Fernandes Vilma v. Cathay Pacific Airways Ltd
Read the full judgment text of HCLA 40/2003 on BabelCite. This HCLA judgment was delivered on 26 April 2004.
1. The Claimant was formerly employed by the Defendant as a flight attendant. She was dismissed by the Defendant on 8 October 2001 with the payment of one month's salary in lieu of notice. She lodged claims in the Labour Tribunal against the Defendant.
Cites 2 cases
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HCLA000040/2003 HCLA 40/2003 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE LABOUR TRIBUNAL APPEAL NO. 40 OF 2003 (ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 2709 OF 2002)
____________ Coram: Hon Lam J in Court Dates of Hearing: 8 December 2003 & 13 April 2004 Date of Judgment: 26 April 2004 _______________ J U D G M E N T _______________ 1.The Claimant was formerly employed by the Defendant as a flight attendant. She was dismissed by the Defendant on 8 October 2001 with the payment of one month's salary in lieu of notice. She lodged claims in the Labour Tribunal against the Defendant. 2.On 5 March 2003, Ms Tracy Chan sitting as the Presiding Officer of the Labour Tribunal dismissed all the claims of the Claimant in LBTC 2709 of 2002. The Claimant sought leave to appeal and leave was granted by this court in respect of one claim only, viz. her claim in respect of annual free of charge ticket. The Presiding Officer regarded the air tickets as part of the rebated travel scheme that was a privilege extended by the Defendant to its employees and not a right. The Presiding Officer held that such privilege was meant for serving employees and the only two exceptions were retirement and resignation. In granting leave to the Claimant, this court allowed the following ground of appeal to be argued,
3.The Claimant first joined the Defendant on 2 March 1993. She was a non-local cabin crew. At that time, the Conditions of Service contained the following provisions which are relevant for present purposes,
4.In 1995, the Defendant introduced a new set of Concessional Travel Policy that encompassed various travel benefits provided by the Defendant to its staff. It was subsequently revised in 1997 ["the 1997 Policy"]. Although parties initially argued the appeal by reference to the 1995 version, the Presiding Officer had decided this part of the claim by reference to the 1997 revision. There is no ground of appeal asserting that the Presiding Officer relied on the wrong set of policy and it is therefore not open to the Claimant to revert back to the 1995 version. In fact, the Claimant had enjoyed benefit in accordance with the 1997 Policy. 5.The relevant provisions of the 1997 Policy are as follows,
6.The first point taken by Mr McLeish, counsel for the Defendant, was that the Policy had replaced the Conditions of Service and the Presiding Officer was correct in disregarding the latter. On the other hand, Mr Ng counsel for the Claimant argued that the Policy did not have such effect. The key lies with the construction of a paragraph in the 1997 Policy,
There is a similar provision in the 1995 version. Although there were some slight changes in the wordings, I do not find them to be material for present purposes. 7.Since the Claimant had subscribed to the 1995 Policy, she had agreed to the same and the exception could not assist her in preserving the effect of the conditions of service. However, Mr Ng argued otherwise. He submitted that Clause 17 in the conditions of service was not a provision protecting existing conditions of service; hence the Defendant could not rely on the agreement by the Claimant to override its effect. I must reject that submission. Assuming Mr Ng were correct in his contention that Clause 17 was not a provision protecting existing conditions of service, the implication would be that it would be caught by the first part of this paragraph in the Policy, viz. it would have been replaced as part of the existing travel policies even without the agreement on the part of the employee concerned. Therefore the contention does not assist the Claimant. In any event, it is plain to me that by signing into the new policy, the Claimant accepted that the governing rules for her travel benefits were set out in the Policy instead of the conditions of service. In law, it was a variation of the terms of her employment contract. 8.Although the Claimant had resigned in March 1999 under a voluntary resignation scheme and was then re-employed from 17 January 2000 until her dismissal on 8 October 2001, there is no suggestion that these affected the implications stemming from the above analysis. 9.As Mr McLeish pointed out, the Claimant herself had acted on the basis that the Policy was the governing rules. She applied for FOC ticket for her husband in her letter of 22 October 2001. Under the conditions of service, she would not be entitled to do so since she had not completed 10 years of service (see Clause 17(B) of the conditions). Under the Policy, FOC would be granted to a spouse after a staff had completed 12 months continuous service. 10.I therefore hold that insofar as travel benefit is concerned, the Conditions of Service had been replaced by the Policy and the crucial issues are whether FOC ticket was a contractual entitlement accrued to a staff under the 1997 Policy and whether the Defendant could invalidate such accrued benefit upon the dismissal of the Claimant. These issues are not within the scope of the original ground of appeal. But Mr Ng had addressed this court on the construction of the Policy in his oral submissions and it is obvious to this court that these issues had to be resolved in order to do justice to the parties. 11.The court invited further submissions from the parties and the appeal was restored for hearing on 13 April 2004. On that day, Mr Ng sought leave to argue further grounds of appeal foreshadowed in his Further Submissions filed on 31 December 2003. The Defendant was given ample notice of such application and it would not suffer any prejudice that cannot be compensated by an order for costs if these grounds were entertained. In the exercise of my discretion under Rule 9(2) of the Labour Tribunal (General) Rules, I allowed these further grounds to be canvassed and I have heard parties on the same. The additional grounds are as follows,
For reasons mentioned above, I will deal with these by reference to the 1997 Policy instead of the 1995 Policy. 12.Before I deal with the additional grounds, I would sidetrack a little bit to refer to the jurisdiction of the Labour Tribunal in hearing claims relating to the FOC tickets. Mr Ng characterized the same as a claim for damages for breach of the contract of employment and as such falling within Paragraph 1 (a) of the Schedule to the Labour Tribunal Ordinance. He relied on the decision of Hunter J in Panalpina (Hong Kong) Ltd v Ulrich Haldemann [1983] HKLR 275 (followed by Deputy Judge Sharwood in Ireland v Canton Fitzgerald (HK) Ltd [1988] HKC 493). 13.Mr McLeish agreed that the Labour Tribunal did have jurisdiction to entertain the claim and he did not dissent from the analysis of Hunter J. He however submitted that there were complicated issues in term of assessment of the quantum and if this court were with the Claimant as to the merits of the appeal, the matter should be remitted to the District Court instead of the Labour Tribunal. 14.For my part, I would respectfully adopt the approach of Hunter J and held that the FOC ticket claim is within the jurisdiction of the Labour Tribunal. 15.Turning to the additional grounds of appeal, in my judgment the most important questions are what is the nature of the benefit conferred under the 1997 Policy and when did such benefit accrue. Although Mr McLeish argued forcefully that the provisions in the 1997 Policy did not confer any benefit or privilege on an employee whose contract of employment had been terminated by the Defendant (referred to as a "terminee" in counsel's submissions), I think that is a red herring. The Claimant's case is not premised upon asserting a right to FOC ticket being accrued to a terminee. Rather her case is that her right to FOC tickets had been accrued prior to the termination of her employment. Hence, it is neither here nor there that there is no provision granting any travel concession to any terminee under the 1997 Policy. 16.Mr McLeish advanced a variation of this contention. He submitted that whatever benefit accrued to an employee under the 1997 Policy was conditional upon the employee remained as a serving employee at the time of travel. The only exception to this is the case of an employee who had resigned. There were express provisions under Clause 11 reproduced above to cater for that situation. An employee who had resigned was given 30 days to utilize the FOC ticket. Mr McLeish submitted that a terminee could not be in a better position than such an employee. 17.On the other hand, Mr Ng contended that there could be many cases where the employment contracts are terminated by the Defendant without any fault on the part of the employees. It would be wrong to assume that a terminee should be worse off than an employee who had resigned. 18.There is no express provision in the 1997 Policy stipulating that any benefit accrued to an employee would be forfeited upon his or her employment being terminated by the Defendant. I do not think Clause 11 by itself necessarily carries such an implication. However, that is not the end of the matter. Even assuming (without deciding) that the 1997 Policy did confer some contractual benefits on the Claimant, one must consider the nature of such benefits. 19.As far as FOC ticket is concerned, the following features should be noted,
20.Looking the matter in that light, although there are provisions in the 1997 Policy suggesting that the FOC tickets "accrued" annually on 1st January of each calendar year, as in the case of other fringe benefits like use of company cars or other company facilities, it is somewhat illusory to talk about accrual of rights. So long as one remains as an employee, he or she can enjoy the fringe benefit. But once the employment relationship is terminated, unless there are special provisions catering for the same (as in the case of resignation), an ex-employee could not claim back what he had not enjoyed in the past although he had an outstanding "accrued" entitlement whilst he was employed. 21.In a way, the FOC ticket might have distorted one's perception about the true nature of the Claimant's entitlement under the 1997 Policy. On true analysis, it is nothing more than a mere booking form. It cannot be compared with a commercial air ticket. 22.Hence, it does not matter whether the entitlement to FOC ticket is a contractual benefit. Even if it is, the very nature of the benefit, as prescribed by the terms of the 1997 Policy, is a benefit that can only be enjoyed during the subsistence of the employment. Once the employment of the Claimant was determined by the Defendant, she had no further right to use the ticket. 23.Therefore, it is not necessary for me to decide whether the entitlement is a contractual right instead of mere privilege. I can see arguments both ways in that regard and I would prefer to leave the point open. Nor do I need to consider the question of discretionary element on the part of the Defendant in withholding the benefit upon termination of employment. On proper construction, the 1997 Policy did not give the Claimant any right to enjoy FOC travel after the termination of her employment by the Defendant. The discretion of the Defendant was simply not engaged. The appeal therefore cannot succeed on the basis of Ground (2). 24.As regards Section 70 of the Employment Ordinance, given the limitation imposed by Clause 11 on the use his or her outstanding FOC entitlement by an employee who resigned, I agree with Mr McLeish's submission that it is too remote to suggest that the difference in treatment of an employee who resigned as compared with that of an employee whose employment was terminated by the Defendant under the 1997 Policy would drive an employee to opt for resignation instead of being dismissed on notice. Hence, the Claimant cannot rely on Section 70 to contend that the 1997 Policy was void by reason of it purporting to extinguish or reduce the right of an employee to long service payment. 25.This appeal is therefore dismissed. I also make an order nisi that the Claimant shall pay the Defendant's costs of the appeal.
Representation: Mr Alan Ng Man Sang, instructed by Messrs Kwok, Ng & Chan, for the Claimant Mr Robin McLeish, instructed by Messrs Johnson, Stokes & Master, for the Defendant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment