Mr Wong also submits that it would be unjust to the Defendant, who having dismissed the Plaintiff on grounds that did not involve any criticism of her performance and who then went further by offering her the option of resigning thereby removing any possible stigma of dismissal, to now prevent it from raising the issue of misconduct when the whole process of dismissal is being called into question by the Plaintiff.

33.  I am satisfied that this is the correct analysis and that the Defendant must be able to deploy misconduct as justifying the dismissal, in any event, even though it was not the basis of termination at the time.

34.  I also need to deal with an argument addressed by the Plaintiff which I have already touched upon in relation to the dismissal/termination provisions in general which is now also taken in relation to dismissal for cause.  What the Plaintiff says is that before an employee is dismissed for cause the Defendant is required to initiate its disciplinary procedures.  Such procedure is referred to in Clause 27 of the Terms and Conditions.  As to whether the initiation and completion of these procedures is a necessary condition precedent to any dismissal for cause or, indeed any type of dismissal, the answer is provided by Clause 27 itself which provides that:

“Disciplinary action is separate from and without prejudice to the University’s right to terminate the employment contract of any staff member with or without notice in accordance with the Laws of Hong Kong and/or these “Terms and Conditions of Service” and/or any applicable terms of contract.”

35.  Once one realises the importance of this provision it becomes very clear that disciplinary procedures are purely optional and I would have thought more usually used to investigate and decide upon more venial transgressions by members of staff which can be dealt with internally by administrative action.  I am entirely satisfied that there is nothing in the Plaintiff’s submission that she should first have been subjected to disciplinary procedures before the decision to dismiss her was taken.

36.  Even less compelling is her submission that the Performance Management System, which is referred to in the Staff Handbook and is the System employed by the University to appraise its staff on an annual basis and to determine pay adjustments and to manage employees who have been graded “poor performance”, should have been employed.  Both Professor Ip and Professor Wong have given evidence that the purpose of this scheme is as I have just stated it to be and not for any other purpose.  In any event these provisions, set out in the Staff Handbook, form no part of the Plaintiff’s contract of employment.  In my judgment the Performance Management Scheme has no part to play in this matter.  The case of Peter King v University of St. Andrews relied on by the Plaintiff, which turned very much on the terms of the particular contract of employment in that case, can have no application here.

What type of conduct will justify summary dismissal?

37.  The answer to this question will set the standard by which the evidence of misconduct is to be judged.  The answer is largely provided by section 9 of the Employment Ordinance which covers cases of summary dismissal.  I need to set it out here:

“	An employer may terminate a contract of employment without notice or payment in lieu-
	(a)	if an employee, in relation to his employment –
		(i)	wilfully disobeys a lawful and reasonable order;
		(ii)	misconducts himself such conduct being inconsistent with the due and faithful discharge of his duties;
		(iii)	is guilty of fraud or dishonesty; or
		(iv)	is habitually neglectful in his duties; or
	(b)	on any other ground on which he would be entitled to terminate the contract without notice at common law.”

38.  As will emerge when I consider the conduct relied upon, the Defendant’s case is that what the Plaintiff did was dishonest.  The case against her has three limbs.

(1)	Dishonesty in relation to the Tutor Marked Assignments (TMA’s) monitoring forms;
(2)	Dishonesty in relation to the use of old TMA assignments;
(3)	Poor attitude and work performance.

39.  A convenient starting point is Halsbury’s Laws of HK Vol. 10(2) para. 145.517 which summarises the position in the following way:

“at common law, dishonesty on the part of an employee is normally regarded as a form of misconduct, which if sufficiently grave, would justify an employee being summarily dismissed.  Statutory provisions [s.9 Employment Ordinance] however provide for summary dismissal in the event of an employee fraud or dishonesty.  The degree of dishonesty capable of giving rise to a dismissal is very low.”

Reference is made to an old District Court case, Yau Luen Transportation Company Limited v Kwok Fu as an example of conduct which did justify summary dismissal for dishonesty.  At paragraph 15 the judge said that:

“the authorities quoted … clearly illustrate that where the conduct complained of is such that the confidential relationship between employer and employee is ruptured, or where it causes loss, or even it seems probable, loss of reputation by the employer, summary dismissal is justified.”

The case of Sinclair v Neighbour (1966) 3 All ER 988, a decision of the Court of Appeal in England is also helpful.  It should be remembered that all of these cases will have turned on their own particular facts and what one must try to do is to extract the principle from them.  Sellers L. J. at 989C-D said that:

“It was sufficient for the employer, if he could, in all the circumstances, regard what the employee did as being something which was seriously inconsistent – incompatible with his duty as the manager in the business in which he was engaged.”

Davies L. J. at 990D-F put it in this way:

“[The court] ought to … consider whether [conduct] even falling short of the label of “dishonesty” … was … conduct of such a grave and weighty character as to amount to a breach of the confidential relationship between master and servant such as would render the servant unfit for continuance in the master employment and give the master the right to discharge him immediately.”

40.  It would appear that the conduct justifying the dismissal may be a single incident or the cumulative effect of a series of incidents on the part of the employee.  See So Ching v Kwan Hang Ching & Anr. (1987) 2 HKC 297 where the effect of the judgment of Barnett J. is, for present purposes, sufficiently reproduced in the headnote to the report:

“	(2)	What must be looked for was whether what was done by the employee was something which was expressly or impliedly a repudiation of the fundamental term of the contract such as to justify an instant dismissal.
	(3)	The conduct which was relied upon by an employer for dismissing an employee might be a single incident, such as one refusal to obey a lawful order, or it might be the cumulative effect of a series of incidents on the part of an employee.”

41.  It seems to me that these passages provide the correct standard to be looked for and applied by me in my appraisal of the evidence on this aspect of the case.

42.  Mr Wong has rightly identified the starting point to the inquiry which I take from his written note to his final speech (para. 55):-

“	55.	It must be borne in mind that D is the Open University of Hong Kong, a tertiary education institute engaged in distance learning.  D understandably expects a high standard of integrity of its staff like P who would be discharging their duties of course coordination and tutors monitoring very independently.  She was in a supervisory capacity.  She was the important link.  As stated in the Course Coordinator Training Manual, at para. 4.4.1 [G/1/71]:
		“	Adequate, timely and accurate feedback from tutors is crucial to distance learning students.  It is your (i.e. course coordinators like P) responsibility to ensure this is happening, and the only way you can do this properly is to monitor your tutor’s marking performance.””

The Plaintiff unquestionably occupied a position of responsibility and of some seniority in the delivery of the Defendant’s service to its students.  Although she would expect to be supervised and her work methods would be looked at by her own supervisors it seems to me that she was largely left to her own devices on a day to day basis and expected to get on alone with the “nuts and bolts”, the detail of her own work.  To a large extent she was trusted to get on and do the tasks set for her by the Defendant.

43.  From this it is now necessary to turn to the specific charges said to justify summary dismissal.

Alleged deception in relation to TMA monitoring forms

44.  Between 1997 and 2000 the Plaintiff was the course co-ordinator of courses B380, B381, B384 and B480 and course team co-ordinator for course B380, B381, B481.  Her supervisor was the Dean of the School of Business Administration, Professor Ip Yiu Keung.  Her duties required her to monitor the performance of outside tutors whose work included marking student assignments.  Sample tutor marked assignments would be sent to her periodically.  She was tasked with assessing the quality of the marking having regard to the assignments that the students had submitted.  The TMA monitoring forms came in triplicate.  After completing the form she would keep the pink copy, the white tutor’s copy would be sent to the tutors together with her comments on their marking and the green office copy would be dispatched by her to the Registry.

45.  It is vital to understand that during this three year period the Defendant had produced three TMA monitoring forms.  Version 1 (F/62/796) in English only which was phased out in 1997, Version 2, a bilingual document used between 1997 and 1999 [F/62/790] and Version 3 [F62/782] also bilingual, which had been approved at the end of 1999 and became available for use after January 2000 to respond to any difficulties resulting from Y2K.

46.  Reports were current that there had been a slippage in the Plaintiff’s performance.  Dr. Andy Kan had reported in a written report dated 17 February 2000 [C/15/107] that the Plaintiff had not been carrying out her tutor monitoring as she should.  The complaints then found their way into the Dean’s report dated 24 February 2000 [C/15/105] and further adverse comment was made in his further report of 31 March 2000 [C/16/232].

47.  The upshot of this was that the Human Resources Unit provided the Plaintiff with a summary of the Dean’s further report of 31 March and she was asked to give her responses to the charges in writing.  A substantial allegation was that she had failed to do tutor monitoring for a number of courses.  She responded on 8 May 2000 [D/18/405] attaching to her response 47 TMA monitoring forms [D/18/425-439, 478-509] in order to answer this charge.  I need only summarise here her response to this matter.  She said that there had been no April 1997 presentation but that there had been one in October 1997 for course B381.  She then attached monitoring forms for B380 April 1999, B381 October 1998, and some of October 1997, B384 April 1999 and B480 October 1998.  She also explained that due to having moved offices twice in the past eighteen months some of the forms had gone astray.  47 forms in all had been attached by her [D/18/478-509] in respect of the presentations that I have just referred to.  The difficulty about the TMA forms submitted is that all, save for 3 of the 47, were dated either 1998 or 1999, nevertheless the forms used were Version 3 forms which first came in the circulation after January 2000.  The dates had been corrected by her.  An analysis of the monitor scores showed that it was the same as the tutor marks and the comments appeared to be perfunctory with remarks such as “Great Job!” or “Good Work”.

48.  It seems to me that in putting forward these forms as they were she was telling the University authorities that she had done the TMA monitoring work, that she had filled in the monitoring forms on the dates that appear on the forms, not long after she had done that work and that she could only produce these 47 forms because the others had been misplaced following moves of office.  In cross-examination she also confirmed that she had done the monitoring work, filed the green copies with the Registry, sent the white’s to the tutor and retained her pink’s, which she had subsequently discarded.

49.  Having received the report and its attachments the Defendant’s staff noticed that the Plaintiff had used Version 3 (post-January 2000) forms to report on tutors marking that was supposedly done before Version 3 had come into existence.  Further suspicion was fuelled by the fact that the tutors and the Registry had no record of the Plaintiff filing any of these monitoring forms.

50.  Having regard to this evidence it is submitted on behalf of the Defendant, that the Plaintiff had not only not done this work (a serious dereliction of duty) but that she was prepared to be dishonest about it by lying to the University that she had in fact done this work when she presented it with her report of 8 May, attaching to it false monitoring forms which she had complied after the event and presenting them as “originals” prepared on or about the dates that appeared on the forms.  In order to carry out her deception she used TMA forms which were not current, or in existence, on the dates when she was supposed to have carried out this work.

51.  To underline the falsity of the Plaintiff’s claim that she returned the green copies to the Registry Mr Wong has attached as Appendix I to his closing speech a comparison between the University’s record of what was sent and what the Defendant says that she had sent.  It seems very clear to me on a fair reading of this comparison that the Plaintiff’s claim that she sent these is a false one.

52.  Following the submission of her 8 May report, the Plaintiff was called to a meeting on 30 May 2000 with the President of the Defendant.  The evidence is that she maintained her case that she had completed the monitoring tasks and returned the TMA forms within 2 to 4 weeks of having received her assignments.  When confronted with the fact that she had used Version 3 forms to do this work before those forms had come into existence she was unable to provide an explanation.

53.  Having been unable to provide an explanation on 30 May, the President decided that dishonesty on this scale was incompatible with her continued employment and it was after the end of that meeting that he decided in consultation with the other present, including Professor Danny Wong, that the Plaintiff would have to be dismissed.

54.  Her evidence is that having been confronted with the use of the Version 3 forms, the President had given her more time to provide him with an explanation which she did on 1 June 2000.  This was contained in a further report by her of that date but according to her the President refused to read it.  In this regard I reject her evidence that such an opportunity had been given to her.  I prefer the evidence of the other witnesses present at the meeting including Professor Danny Wong and Miss Gwenny Tsui of the Human Resources Unit that no such opportunity had been offered to her.  On 1 June she told the President (which is what she had written in her report of 1 June) that the forms had been discarded and so she was obliged to fill in new forms and back-date these on student records which she had previously entered into her computer.  This was a version that she gave for the first time under cross-examination in Court.  She said that the 47 TMA forms which she submitted on the Version 3 forms had been complied from these computer records which had by now been deleted.

55.  It seems to me that there was no reason why she could not have told this to the President at their meeting on 30 May.  In fact there was every reason why, had she been honest and truthful, she should have set out all of this background in her report of 8 May.  The plain fact is that she had not carried out the assignments over this substantial period of time – that when challenged she decided to cover up what amounted to a very serious dereliction of duty and she did so by fabricating TMA monitoring forms to make it appear that she had actually done the work.  For an academic charged with these important duties it is difficult to imagine a more serious breach of duty to the University that employed her.  To make matters worse, she was prepared to lie to the President on 1 June and now to me in the course of the trial as to how she came to make use of the Version 3 forms.  I would have thought that the President was left with no alternative but to dismiss her.  I find that this alone amply justified her summary removal.  It is much to the Defendant’s credit that it was prepared to take a very compassionate course in opting for dismissal by payment in lieu of notice and then going further by giving her the option to resign.

56.  If that was not enough justification for summary dismissal there were two other broad categories of serious misconduct which the Defendant could rely on as justifying summary dismissal taken cumulatively with each other and of course also when added to the matter that I have just been considering which justified summary dismissal by itself.

Misrepresentations as to why old assignments had been re-used

57.  This is the first of the two other categories of misconduct.  It comes about in this way.  On 7 January 2000 the University Educational and Publishing Unit (“ETPU”) and on 11 January 2000 the Dean, in the course of a meeting, had asked the Plaintiff why she had used the April 1999 assignments again for the April 2000 assignments.  She said that Dr. Nigel Leung, a colleague of hers and another course co-ordinator, had said, during a Broad meeting, that there would be no objection to this being done.  The raw evidence as to this is in her e.mail dated 7 January 2000 to the ETPU [C/15/111, D/18/424] and the minute of the 11 January meeting [C15/112].  It is very clear from the evidence that no such representation had been made by Dr. Leung.  The matter had been thoroughly investigated by the Defendant at the highest level and found not to be true.  The Plaintiff has complained that this investigation was carried out in an unfair way.  I do not consider this to be the case.  She had been given every opportunity to state her version of events about this before any conclusion and decision had been arrived at.  What is worse is that the Plaintiff has changed her ground in this regard by saying that she had heard “somebody” mention that the re-use of old assignments would be alright.  In her new pleaded case on this [A/3/61] she has put forward an account that it was not Dr. Leung who said such a thing.  This is to try and avoid the effect of overwhelming evidence that Dr. Leung had never said such a thing.

58.  I am afraid that the reality of all of this is that when she had been challenged about her re-use of old assignments she had tried to get round this by falsely accusing a colleague of having said that this would be acceptable.  She then engaged in trying to get out of this lie when it was clearly demonstratable that Dr. Leung had said no such thing.  This is a serious matter.  In a University academic colleagues are expected to pull together and co-operate.  This lady, having been caught out on a matter which reflected badly on her performance by re-using old assignments had tried to put the blame on a colleague by fabricating an account of what he had said, when he had said no such thing.  Such conduct strains to breaking point the necessary bond of trust and confidence that academic colleagues should have between each other and which is also due to the University itself.  I find this complaint proved and it is, in my judgment, of such gravity as to justify summary dismissal of itself.  Even if I am wrong in concluding that standing alone this justifies such dismissal, its cumulative effect when added to the first grave charge and what I am about to turn to, clearly demonstrates that summary dismissal was the correct course for the Defendant to adopt.

Poor attitude and performance of her duties

59.  This category includes an element of overlap with matters that I have already considered and ruled on in the two previous categories of misconduct.  Mr Wong has referred to the failure to carry out the tutor monitoring work under this head which she then tried to cover up by filling in false monitoring forms.  I have already found as a fact that she never did this work and therefore fabricated forms in respect of which she was caught out and which was the event that triggered her dismissal.  In my view all of this is more conveniently considered as I have done under category I, which I have already dealt with and this being the case I do not propose to say more about this area of serious misconduct.

60.  A failure to arrange tutor meetings or tutorial visits for two years is another serious allegation of dereliction of the duties that she had been charged with.  An enquiry was launched.  There is a record of this at C/16/325.  Tutors were interviewed and they have confirmed that either no tutor meetings or very few such meetings had taken place.  See Mr Ng E/27/253, Mr Yip E/27/255, Mr H. M. Wong E27/268 and Mr C. M. Lai.  This area of her duties was very important.  She was the link between the Defendant and the tutors through whom an important part of the Defendant’s service to its students is delivered.  It is very clear to me, that overall, the Plaintiff had taken her foot off the pedal so far as her work at the University was concerned.  She simply neglected this part of her duties and she was coasting.

61.  This is also demonstrated by her use of old assignments, an aspect of which I have already considered in relation to the false allegation against Dr. Nigel Leung.  It must be very obvious that if old assignments are used that students will be tempted to provide the previous answers to such assignments rather than their own.  This does not help them and it serves to harm the University’s reputation.  There has been a close analysis of this re-use in the course of the evidence which leaves me in no doubt that this complaint is also proved.

62.  There was also a complaint about her poor attitude.  The authorities had noticed a slippage in her performance and she was downgraded in her annual report.  Previously, she had been well thought of which had resulted in her appointment to superannuation terms.  I am satisfied that having observed this general downturn in her work the Defendant was prepared to assist her by lessening some of her workload.  This was resented by her and she was prepared to level quite unjustified complaints going as far as falsely accusing the Dean of sexually improper behaviour.  I desire to say, in the clearest terms, that there is absolutely no substance in this complaint.  She has also taken all sorts of points about the procedures employed by the Defendant in investigating complaints which I find to be completely unfounded.  The Defendant has bent backwards to deal with her fairly.

Conclusion

63.  The Plaintiff in my judgment became quite unsuitable for employment by the Defendant.  Her work had slipped to an unacceptably low standard.  She resented criticism and was prepared to make serious and false allegations against colleagues and superiors.  She lied to cover up her failure to do important work that she should have done and she has told lies in court in order to advance her case.  It was high time that she was removed from the Defendant’s employment once it had been discovered what she had done with the fabricated TMA monitoring forms.  The Defendant has been unnecessarily understanding to her by allowing her to resign.  Notwithstanding a compassionate attitude by the Defendant she has brought this action and has been prepared to make scurrilous allegations against the Defendant and its solicitors and counsel which have no substance whatsoever.  There is no doubt in my mind that the Plaintiff ought to have been summarily dismissed and could have been had the Defendant and its senior management decided on such a course.

The claim for lost property

64.  There is simply no merit in this part of the claim at all.  The Plaintiff was given ample time to remove her belongings over two full days.  She failed to do so.  The Defendant’s staff was more than justified to conclude that anything of hers that may have been left behind could be disposed of.  Yet again, the Defendant had shown considerable understanding and it was prepared to be accommodating.  Her response has been to make false accusations over their conduct in this regard which simply do not stand up to any reasonable view of the evidence.

Damages

65.  Where the Plaintiff has failed so comprehensively I do not propose to consider what damages she might have obtained had she succeeded.  That would be an unreal exercise in the circumstances.

Costs

66.  In circumstances where the Defendant has succeeded on every basis that this long and expensive action has been contested on it must have its costs.  I will say that these costs are to be taxed on a party and party basis but I can well imagine that the Defendant may wish to seek a more generous basis of taxation having regard to the completely unworthy and unmeritorious way in which the action has been brought and contested by the Plaintiff.  This having been said I can also understand why the Defendant may feel that the expense of a further hearing to argue the basis of taxation may not be worth the additional costs that they will have to incur, given what I assume is the Plaintiff’s modest financial position, as a result of which full recovery of its costs may prove problematic.  The order for costs will be an order nisi in the usual way.