Mak Wai Man v. Richfield Realty Ltd
Read the full judgment text of HCLA 28/2015 on BabelCite. This HCLA judgment was delivered on 23 June 2016.
1. On 30 October 2015, I granted leave to the defendant (“ D ”) to appeal against an award made by the Presiding Officer of the Labour Tribunal, and my reasons were set out in my decision handed down that day (“ Leave Decision ”) [1] .
Cited by 7 cases · Cites 5 cases
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HCLA 28/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE LABOUR TRIBUNAL APPEAL NO 28 OF 2015 (ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 2308 OF 2014) ______________________
______________________ HCLA 29/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE LABOUR TRIBUNAL APPEAL NO 29 OF 2015 (ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 2309 OF 2014) ______________________
______________________ HCLA 30/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE LABOUR TRIBUNAL APPEAL NO 30 OF 2015 (ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 2310 OF 2014) ______________________
______________________ HCLA 31/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE LABOUR TRIBUNAL APPEAL NO 31 OF 2015 (ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 2311 OF 2014) ______________________
______________________ (Heard together)
________________ J U D G M E N T ________________ Introduction 1.On 30 October 2015, I granted leave to the defendant (“D”) to appeal against an award made by the Presiding Officer of the Labour Tribunal, and my reasons were set out in my decision handed down that day (“Leave Decision”)[1]. 2.For ease of reference, in this judgment, I shall adopt the same definitions in the Leave Decision, unless otherwise indicated. 3.The background has been briefly set out in the Leave Decision, which I shall not repeat here. As set out by the Presiding Officer in his Reasons, the main disputes were[2]:
4.The Presiding Officer than made his determinations on each of the above issues as follows[3]:
5.D only sought leave to appeal against the Presiding Officer’s 2nd Determination and the 3rd Determination, and as seen in the Leave Decision, leave was so given. 6.Mr Anson Wong SC appeared with Ms Connie Lee and Mr Vincent Chiu for D at the hearing before this court. 3 of the 4 Claimants had obtained legal aid after the Leave Decision, and Mr Eric Shum appeared for them at the hearing. The Claimant in HCLA 29 of 2015, Madam Tsang Mei Sheung Meiz appeared in person, and basically adopted the submissions made by Mr Shum on behalf of the other 3 Claimants. Grounds of Appeal 7.There are two main grounds of appeal in D’s Notice of Motion lodged on 9 November 2015 (“Notice of Motion”)[4]:
8.Mr Shum had complained that in the Notice of Motion the 1st Ground was drafted in a way that D appeared to be asserting and relying on implied terms of the Employment Contracts, but instead D’s case at the hearing was based on Clause 4 of each of the Employment Contracts. Mr Shum thus submitted that as the granting of leave by this court was based on the 1st Ground as it was drafted, D should not be allowed to rely on a different case, and that this court should dismiss 1st Ground forthwith. 9.In the 1st Ground, D had complained that the Presiding Officer should have concluded that by reason of “implied term of the employment agreement or for other reasons” that the Commission in a particular month should be averaged out by the number of days of that particular month for deductions under the relevant Deduction Sub-sections and that the Presiding Officer had failed to consider the legislative intent and proper interpretation of those provisions. Thus, the 1st Ground is essentially based on the statutory interpretation and the legislative intent and proper interpretation of the relevant provisions in the EO, and further, on the drafting, D was not relying only on “implied term”. I do not find there had been any material change of ground as complained by Mr Shum. The 1st Ground The Deduction Sub-sections 10.Mr Wong submitted that the 2nd Determination concerned a question of statutory interpretation ie on a proper interpretation and application of sections 35(4), 41(6) & 41C(6) of the EO (the “Deduction Sub-sections”), whether the Commissions, which were contractual, paid to the Claimants could be used to reduce their Statutory Entitlements. 11.The Deduction Sub-sections provide that:-
Statutory Interpretation - Generally 12.The general legal principles on statutory interpretation were set out by the CFA in Town Planning Board v Society for the Protection of the Harbour Ltd (2004) 7 HKCFAR 1 and summarised as follows[5]:-
13.Further, in HKSAR and Cheung Kwun Yin (2009) 12 HKCFAR 568, the CFA held that, among other things :
14.It was further said by Ma CJ in Cathay Pacific Airways Ltd v Kwan Siu Wa Becky (2012) 15 HKCFAR 615 that, as a general approach to statutory interpretation, particularly where a piece of legislation deals with a subject matter which most people would expect to be dealt with in a common sense and purposive manner, the court should aim to arrive at an interpretation that, as far as the wording of the legislative provision in question will allow, will accord with such common sense and which can be easily applied[7]. (emphasis added) Legislative Background of the Relevant Statutory Provisions 15.The Deduction Sub-sections were introduced into the EO by the Employment (Amendment) Ordinance 2007 (“2007 Amendment Ordinance”), which was enacted following the CFA decision in Lisbeth Enterprises Ltd v Mandy Luk (2006) 9 HKCFAR 131. 16.The old s 41 and s 41C (“Old Sections”) were:
17.It was held in Lisbeth that, while contractual commission was included in the definition of “wages” under s 2 of the EO, holiday pay and annual leave pay under the Old Sections did not include such commission because[8]:-
18.In light of the CFA’s decision in Lisbeth, the Government took the view that the Old Provisions failed to implement the policy objective, namely, that contractual commission should be included as “wages” for the purpose of calculating Statutory Entitlements under the EO. 19.As further set out in paragraph 4, the ruling in Lisbeth had resulted in different treatment for employees with commission accrued and calculated on a daily basis vis-à-vis employees with commission accrued and calculated on a monthly basis, and that this anomaly was to the detriment of the interest of the latter group of employees (emphasis added), and that the ruling had also shown that the Government’s policy intention had not been fully reflected. 20.It was against the above background that the Government decided to bring in amendments to the then EO. 21.Further, as seen from the Legislative Council Panel on Manpower’s Proposal, LC Paper No CB (2) 2119/05-06(03) (May 2006) (“LegCo Proposal Paper”), the proposed amendments did not seek to introduce any new rights and benefits for employees, or created new obligations for employers, nor did they seek to make any fundamental change to the mode of calculation of the existing statutory entitlements. The proposed amendments were designed solely to adequately express the original policy intention[9]. 22.The original policy intention behind the calculation of Statutory Entitlements of employees under the EO was set out in the LegCo Proposal Paper, namely that “wages” inclusive of commission of a contractual natureshould be used as the basis for all calculations, and this was to ensure that an employee’s take-home pay would not be affected if he/she enjoyed a Statutory Entitlement such as taking a statutory holiday or a period of annual leave[10] (emphasis added). 23.As further set out in the Report of the Bills Committee, LC Paper No CB (2)1628/06-07, 19 April 2007 (“LegCo Report”), that given the evolving and increasingly complex nature of the remuneration systems in Hong Kong, and in the light of CFA’s ruling in the Lisbeth case, the Administration considered it imperative that the law should provide a workable, predictable and consistent mode of calculation for Statutory Entitlements[11]. 24.Mr Shum had submitted that the objective of the proposed amendments was only to clarify the definition of “wages”. This would perhaps be a somewhat over simplification. In fact, there were no proposed amendments to the definition of “wages” in the EO. 25.As seen in the LegCo Report, the objectives for the amendments were[12]:
26.As further set out in the “Explanatory Memorandum” to the proposed Bill annexed in the LegoCo Brief (“Amendment Bill”), the main object of the Amendment Bill was to revise the modes of calculating several kinds of payments under the EO, and that after the revision, the average of the wages (to include commission payable to an employee) earned by an employee during the past 12 months was to be used in the calculation[13]. The Amendment Bill was thus not simply to clarify the definition of “wages”. 27.The Amendment Bill eventually became the 2007 Amendment Ordinance. The 2007 Amendment Ordinance was clearly intended to cover all kinds of employment relationship with different forms of remuneration, and to avoid distinguishing fixed and variable wages. 28.Mr Wong submitted that :
29.In respect of (ii) above, Mr Wong also referred to what was said by Ma CJ in Cathay Pacific, in particular in paragraph 20(6), as follows:-
30.Mr Shum had sought to argue that Ma CJ’s comments were confined to a situation where an employee earned a fixed monthly salary. 31.However, as pointed out by Mr Wong, the example which Ma CJ gave in the following paragraph 20(7) in Cathay Pacific would seem to indicate that under the Old Sections at least that if there were commissions earned by X over the wage period albeit varied from day to day, in addition to his basic monthly wage, then everything was to be averaged out, or divided by 30 days, to calculate the daily wage for the purpose of the statutory holiday pay. 32.Mr Wong submitted that to give effect to the legislative purpose of clarifying the calculation of Statutory Entitlements, the Amendment Bill would require a mechanism through which the monthly salary, commissions, etc (those periodic payments which were already taken into account in the DAW calculation) could be averaged out and deducted such that the employers would not be required to make double payments in relation to these Statutory Entitlements, and that the purpose of enacting the Deduction Sub-sections in the 2007 Amendment Ordinance was to provide a mechanism to avoid double payment by employers. 33.In this respect, Mr Wong referred to paragraphs 10, 12 and 14 of the “Explanatory Memorandum” of the Amendment Bill[15], which explained the Deduction Sub-sections were added to clarify where an employee was paid a sum of money in respect of a paid sickness day/holiday/a day of annual leave, the pay payable in respect of that day was to be reduced by that sum. This could also be seen from the Explanatory Paper, LC Paper No CB (2) 1511/06-07(03), April 2007 to the Bills Committee (“LegCo Explanatory Paper”) where it was stated that the Administration had identified refinements to the Amendment Bill which included “(a) expressing more clearly the intention of avoiding double payment by the employer”[16]. 34.Mr Shum had argued that the Deduction Sub-sections were only introduced for the sake of clarity and to put matters beyond argument as to what and when deductions should be made to the relevant entitlements and that the Deduction Sub-sections made it clear that there could be deductions and completely left the matter relating to deductions to the agreement between the employer and the employee. Thus, Mr Shum submitted, in accordance with the Deduction Sub-sections, it could be by (a) express terms of the contract of employment, (b) by other agreement outside of or subsequent to the employment, or (c) for any reasons (it could be implied agreement or estoppel by convention), and that in every case, the court is to decide whether there is any such agreement/reason to find that leave/holiday/annual leave pays should be reduced, by how much and by what payments, and that the burden is on the one who asserts there is deduction to prove the agreement/reason[17]. 35.On the other hand, Mr Wong submitted that to give effect to the legislative intent of the 2007 Amendment Ordinance, the applicable test should be :
36.Sickness Allowance, Holiday Pay, Annual Leave Pay are Statutory Entitlements enjoyed by the employees. Sections 35, 41, 41C set out the mode of calculations for the DAW for such entitlements. The definition of “wages” is very wide, and means:
37.In calculating the DAW, all the above different kinds of remuneration earned by an employee under his contract of employment for the period of 12 months (or any shorter period he was employed) immediately before the sickness day/holiday/annual leave day will be taken into account or “thrown into the pool”, so to speak, for the calculation of the daily rate for the sickness/holiday/annual leave allowance. 38.It can also be seen from subsections (1) of ss 35, 41, 41C of the EO that “wages” include any sum paid by an employer in respect of a maternity leave day/rest day/sickness day/holiday/annual leave day taken by the employee for the purposes of those subsections in relation to the calculations of the rate of the Statutory Entitlements and for the DAW. 39.However, there was no mention or any reference to “wages” or the DAW in the Deduction Sub-sections, and instead of “wages” or “DAW” the Deduction Sub-sections referred to “a sum of money” paid by the employer. Thus, on my interpretation, this must be deliberate and that the sum of money referred to does not necessarily mean nor is it confined to “wages” or the “DAW”, and I would agree with Mr Shum that in each case one would have to consider whether there have been sums of money paid by the employer to an employee in respect of a paid sickness day/holiday/annual leave day, whether pursuant to the terms of the contract of employment or other agreement, or for any other reasons. 40.In the Interpretation Section of the EO, “contract of employment” means “any agreement, whether in writing or oral, express or implied, whereby one person agrees to employ another and that other agrees to serve his employer as an employee and also a contract of apprenticeship”[19]. Hence, “any other agreement” in the Deduction Sub-sections would, in my view, mean any agreement other than the terms of the contract of employment (whether written/oral/express/implied) which could mean, as suggested by Mr Shum, outside of or subsequent to the employment. Further, the court can also look at whether there is “any other reason”. 41.It is clear that the Deduction Sub-sections were introduced to avoid double payments by employers, and thus for the benefit of the employers who would normally be the ones seeking the deductions. I agree with Mr Shum that the burden should be on the employer to prove entitlement to a deduction. 42.The Deduction Sub-sections allow the deduction of a sum of money which is paid by the employer to the employee in respect of a paid sickness day/holiday/annual leave day. As seen from what was said by Ma CJ in the Cathay Pacific case, in a case where an employee was engaged on a monthly basis with simply a basic monthly salary, the employee would generally be treated as being paid for each day of that month,and that his example showed that this would not be necessarily be confined to only the basic salary. It is thus my view that an employee employed on a monthly basis and paid a monthly sum of “wages” at the end of each month for work carried out in that month, irrespective of whether the employee has been on sick leave/holiday/annual leave or not, the monthly sum should generally be treated as being paid for each day of that month, unless the nature of a particular item of “wages” indicating that the item is only attributable to specific working day(s), eg “overtime pay”. 43.I now turn to consider the present case. The Employment Contract 44.The 4 Claimants were all D’s Marketing Department employees and according to them, their job duties were for acquisition of an entire building (全幢物業倂購買賣)[20]. 45.Clause 4 of the of the Employment Contract of 3 of the Claimants provides for “Remuneration” as follows :
46.Under Clause 4 of the Employment Contract of the claimant Mr Mo in HCLA 30/2015, the Travel Allowance was typed as HK$10,000, which appeared to be a typing error, and for the Commission, the cut off date was the 20th of each month, and the pay day is the 25th days of each month. Other than this, the provisions for Clause 4 appeared to be the same as the other 3 Claimants. 47.According to Clause 4 of each of the Claimants’ Employment Contracts, the calculation of thee Commission was with reference to the commissions received by D from the owners. 48.Subsequent to their Employment Contracts, D had issued various announcements to its employees in relation to Commissions and Leave arrangements (“Announcements”). 49.It would appear from these Announcements that the system for entitlement and calculations for the Commissions was varied by D[22]. 50.There were at least 3 of such Announcements which had varied and/or clarified the system of payment of Commissions[23]. The Announcement dated 1 March 2010 had set out different types of transactions for the payment of the Commission, namely (1) those transactions of which the Commission of 1% of the completion price was paid by the owner of the property; (2) those transactions of which the Commission of 0.5% of the completion price were paid by D and not by the owner; (3) those transactions (from non-acquisition projects) of which the Commission was to be negotiated individually, which was subject to prior discussion and agreement with D[24]. This was followed by another Announcement dated 27 March 2010 setting out, among other things, the meaning of a joint sales (acquisition) transaction and a single sale (non-acquisition) transaction and setting out the time of payment of the Commission[25]. Then on 3 January 2011, there was another Announcement in relation to, among other things, payment of Commissions and various bonuses[26]. 51.In the Reasons, the Presiding Officer had found that the Announcements had formed part of the terms of the Claimants’ Employment Contracts. There was no challenge to this finding. Reasons for the 1st Determination 52.The effect of the 1st Determination was that both the Travel Allowance and the Team Leader Bonus were to be taken into account for the calculations of the DAW, as well as the Basic Salary and the Commissions. As mentioned earlier, there was no challenge to the 1st Determination. Reasons for the 2nd Determination 53.The effect of the 2nd Determination was that although the Commission was included by D for the calculations for the DAW for the Statutory Entitlements of the Claimant by D, they were excluded from the calculations under the Deduction Sub-sections. 54.It was Mr Shum’s argument that the Presiding Officer was correct to find that although the parties agreed that the Basic Salary was to pay also for sickness days/holidays/annual leave days, Commissions would not be in the same category giving rise to deductions. It was his submissions that there was nothing in Clause 4 which would result in the Commissions being in the same category as the Basic Salary. 55.In the Reasons, the Presiding Officer had said that the formula used by D in calculating the payment for the paid sickness day/holiday/annual leave day was only based on the DAW, and it was a completely different matter as to whether D had already paid for that “paid sickness day/holiday/annual leave day”, and that the DAW should include Commission did not mean that the Commission paid had included paid sickness day/holiday/annual leave day[27] . 56.The Presiding Officer went on to say that the terms of the Employment Contract or of the Announcements did not mention that the paid Commissions had included the pay for sickness day/holiday/annual leave day, and therefore the Commissions did not include such payment. He accepted that there was no provision in the Employment Contract as to how the allowances for sickness day/holiday/annual leave day should be calculated. As for the Basic Salary, he pointed out that the parties did not dispute that the Basic Salary had included the paid sickness day/holiday/ annual leave day[28]. 57.The Presiding Officer further said that in relation to the Basic Salary, as it was stated in the Employment Contract that this was payable on a monthly basis, it was understandable why the Claimants had already been paid for their sickness day/holiday/annual leave day[29]. 58.First of all, like the Basic Salary, the Commission was also stated in the Employment Contract to be payable on a monthly basis. 59.The Presiding Officer had however drawn distinctions between the Basic Salary and the Commission. The Presiding Officer pointed out that according to D, a transaction could involve communications and negotiations over a long period of time, but eventually, if the transaction fell through, the Claimant would not be able to receive the Commission, and further the amount of the Commission was dependent on the completion price, and it did not matter how much time the Claimant had put in. The Presiding Officer then came to the view that although the Commission was also payable on a monthly basis as the Basic Salary, the Commission was linked to the transaction results and not to the volume of work or hours of work, and the basis for payment was completely different from the Basic Salary, and therefore the two could not be directly compared. Thus, as the payment of Commission was related to the actual transaction results, he did not agree that the Commission for a particular month had included the payment for the Claimant’s paid sickness day/holiday/annual leave day for that month[30]. 60.The Presiding Officer had also said that Commission was accumulated from work done in the past over a period of time, and that the Commission received by the Claimant during his/her leave was for work done in the past, and not for the “paid sickness day/holiday/annual leave day”[31]. 61.The Presiding Officer further commented that, in accordance to D’s calculations, if the Commissions paid to the Claimants in a particular month could be used to reduce their Statutory Entitlement in that month, there would be cases where the Claimants received payment in excess of their Statutory Entitlement, and that this could mean that the excess payment could be used to set off the Claimants’ Commissions for the following month[32]. 62.To summarise, the Presiding Officer made 3 main distinctions between the Basic Salary and the Commission :
63.The Presiding Officer then came to the conclusion that the Commission was not part of a sum of money paid in respect of a paid sickness day/holiday/annual leave day, and thus it should not be included for the purposes of the calculations under the Deduction Sub-sections. 64.Whether Basic Salary or Commission, Travel Allowance or Team Leader Bonus, it was not disputed that there were no express provisions in the Employment Contract or in the Announcements as to whether these were payments in respect of a paid sickness day/holiday/annual leave day. 65.As mentioned earlier, under his 1st Determination, the Presiding Officer had accepted that the Travel Allowance was a fixed amount paid on monthly basis and was part of “wages”. It would further appear that until 2011, the fixed amount of the Travel Allowance was paid every month irrespectivewhether for that month, the Claimants had any sickness day/holiday/annual leave day, and that it was only after 2011 that D had made proportional deductions for annual leave days, but there seemed to be no evidence that proportional deductions had been made by D for the Claimant’s rest days, sickness days or holidays[33]. 66.The Presiding Officer had said that as the Travel Allowance was a monthly fixed amount, and not an irregular payment or paid against actual work related expenditure, it should be included as part of “wages”, and even if there were proportional deductions from the Travel Allowance in relation to annual leave days , this would be a matter which would only affect the calculations for the Statutory Entitlements or the calculations for DAW, but would not affect whether the Travel Allowance should be part of “wages”[34]. It would appear from what he said that the Presiding Officer could have accepted that the Travel Allowance included payment for a paid sickness day/holiday and until 2000, also annual leave day. 67.In any event, the Claimants themselves seemed to have accepted that both the Basic Salary and the Travel Allowance had included payment for a paid sickness day/holiday/annual leave day. However, it was not quite clear as to how the Team Leader Bonus was treated under the Deduction Sub-sections by D. 68.The Claimants were D’s Marking Department employees and although under Clause 5 of the Employment Contracts, there was flexibility over lunch hour and that it was envisaged that such employees could work outside the office, the fixed hours of work stipulated in Clause 5 would generally apply to all employees. 69.I accept that sometimes Commission would not be earned if a transaction fell through even though the employee might have worked very hard and over very long hours and that the Commission might be said to be not directly linked to volume of work or work hours. However, even if this distinguished the Commission from the Basic Salary, this would not necessarily provide a basis to justify the different treatment of the Commission from the Basic Salary under the Deduction Sub-sections. 70.As for the 2nd distinction, I agree with what was submitted by Mr Wong, that whether Basic Salary or Commission or Travel Allowance of Team Leader Bonus, they were all paid in arrears for work already done and not for work done on the sickness day/holiday/annual leave day, and that this distinction could not be a valid distinction. 71.In relation to the 3rd distinction, Mr Wong submitted that such excess of payment would unavoidably arise if the monthly remuneration received by an employee in particular month was lower than his DAW calculated by reference to his past 12 months’ earnings, and that it was irrelevant to take this into consideration. 72.In any event, the evidence presented before the Presiding Officer was that based on D’s calculation, there were some months in which the Claimant’s Statutory Entitlement would be “fully settled” by the Commission he earned in those particular months. The evidence indicated that D did not use any such “excess” to reduce any other entitlements of the Claimants[35]. 73.Mr Wong also submitted that the 2nd Determination was wrong for two further reasons:-
74.As for (i) above, generally whether commissions arising out of a contract of employment could be applied to reduce the Statutory Entitlements will, in my view, depend on the circumstances of each case and to the terms in relation to the payment of the commissions. As for (ii), the evidence did indicate that the Claimants worked as part of an entire team and that if one of the Claimants was on leave, the other teammates would help. 75.Having considered all the above, I have come to the conclusion that the distinctions made by the Presiding Officer between the Basic Salary and Commission would not be relevant to the central issue of whether the Commission had or had not included payment in respect of a paid sickness day/holiday/annual leave day. Further, the Presiding Officer seemed to have only considered the express terms in the Employment Contract and/or the Announcements, and failed to consider the legislative intent and to investigate into whether there were any implied terms or any other agreement or any other reason eg whether the Commission was earned over a period of time including sickness days/holidays/annual leave days and whether the Commission could be treated as being paid for each day over that period for which D could claim the deductions of Commissions under the Deduction Sub-sections. 76.For the above reasons, I am prepared to allow the appeal on the 1st Ground. 2nd Ground 77.In relation to the 3rd Determination, D’s main complaint was that the Presiding Officer had failed to discharge his statutory duty to investigate the following highly relevant and material issues before describing the Replacement Arrangement as a “unilateral arrangement” on part of D :
78.D’s calculation of annual leave pay in the Replacement Arrangement was that the DAW would be calculated using the wages in the 12 months prior to the termination date of the employment contracts of the Claimants in 2014, instead of the 12 months immediately prior to the CNY Holidays for each relevant year in 2008-2011[37]. This was the difference giving rise to the shortfall claimed by the Claimants. The calculation in the Replacement Arrangement using the 12 months prior to termination in 2014 gave a much lower DAW since there were less Commissions paid in that period than the 12 months prior to the Chinese New Year in each of those years 2008 to 2011. The Replacement Arrangement in the context of annual leave pay as proposed by D in 2014 was thus more favourable to D and not to the Claimants. 79.The main issue was whether the Claimants had by their conduct accepted the Replacement Arrangement by mutual variation or by reason of their conduct estopped from contending that they were not bound by the Replacement Arrangement. 80.There had been no less than 3 preliminary hearings at the Labour Tribunal prior to the actual trial before the Presiding Officer, namely on 26 August 2014, 6 October 2014, 7 October 2014. The actual trial took place from 12 to 15 January 2015, 17 April 2015, 19 May 2015 (delivery of oral reasons) and 29 July 2014 (determination on quantum). D’s representative a Miss Wong had appeared on D’s behalf at the trial. All 4 Claimants were present throughout the trial. The transcript of the trial before the Presiding Officer was produced to this Court (“Transcript”). 81.Mr Mak (the Claimant in LB 2308/2014, HCLA 28/2015 whose evidence was adopted by the others[38]) had given evidence that in December 2013, he was notified that he had 49 days of annual leave, and he said he had queried the calculations of the 49 days but received no answer. When cross-examined as to whether he expressed dissatisfaction, he had said he did not as he did not know how to[39]. 82.Mr Mak had also been cross examined that he would not have protested had the Replacement Arrangement turned out to be more favourable to him when it came to the calculation of his entitlements to annual leave pay[40]. The Presiding Officer had queried the relevance of this question, and had said although he would allow the question, but this might not affect the outcome[41]. Mr Mak then answered by saying he agreed as he was only an employee, and he would not have complained[42]. 83.Mr Wong submitted that in light of the above evidence of Mr Mak, the Presiding Officer should have investigated into the Acceptance Issue and the Estoppel Issue. 84.Mr Shum had however referred to the following evidence of the Claimants to show that there was no agreement by the Claimants to the Replacement Arrangement, or to the method of calculation of the shortfall. In fact, in their witness statements and closing submissions[43], the Claimants had clearly stated that they did not agree with the Replacement Arrangement and that was the reason for the termination of their Employment Contracts, and that they did not agree with the “free CNY Holiday calculations”, and that D would save a lot of money by using such an arrangement, and thus the method of calculation in the Replacement Arrangement was clearly not more favourable to the Claimants. 85.Mr Shum had also referred this court to parts of the Transcript to the effect that the Claimants had said they disagreed with the Replacement Arrangement and the method of calculation put forth by D using such an arrangement. 86.Further, upon termination of their Employment Contracts in April/May2014, the Claimants had each been asked to sign an acknowledgment that all outstanding payments arising out of their employment had been made by D and that they had no further claims against D (“Acknowledgments”). They had either deleted this part of the Acknowledgments or they reserved their right to seek recourse for the balance[44]. 87.The evidence also showed that D was visited by Labour Department officers on about 18 January 2013[45], and it was only then that D found out that D’s deduction of the CNY Holiday from employees’ Annual Leave was in contravention of s 41F of EO, in that no one month notice had been given pursuant to s 41F (1), and thereafter, D arrived at the Replacement Arrangement with some of their employees on about 14 May 2013[46]. However, the Claimants were not among those employees. 88.At the trial, Ms Wong had agreed that, so far was the Claimants were concerned, it was not until early April 2104 that D had come up with the compensation package under the Replacement Arrangement. When she was asked why it took so long, she had explained that D needed time to work out a formula and they were trying to come up with the compensation arrangement for the Claimants before the end of the tax financial year[47]. 89.In Mr Mak’s witness statement dated 31 July 2014, he had said he had approached the company in November 2012 raising a query over his Annual Leave record and sought a report from the company, but was not provided with any and eventually it was only 2 April 2014 that D issued a report to all employees in relation to the calculations of their Annual Leave and compensation for such Annual Leave, from date of joining the company until March 2014[48]. Mr Mak had been cross examined by Ms Wong on 14 January 2015 as to whether he had raised query over Annual Leave in 2012, he agreed he had but there was no clear reply from the company and that it was eventually on 10 December 2013 that he was told that he had 49 days with no explanation as to calculation, and that he was only explained as to why he had 49 days in early April 2014[49]. 90.It was only after the above answers that Mr Mak was asked by Ms Wong whether he had expressed dissatisfaction after he learnt that he had 49 days and Mr Wong said he did not express dissatisfaction as he did not know how[50]. 91.To summarise, the evidence showed that the Claimants were only informed of the Annual Leave days at about end of December 2013, and there was no explanation from D and the Claimants were not notified of the details of the compensation arrangement until early April 2014. 92.Mr Shum had referred this court toWoodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 and Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 and submitted that to be waiver or estoppel by conduct, the conduct pointing to waiver or estoppel must be clear and unequivocal. 93.I accept Mr Shum’s submission that the evidence clearly showed that not only were the Claimants not silent and did not acquiesce to the Replacement Arrangement when they were informed about it in early April 2014, they had in fact informed D that they did not accept this arrangement, which actually then led to their employment being terminated by D. 94.Having considered the evidence before the Presiding Officer at the trial, even though the Presiding Officer had not set out detailed reasons for commenting that the Replacement Arrangement was a unilateral arrangement on D’s part and that D had no right to impose the Replacement Arrangement on the Claimants, the 3rd Determination was clearly supported by ample evidence as mentioned earlier. I accept what was submitted by Mr Shum that the Presiding Officer could not be said to have failed to make inquiry or investigate by reason of the overwhelming and clear evidence at the trial, and that the calculations under the Replacement Arrangement by D were provided to the Claimants only shortly before termination of their employment. In my view, there was no material injustice to D as alleged in paragraph 2(3) of the Notice of Motion. 95.In light of the above, I have come to the conclusion that the 2nd Ground has not been made out, and I dismiss this ground of appeal. Conclusion 96.The effect of my order is as follows:
97.So far as costs are concerned, D has only succeeded on one of the grounds. I made an order nisi that there be no order as to costs, which shall be made final after 21 days. For those Claimants who are under legal aid, their own costs are to be taxed under legal aid taxation with certificate for counsel. 98.Finally, I would like to thank all Counsel for their helpful research and assistance to the court.
Mr Erik Shum, instructed by K B Chau & Co, for the claimants (respondents) in HCLA 28/2015, HCLA 30/2015 and HCLA 31/2015 The claimant in HCLA 29/2015 appeared in person Mr Anson Wong SC, Ms Connie Lee and Mr Vincent Chiu, instructed by Iu Lai & Li, for the defendant (appellant) in HCLA 28/2015, HCLA 29/2015, HCLA 30/2015 and HCLA 31/2015 [1] C:3-14 [2] See paras 4-12, C:9 [3] See para 13, Reasons, C:7 [4] C:49-52 [5] At paras 28-30 [6] See Holding (1), at pg 568-569 [7] See para 20(1), at pg 627 [8] See paras 19-26 [9] At para 13 [10] See para 6, LegCo Proposal Paper [11] At para 9, pg 3 LegCo Report [12] See para 4 [13] At pg 17, Annex A, LegCo Brief, also C1165 of the Employment (Amendment) Bill 2006 [14] See para 20(6) at pg 629 [15] Pg 19, Annex A, LegCo Brief, [16] At para 13, pg 4, see also Annex, pg 4, Item 5 [17] See para 7, Mr Shum’s Further skeleton submissions [18] s2 Interpretation [19] See section 2 (1), EO [20] B1:48, 58, 66, 75 [21] B1:001, 003, 007 [22] See paras 20, 21 of Reasons, A1:11 [23] At B1:33, 38, 39 [24] Item A, B1:33 [25] Item C, B1:38 [26] B1:40 [27] See para 29, A1:12 [28] See paras 31, 32, A1:13 [29] At para 33, A1:13 [30] See paras 35, 36, A1:14 [31] See para 36, A1:14 [32] See para 37, Reasons, A1:14 [33] See para 16, A1:10 [34] See paras 16, and 19, A1:10 [35] Transcript of 14/1/2015 at pg 173E-H &174E-J, A2: 252-253; Mo’s Closing Submission, B1:104 [36] Transcript of 13/1/2015 at pg 66Q-R, 68O-P, 69Q-U & 70M-71M, A1:145; 147-148;149-150; Transcript of 14/1/2015 at pg 108D-E, A1:187 [37] See para 10, C:6 [38] A1:82-83 [39] E-N, A1:167 [40] T-V, A1:189 [41] F-I, A1:190 [42] K-M, A1:190 [43] B1:47 to 106-5 [44] B2:155,157, B2:160,160-1, B2:162,165, B2:166 [45] L-V, A2:230; A-E, A2:231 [46] E-G, A2:231 [47] O-V, A2,231, A-D, A2:232 [48] Under Claim (2), B1:48 [49] B-G, A1:167 [50] H-O, A1:167 |
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