Alfonso Pacheco Dorrallo v. Ellis Enterprises Ltd

DCMP000001/1975

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

LABOUR TRIBUNAL APPEAL NO. 1 OF 1975

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Coram: Judge Rhind, D.J.

Date of Judgment: 14 March 75

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JUDGMENT

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1. The Appellant was employed by the Respondent company on month to month terms as the night manager of The Yellow submarine International Bar at a salary of $1,500.00 per month. Under the terms of his contract, he was required to be present in the bar every day from 8 p.m. to 4 a.m. for the purpose of supervising the running of the bar and he was allowed two days leave every month. He special terms were included in the agreement between the parties about the notice which should be given to the Appellant on termination of the contract.

2. As part of the staff of the bar, the Respondent employed disc jockeys from time to time, paying them on an hourly basis. It was common ground that while employed by the Respondent company the Appellant had discussed with one of its directors the possibility of becoming a disc jockey but no agreement had been reached on this. In particular, the discussion had not touched upon the topic whether, if the Appellant were to become a disc jockey, his work in that capacity would be in addition to or in substitution for his work as night manager, and that the consequential salary arrangement should be.

3. According to the Respondent company, the Appellant absented himself from work from the 17th to the 19th November 1974 without permission and as the company also believed that he was about to absent himself on the 20th November as well, the company terminated his contract without notice, refusing to pay him any wages in lieu of notice.

4. The Appellant's version of what happened was different. He maintained that be took the 17th November off as part of his monthly leave entitlement. He worked on the 18th but admitted absenting himself on the 19th, his excuse being that he had to attend to some private business with the Immigration Department. Insofar as the 20th was concerned, he contended that the Respondent company terminated his contract before he had an opportunity to present himself for work.

5. Because the Appellant considered his contract had been wrongfully terminated he sued the Respondent company in the Labour Tribunal for damages for wrongful dismissal.

6. Before the Labour Tribunal the Appellant contended that his damages should be based not only on his wages of $1,500.00 per month as night manager, but also should include an additional amount because he had performed the services of a disc jockey by playing records in the bar during his working hours.

7. While accepting the Appellant's version of the nature and extent of his absence from work, the learned President of the Labour Tribunal rejected his claim to any additional entitlement by virtue of doing the work of a disc jockey on the ground that the arrangements between the parties relating to that type of work were too vague to be enforceable.

8. Having made his finding of fact to the effect that the Appellant had improperly absented himself from work on one day only, namely the 19th November, the learned President went on to hold that nonetheless the Appellant's conduct was not sufficiently grave to justify the Respondent in ...(illegible) dismissing him.

9. It is pertinent to observe that the day the Appellant took off without excuse (vis. the 19th November) was one which both parties realised would be particulary busy for the bar as the American fleet was in harbour.

10. There could be no question that by virtue of the provisions of the employment Ordinance a monthly employee such as the Appellant was entitled to one month's notice if his employer wanted to terminate the contract. If the employer terminated the contract without notice, the employee would clearly be entitled to damages for breach of contract. Although the damages are unliquidated, a wrongfully dismissed monthly employee would normally receive damages the equivalent of one month's salary, assuming of course that he had not failed in his duty to mitigate his loss. For the purpose of the present case, let me hasten to add there was no suggestion that the Appellant had failed to mitigate his loss.

11. All of the propositions stated in the previous paragraph are trite law and it is clear from the learned President's judgment that he was well sware of them.

12. However, while acknowledging that in the ordinary course of events the Appellant might expect damages the equivalent of one month's salary for his wrongful dismissal, the learned President took the view that a deduction of 20% should be made from this sum to reflect the Appellant's ...(illegible) in absenting himself on the 19th November without excuse. Thus, instead of awarding damages of $1,500.00, the learned President made an award of $1,200.00.

13. When the Appellant first appeared before be he sought leave to appeal firstly under S.32 of the Labour Tribunal Ordinance, Cap.25 on a point of law, namely that the learned President had erred in failing to award him the equivalent of a full month's salary as damages, and secondly under S.33 of that Ordinance on the ground that the admission of perjured evidence from some of the Respondent's witnesses had resulted in the wrongful disallowance of his claim for damages in respect of work he performed as a disc jockey.

14. While granting him leave to appeal on the point of law, I refused his application in respect of the alleged perjury because, even if one accepted everything the Appellant said as true concerning the arrangements made between the parties in connection with work the Appellant might perform as a disc jockey the learned President would, nonetheless, have been impelled to dismiss that part of the Appellant's claim. The Appellant's own description of the arrestments clearly showed them to be so vague as to be ...(illegible). In any event the learned President's judgment shows that he assessed the evidence of all the witnesses most carefully and the Appellant did not disclose any ground for supposing that the learned president had failed to detect any perjured evidence from the Defence witnesses which adversely affected the Appellant.

15. At the bearing of the actual appeal on the point of law before me, neither the Appellant nor the director who appeared on behalf of the Respondent company chose to make any submissions.

16. As the learned President had had the opportunity of observing the witnesses at the trial and made a careful evaluation of the evidence in his judgment, I saw no reason to question any of his findings of primary fact. Nor was I prepared to disturb the conclusion he reached that the Appellant's conduct in taking a day off without leave did not amount to a repudiation of the contract of employment by the Appellant. Whether unauthorised absence from work by an employee amounts to a sufficiently grave breach of the contract to justify the employer in summary dismissal of the employee without notice is always a question of fact and degree, depending on the circumstances of the particular contract. I regard the facts of the present case as giving rise to a borderline situation and as I do not regard it as unreasonable for the learned President to have hold in effect that the Appellant's conduct fell just short of the line which would have barred his claim, I see no cause to disturb the learned President's conclusion on this.

17. However, having reached the conclusion that the Respondent was liable in principle for having wrongfully dismissed the Appellant, the learned President should have gone on to accept the full consequences of that finding by awarding the Appellant all the damages flowing from that breach without any deduction. What the learned President did in effect was to reject the Respondent's contention that the Appellant's behaviour disentitled him from damages but nonetheless he allowed that behaviour to influence him for the purposes of assessing the quantum of damages.

18. From a common sense point of view, the learned President's Approach in seeking to apportion the ...(illegible) has such to commend it, but ...(illegible), unless there is legislative sanction for such a course, as for example, by S.21 of Cap.23 in the case of contributory negligence, the law does not allow it. The learned President has failed to distinguish the question of the existence of a liability to pay ...(illegible) as from the question of the extent of a liability to pay damages. For a general discussion of the law on this problem reference can be made to ...(illegible) on Damages, (13th Edit.) para.72 ...(illegible).

19. At common law the correct principle is, "All or nothing". If the employee is not found to be guilty of grave misconduct he gets his full damages; if he has committed such misconduct he gets nothing.

20. Flowing from my acceptance of the learned President's conclusion that the Appellant had not fundamentally breached the contract, it follows that the Appellant is entitled to his damages in full.

21. I therefore allowed this appeal on the point of law by increasing the damages awarded to the Appellant from $1,200.00 to $1,500.00.

Representation: