Winsome Watch-case Manufactory Ltd v. Chan Hau Chung

HCLA000040/1983

L.T.A. No. 40 of 1983

On an appeal from the presiding officer of the Labour Tribunal held - dismissing the appeal - that: -

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

LABOUR TRIBUNAL APPEAL NO. 40 OF 1983

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BETWEEN

Coram: The Hon. Mr. Justice Hunter.

Date of Hearing: 19th March 1984.

Date of Delivery: 19th March 1984.

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J U D G M E N T

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1. This is an appeal brought by employers against a decision of Mr. Chiu, the presiding officer of the Labour Tribunal, given on the 8th July of last year, in favour of the respondent servant, whereby he was awarded inter alia a severance payment. In the appeal Mr. Chan for the appellants has taken three points.

2. The first he says there was no evidence to support a finding of the presiding officer to the effect that during the months of April, May and June 1982 the claimant was not on leave, as the appellants had sought to contend. The short answer to this point is that the presiding officer is the primary judge of fact. He heard the witnesses. He made clear findings based in part upon credibility; and his finding is unassailable if there was evidence before him upon which he could have so found. There was such evidence. There is nothing more to be said about that point.

3. The next point Mr. Chan took is that there was really no basis for saying that this servant was ever laid off by reason of a monetary offer that was made to him. Section 31E(1) of the Employment Ordinance (Cap. 57) provides that where an employee's remuneration depends upon his being provided with work, which means that anyone on piece-rates such as this man comes within that definition; anyone in that position "shall be taken" for the purposes of section 31B(1) as having been laid off where two things happen: "where the employer does not provide such work for him on at least a total of 12 normal working days in any period of 4 consecutive weeks, and whereby he is not entitled to any remuneration under the contract for such period".

4. The submission here is that the second qualification was not satisfied, because there was evidence before the court below that it was open to this man to attend his place of work for six days out of fourteen, or more specifically six days out of each bi-monthly pay period, and if he did so he would receive $30 a day regardless of the fact that there was nothing for him to do, and that he did nothing. It said that this offer of remuneration takes him out of section 31E(1). I am unable to accept that submission. The point to note in my judgment is that the word used is "entitled". This must relate back to the contract of employment and shows that this is money that he has earned under the contract, money which the employer is obliged to pay him.Now this $30 offer is not such a sum. It was really a charitable offer for doing nothing. It was an attempt to avoid a laying off or redundancy situation which unfortunately existed at the employer's works, because the employer simply did not have enough work to give to his piece workers. But in my judgment an offer of this nature is simply not sufficient to prevent this part of section 31E(1) operating: Mr. Chan accepted that no variation of the contract was established showing that the applicant had agreed to accept $30 a day if work was not available.

5. The third point taken is rather a more difficult one. It is that the claim in this case was out of time. The letter of claim was in fact dated the 7th June 1982. It purported to be made under section 31N(b) of the Ordinance. The notice asserted that the applicant was either dismissed or laid off as from the 7th June. What is asserted here is that this notice was in fact 7 days too late, because on the presiding officer's findings no work had been provided for this man during the month of April when he was not on leave. Therefore the first four week period must have expired on the 1st May. The man is "taken to be" laid off at that date. That is the "relevant date" for the purposes of section 31E(3). Time starts to run on that date. This notice was 7 days out of time under section 31N, and is now too late to apply to the Commissioner for any extension of time.

6. This raises an awkward question as to upon what date and in what circumstances a man who has been laid off within the meaning of this Act, actually ceases to be employed. Unfortunately as far as counsel or I can find there is nothing in this Ordinance which expressly relates these concepts together. There is no provision which says that if the man is laid off for a certain period of time, or in a certain way, he is deemed to have cased to be employed.

7. The relevant provisions of the Ordinance seem to me to start with section 11(3), which says that "an employer may layoff an employee for such periods as are expressly agreed in, or may be implied from, the contract of employment: provided that the period of lay off shall in no case exceed a total of 12 normal working days in any period of 4 consecutive weeks."

8. Now there are two points I think to notice about that sub-section. First, the Ordinance assumes that this is permissible expressly or impliedly by the contract, and that up to a certain point, defined in the proviso, this is something that the employer is entitled to do under the contract, and during the continuance of the contract. This is something which the employer can do under this sub-section, repeatedly, month after month, so long as he does not exceed the permitted minimum.In other words a man can be laid off repeatedly within the meaning of the Ordinance, but his contract of employment will continue. Secondly there is in the proviso a minimum put upon this. Having regard to the provisions of section 70 which prohibit contracting out, this is a statutory minimum which cannot be excluded by the contract. It follows from that, that if the employer exceeds this he comits a breach of the contract, and it is the consequences of such breach which I shall consider in a moment.

9. The next relevant section to my mind is section 31B which says that where a person after the appointed day has been employed for a sufficiently long period and "(b) is laid off within the meaning of section 31E, the employer shall, subject to this part, be liable to pay to the employee a severance payment".This creates a liability to pay a severance payment if the person is laid off within the meaning of section 31E, and the problem is whether this liability arises automatically or whether it requires some conduct on behalf of the servant to trigger it off.

10. One then goes on to section 31E, which says that in the circumstances which I have earlier read (i.e. the failure to provide work whereby he is not entitled to any remuneration) the employee "shall for the purposes of section 31B(1) be taken to be laid off".The words which matter are "shall be taken to be laid off". It follows that if you have a four weeks period where he is not given sufficient work he is within the laying off provisions of section 31E, but is the effect of that automatic or does he have an option. One then goes on to 31E(3) which defines the "relevant date" for the purposes of a severance payment arising by reason of lay off as being "any day on which the period of four consecutive weeks referred to in sub-section 1 has expired". Mr. Chan, for the employer, says that this means, given two consecutive four weeks period, the first period, because at the end of that first period he must be taken to have been laid off for the purposes of sub-section 1. Mr. Young for the servant says, No, this is unreasonable. The servant should have a choice, and until he elects to treat this hypothetical breach as a repudiation he can hold his hand and accept the repudiation on any day i.e. he can accept it at the end of the second period.

11. The last relevant section 31N reads: "Notwithstanding anything in this part, an employee shall not be entitled to a severance payment unless, before the end of the period of one month beginning with the relevant date or within such extended period as the Commissioner may agree (a) the payment has been agreed and paid; (b) the employee has made a claim for payment by notice in writing given to the employer or (c)" a claim has been advanced (I paraphrase) before the Labour Tribunal. So one has there three alternatives. The first is plainly consensual where they have come to an agreement. The second two alternatives are unilateral; and is open to the employee to trigger the mechanism when he is so inclined.

12. Now it seems to be that there are only two ways of reading these sections. The first is the way advanced by Mr. Chan which is that the "relevant date" for the purposes of the Ordinance is the termination date of the contract. Taking the example I have already put of two consecutive periods during which insufficient work was provided by the employer: You look at the first period and to the end of that first period; and if insufficient work has been provided during it section 31B(1) applies; he is taken to be laid off; the relevant date for the purposes of the calculation is then the end of that period; and the contract comes to an end at that relevant date. In the result you have a singular situation, where a contract can come to an end without further conduct on the part of either parties; without anything which could be described as acceptance of repudiation by the servant; without any sort of notice or unilateral act; and indeed perhaps without the knowledge of either party. That would certainly have been the position here, because on the facts found neither party was conscious that this contract of employment terminated on or about the 1st May.

13. The converse proposition, which is urged upon me by Mr. Young, is that I should simply apply well known provisions of the law of contract to fill the lacuna in this Ordinance, and say that if in fact the employer behaves in a certain way, and fails to provide sufficient work, he is committing a breach of the contract which the employee may then choose to accept or not. Reverting to the two consecutive periods, it means that at the end of the first the employee could say, "Well this was bad luck, I will see what happen in the next month before deciding what to do": Then if the next month was no better than the first, he could say, "No, enough is enough, I will now treat this contract as repudiated". The decisive act is his acceptance. The mode of acceptance prima facie required by the Act is one of other of the two alternatives set out in (b) and (c) of section 31N. The contract comes to an end only when such a notice is given.

14. Now of those two alternatives I have no hesitation myself in preferring the second. I think it is unfortunate that the matter was left in the air like this in the Ordinance, but to read the Ordinance in this way makes sense of it. It is also the way in which the presiding officer in the court below read it, because he came to the conclusion, plainly by that line of thinking, that the contract in this case terminated on 7th June with the notice of that date. In those circumstances, in my judgment, his conclusion is right in law and well founded.

15. I also think that there is a great deal of force in Mr. Young's second submission that this is a point which it is really too late to take on appeal at all.This is a rather special limitation provision. It gives a power to extend the time only expressly to the Commissioner, and the procedures by which he is to be invited to exercise this power seem to me not to be spelt out or indeed specified in the Act. Given that background it seems to me particularly important that a limitation point should betaken at the proper time, even though this is a Tribunal before whom the parties may well be expected to appear in person. Because unless it is taken at the proper time, all prospect is lost of asking the Commissioner to extend a time period, if there should be any need for it, or if there should be any prospective merit in the application. To take the point for the first time on appeal when it is plainly too late for anyone to invite the Commissioner to do anything, is Mr. Young submits too late; and I agree with him. I think that if a point like this is to be taken it must be taken in the court below. I strongly suspect that in the ordinary course the Court of Appeal would refuse to hear a limitation argument which has neither been pleaded nor raised in the court below. That position is a fortiori because in many limitation periods the court has no power, and nobody has any power, to extend the period at all. In those circumstances and for these reasons, in my opinion, this appeal fails and must be dismissed.

Representation:

S.M. Chan (M/s Fairbairn & Kwok) for Appellant/Defendant.

Christopher Young (Legal Aid Department) for Respondent/Claimant.