Li Mijiang v. Hoilung Group International Ltd

HCLA 47/2024

[2025] HKCFI 895

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 47 OF 2024

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 805 OF 2023)

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D E C I S I O N

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A.  Introduction

1.On 8 November 2024, a deputy adjudicator (the “Deputy Adjudicator”) of the Labour Tribunal allowed the Claimant’s claims against the Defendant. She ordered the Defendant to pay the Claimant (i) an aggregate sum of HK$300,580.96; and (ii) costs of HK$16,567.10.

2.The Defendant seeks leave to appeal against the order made by the Deputy Adjudicator[1].

B.  Material Background

3.It would be helpful to summarize the material background succinctly as follows.

4.The Claimant alleged that he was the Defendant’s employee.

5.It was the Claimant’s case that:-

(1)  On 1 August 2021, he signed an employment agreement with the Defendant (the “2021 Agreement”), under which his monthly salary was HK$40,000. However, he did not retain a copy of the 2021 Agreement.

(2)  On 1 January 2022, he signed another employment agreement with the Defendant (the “2022 Agreement”). Whilst his monthly salary was reduced to HK$28,000, he was given shares or interests in the Defendant.

(3)  On 10 December 2022, he terminated the employment with the Defendant pursuant to section 10A of the Employment Ordinance (Cap.57) on the ground that the Defendant failed to pay his salary for August to October 2021 and October to November 2022 within one month.

(4)  In the premises, the Claimant claims against the Defendant for wages in lieu of notice, arrears of wages, underpayment of wages, annual leave pay, statutory holiday pay, expenses and the value of the share option.

6.The Defendant strenuously disputes the Claimant’s assertions.

7.In her reasons for judgment (the “Reasons for Judgment”), the Deputy Adjudicator summarized the Defendant’s case as follows:-

(1)  Whilst the 2021 Agreement did not exist at all, the 2022 Agreement was never performed by the parties.

(2)  Although the Claimant was assigned to work in a subsidiary company in Anhui, the Claimant never reported to duties.

(3)  Although the Claimant received payments from the Defendant’s Mr Zhu, these payments were personal loans advanced to the Claimant, not wages.

8.As stated in the submissions lodged to the Labour Tribunal[2], the Defendant also sought to contend, inter alios, that:-

(1)  The Claimant was employed by a related company in Shenzhen named “深圳海龍精密股份有限公司” (the “Shenzhen Company”) until 24 October 2022, and an employment contract was signed.

(2)  The alleged employment with the Defendant was anyhow illegal as the Director of Immigration never permitted the Claimant to work in Hong Kong.

C.  The Deputy Adjudicator’s Findings

9.The Deputy Adjudicator accepted the Claimant’s case and rejected the Defendant’s case. As evidenced by her Reasons for Judgment, the crucial matters that Deputy Adjudicator took into account were as follows:-

(1)  The payment records showed that the Claimant received monthly sums in RMB that were equivalent to HK$40,000. Thus, it could be inferred that the 2021 Agreement existed, and the Claimant was employed by the Defendant at the time.

(2)  The payment records showed that after February 2022, the Claimant received monthly sums in RMB that were equivalent to HK$28,000. Thus, it could be inferred that the 2022 Agreement was performed, and the Claimant was continuously employed by the Defendant at the time.

(3)  Whilst the Defendant’s Mr Zhu was unable to provide credible explanations regarding the payments, he also failed to provide documentary evidence to substantiate his allegation that the payments made to the Claimant were personal loans.

(4)  There was no documentary evidence showing that the Claimant was requested to work for the Defendant’s subsidiary in Anhui. This was inherently improbable.

(5)  The Defendant’s witnesses gave inconsistent evidence.

(6)  There was ample documentary evidence showing that the Claimant was an employee. For instance:-

(a)  The Defendant issued a letter dated 10 August 2021 confirming that the Claimant had been employed by the Defendant’s China office since February 2020.

(b)  The emails and WhatsApp messages show the Claimant discussed work matters with the Defendant’s Mr. Zhu.

10.In these premises, the Deputy Adjudicator allowed the Claimant’s claims against the Defendant to the extent of HK$300,580.96.

D.  Legal Principles

11.In Mak Wai Man v Richfield Realty Ltd (HCLA 28/2015, 30 October 2015) at para 16, B Chu J stated:-

“(1) Under s 32 of the Labour Tribunal Ordinance, a party may only apply for leave to appeal on the ground that the award of the Tribunal is erroneous on point of law or outside its jurisdiction;

(2) The threshold onus of an application for leave is to show that the intended appeal has arguable grounds;

(3) Apart from errors of law, leave will also be granted if the Tribunal’s determination (a) was made without regard to relevant factors, (b) was made without evidence, or (c) there was failure to discharge the statutory duty to investigate and such failure has given rise to injustice, in that a fair and proper determination of the claim cannot be attained.” (emphasis added)

12.Under section 20(3) of the Labour Tribunal Ordinance (Cap.25), a presiding officer shall investigate any matter which he or she may consider relevant to the claim, whether or not it has been raised by a party.

13.In this connection, it is trite that the proceedings in Labour Tribunal are inquisitorial in nature. Thus, a presiding officer would err in law if he or she fails to discharge the duty to investigate properly. It is open to the court of first instance to consider if the presiding officer had discharged such duty by investigating the relevant matters which ought to have been investigated: see Chan Suk Bing Angie v Harbour Phoenix Ltd [1992] 2 HKC 459, at pp 462B-C and 462F-G (per DHCJ Jerome Chan (as he then was)); and Poon Shing Hin v Li Wai Chun Transportation Co Ltd [2024] HKCFI 2564 at para 26 (per Wilson Chan J)

E.  Discussion

14.The Defendant raises three intended grounds of the appeal, and its contentions are summarized in Mr. Chow’s skeleton submissions.

E1.  Ground 1

15.Under the first ground, Mr. Chow submitted that the Deputy Adjudicator overlooked the evidence, which showed that the Claimant was employed by the Shenzhen Company. In his submissions, Mr. Chow referred me to the documentary evidence and the Plaintiff’s own evidence.

16.I have carefully considered the Reasons for Judgment. It appears that the Deputy Adjudicator did not address the issue as to whether the Claimant was employed by Shenzhen Company rather than the Defendant.

17.In my view, it is arguable that the Deputy Adjudicator should have investigated this issue.

18.In the premises, I grant leave on the following question:-

“Did the Deputy Adjudicator err in failing to investigate the issue as to whether the Claimant was employed by the Shenzhen Company as opposed to the Defendant?”

E2.  Ground 2

19.Under the second ground, Mr. Chow submitted that the Deputy Adjudicator was wrong to assume that the 2022 Agreement was enforceable. In particular, he submitted that the Claimant, who was not a Hong Kong resident and who had not obtained permission from the Immigration Department, was not entitled to be employed in Hong Kong. Thus, the 2021 Agreement (if in existence) and the 2022 Agreement were void and unenforceable by reason of illegality.

20.In her Reasons for Judgment, the Deputy Adjudicator did not deal with the matter. She did not address (i) the application of the relevant authorities, such as Lilik Andayani v Chan Oi Ling [2001] 2 HKLRD 572, Dumayag Analyn Pedro v Leung Mei Ling & Anor [2020] HKCFI 276 and Tse Chun Wai v Leung Kwok Kin Joseph [2017] 4 HKLRD 563; (ii) the extent to which the Claimant performed his job duties in Hong Kong; and (iii) the plausible defences, such as estoppel by convention: see Unruh v Seeberger (2007) 10 HKCFAR 31 at paras 133-138, 142 and 150 (per Ribeiro PJ).

21.In my view, it is arguable that the Deputy Adjudicator should have investigated the issue of illegality.

22.In the premises, I grant leave on the following question:-

“Did the Deputy Adjudicator err in failing to investigate the issue as to whether the 2021 Agreement (if in existence) and the 2022 Agreement were void and/or unenforceable by reason of illegality?”

E2.  Ground 3

23.Under the third ground, Mr. Chow submitted that the Deputy Adjudicator overlooked the incontrovertible documentary evidence showing that the Claimant voluntarily tendered his resignation on 24 September 2022 on the ground of excessive stress[3]. Thus, the Deputy Adjudicator was wrong to hold that the Claimant terminated the employment due to the Defendant’s failure to pay wages.

24.In her Reasons for Judgment, the Deputy Adjudicator did not address the issue regarding resignation.

25.In my view, it is arguable that the Deputy Adjudicator should have investigated this issue.

26.Accordingly, I grant leave on the following question:-

“Did the Deputy Adjudicator err in failing to investigate the issue as to whether the Claimant’s employment was terminated by reason of his own resignation?”

F.  Conclusion and Disposition

27.I grant leave to appeal in respect of the questions set out in paragraphs 18, 22 and 26 above.

28.I order that the costs in respect of the Defendant’s application for leave to appeal be in the cause.

Mr Jackson Chow, instructed by Franki Ho & Associates, for the defendant (appellant)