Choi Sum and Others v. Atorney General

HCMP000211/1976

IN THE HIGH COURT OF HONG KONG

MISCELLANEOUS PROCEEDINGS NO. 211 OF 1976

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Coram: Cons, J.

Date of Judgment: 30th June 1976.

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JUDGMENT

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1. There are working throughout the New Territories some three hundred and sixty Government servants known as "Demarcators". They have long been dissatisfied with their conditions of service. They feel that these do not adequately reflect their responsibilities or provide them with sufficient avenues of promotion. I do not propose to go into those responsibilities in detail. In very broad generalisation they appear to cover all aspects of the basic work necessary for the administration and enforcement of Government land policy in the New Territories. The title "Demarcator" indicates only a very small portion of what is expected from them. That is one of their complaints. They would prefer to be called something more appropriate. But this is one of the lesser complaints. Their main grievance relates to pay. They feel they deserve more than they are getting, in official language, that they should be "upgraded". For many years they have waged a campaign to this end. It has been conducted through the Association which they have formed and to which almost all of them belong. They first adopted conventional approaches - meetings with senior staff, submissions to the Salaries Commission, petitions to the Colonial Secretary and to the Governor. All were without success. But it is fair to say that Government has not dismissed their claims lightly. Both the New Territories Administration and the Establishment Branch appear to have made full investigation, particularly by way of comparison with other grades within the Administration and the Government service generally. To some extent the New Territories Administration gave support to the demarcators' claims. But it was not enough. The final answer came from Government towards the end of last year. Very slight concessions were made but basically all that the demarcators asked for was refused. They were unwilling to accept that refusal. On the 2nd January they advised Government that they intended to take industrial action by "working-to-rule". This did not mean, as perhaps it may mean elsewhere, a meticulous and painstaking adherence to the strict letter of rules accepted by both sides. It meant that the demarcators would no longer perform at all certain particular duties which they have always done before but which they have more recently alleged are not strictly part of their duties. On the 7th January the Secretary for the New Territories wrote to the Association, and to each demarcator in person, in an attempt to avoid the showdown. He warned of the possible repercussions that it could bring. Nevertheless the demarcators persisted. They started their "work-to-rule" that same day. The effect was apparently not felt immediately, but on the 22nd March the Secretary for the New Territories informed the Secretary for the Civil Service that none of the demarcators was doing more than 70% of his full duties and that it was causing interference with the efficiency of his Administration. The Secretary for the Civil Service decided that if the demarcators should continue in that way their salary should be reduced by 30%. Each demarcator was advised of this decision by letter and the decision was duly implemented on the 1st April. Some of the demarcators have brought this action to challenge the legality of that action. They also ask me to rule particularly upon one of the disputed duties, that of delivering letters from other Government Departments and from non-Government organisations.

2. Before I turn to the particular arguments I should say that whatever views may have been held earlier it is now well settled that the relationship between the Crown and its servants is one of the simple contract. The comments of the Privy Council in Kudeeswaran v. the Attorney-General of Ceylon⁽¹⁾ have put this beyond doubt. But each contract is subject to the overriding power of the Crown to dismiss at will. It is a term implied by law, unless that term is expressly excluded. The only doubt that remains today is whether the exclusion must be made by statute or whether it can be achieved in the contract itself. From this general statement it follows that, unless the servant agrees, the Crown can only reduce his salary within the contract if there is an express or implied term to that effect. That is the general law of contract.

3. Mr. Somerville for the Crown submits first that there is an implied term. He says that it is like the implied right to dismiss at will, another manifestation of the doctrine that the Crown cannot bind itself so as to fetter its future executive action: Rederiaktiebolaget Amphitrite v. The King⁽²⁾. In 1948 Denning L.J. appeared to doubt the existence of such a doctrine: Robertson v. the Minister of Pensions⁽³⁾. It has since been accepted by Devlin L.J. in Commissioner of Crown Lands v. Page⁽⁴⁾, although I feel that it is limited to matters that would usually be termed "affairs of state". It is easy to see how in this respect the doctrine justifies the power to dismiss at will. Civil servants, at least senior ones, may have considerable influence over affairs of state. It may be essential occasionally to remove at once a particular servant whose influence is having an undesirable effect. It is difficult to see how the State interest would be protected by merely reducing his salary.

4. There is no authority on the question within this jurisdiction. There is authority in the West Indies. That is the case of Nobrega v. the Attorney General of Guyana⁽⁵⁾. There a lady had been employed by the Government of British Guiana, as it then was, as a Class I school teacher. Sometime later, for reasons apparently connected with her qualifications, the Government rescinded her appointment as a Class I teacher but allowed her to carry on as an unqualified teacher at a very much reduced salary. The Court of Appeal of Guyana dealt with the action on the assumption that there had been no dismissal by Government, merely an unilateral variation by the Government of her terms of service. The majority was of the opinion that such variation was unlawful. The case eventually went to the Privy Council⁽⁶⁾. but there it was decided upon the ground that there had in fact been a dismissal. Their Lordships gave no indication of what they thought about unilateral variation.

5. Mr. Somerville criticises the reasoning of the learned judges in the Guyana Court of Appeal. He says that it is not supported by the cases on which they purport to rely. To some extent he is right. Cameron v. Lord Advocate⁽⁷⁾ appears to have turned on whether the Crown was bound by its contract at all; Faithorne v. Territory of Papua⁽⁸⁾ turned on local legislation; Hill and Peter Gorman Ltd.⁽⁹⁾ did not concern a public servant. But I do not think it right to say that the learned judges relied on these cases as direct authority. They used them, at least the first two, to indicate a tendency. Their actual decision was based on general principles. I rely upon principle in the same way. No other authority, as far as I know, has departed from principle in this respect. I am not persuaded that I should take the first step.

6. The second contention of the Crown seeks to reach the same position by a slightly longer route. It is said that upon a true construction of the circumstances what would at first sight appear to be a reduction in salary is in fact a dismissal and re-employment on less favourable terms. Support for this view is found in "Crown Proceedings" by Professor Grenville Williams on Page 68:

"The Crown has a right to reduce its servants' pay. In the case of civil servants this right follows as a logical consequence from the right to dismiss at will. If the Crown can dismiss at will it can offer to mitigate the exercise of its legal right by continuing the contract of service at a lower rate of pay."

This view was foreshadowed by Rigby L.J. in Worthington v. Robinson⁽¹⁰⁾ where speaking obiter of a civil servant whose rank and salary had been reduced under an express power to that effect, he said:

"I treat what has happened as a dismissal, because though in effect he has been reduced to a lower position, his new appointment is in fact a re-appointment."

It is possible, with the greatest respect, to take issue with the learned professor on the way in which he has framed his comments. Neither legally or logically can a contract continue in existence once it has been terminated. What follows can only be something new. But the Crown will usually be in so strong a position to enforce a reduction by agreement that one can perhaps almost say that it has a right. This was observed by their Lordships in the Kodeeswaran case, in a passage heavily relied upon by Mr. Chang for the demarcators at page 1123:

"A right to terminate a contract of service at will coupled with a right to enter into a fresh contract of service may in effect enable the Crown to change the term of employment in future if the true inference to be drawn from the indication of the intended change to the servant and his continuing to serve thereafter is that his existing contract has been terminated by the Crown and a fresh contract entered into on the revised terms."

7. I find myself unable to draw that inference in the present instance. Nowhere and at no time has the Crown given the slightest indication that it was dismissing the demarcators. They, on their part, made it abundantly clear that they were not accepting lesser pay. Within a few days of receiving the letters informing them of Government's action they staged a public demonstration to return those letters. Not long after that their Association sent a formal letter of protest. They have, it is true, continued to work to some extent. That alone, in the circumstances just mentioned, cannot justify implied agreement.

8. By the same token the Crown's third contention must fail, that is that there was a mutual agreement, on the one hand to do less work and on the other to give less pay. For that to succeed I would have to construe the Association's notice of intention to "work-to-rule" as an offer of reduced service, ignore the reply of the Secretary for the New Territories in which he demanded full and customary work, then construe the later reduction in salary as an acceptance of the rejected offer. It is an ingenuous suggestion but it cannot stand in the face of such clearly expressed intentions to the contrary.

9. So much then for any implied terms or agreement. If there is any express term it must be contained in Regulation 610 of the Civil Service Regulations. That is the regulation on which the Secretary for the New Territories relied in his correspondence with the demarcators and mentioned in his memorandum to the authority responsible for making the actual payments out. It is as follows:

10. Here we have a curious situation in that neither side wishes me to take any notice of this Regulation. The position of the demarcators is simple. They rely upon Regulation 2, which appears under the heading: "Validity of Government Regulations and Circulars" and provides "Government Regulations are Regulations made by the Governor and authority for their interpretation and application is vested in him. They have no force in law ...." The Crown position is not so simple. When the matter was first raised the view put forward, if I recorded it correctly, was that the Regulation gives no legal rights to the servant although it is part of his conditions of service. I do not think this submission was limited to this particular Regulation alone. By its very form it confers no rights or benefits of any kind upon the servant. Later the submission was put in a slightly different way. It was said that the Regulations deal with matters of a domestic nature which are not justiciable in the courts. If this is so it seems wrong to speak of them as "conditions of service" but it is perhaps merely a question of choice of words. The submission relies on three grounds. First it is again said that the Crown is unable to fetter its future conduct; then, that authority is in the Crown's favour: Venkata Rao v. Secretary of State for India⁽¹¹⁾; finally, that the situation would in practice become impossible if every disgruntled civil servant immediately reached for a writ. Arguments for and against the Civil Service Regulations' forming part of contracts of service with the Hong Kong Government, including those I have just mentioned, are neatly tabulated in an article by Messrs. Goodstadt & Li⁽¹²⁾. It is not an easy question. Upon consideration I have come to agreement with counsel before me. I am satisfied that the Regulations are not intended by either party to create binding legal relations. I reach this conclusion partly from the express words of Regulation 2 and partly from Regulations 1 and 4, which provide how the Regulations can be so easily made, changed, abrogated or ignored. Provisions which do not form part of a contract cannot override that contract. They may be effective in some circumstances, but they cannot ever be effective to derogate from rights which are conferred by the contract, for example, the right of a servant to receive the agreed wages.

11. In view of this conclusion it would be undesirable to express any concluded opinion upon the construction of Regulation 610 itself. In fairness however to the submissions made for the Crown I should add that on the affidavits filed in this case there is little doubt that the stand taken by the demarcators puts them also in breach of their contractual duties. A servant is bound to obey the instructions given to him. These instructions must of course be within the scope of the contract. But where particular duties have been carried out as a matter of normal course for many years and in addition relied upon by the servant to seek an increase in salary (submissions to Salaries Commission 1971) it is impossible to say they are not within the scope of the contract.

12. I should also mention another approach by the Crown. In Employment Secretary v. ASLEF⁽¹³⁾ the railway staff of England, by their concerted action in "work-to-rule" contrived deliberately to defeat the whole object of the contracts by which they were employed. In so doing they committed a fundamental breach. It is suggested that the demarcators are in the same position. However I have some doubt that they have gone that far. Their action was taken in the hope of causing inconvenience. That it has. But I am not satisfied it has caused complete frustration.

13. There is left only the matter of the demarcators as postmen. It appears that from time to time they are asked to carry letters to houses that are out of reach. These letters may be from other Government departments but sometimes it seems they are demands for electricity charges. The argument was deliberately confined to whether such action constitutes a breach of the Post Office Ordinance. The relevant part of that Ordinance is contained in Section 6 and reads as follows:

and "an officer of the Post Office" includes any person "employed in any post office in the Postal Department or on behalf of the Postal Department". I was asked to say that in the circumstances the demarcators fell within that definition. I would not be prepared to go that far without further evidence but there is a provision in the Ordinance which is of assistance to the Crown. That is Sec.6(d)(ii) which excludes from the Ordinance "letters concerning affairs of the sender or receiver thereof sent by a messenger employed for that purpose." In my opinion this would cover all occasions that the demarcators are asked to carry letters concerned with Government business whether that of the New Territories Administration or any other Department. It would not justify carrying demand notes from the electricity company or letters from any other non Government concern. To that extent the demarcators are entitled to their third declaration.

14. For these reasons, the plaintiffs are entitled to declarations that the reductions in salaries made as from 1st April this year are in breach of contract and that any order to deliver letters other than letters relating to Government business is unlawful.

Representation:

Denis K.L. Chang and Andrew K.N. Li (K.M. Lai & Li) for plaintiff.

H.J. Somerville and Frank Wong, Crown Counsel for Defendant.

(1) (1970) A.C. 1111.

(2) (1921) 3 K.B. 500

(3) (1949) 1 K.B. 227 @ 231

(4) (1960) 2 Q.B. 274 @ 291

(5) 10 W.I.R. P.187.

(6) (1969) 3 A.E. 1640

(7) (1952) S.C. 165

(8) (1860) C.L.R. 772

(9) 9 D.L.R. 2nd Ed. 131

(10) (1897) L.T.R. Vol.75 446 @ 447.

(11) (1937) App. Cas. 240

(12) 4 H.K.L.J. 23 @ 30.

(13) (1972) 2 Q.B. 455.