HKSAR v. McDONALD'S RESTAURANT (HONGKONG) LTD.

HCMA304/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 304 OF 1998

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J U D G M E N T

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1. The Appellant Company, a very well-known chain of restaurants which sells, amongst other things, hot dogs, was convicted upon its own plea of two offences of being the employer of a person not lawfully employable, contrary to s.17I(1) of the Immigration Ordinance. The pleas were tendered before Ms Polly Lo on 6th March 1998, and on each summons, the learned Magistrate fined the Appellant $60,000, making a total of $120,000.

2. The offences alleged that on 6th October 1997 at the Star House McDonald's Restaurant, the Appellant employed two employees who were not lawfully employable. The facts were that Immigration Officers had intercepted, on that day, two Indonesian females who were wearing uniforms of the McDonald's chain and who were at the time walking out from the kitchen of the basement shop. As they were found to be apparently foreign domestic helpers and their limitation of stay would have had limitations, the case was investigated by the Immigration Officers. Enquiries reveal that the two employees had entered Hong Kong as domestic helpers in 1993 and 1994. Their employment contracts were terminated in July 1996 and September 1997, and the Appellant Company had employed the two employees on 8th April 1997 and 1st September 1997.

3. Mr Y.L. Cheung, appearing for the Appellant, has submitted that the sentences were manifestly excessive because the offences were committed not intentionally but inadvertently due to the negligence of the staff of the Star House branch in not checking the identity documents of the two employees more carefully to find out whether they were in fact lawfully employable. Mr Cheung also submitted that a deterrent approach in passing sentence was not appropriate in the Appellant's case. He also invited me to issue guidelines for this type of offence.

4. I invited the prosecution to submit statistics to me of sentences imposed upon companies or firms in respect of this offence, and Mr W.S. Cheung has submitted to me a table comprising 15 cases which started from August 1996 to June 1998. The defendants in those 15 cases were all firms or companies, and the fines ranged from a minimum in one case of $5,000 and $50,000 in another case. The facts of these cases are of course unknown to us, nor are the mitigating factors. Other sentences in between these two extremes were fines of $10,000, $20,000 and $30,000. During this period there appears to be some consistency on the part of magistrates dealing with this sort of offence, and the financial penalties for these defendants were all in the range of fines in excess of $10,000.

5. Mr W.S. Cheung has relied upon the case of A.G. v. Wong Chung Lee [1996] 2 HKCLR 159 which considered the previous case of A.G. v. Wong Mok Yin [1994] 2 HKCLR 96. Mr Cheung has submitted that it was said in Wong Mok Yin that a starting point of 15 months' imprisonment after trial would be appropriate where one employee is involved, where there are no circumstances of exploitation and where it is established that the offender was aware that he was employing an unlawful immigrant or had acted recklessly in so doing. Mr Cheung then submitted that 15 months was equivalent to 40% of the maximum imprisonment permissible of 3 years, and on the basis of 40% of the maximum of $350,000, Mr Cheung submitted that a fine of $140,000 would be appropriate if there were present the circumstances just mentioned. In this particular case, Mr Cheung submitted that since the Appellant was not aware that they were employing an unlawful immigrant, the fine should be reduced accordingly and he submitted that $90,000 per summons would be appropriate.

6. I would say straight away that I do not intend to issue guidelines for this particular type of offence because the facts of each case involving employing a person not lawfully employable vary so much from case to case that I do not think guidelines would be useful to magistrates having to deal with these offences. I also do not think that a mathematical approach to this sort of offences using the starting point of 15 months suggested by the Court of Appeal in Wong Mok Yin would also be helpful because, again, the facts of each case vary from case to case.

7. What I would mention is that the maximum fine for this particular type of offence was increased in January 1996 from $250,000 to $350,000, whereas the term of imprisonment of 3 years remained unamended. This obviously shows that the legislature, in passing this amendment in January 1996, considered that the sentence for these offences were too lenient and these offences were sufficiently serious to warrant the added financial penalty.

8. The Appellant Company has been established in Hong Kong for 22 years and is a very large chain employing about 7,000 employees, some of whom are part-time employees paid on an hourly basis. In mid-1997, the Appellant had 123 stores operating in Hong Kong. These stores, of course, doubled up as restaurants in that after a purchase at the counter the customer would be able to sit down to enjoy the meal. The Appellant had filed two affidavits for the purposes of this appeal, one by the Area Supervisor of the Operations Department, and the other by the Manager of the Human Resources Department. These affidavits are to the effect that steps have been introduced to try and prevent the recurrence of these offences. Mr Cheung, for the Appellant, has made the point that this Appellant has a clear record after so many years of business in Hong Kong. The other point made in the affidavits is that these two offences were committed because of the negligence of the staff of that particular branch in that the Manager who inspected the identity cards of these two employees failed to notice that on their identity cards there was the letter "C" on it indicating that the holder might be subjected to certain visa restrictions. The negligence is said to have arisen because the Manager failed to call for the passports of these two employees to find out what the visa restrictions were.

9. I cannot emphasize more strongly that these offences are serious offences, and as the Court of Appeal in Wong Chung Lee said :

"We would add that those minded to employ workers who are not lawfully employable should not doubt the liability they would incur to substantial sentences of imprisonment, not to mention maximum fines that were in January this year (1996) increased from $250,000 to $350,000."

In the case of Wong Mok Yin which was considered by the Court of Appeal in Wong Chung Lee, the learned Magistrate who dealt with the defendant listed as factors which called for a deterrent sentence the following :

"The commercial nature of the enterprise which was reflected in the multiplicity of employees employed, and some element of exploitation of the workers."

The Magistrate also mentioned the higher levels of unemployment in Hong Kong in recent years, the greatly increased incidence of unlawful employment and the increased penalties provided by the legislature. The Magistrate noted that the fine was originally $50,000 in 1990, it was increased to $250,000 and the imprisonment was increased from one year to two years' imprisonment. The Court of Appeal in Wong Chung Lee agreed that a degree of deterrence was appropriate in this sort of cases.

10. The Appellant Company is a very large organization employing a large number of employees and therefore should be extra cautious when employing employees. There is no suggestion here that they had intentionally employed somebody who is not lawfully employable, nor is there any suggestion of exploitation of these two employees.

11. I am told by Mr Cheung that these two employees were paid $21 per hour, and the range for hourly paid workers was from $10 to $31. Nevertheless, the negligence which gave rise to these two offences occurred on two separate occasions when the two workers were separately taken on. The first occasion was in April 1997 and the second occasion was in September 1997. Even though it is true that the dates of the two offences is the same, namely, on 6th October 1997, that has occurred simply because that was the day when the two employees were discovered by the Immigration Officers. The fact is these two employees were taken on on two separate occasions, five months apart from each other, and had been working for the Appellant for respectively one month and six months.

12. The negligence of the staff of the Star House branch was, to my mind, not easily excusable because these two employees were Indonesian females and should have been apparent on their appearances alone to be non-Hong Kong residents, and therefore, in my view, the Manager who inspected the identity cards of these two employees should have been alerted immediately to the need to inspect their passports to see if they were employable people in Hong Kong. The fine of $60,000 imposed for each summons can be said to be within the range of previous sentences imposed in other cases. I find it impossible to say that these sentences are manifestly excessive. The totality principle has not been breached because the offences are clearly distinct and separate offences, and consecutive sentences would of course be entirely appropriate.

13. Having reached my conclusion that the sentences are not manifestly excessive, I dismiss the appeal against sentence.

14. I should add that there is some expression of confidence by Counsel appearing for the Appellant that these offences would not recur again in the future. I hope that would prove to be true in the future and that the Appellant company will implement the steps that have been mentioned in the affidavits to ensure that in future no employees who are not lawfully employable will be taken into the employment of the Company.