Lee Wai Wah & Others v. Kowloon Motor Bus Co (1933) Ltd
Read the full judgment text of DCMP 3/1975 on BabelCite. This District Court judgment was delivered on 28 July 1975.
1. Each of the nine Appellants, whose claims arising from the termination of their employment as bus conductors by the Respondent Company were joined together for the purpose of trial in accordance with S. 24 of the Labour Tribunal Ordinance, appeals against the dismissal of his claims by the Labour Tribunal for:-
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DCMP000003/1975 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT KOWLOON LABOUR TRIBUNAL APPEAL NO.3 OF 1975 -----------------
----------------- Coram: J. J. Rhind, D. J. Date of Judgment: 28 July 1975 ----------------- JUDGMENT ----------------- 1. Each of the nine Appellants, whose claims arising from the termination of their employment as bus conductors by the Respondent Company were joined together for the purpose of trial in accordance with S. 24 of the Labour Tribunal Ordinance, appeals against the dismissal of his claims by the Labour Tribunal for:-
2. Included in the claim of each Appellant was also an amount in respect of back-pay under an award finalized between the Respondent Company and its employees after the Appellants left the Respondent Company's service. All of the Appellants succeeded before the Labour Tribunal in that part of their claim, and as there was no cross-appeal by the Respondent Company that aspect of the case need not be mentioned further. 3. The Appellants commenced working as bus conductors for the Respondent Company on divers dates between July 1973 and May 1974. Before commencing such employment, each Appellant was required by the Respondent Company to sign its standard form of agreement in Chinese, acknowledging, inter alia, that the duration of the period of employment was limited to at most three months. As each three monthly period expired, the employee would sign a fresh agreement covering him for the next three months. None of the Appellants signed less than two such agreements while some signed as many as five. By virtue of the series of agreements each signed, the minimum continuous period worked by any Appellant was six months and the maximum fifteen. 4. Whilst each Appellant signed every one of his agreement forms, none was ever signed on behalf of the Respondent Company. Apart from one Appellant, the final agreement each Appellant signed was, as translated, in the following form:-
In the case of the remaining Appellant, the final form of agreement he signed lacked the penultimate paragraph of the specimen set out above but otherwise was identical. In fact the standard form of agreement signed by all the Appellants till the final one was the specimen set out above without the penultimate paragraph. However, as that penultimate paragraph is not material for the purpose of the present appeal, the cases of all the Appellants involve identical considerations. 5. During the course of the hearing before me, evidence was called on behalf of the Appellants, disputing the correctness of parts of the translation set out above, but as nothing turned on these alleged inaccuracies any attempt to reslove this problem of rival interpretations would have been otiose. 6. The three month periods provided for in the final agreements signed by each of the Appellants expired on various dates between September and December 1974. Three or four days before that date arrived, the Appellant concerned would be told on behalf of the Respondent Company that his services were no longer required after the expiry date of his agreement. 7. When that expiry date arrived, that Appellant would be paid the wages he had earned till then but nothing more. 8. In previous years any employee, including those in the "temporary conductor" category to which the Appellants belonged, if still in the Respondent Company's service on 31st December that year had shortly thereafter been paid what the Respondent Company called a "bonus", amounting to 5% of that employee's earnings that year. It was admitted on behalf of the Respondent Company that any Appellant whose service had been continued until 31st December 1974 would have been paid a "bonus" of 5% of his earnings during the period from 1st January 1974 till then. However, as the Respondent Company regarded it as a condition precedent to such payment that the employee was still serving on 31st December, it declined to make any pro rata payments to the Appellants when their employment discontinued prior to that date in 1974. 9. The learned President decided the case on the footing that the provisions of the Employment Ordinance, Cap. 57 (hereinafter referred to as "the Ordinance") did not apply. Basing himself solely on the construction of the terms of the agreement form signed by each Appellant, he held that the Respondent Company was not required to give any notice of termination, with the result that the part of each Appellants claim relating to wages in lieu of notice was dismissed. Also, upholding the Respondent Company's contention that remaining in its service up till 31st December was a condition precedent to payment of "bonus", that head of claim failed too. 10. On behalf of the Appellants it was submitted that the learned President erred in regarding them as excluded from the benefits conferred on employees by the Ordinance, in particular those occruing by virtue of S. 5 and S. 6, the relevant parts of which read as follows:-
11. Pausing at this point, it is convenient to consider what is the legal position of the Appellants if they are right in their contention that they are emtitled to the advantages conferred by the parts of S. 5 and S. 6 just quoted. In brief, for wrongful dismissal without notice they will be entitled to damages at large. Their claim is not in the nature of liquidated damages as originally framed but is really for unliquidated damages: Yip Wan Chui v. Magnificent Industrial Ltd,. Civil Appeal No. 47 of 1973 (Full Court). Within the scope of such unliquidated damages, the court can allow an element which is in practice in the nature of wages in lieu of the appropriate period of notice and also an element for wrongfully being deprived of the opportunity to earn bonus. An illustration of how unliquidated damages for wrongful dismissal can also include an element for being deprived of the opportunity to earn a payment in the nature of bonus is afforded by Ma Mou Leung v. Dolla Motors Limited 1969 D.C.L.R. 21. 12. Thus, it can be seen that if the Appellants are entitled to succeed by virtue of the Ordinance, the original claim they filed should not have taken the form it did, but instead should have been for unliquidated damages for wrongful dismissal. However, that is a mere point of form, not substance, and in the same way that the learned President could have amended the claims under S. 46 of the Labour Tribunal Ordinance, this court too can amend them at the hearing of the appeal by virtue of S. 35(3)(d) of that same ordinance. Thus in order to determine the claims on their merits the court will treat them as if they were for unliquidated damages for wrongful dismissal. Of course, if a claim for wages in lieu of notice were to arise now it could be for liquidated damages because of the amendment enacted by S. 8A of the Ordinance but that occured too late to have any bearing on the present case. 13. To return now to what is really the central question in this appeal - was the learned President correct in holding that the Employment Ordinance did not apply to the Appellants? 14. It emerged as common ground from the evidence given before the Labour Tribunal that, within the meaning ascribed to those words by the Employment Ordinance, the Appellants were "employees" of the Respondent Company "employer" under "contracts of employment" which were "continuous", and moreover that none of the Appellants fell within the classes of persons who are excluded from the ambit of that Ordinance by S. 4(2) thereof. 15. Nonetheless the learned President took the view that the terms of the agreements the Appellants had signed meant that they had contracted out of the benefits they would otherwise have enjoyed under the Ordinance. 16. That there is no general power to contract out of the provisions of the Ordinance is made clear by S. 70 which reads:-
17. Where the learned President thought he discerned the power for the Respondent Company to relieve itself of the burdens imposed by the Ordinance is not made clear in his judgment: he seems to have regarded it as axiomatic that the parties could make whatever bargain they chose. However, with respect, I think the learned President was wrong on this point. 18. It was urged on behalf of the Respondent Company that the employer's power to negotiate an enforceable contract of employment which could be terminated without notice or payment in lieu, the provisions of S. 70 of the Employment Ordinance notwithstanding, was preserved by S. 9(b) of the Ordinance.
19. The argument based on this section ran thus: one ground on which an employer could terminate a contract without notice at common law was if he could rely on an express term in the agreement stating he could terminate the agreement without notice; hence, enforcing such a term was within the scope of "any other ground" in sub-section (b). 20. However, it is quite clear from S. 9 as a whole that it was intended to cover the situation of what is generally known as "industrial misconduct" on the part of the employee. The type of "other ground" contemplated by S. 9(b) is say, incompetence on the part of a worker who holds himself out as having a particular skill. That S.9 is concerned with the employee's conduct can further be gathered from S. 31C(1) which reads:-
21. S. 9 clearly has nothing to do with contracting out. 22. Perhaps the learned President was misled by the form in which S. 5(1) of the Ordinance is cast. That sub-section contemplates that there can be an "express agreement to the contrary" which will prevent a continuous contract from being deemed a contract for one month renewable for one month, with the result that the provisions of S. 6(2)(a) & (b) with regard to the length of notice required to terminate such a contract will not be brought into play. However, such an "express agreement to the contrary" does not oust the provisions of the Ordinance altogether it merely means that S. 5(1) will not operate so as to render the continuous contract in question of the one month variety renewable from month to month. No matter how ingenious the agreement to the contrary devised by the parties, if it amounts to a continuous contract of employment, the employee must always be entitled to at least seven days notice under the dragnet provision of S.6(2)(c) which catches "every other case". For a contract to be deemed "continuous", it requires no more than that the employee shall have worked for the employer for a certain number of days (as more particularly described in the First Schedule to the Ordinance) during the previous four weeks. Moreover. a contract of employment is presumed "continuous" until the employer proves the contrary (S. 3(2) of the Ordinance) 23. In the case of the Appellants, though, there is no need for them to fall back on S. 6(2)(c), because the agreements they entered into fall squarely within the provisions of S. 5(2). The agreements between the parties were for a period of three months, but being signed by one party only, namely the employee, they are deemed to be contracts for one month renewable from month to month. Hence S.6(2)(a) and (b) regulate the length of notice required. 24. As the form of agreement entered into between the parties cannot be said to make provision for the length of notice required for termination, I consider the case to fall within S. 6(2)(a), with the result that each Appellant should have been given not less than one month's notice of termination (or wages in lieu) by the Respondent Company. 25. By failing to give the proper period of notice or to pay wages in lieu, the Respondent Company wrongfully dismissed the Appellants, and is therefore liable to pay damages. As indicated earlier in this judgment those damages can embrace an element for loss of wages during the proper period of notice as well as an element for loss of "bonus". Subject to any special features such as failure to mitigate, the damages which the court would in practice award in cases such as the present would be the equivalent of one month's wages plus 5% of all earnings (including the one month's wages just referred to) for 1974. It might well be that the solicitors for the parties will be able to agree the quantum of damages, but if not the court will proceed to assess damages forthwith rather than incur delay by remitting the papers to the court below for that purpose.
Representation: Mr. Fairbairn of Messrs. Fairbairn, Kwok & Wang for Appellants. Mr. Edwards of Messrs. P.C. Woo & Co. for Respondents. |