Chau Chun-man and Otheres v. International Fur Co Ltd
Read the full judgment text of DCMP 10/1980 on BabelCite. This District Court judgment.
1. This is an appeal by International Fur Company Limited (hereinafter referred to as "the defendant") against awards of wages in lieu of notice made by the Labour Tribunal in favour of six claimants, who were formerly employed by the defendant as tailors on a piece-rate basis. It is not now disputed that the claimants had been continuously employed by the defendant for the required periods until 20th March 1980, on which date their employment came to an end.
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DCMP000010/1980 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT KOWLOON CIVIL JURISDICTION LABOUR TRIBUNAL APPEAL NO. 10 OF 1980 -----------------
----------------- Coram: His Honour Judge Downey Date of Judgment: 12th October, 1981 ----------------- JUDGMENT ----------------- 1. This is an appeal by International Fur Company Limited (hereinafter referred to as "the defendant") against awards of wages in lieu of notice made by the Labour Tribunal in favour of six claimants, who were formerly employed by the defendant as tailors on a piece-rate basis. It is not now disputed that the claimants had been continuously employed by the defendant for the required periods until 20th March 1980, on which date their employment came to an end. 2. The awards were made on 30th April 1980, when the learned presiding officer delivered oral reasons for his decision. The award was served on the defendant on 7th May 1980. On 13th May 1980 the defendant applied for leave to appeal against the awards on various grounds. Between that date and 30th June 1980, when the application was considered by a judge of the District Court, the presiding officer, on 28th May 1980 gave his reasons in writing. The defendant filed supplemental grounds of appeal on 24th June 1980. On 30th June 1980 the defendant was given leave to appeal on the grounds set out in the supplemental grounds of appeal. 3. From various dates in 1979, the claimants were employed to make fur garments at the defendant's factory at Man Yue Street, Hunghom in accordance with paper patterns, which had to be delivered to the factory from the defendant's main office in Kimberley New Street, Tsimshatsui. It is clear from the documentary and oral evidence before the presiding officer that, from in or about December 1979, the business of the defendant went into a rapid decline culminating, in March 1980, in the virtual, if not total, closure of the factory. The reasons for this decline are not relevant to any issue I have to determine. I do not think that they were relevant to any issue of fact which the presiding officer had to determine. But I advert to this feature of the background evidence solely for the purpose of saying that I would respectfully agree with the approach adopted by the learned presiding officer to the principal issue before him, namely, whether the defendant had committed a fundamental breach by failing to provide a reasonable amount of work to enable the claimants to earn their piece-work remuneration. 4. He contrasted the wages of the claimants in December 1979 with those in March 1980, and also contrasted the figures for the number of garments completed by them in December 1979 with those completed in March 1980. Although this does not necessarily lead to the conclusion that the claimants were not provided with sufficient work in March 1980 - it is also consistent with a refusal on their part to do work provided by the defendant, which was faintly suggested by the defendant - it was, in my respectful view, a legitimate and pragmatic approach having regard to all the circumstances of this case. It was a convenient and useful way of gathering together all the evidence before him, both oral and documentary. 5. Mr. Wong has not sought to criticise that approach. Instead, he has argued that there was no or no sufficient evidence to support the learned presiding officer's findings that the defendant failed to provide work for the claimants for over 12 working days between 1st March 1980 and 20th March 1980, and that the claimants had been laid off without wages for more than 12 normal working days during the four weeks prior to 20th March 1980. These are embodied in grounds 1 and 2 of the supplemental grounds of appeal. Having considered Mr. Wong's detailed and painstaking submissions, as well as all the oral and documentary evidence before the presiding officer, I am not persuaded that there is any merit in these grounds of appeal. On the contrary, I am satisfied that there was ample evidence to justify these findings. I do not propose to refer to that evidence, but I think that I should indicate, in general terms, my reasons for not accepting Mr. Wong's submissions. 6. In the first place, they were advanced on the basis that the only evidence was that contained in the claimants' written statement (Exhibit C.1), prepared before the hearing in accordance with the usual practice of the Tribunal. Having regard to the circumstances in which such statements are prepared, it is not surprising that they contain vague or ambiguous versions of the facts or are silent as to other facts. But some of these omissions or ambiguities were, in my view, cured by other evidence before the Tribunal in the form of oral evidence by the parties and the wages' and attendance records kept by the defendant. Mr. Wong did not refer to this other evidence in his submissions. 7. Secondly, Mr. Wong's microscopic examination of Exhibit C.1, was designed to show that work was in fact provided by the defendant for some or all of the claimants on sufficient days during February and March 1980, to preclude the presiding officer from concluding that the claimants had been laid-off or deprived of work for more than twelve days during the periods referred to. Although it must be conceded that Mr. Wong came very close to showing that the days when the claimants were without any work at all, during either of these periods, did not add up to twelve days, I consider that this exercise was misconceived. It overlooked the fact that the claimants were piece-rated employees, engaged on terms which required them to observe the factory's working hours from 9.30 a.m. to 8 p.m. (with two hours for meals), and the other evidence that such work as was provided was either completed by the claimants in the usual time, leaving them idle for the rest of the day, or could not be completed within the usual time, because they were kept waiting for the necessary patterns to arrive at the factory from the defendant's offices. In my view, such limited and spasmodic provision of work does not constitute performance of an employer's common law duty to provide a reasonable amount of work for piece-rated workers, especially when they are required or expected to be present at the employer's place of business from 9.30 a.m. until 8 p.m. each day. The evidence before the Tribunal revealed that the claimants not infrequently left the factory after lunch or at or around 5.00 p.m. or 6 p.m. because they had nothing to do. 8. The learned presiding officer rightly recognised that the claimants impliedly agreed to being laid off occasionally. Section 11(3) of the Employment Ordinance (Cap.57) expressly provides that this should not exceed a total of twelve normal working days in any period of four consecutive weeks (emphasis supplied). Unfortunately, the ordinance does not offer any definition of "normal working days", but I consider that there is much to be said in favour of Mr. Chan's submission that it must mean something more than a few hours' work each day. He referred me to paragraph 6(b) of the First Schedule to Cap.57. Although this deals with an entirely different aspect of the Employment Ordinance, I consider that it can be taken as an indication of what the legislature had in mind as "normal working days" in the conditions which exist in Hong Kong. Notwithstanding the fact that certain statutory holidays fall on dates which some businessmen regard as irksome or inconvenient, I do not think that, by using the words "normal working days", the legislature intended to further its gradual policy of improving the lot of workers in Hong Kong, by the radical step of reducing the normal working day to a few hours each day! If that was its intention, I am sure that it would have been made manifest by a statutory definition of "normal working days". 9. Ground 3 of the supplemental grounds of appeal is in the following terms:
Despite the generality of this objection, I consider that it affords much stronger ground for Mr. Wong's challenge to the correctness of the learned presiding officer's awards in this case, because of certain passages in the presiding officer's written reasons for his decision. Indeed, I must confess that this aspect of the appeal has caused me to harbour certain reservations regarding the reasons for the awards made in this case, as well as reservations regarding my powers, as an appellate tribunal. In short, the validity of this ground of appeal depends upon the assumption that the defendant had "given proper notice in accordance with section 6" of Cap.57. If such notice was not given by the defendant, this ground of appeal must fail in limine. 10. In order to consider this ground of appeal it is necessary to consider the evidence before the learned presiding officer and certain passages in the written reasons for his decision. It is also necessary to consider the somewhat restrictive statutory provisions regulating appeals against decisions of the Labour Tribunal. 11. On 7th March 1980, the defendant put up a notice at the factory in the following terms:-
For my part, I do not think that this notice can be construed as a valid notice in accordance with section 6 of Cap. 57. At the most, it is an invitation to employees to accept shorter notice of the termination of their contracts. This notice was followed by another notice, dated 11th March 1980 posted at the factory, in the following terms:-
The second notice is a much clearer indication of the defendant's intention to terminate its contract of employment with the claimants. But, as it was to take effect within a period of less than one month from the date when it was given, I do not consider that it can be regarded as "proper notice in accordance with section 6". Nor do I think, that the mere fact that the second notice was back-dated to the date of the first notice, so that the employees could be said to have received during the period of the first notice, the period of notice required by the statute makes any difference. Two invalid or insufficient notices, which, in my view, the employee can disregard as nullities, cannot, in my view, be combined to bring into existence a valid notice in accordance with the statute. 12. If the employee, whether in ignorance of his strict legal entitlement or for other reasons, chooses to arrange his affairs by submitting to, or accepting, one or other of these informal methods of terminating his employment, I conceive that it is arguable that the contract of employment comes to an end by mutual agreement, or that the employee is discharging his duty of mitigating his loss, upon a breach by the employer. These aspects have not been fully canvassed before me, and do not arise from the learned presiding officer's findings of fact in this case. I mention them merely to indicate that what were, in my view, ineffectual attempts to give lawful notice in this case might, with the addition of other facts, be capable of terminating a contract of employment, otherwise than in accordance with section 6 or 7 of Cap. 57. 13. These views, however, are not sufficient to enable me to finally dispose of the third ground of appeal. In the written reasons for his decision the learned presiding officer appears to make findings which suggest that he thought that the defendant had given a valid notice in accordance with section 6 of Cap. 57, and these tend to support Mr. Wong's submissions in support of this ground of appeal. 14. The following passage appears in the third paragraph of the learned presiding officer's decision:-
This strongly suggests that he considered the two notices, in the events which actually occurred, to be sufficient to comply with the requirements of section 6 of Cap. 57. His understanding of the legal effect of these events is, perhaps, made clearer in the fifth paragraph of his decision, as follows:-
However, he then proceeded to consider another aspect of the case, namely, whether the defendant had, during the notice period, committed a fundamental breach, which the claimants were entitled to regard as terminating their employment. He eventually concluded that the defendant had committed such a breach. For the reasons I have given in relation to the defendant's first and second grounds of appeal, I consider that the learned presiding officer was amply justified in coming to his conclusion that the defendant had committed such a breach. 15. Whether such a breach gives an employee a remedy in the form of unliquidated damages or a claim for a liquidated sum is, in my view, still an open question. I incline to the view that the legislature, by enacting section 8A of Cap 57, intended to confer upon a dismissed employee an option of claiming a liquidated sum in accordance with the ordinance, justiciable only in the Labour Tribunal, or pursuing a claim for unliquidated damages before the ordinary courts. (Many of the conceptual difficulties in this area are touched upon in a learned commentary upon the legislature's attempt, by enacting section 8A of Cap.57, to overcome earlier decisions of local courts. See [1975] HKLJ 249-254) I do not propose to say anything more about the precise scope of this option, other than to express the view that I respectfully agree with the final decision of the learned presiding officer in this particular case. I cannot tell whether he had in mind the highly technical distinctions, implicit in the possible remedies available to a dismissed employee, or the extent to which these are amenable to the jurisdiction of the Labour Tribunal. It is however, clear, that he thought that the remedies, available to the claimants, were those provided by section 8A of Cap.57. He quantified his award by applying the provisions of sub-section (1). Mr. Wong contends that he should have applied the provisions of sub-section (2) of that section. 16. If the learned presiding officer correctly came to the conclusion that the defendant had given "proper notice in accordance with section 6 ...... and accepted by the innocent party as terminating the contract, takes the case out of section 8A(2). Such breaches would give the innocent party a remedy in the form of unliquidated damages. His remedy in the shape of an optional claim to a liquidated sum would remain, but would be reduced pro tanto. 17. For the reason I have given, I do not think that the defendant can bring itself within section 8A(2), because I do not think that it had given "proper notice in accordance with section 6" before it terminated the contracts of employment by its repudiatory breaches, accepted by the claimants. However, I must consider whether the restrictive provisions governing appeals from the Labour Tribunal preclude me from upholding the decision of the learned presiding officer on different grounds. 18. Despite the power to draw any inference of fact conferred by section 35(2)(a) of Cap. 25 (which must be very limited in view of the express provisions of section 35(2)(b)!), I conceive that I can only exercise the options open to me by section 35(1), if the award, order or determination of the Labour Tribunal is:-
Section 32(1) requires the "dissatisfied" party to apply to the District Court for leave to appeal within 7 days after the date on which the award, order or determination was served on him. Rule 9(2) of the Labour Tribunal (General) Rules provides:-
Insofar as these provisions severely limit a "dissatisfied" party's freedom to challenge an award against him, they accord, in my view, with the clear intention of the legislature that matters within the jurisdiction of the Labour Tribunal should be disposed of speedily and not be subject to extensive appellate scrutiny. Section 35(3) states that the decision of the District Court on any appeal shall be final. (Whether the decision of the Court of Appeal, on any appeal transferred in accordance with section 34, is final is, perhaps, an open question. Furthermore, it seems that an appellant in the Court of Appeal must apply to the High Court for permission to rely on a ground not specified in his application for leave to appeal! See Rule 10(2).) However, these provisions envisage that only the "dissatisfied" party will wish to question the decision of the Labour Tribunal on any appeal. There is nothing in the Ordinance or the Rules which expressly caters for the situation where the "satisfied" party (who will invariably be the "respondent") may wish to uphold the award in his favour on some different ground which involves a question of law. There is no express provision for the procedural devices of a "cross-appeal" or "respondent's notice", other than section 32(1) of the Ordinance. I cannot believe that it was the intention of the legislature that a "satisfied" party, having obtained the award he sought, must nevertheless, apply for leave to appeal within 7 days thereof, just in case the "dissatisfied" party applies for leave to appeal against the award, so as to enable him to contend that the award should be upheld on some different legal basis. Nor can I accept the proposition that, if he fails to apply for leave to appeal, he is to be effectively prevented from relying upon his alternative reason for upholding the award in his favour as an answer to the "dissatisfied" party's ground of appeal, especially when it is closely related to an essential step in the "dissatisfied" party's argument. That is precisely the position in this appeal. 19. Mr. Wong's submissions in support of his third ground of appeal were based on the proposition that the defendant had "given proper notice in accordance with section 6" of Cap.57. In my view, elementary considerations of fundamental justice surely entitle the opposite party to challenge the validity of that proposition. Having submitted his claim to a specialised tribunal, separate and distinct from the ordinary courts, where the advantages of legal representation are denied, he must surely be entitled to support the award in his favour, at any appeal brought by the other party. 20. If the effect of the Rules, when properly construed, is to prevent the respondent from arguing a new point of law, which the appellant has assumed when formulating his grounds of appeal, I venture to suggest that the Rules may be ultra vires. If they are not ultra vires, it would seem that the only course open to a respondent is to invite the appellate court to exercise its power to remit the matter to the tribunal for it to consider the new point of law. In a case such as the present one, where all the necessary facts have been found by the tribunal and the appellate court is able to decide the new point of law, it seems to me that to remit the matter to the tribunal would defeat the essential purposes of the legislature, as I perceive them. Further delay, multiplication of legal proceedings, and unnecessary expense would be involved. For these reasons, I consider that a respondent is entitled to take a new point on appeal, at least in answer to an essential step in the argument of the appellant in support of a ground of appeal which is properly before the appellate court. Having invited Mr. Wong and Mr. Chan to address me on this point of law - for which assistance I am particularly grateful - I am satisfied that Mr. Wong's third ground of appeal must be dismissed. Not having given "proper notice in accordance with section 6", the defendant could not bring itself within section 8A(2). The learned presiding officer was, in my view, correct to apply the provisions of section 8A(1) to the circumstances of this case. 21. Mr. Wong's fourth and final ground of appeal was that the learned presiding officer:-
It is true that the learned presiding officer did not consider this provision at all before making his awards. In my view, it was unnecessary for him to do so because the situation for which this provision was designed never arose. Despite the very real difficulties of construing this provision, I consider that it only applies if two conditions are satisfied, viz:
Apart from the fact that there was absolutely no evidence that the defendant ever agreed to pay any sum to the claimants in order to terminate their employment, for the reasons I have already given, the defendant cannot show that the first condition was satisfied. In my view, this ground of appeal was wholly misconceived. But, in fairness to Mr. Wong, who has fairly and amply advanced everything which could properly be said on behalf of the defendant in this appeal, I consider that he, or the person who settled this ground of appeal, may have been led astray by the somewhat misleading marginal notes to sections 7 and 8 of Cap. 57. But, insofar as section 7(3) purports to provide a special formula for calculating "the amount of wages", I do not think that it applies to a situation where the claimant's remedy is to be found in section 8A of Cap. 57. 22. The Ordinance includes specific provisions for the calculation of the wages which would accrue to an employee in certain given situations. See section 15(3), which deals with maternity leave, and section 31G, which deals with severance payments, I consider that section 7(3) falls into the same exceptional category. I do not think that it can be prayed in aid when an award under some other section is in question. In particular, I do not consider that it controls the manner in which "the amount of wages", referred to in section 8A, is to be ascertained. This feature of the formula must be arrived at in accordance with the ordinary meaning of the words in that section, aided by the general definition, found in section 2 of Cap.57. In my view, that part of the exercise is not to be determined or influenced, to any degree, by the special rules or criteria to be found in sections 7(3), 15(3) or 31G of Cap. 57. 23. For the reasons I have given, this appeal must be dismissed, with costs on the upper scale. Certificate for counsel.
Representation: Mr. Charles Wong of Messrs. Lo, Wong and Tsui for the appellant. Mr. Patrick Chan, counsel instructed by Messrs. Cheung and Tong for the respondents. |