Sam Woo Bore Pile Foundation Ltd v. Cheung Chi Wah

HCLA25/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO.25 OF 2004

(ON APPEAL FROM LBTC 8844 OF 2001)

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BETWEEN

	SAM WOO BORE PILE FOUNDATION LTD	Appellant (Defendant)
	and
	CHEUNG CHI WAH	Respondent (Claimant)

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Before : Hon Tang J in Court

Date of Hearing : 29 October 2004

Date of Handing Down Judgment : 23 November 2004

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J U D G M E N T

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1.This is an appeal by the employer against the decision of the Presiding Officer, Labour Tribunal, dated 26 February 2004.  There was an earlier appeal which was heard by Lam DJ (as he then was).  In that appeal, HCLA33/2002, Lam DJ ordered a rehearing.

2.This is the employer’s appeal against the result of that re-hearing.

3.The employee, Cheung Chi Wah, was dismissed summarily on 13 September 2001.  That notice of summary dismissal dated 13 September 2001 reads as follows :

「即時解僱通知

本公司曾於本年度二月三日，就你懶散的工作表現作了第一次書面警告，希望閣下作出改善。但經多個月的觀察，閣下的工作態度仍然沒有改善，且更不服從上司合法合理的命令，船廠部經理亦多次作出口頭警告。還有行為不當，對船廠部經理說有利誘成份的言語：『你快些炒我吧，那麼我便請你飲茶！』

事態嚴重，因此，本公司經考慮後，決定於二零零一年九月十四日即時解僱閣下，立刻終止閣下與本公司的僱傭合約。」

4.Earlier, on 3 February 2001, the employee had been given a written warning.  That written warning appears as follows :

「第一次警告

公司對你的表現十分不滿，你不但工作懶散，而且經常無故早退，工作時間更不服從上級命令，船廠部經理向你多次口頭警告，仍屢勸不聽，故意再犯。

公司現給予第一次書面警告，以示警戒，並希望你即日作出改善，如有再犯，公司將作出處分，並會考慮即時解僱，而不作出任何補償。」

5.The first decision of the Labour Tribunal in the employee’s favour was given on 1 March 2002.

6.On 23 August 2002, Lam DJ ordered a re-trial.

7.The rehearing took place on 26 February 2004, at 9:45 a.m.  In the afternoon, at 4:42 p.m., the Presiding Officer gave an extemporary judgment which is the subject matter of this appeal.

8.Between the order for re-trial and the actual hearing of the re-trial, two events of significance took place.  

9.First, on 13 June 2003, in SCTC61191/2002, the employer’s claim against the employee in the Small Claims Tribunal in respect of dishonest overclaiming of overtime succeeded and the employee was ordered to repay the employer $6,525, being overpayment of overtime.

10.It is important to note that in the 簡要理由given by the Tribunal Officer the employee’s defence in the Small Claims Tribunal was that there had been no overpayment.  However, he was disbelieved by the Presiding Officer.

11.The other event was that the employee was prosecuted by the ICAC in case no.8235 of 2003 in respect of using forged documents to claim overtime payment.  The employee pleaded guilty, and after he was remanded in custody for reports, he was sentenced to 160 hours of community service.

12.These overtime payments related to the period from 1 March 2000 to 28 February 2001 (“the earlier period”).  

13.In relation to the overtime payment for the month of March 2001, the learned Presiding Officer had this to say :

“The case against Mr. Cheung depended on the testimony of the accomplice Mr. Kwok Ki who was fellow worker of Mr. Cheung.  He alleged that Mr. Cheung believed that he could claim additional 3 hours as overtime for working on Sundays and additional 1 hour for working during tea break.  Mr. Lau Chun Ka explains that the overtime for formal situation did not apply to Mr. Cheung and no overtime would be paid for the latter situation.  Mr. Kwok Ki alleged that Mr. Cheung forced him to make false claims so that no discrepancies could be found on them who always worked together.  This happened from 10 March 2000 to 31 March 2001.  However Mr. Lau Chun Ka discovered the falsity in March 2001 and the overtime for this month was cancelled.  Thereafter no false claims were made.”

14.At the heart of this appeal is the Labour Tribunal’s finding that the employer had waived or condoned the employee’s fraudulent claim in respect of overtime for the earlier period.  At page 48 of the bundle, the Labour Tribunal had this to say :

“Perhaps I should continue to deal with the case on the basis that a fresh ground could be argued.  I find as fact that Mr. Lau Chun Ka must know or should have known that Mr. Cheung had overstated his overtime hours in March 2001.  If he had made enquiries [sic] with Mr. Cheung and Mr. Kwok Ki who blamed each other, I do not believe the matter would be just confined to March 2001.  If it happened in March, it must have happened before.  Mr. Kwok Ki in his statement maintained that he felt uneasy about Mr. Cheung’s conduct which affected him, and in August 2000, had told the other staff, Ah Cheong, Uncle Choi and Mr. Ma who felt no surprise about such thing.  Mr. Ma must be Mr. Ma Yuet Wah, the Personnel Manager, who issued the letters on 22 May 2002 to recover the over-payment.  On the case as a whole, I believe the management did not take serious view on such matter.  Mr. Kwok Ki was not charged with any criminal offence, despite his written admission in May 2002.  In the course of these proceedings, Mr. Lau Chun Ka, perhaps advised by his staff, mainly pursued the defence based on Mr. Cheung’s general conduct.  They only pursued against Mr. Cheung on every avenue after the judgment in March 2002 apparently as a kind of pressure on him.  I find as fact that Mr. Lau Chun Ka had full knowledge of Mr. Cheung’s and Mr. Kwok’s fraud in as early as March 2001 and did not regard it as serious enough to take any disciplinary actions.”

15.Earlier, on the same page, he said :

“He also testifies that Mr. Kwok Ki made full admission in May 2002 and this was the time he was first aware of the fraud.  I find this could not be true.  Sam Woo filed the defence statement on 20 November 2001 in this action.  This fraud was not mentioned.  Mr. Lau Chun Ka was required to set out his case in detail.  On 3 January 2002, he filed a witness statement, and in the last paragraph, he mentioned this fraud and said that the company would deal with it in a separate way to recover the amount of $16,500.  No evidence was called at trial and this fraud was never a ground of appeal filed on 25 April 2002.”

16.In order to understand this matter better, it is necessary to deal with the overtime for March 2001.  The evidence was that the employer discovered that the employee had overcharged on overtime for that month.  After this was discovered, the claim for overtime for March 2001 was reduced and that the employer took no further action.

17.However, at issue before the Labour Tribunal was whether the employer was aware of the dishonest overtime claims for the earlier period and, if so, whether the employer could be said to have waived or condoned them.

18.Insofar as the Labour Tribunal said that the employer should have known that the employee had overstated his overtime hours for the earlier period because it was aware of excessive claim for March 2001, I do not believe that followed at all.  Indeed, that was flatly denied by the employer. 

19.I do not believe the Labour Tribunal’s conclusion that the employer was aware of the dishonest claim in relation to the earlier period is supported by evidence which could support such a finding.

20.Moreover, it seems that the Labour Tribunal had overlooked the fact that by letter dated 25 March 2002 the employee denied that he had been overpaid.  This is what the employee said in his letter dated 28 May 2002 :

「貴司於二零零二年五月二十三日來函 (檔案編號：SWG/bp/HR/L/02/037) 得悉。

就  貴司單方面指本人曾多收  貴司之工薪及向本人作追討壹事，本人認為這並非事實，故本人決無理由支付。

此外，本人已就  貴司之來函作存案，並與法律顧問作進一步研究。

最後，本人現建議  貴司於進行函中所謂『相應行動』前，必須基於事實出發，否則  貴司將可能於法律上承受不可挽回之後果。敬希留意！」

21.I have already mentioned earlier the decision in the Small Claims Tribunal which made it quite clear that the employee’s defence there was that he had not been overpaid.  Such evidence contradicted the Labour Tribunal’s finding that not only was the employer aware of the dishonest claim for overtime but that it had waived or condoned it.  Moreover, this does not seem to have been taken into account by the Labour Tribunal when it concluded that the employer knew of the excessive overtime for the earlier period.  I should add that the clear evidence of the employer was that he did not know and that there was no positive evidence contradicting the employer’s assertion.  Indeed, the evidence of the employer was very clear — they suspected overcharging of overtime by the employee as well as another employee, Kwok Ki, who confessed on 16 May 2002 and agreed to repay all the excessive overtime to the employer by 12 monthly instalments.  It is also clear from Kwok Ki’s letter to the employer dated 16 May 2002 that after the excessive overtime was discovered in March 2001 by Mr Lau of the employer, that was corrected and no further claim for excessive overtime had been made thereafter.  In paragraph 14 above I referred to the Labour Tribunal’s decision where the Presiding Officer said : “Mr. Ma must be Mr. Ma Yuet Wah, the Personnel Manager…”  But Ma Yuet Wah, the personnel manager is a woman, so it is not clear whom Kwok Ki was referring to.  In any event, I do not believe this can be taken as knowledge of and condonation or waiver by the employer of the dishonest claim for overtime in respect of the earlier period.

22.As noted above, the Labour Tribunal referred to paragraph 3 of Mr Lau’s statement dated 3 January 2002.  However, when one looks at paragraph 3 closely, one can see that the employer were asserting that it was only “recently” that they discovered possible overcharging of overtime claimed by the employee.  Thus, this cannot support the Labour Tribunal’s decision that it had been condoned in March 2001.

23.As for the criticism which was made at paragraph 3 and the Labour Tribunal using it as foundation for finding that the employer was aware of the employee’s fraud but had chosen not to rely on it at the first hearing.  Again, it seems to me that the Labour Tribunal had misunderstood the situation.  This is what paragraph 3 said :

「(三) 不誠實

本公司所聘用的三位員工：吳積材(吊機手)，張志華(雜工)，郭棋(雜工)。他們是必須一起工作的，因此他們的工作時間應該是相同的，如要超時工作，超時數目也應該是相同的。

但最近，本人翻看他們三人由2000 年至2001 年工資記錄時，發覺張志華先生，填寫的超時工作數量不實，與組長吳積材有不同之處。初步計算所得，於2000 年至2001 年張先生超時工作較組長吳積材多出220 小時，以公司紀錄每小時超時工資HK$75計算，張先生不誠實，多取了公司HK$16,500。關於此事，本公司會另行處理去追溯此事。隨此信附上有關資料參考。(附件 三)」

24.The employer’s case is that it was when they had Kwok Ki’s confession that they were able to prove the employee’s fraud.  Paragraph 3 is not inconsistent with that.  Paragraph 3 simply shows that they had reason to suspect the employee.  The only evidence they had at the time seemed to be the discrepancy between what the employee and Kwok Ki charged by way of overtime and what another employee吳積材charged in respect of overtime.  Indeed, Ms Ng, who appeared for the employer, explained that no reliance was made on this ground at the first trial because of the denial of the employee of any overpayment.

25.The Labour Tribunal had this to say, at page 48 :

“This is a re-trial ordered by the appeal court.  I do not think it fair that the whole case should be re-opened afresh.  I take the view that the case concluded with finality on 1 March 2002 when this court delivered the judgment.  This judgment was partly upheld by the High Court and this court was directed to consider other matters (sic).  These other matters must be confined to those already raised which were subjects of appeal.  It is not fair that a party should succeed in a subsequent supplementary proceeding on a matter not raised before.  Following the direction of the High Court, I have already found that summary dismissal was not justified.  This should be the end of the matter.”

26.This is a matter of discretion and should not be interfered with except when it can be shown that it was clearly wrong. 

27.Ms Ng referred me to the decision of Jerome Chan DJ (as he then was) in Chan Suk Bing Angie v. Harbour Phoenix Ltd & Another [1992] 2 HKC 459 which decided that :

“(1)   Hearings at the tribunal were inquisitorial rather than adversary in nature.  In view of the lack of legal representation and the informal nature of the hearings, Presiding Officers had the duty to investigate relevant matters irrespective of whether they were raised or relied upon by any party.”

That was also the view of Waung J in Leung Wan Kee Shipyard Limited v. Lik Shau Foo [1995] 3 HKC229 :

“There is a duty on the presiding officer to investigate all matters on his own volition and direct the parties to the right issues and seek from them the relevant material and evidence.  I, of course, appreciate that this is an onerous duty but this is what the law demands and bearing in mind that lay people with very little or no knowledge of the law are regularly before the Labour Tribunal, I do not see how the law can demand any less from the Tribunal.”

These authorities underlined the duty of the Labour Tribunal to investigate. 

28.Here, I am concerned with a case where the Labour Tribunal actually excluded a relevant matter from its consideration.  I do not believe the fact that it was a re-trial was a sufficient reason for the Labour Tribunal to disregard this important matter.  I believe the case must be truly exceptional before a relevant matter should be excluded, e.g. a case where a party had tried to overreach.

29.The Labour Tribunal ought to have tried to ascertain why it was that the point had not been taken earlier.  As Ms Ng explained to me, at that time the employer had no more than a circumstantial case.  The employee denied overpayment and the employer did not have Kwok Ki’s confession.  By the time of the re-trial, of course, the employer had the judgment in the Small Claims Tribunal in its favour as well as the conviction of the employee.  In such circumstances, given the inquisitional nature of the proceedings, I believe the Presiding Officer ought not to have refused to deal with this matter.

30.Further, I believe the Presiding Officers’ approach was coloured by his finding that the misconduct had been waived or condoned.  However, as I have said, that is incorrect.  I believe that had the Presiding Officer not come to the erroneous conclusion that the employer was aware of this misconduct in March 2001 and had waived or condoned it, he would have exercised his discretion differently, and being mindful of the inquisitorial nature of the proceedings, I believe he would have permitted the point to be taken on behalf of the employer.

31.On such evidence, as the Presiding Officer had made it clear in the course of the proceedings (see page 22 of the transcript), but for the condonation he would have had no difficulty in finding in favour of the employer.

32.For the above reasons, I am of the opinion that the employee’s claim ought to have been dismissed by the Labour Tribunal.  Accordingly, the employer’s appeal is allowed and I also order that the employer should have the costs of the appeal, to be taxed if not agreed.

	(Robert Tang)
	Judge of the Court of First Instance
	High Court

Ms Queenie W.S. Ng, instructed by Messrs K.H. Lam & Co., for the Appellant/Defendant

Respondent/Claimant in person, present