Wing Ming Garment Factory Ltd v. Pun Yut-kit and Others

DCMP000013/1979

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

LABOUR TRIBUNAL APPEAL NO. 13 OF 1979

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Coram: D.A. Davies, D.J.

Date of Judgment: 28 December 1979

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JUDGMENT

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1. This is an appeal from a decision made on 21st May, 1979, by the learned President of the Labour Tribunal, who awarded to each of the 5 respondents (the claimants in the court below) wages in lieu of notice, and severance pay to 1st, 2nd and 3rd respondents as against the appellant company (the defendant in the court below).

2. Certain other awards were also made to the respondents but I am not seised of those, since the present appeal is only against the awards of wages in lieu of notice and severance pay.

3. Much of the background to the dispute between the parties, is agreed.

4. All five respondents were employed by the appellant company as ironing workers. All were dismissed without notice, and without wages in lieu of notice, apparently on Monday 5th March 1979.

5. The reason given by the appellant for this dismissal was the admitted failure of all respondents to report for work on the afternoon of Saturday 3rd March. The appellant's case in the court below was that this failure to report for work amounted to misconduct sufficient to justify dismissal without notice.

6. In his decision, the learned President found that the respondents were not guilty of misconduct such as to warrant their dismissal, and accordingly that the appellants were not justified in terminating the employment without notice. He thus awarded each respondent one month's wages in lieu of notice.

7. It is abundantly clear that this aspect of the appeal should be dealt with first, because issues involving redundancy and consequent liability for severance pay arise only in cases where redundancy is the reason for the termination of contract. In other words, if the respondents were validly dismissed for misconduct, they would under no circumstances be entitled to severance pay.

8. Before I proceed further, however, I must advert to a submission by Mr. Woolley, counsel for four of the respondents, to which Mr. Lim, for the appellant, later replied.

9. Mr. Woolley has referred me to section 35 of the Labour Tribunal Ordinance, and in particular, to section 35(2)(b)(i).

10. Mr. Woolley submits that by reason of that provision, much of the present appeal is misconceived, insofar as the appellant is in effect asking me to interfere with the President's findings of fact.

11. Mr. Lim has replied by emphasizing that the issue of whether there is any evidence, or sufficient evidence to support the President's findings, is in itself a matter of law, and I am therefore properly seised of it.

12. In connection with the claim for wages in lieu of notice, there is happily no need to dwell upon this matter of jurisdiction, since the essential facts found by the court below are not in dispute.

13. It clearly emerges from the evidence that when the 5 respondents finished work on the morning of Saturday, 3rd March, they were told to come back that afternoon. It is agreed that they did not do so. When they did return to work on Monday 5th March, they were summarily dismissed, the reason given by the appellant being that of their failure to appear on the afternoon of 3rd March.

14. Those are the president's findings of fact, abundantly supported by the evidence, and I would not interfere with them even if I could.

15. It then fell to the President to address his mind (which he did) to the question whether the appellant acted reasonably in dismissing the respondents without notice. I am satisfied that this is a question of law and within the four corners of this appeal. Indeed if it were otherwise, the whole procedure of appeal from an industrial tribunal would be pointless, since of all issues in labour disputes, this is by far the most prevalent.

16. Mr. Lim has complained that in his decision, the President has not dealt adequately with the question of unlawful dismissal, and that his approach to the whole issue was erroneous. He refers in particular to one sentence on page 4 of the decision "I am satisfied that their (the respondents') absence was not of a strike and under the circumstances cannot be of a case of misconduct".

17. Mr. Lim has also pointed out that certain allegations of previous misconduct, i.e. of lateness and not ironing according to instructions were not denied at the hearing by 3 of the respondents.

18. Finally Mr. Lim submitted that the evidence revealed deliberate disobediance of orders - a flagrant breach of contract, of which a single instance justifies dismissal without notice.

19. Mr. Woolley has replied to these various points. He has urged upon me that the President was not obliged to spell out findings on every aspect of the case, but that he has nonetheless covered all the essential ground in the course of his decision.

20. As to the specific sentence in the decision complained of by Mr. Lim, Mr. Woolley remarks that it can be read in two ways, and that the President is not necessarily equating the absence of a strike with the absence of misconduct; that his reference to the strike allegation was en passant, and the "circumstances" he later mentions are intended to mean all the circumstances which emerged from the evidence.

21. Concerning the apparent failure of 3rd, 4th and 5th respondents to give evidence concerning allegations of past misconduct, it is Mr. Woolley's submission that in informal proceedings such as those in the Labour Tribunal, formal rules of evidence do not apply and one should not interpret the silence of these three respondents as constituting any admission. He points out that the allegations were vague and unspecific, and that the onus was upon the appellant to set them up properly if it was intended to rely upon them.

22. Lastly, Mr. Woolley submits that having regard to the evidence accepted by the President - i. e. that the respondents failed to return to work on 3rd March because by reason of recent past experience, they genuinely did not think there would be any work for them to do, they were not guilty of misconduct such as would justify an employer in dismissing them without notice.

23. I have herein attempted merely to summarize the substance of the arguments, and I trust that neither counsel will feel that I have failed to do justice to the length and breadth of his submissions.

24. Almost every full judgment or decision is susceptable to criticism in some degree, and the President's decision in the present case is no exception. Upon my reading of it however, and with all respect to Mr. Lim, I think that the President has adequately considered the essential evidence, and where he has not perhaps made specific findings, has expressed himself in such a way that his views can clearly be inferred.

25. Where credibility was in issue, the President manifestly preferred the evidence of the respondents to that of the appellant, and gave his reasons therefor.

26. He was careful to note that he considered D.W.2 CHAN Kwan-hing unreliable and gave substantial reasons for having reached that conclusion.

27. As to the particular sentence complained of by Mr. Lim, whilst I agree that the wording is somewhat unfortunate, it is certainly capable of the interpretation placed upon it by Mr. Woolley, and in the context of the decision as a whole, I do not read the President as meaning that because there was no strike action, there could therefore be no misconduct. Elsewhere in the decision (e.g. at the end of page 2) the President has warned himself of the importance of finding whether or not the absence of the respondents amounted to misconduct. Also in his "short" decision, the President has referred to misconduct, without any parallel reference to strike action. I do not think the President has misdirected himself as to the nature of the alleged misconduct upon which the appellant sought to rely.

28. Finally, it remains for me to decide whether or not, on the facts as found by the President, I should interfere with his decision that summary dismissal of the respondents was not justified.

29. In considering what he calls the circumstances of the respondents' absence the President pertinently bore in mind that the respondents, as piece-rate workers differed from workers on a regular monthly wage, in that they (the respondents) would lose money by reason of their absence if there was work waiting for them at the factory.

30. He later goes on to say that he was not satisfied on a balance of probability that there was any misconduct on the part of the respondents.

31. On the evidence adduced in the court below, I would not be prepared to go as far as that; Mr. Lim is correct in his submission that there was a proven disobedience of orders. With respect to the President, that must constitute misconduct if the orders were reason-able (and it has never been suggested that they were not).

32. In my view the correct approach is that there was misconduct on the part of the respondents, but the heinousness thereof was mitigated by the reason which they advanced, and which was accepted by the President.

33. Counsel for both sides in this appeal agree, and I with them, that having reached the stage of accepting as the truth the reason advanced by the respondents for their absence, the President should then have put to himself the question:" Did the employer act reasonably in dismissing these employees without notice?"

34. Mr. Lim complains that the President did not do this, and indeed the transcript shows that in specific terms he did not. I agree with Mr. Woolley, however, that this is not fatal because it is clear, from the language he used, that the President did find that there were no grounds for dismissal. He said (Decision, page 4, paragraph 3): "I also do ("am?") not satisfied on balance of probability that there was any misconduct on the part of the claimants as alleged by the defendant. I am satisfied on balance of probability that the claimants have proved their claims for wages in lieu of notice".

35. It is perhaps unfortunate that the President did not refer particularly to the issue of reasonableness or otherwise on the part of the defendant (appellant), but the passage I have just quoted in my view speaks for itself, since if there was no misconduct, then it follows that the dismissal (in that context) could not be reasonable.

36. I have already stated herein that the President went further in his findings than I would have done.

37. Nevertheless, on the evidence, it is my opinion that the appellant over-reacted towards the absence of the respondents on March 3rd. It may well be that the respondents' absence did cause a measure of inconvenience to the appellant in terms of business efficiency; but that is not the criterion.

38. The President quite properly dismissed the appellants' vague and unsubstantiated allegations of prior misconduct, and treated the incident of March 3rd as an isolated instance of its kind. Three of the respondents were employees with long service. Those 3 at least were entitled to consideration by reason of that alone - Tiptools Ltd. v. Curtis⁽¹⁾, Hilti (Great Britain) Ltd. v. Windridge⁽²⁾

39. I am not suggesting that the management should have distinguished between these 3, and the other 2, respondents; but rather that the whole group should have been afforded the benefit of the long-service record of 3 of them.

40. Having regard to that, and the fact that on some prior recent Saturday afternoons there had been no work for the respondents to do, I would hold that the misconduct merited a warning (preferably in writing) that any further instance would result in dismissal, but I do not take the view that this single act of misconduct was so gross as to justify summary dismissal.

41. For these reasons I decline to interfere with the President's decision in relation to wages in lieu of notice, and this part of the appeal is accordingly dismissed.

42. I next deal with the issue of redundancy and severance pay. The President relied upon the presumption of redundancy created under section 31(Q) of the Employment Ordinance (applicable in all cases of dismissal) and quite correctly directed himself that the onus of proving the contrary is upon the employer.

43. Mr. Woolley has submitted that the question whether the presumption arises is a matter of law, but whether or not the presumption is rebutted is one of fact, and accordingly not within my jurisdiction in this appeal.

44. I am unable to find any authority for this proposition, and with respect am doubtful indeed as to its validity.

45. If a presumption arises by operation of law, then surely the issue of rebuttal must be one of law also, or at best of mixed fact and law? I do not think that the legislation is intended to shut out the appeal of an employer who complains that the tribunal wrongly held that he failed to rebut a presumption of redundancy. I therefore propose to deal with this aspect of the appeal.

46. The President found that the appellant did not succeed in rebutting the presumption.

47. In the first place, it is apparent from his written decision that the President was sceptical, if he was not positively in disbelief, of the appellants case that the respondents were dismissed by reason of their absence from work on the afternoon of 3rd March. It would appear that this arose from some doubt in his mind as to the actual date of dismissal of the respondents. The doubt which he expressed arose primarily from his finding of fact. If it were open to me to comment upon it, I would; but I take the view that it is outside of the four corners of this appeal.

48. The amount of weight placed upon this matter by the President is however a factor which I can and must, consider, and at this stage, my comment is that the President should have approached the question of redundancy without president in his mind arising from his finding upon the summary dismissal. These are two separate issues. The (in my view strong) possibility of the dismissal of the respondents having resulted from over-reaction on the part of the appellant does not appear to have been considered by the President; instead, he appears to have approached the question of redundancy with a preconceived idea that the absence from work of the respondents on 3rd March was merely a pretext or excuse for dismissing them, the real reason being that their services were excess to the appellant's requirements.

49. In my view, however, the President should have considered the evidence concerning the existence or otherwise of redundancy on its own merits.

50. The only evidence before the President which can be regarded as relative to redundancy was of some fall-off or slackness in the volume of work for a few months prior to the dismissal of the respondents, and the number and status of the workers hired to replace the respondents after their dismissal. Both aspects of this evidence have formed the subject of Mr. Lim's submissions, and it appears to me that the President paid much more regard to the latter aspect than to the former.

51. In connection with the redundancy issue, it is once again necessary for me to determine what matters are within the scope of this appeal.

52. What the President did was to make findings of fact concerning the two aspects of the evidence to which I have just referred, and he then proceeded to draw inferences from those facts.

53. It has been held to be a matter of law whether the inferences which the trial court drew are possible inferences from the facts as found.

- Hemns v. Wheeler⁽³⁾ and British Launderers' Research Association v. Hendon Borough Rating Authority⁽⁴⁾.

54. It is the appellant's case that the inferences drawn by the President have led to a complete misdirection.

55. In effect, Mr. Lim has submitted that the President's decision on the issue of redundancy reveal a total misunderstanding (a) of conditions within Hong Kong's garment-industry, and (b) of the essential distinction between piece-rate workers and regular-wage workers.

56. The difficulty about the first of these points, as I see it. is that the President had to evidence before him as to the peculiarities of the garment industry. Although the appellant may not have realized it at the time of the trial, the onus was upon him to adduce such evidence.

57. Nevertheless, in proceedings where neither side is entitled to legal representation, I do not think that such principles should be too strictly or oppressively applied, and I see it as my duty to interfere if the court below has been misled into drawing erroneous inferences from the facts found.

58. Mr. Lim has urged upon me that the volume of work in a garment factory is one which fluctuates considerably from time to time according to the state of the order-books, the speed of production, and other factors. Sometimes the fluctuations are seasonal.

59. According to Mr. Lim, by reason that labour requirements are a variable factor, there is within the industry, much flexibility in the available labour force.

60. When there is insufficient work in one factory, workers go to another factory which is more busy, and vice versa when the pendulum swings. Thus Mr. Lim submits that it is incorrect to infer from evidence of a slack period in the appellants factory for a few months prior to March 1979, that a redundancy situation obtained.

61. Mr. Woolley has not sought to challenge Mr. Lim's description of the state of affairs within the garment industry, but is content to point out that it was for the appellant to rebut the presumption of redundancy, and he took no steps in that direction.

62. I think that despite a certain sympathy with the difficulties of an unrepresented employer, had this been the only point raised, I would either have had to dismiss it, or at best remit the case back to the tribunal for further evidence.

63. Mr. Lim's second point is however more formidable. The learned President looked closely at the position in the ironing section of the appellant's factory subsequent to the dismissal of the respondents.

64. The President noted originally there were 7 permanent workers in the section, including the 5 respondents.

65. After the dismissal, the 5 respondents were replaced by 5 temporary workers (thus leaving only 2 permanent workers) though after 16th March the number of permanent workers increased to 4. From this, the President inferred a diminution of business after the dismissal of the 5 respondents.

66. Mr. Lim submits that far from militating against the appellant, this was evidence upon which he was entitled to rely in rebuttal of the presumption, since it reveals that the number of workers in the ironing section was not reduced after the dismissal of the respondents.

67. He points out that the distinction made by the President as between permanent and temporary workers is a complete misconception. The important distinction for the purposes of this case is, he says, between piece-rated and fixed wage workers. The former class of worker, whether permanent or temporary, can never become redundant.

68. When there is work for a piece-rate worker, he does it, and is paid for it. When there is no work for him, he is protem unemployed, and is not paid. There is, therefore, no need for any employer to dismiss a piece-rate worker on the basis of redundancy.

69. It appears to me that this is a flawless argument. It has not been made clear what is the difference between a temporary and a permanent worker in the appellant's factory - it may affect wage-scales, it may affect privileges, holiday entitlement and other terms and conditions generally. But, I certainly take Mr. Lim's point that in essence, redundancy can have no application to the case of a piece-rate worker as opposed to a fixed-wage worker.

70. Accordingly, as it seems to me, the President, who clearly gave great weight to the evidence concerning the ironing section after the dismissal of the respondents, drew from that evidence an inference that was erroneous. Instead, he should have regarded it as sufficient in itself to rebut the presumption of redundancy which arose under section 31 (Q).

71. For this reason, I now allow the appeal against the President's finding of redundancy, and set aside the award of severance pay.

72. The costs of the first part of this appeal, (which I dismissed) would normally be in favour of the respondents against the applicant whereas the reverse would be the case in respect of the second part of the appeal (which I have allowed).

73. The overall costs are in my opinion virtually indivisible and I have therefore decided to order that each side shall pay its own costs.

74. Dated this 28th day of December, 1979.

Representation:

(1) (1973) 1 R.L.R. 276 NIRC

(2) (1974) 1 R.L.R. 53, NIRC

(3) (1948) 2 K.B. 61, C.A.

(4) (1949) 1 K.B. 434