Suzuya International (HK) Co Ltd v. Chung Chun Hei
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DCCJ 5251 and 6016 of 2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 5251 OF 2004 ------------------------ BETWEEN
------------------------ IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 6016 OF 2004 ------------------------ BETWEEN
Coram: Deputy District Judge Abu B. bin Wahab Date of Hearing: 9 - 12 and 19 January 2007 Date of Handing Down Decision: 12 March 2007 ------------------------ JUDGMENT ------------------------ 1.For the sake of convenience, I will simply refer to Suzuya International (HK) Co. Ltd. as the Plaintiff and Madam Chung Chun Hei as the Defendant 2.The Defendant originally laid claim against the Plaintiff in the Labour Tribunal. The Plaintiff subsequently commenced action in the District Court (DCCJ 5251 of 2004). The Labour Tribunal claim was then transferred to the District Court (DCCJ 6016 of 2004). The 2 cases were consolidated to be tried together. The claim by the Defendant appears as the Counterclaim in the consolidated action. 3.It is common ground that the Plaintiff employed the Defendant as its Human Resources and Administration Manager from 2 July 2001 to 5 March 2002 under what will be described herein as “the 1st Employment Contract” (Bundle C, page 9 to 10). It is also common ground that from 6 March 2002 the Plaintiff employed the Defendant as its Assistant General Manager under what will be described herein as “the 2nd Employment Contract” (Bundle C, page 16 to 17). One of the points in dispute is whether the 2nd Employment Contract came to an end by effluxion of time on 4 March 2004 or by way of constructive dismissal on 16 September 2004. 4.The Plaintiff claims the sum of $130,600 comprising:
5.To put it simply, the Defendant says that amounts in Paragraph 3 a) and b) were perks or extras offered by Mr. Okada (“PW1”), Managing Director, substantial shareholder and de facto boss of the Plaintiff. Regarding Paragraph 3 c), the Defendant says that PW1 took over from her the responsibility of filing the tax returns. 6.The Defendant counterclaims for $636,881.14 or $623,281.14 with an Order that the Plaintiff do pay $13,600 as employer’s contribution (from 1 May to 31 August 2004) into the ORSO Scheme. The Counterclaim is based on her entitlement under the 2nd Employment Contract and, to a large extent, proceeds on the basis that employment ended only on 16 September 2004. 7.I mention the above to give some flavour of what this case is about before going into details. 8.Having considered all the evidence in this case, I preferred and accepted the evidence of Defence. I dismiss the Plaintiff’s claims. I make awards in favour of the Defendant as follows:
9.I order that the Plaintiff pay interest on the aforesaid sum of $539,037.32 at judgment rate from 16 September 2004 (date of constructive dismissal of the Defendant) until full payment. 10.I make an order nisi regarding costs. The Plaintiff is to pay the Defendant’s costs for the whole proceedings in the District Court. There will be certificate for counsel. Pursuant to Section 44A of the District Court Ordinance, Cap. 336, I also order the Plaintiff to pay the Defendant’s costs for the whole proceedings in the Labour Tribunal. All costs are to be taxed if not agreed. 11.I now explain my decision. 12.Plaintiff’s case
13.The thrust of the Plaintiff’s defence to the Counterclaim is that the 2nd Employment Contract was for “a fixed term of 2 years which came to an end on 31st March 2004” (see paragraph 11(2) of Amended Reply and Defence to Counterclaim, Bundle A, page 51.1). In any case, the Plaintiff argued that oral notice of termination was given the Defendant around January or February 2004. In submission, Counsel for the Plaintiff argued that assuming the 2nd Employment Contract was not for a fixed term of 2 years and was not terminated by notice, there was nonetheless no contract of employment after 31 March 2004 in that a material term, salary, had yet to be agreed.
14.I should at this juncture explain references herein to documents in the Bundles C and D. Bundle C contains (copies of) documents referred to by witnesses in their written statements (as contained in Bundle B). Bundle D contains copies of all agreed documents. Hence, there is duplication of some of the documents in Bundles C and D. I try to make references as much as possible to Bundle C because the witnesses were often examined or cross-examined on documents in that Bundle. 15.Defence case Salient features of the Defence case are:
16.Matters considered The dramatis personae of this case are PW1 and the Defendant. Both of them are highly educated and sophisticated people. This is all the more so for PW1. He heads a not insubstantial business with undertakings in Hong Kong, Indonesia and Japan. There are at present some 45 retail shops in Hong Kong and Macau with around 270 employees in Hong Kong. Both PW1 and the Defendant were essentially saying that he (or she) trusted the other party. 17.As I understand it, the main purpose of calling PW2 was to rebut the pleaded Defence stance that around August or September 2003 the Auditors enquired about documentation regarding “consultancy fee” booked for the Defendant. PW2 said that the Auditors would not do any review of the Plaintiff’s books, accounts, supporting documents etc. in August or September. In cross-examination, PW2 said that such field visits would be conducted around April or May. He went on to explain it was normal procedure to ask for supporting documents “but may not be against consultancy fees”. PW2’s impression was that the Auditors did not ask about “consultancy fees”. PW2 went on to say that it was possible in the audit process for the Auditors to ask Accounts Department of the Plaintiff why there were no supporting documents for amounts concerning the Human Resources Department. PW2, however, had no impression the Auditors did so ask.. 18.This Defence stance can be seen in paragraphs 19 to 21 of the Re-amended Defence and Counterclaim (Bundle A, page 47-6 to 47-7). The evidence of the Defendant was that it was not PW2 who made the enquiry. The enquiry was made by subordinates or juniors of PW2. It was also clear that the Defendant was not certain when the enquiry was made or when the Consultation Agreement was entered into. In her written statement adopted as part of her evidence, the Defendant said “Sometime in the course of 2003, possibly around August/ September 2003 (the exact time I cannot now recall)…” (Bundle B, page 31, paragraph 21 and 22. See also paragraph 15 f) above). I noted the same uncertainty in Court when the Defendant orally gave her evidence on this aspect. 19.I think it probably true that PW2 would not conduct field visits himself. There is nothing to explain the basis for PW2’s impressions stated in paragraph 17 above. PW2’s evidence did not preclude the probability of those conducting field visits asking for documentation regarding “consultancy fees”. I have already noted the uncertainty of the Defendant regarding the date of enquiry of the Auditors or the preparation of the Consultation Agreement. I do not think PW2’s evidence helpful to the Plaintiff. 20.DW2 began employment at the Human Resources and Administration Department of the Plaintiff sometime in December 2001. She worked as the assistant of the Defendant. On 14 April 2004 DW2 gave one month’s notice of termination of employment. She last worked at the Plaintiff on 13 May 2004. She gave evidence before me and adopted her written witness statement (Bundle B, page 62 to 68). Matters stated in paragraph 15 o) above proceeded mainly from DW2. Counsel for the Plaintiff did not cross-examine her at all. I do not think DW2 was mistaken in her evidence or that she lied about it. I accept the evidence of DW2. 21.I do not accept the evidence of PW1. I considered material aspects of his evidence improbable, to say the least:
22.PW1 said he thought the 2nd Employment Contract came to an end on 31 March 2004. I do not think he was telling the truth. Approval of the Defendant’s leave extending to middle of April 2004, the signing of the Letter, payment made to the Defendant for April 2004, requesting the Defendant to handle payroll matters and take away relevant documents in April/ May 2004 all indicated that in PW1’s mind employment was not terminated but continued. 23.The Defendant was subjected to lengthy cross-examination. I confess that at times I queried in my mind whether such prolix questioning was called for. In any event, the longer the Defendant was cross-examined, the better she came across as a witness. Having said that, I should mention that I think she was not too forthcoming when she said she did not appreciate the difference between an employee and a person engaged as a consultant (not an employee). I consider, however, that she was really more interested in her fiscal rewards rather than anything else. The Defendant’s evidence about doing work for the Plaintiff/ PW1 during her sick-leave is confirmed by DW2. 24.The Defendant was prepared to agree that she did not see how the cash cheque/ consultancy fee exercise could keep her pay secret. She said she did not really understand how it would work. My view is that she did not care about confidentiality so long as she got what she wanted. The 2nd Employment Contract bestowed on the Defendant at least an increase in pay of over $25,000 per month. Why would PW1 again offer something extra ($1,000 and the Plaintiff paying everything towards the ORSO Scheme)? Whether secrecy was achieved or what it was that PW1 really had in mind might remain mysteries. However, it does not follow that the Defendant cannot be believed. 25.Counsel for the Plaintiff criticised the Defendant on quite a number of aspects including the Defendant asking for a raise only after (and not before) the Confirmation Letter was signed; the way the Defendant handled the cash cheques she received; the Defendant’s belated production of her marriage certificate and the Defendant not being able to be specific on the amount of income she reported in her own tax return or the formula she adopted in calculating that income. These and other points raised can be found in Counsel’s closing submission both oral and written. I will simply say that, save as mentioned before, I do not find the Defendant “evasive, unhelpful and utterly unnatural” (see, for example, paragraph 38 of Appendix to written closing submission). 26.This is trial of a civil matter. The standard for assessing evidence is on balance of probabilities. I accept the evidence of the Defendant and prefer her evidence to that of PW1. As indicated earlier, I also accept the evidence of DW2. 27.Dismissal of Plaintiff’s claims Having come to such a conclusion on the evidence, it follows that the Plaintiff’s claims must be dismissed and I so order. 28.Counterclaim I now turn to consider the Defendant’s Counterclaim. As earlier indicated, the Counterclaim is mainly based on the 2nd Employment Contract. It is apposite at this point to refer to its relevant clauses:
29.The main line of defence to the Counterclaim is that in accordance with the terms of the 2nd Employment Contract, employment terminated by effluxion of time with 31 March 2004 being its last effective date (2 years from 1 April 2002. See also paragraph 13 above). One has therefore to focus on interpretation of the 2nd Employment Contract. The approach I adopt is that stated in the words of Lord Hoffmann NPJ in Jumbo King Ltd. V Faithful Properties Ltd. & Others (1999) 3 HKLRD 757, 773-774:
30.It is clear that the interpretation exercise is to ascertain the intention of the parties at the time the contract was entered into. Negotiations of the parties, their stated individual intentions, their words or action after the contract are all not relevant or admissible for purposes of the interpretation exercise (see Chitty on Contracts, 29th ed., Volume I, paragraph 12-126. See also paragraph 22 above). 31.Counsel for the Plaintiff did not argue that the 2nd Employment Contract was not legally binding in its entirety. He argued that its last effective date was 31 March 2004. He argued alternatively that if it did not so expire, there was no legally binding contract beyond this March date because an essential term, remuneration, had not been agreed upon. 32.I see no clear words in the 2nd Employment Contract to say that it would last 2 years only. I consider that it would have been a simple exercise to put in words to that effect. Clause 6 and 9 make provision for periods beyond 31 March 2004. 33.One might point to Clause 2 which provided that the Defendant’s “basic salary shall be HK$47,600 plus HK$20,400 position allowance per month and the package shall be fixed for two (2) years. ” One might also point to Clause 5 which provided that the Plaintiff guaranteed to provide the Defendant “… with two (2) years of employment under the same terms and conditions.” PW1 appreciated the work of the Defendant and wanted to secure her employment. The Defendant was willing to stay on provided she was appropriately remunerated. PW1 was concerned over frequent requests by the Defendant for increase in pay. The parties wanted to enter into a formal written contract of employment. I find this to be the background against which the 2nd Contract of Employment was entered into. I consider that both Clause 2 and that part of Clause 5 merely provided for the fixing of the remuneration package for a particular period and not the duration of employment itself. They echo and reinforce one another and are meant to address the concern of PW1 over repeated requests for increase in remuneration. Adopting the approach mentioned in paragraph 29 above, I am satisfied that the remuneration package mentioned in the 2nd Employment Contract was intended to continue beyond 31 March 2004 until employment was terminated or parties came to some other agreement. If remuneration beyond the end of March was at large or there was merely an “agreement to agree”, I agree that there would then be no binding contract beyond March. My present interpretation of the 2nd Employment Contract means, however, that Counsel also fails on this point. 34.I now turn to consider the various items of Counterclaim. I should say at the outset that the Employment Ordinance, Cap.57 (“the Ordinance”), to a very large extent governs the relationship of employment between the Plaintiff and the Defendant. The 2nd Employment Contract is a “continuous contract” under the Ordinance. I think Counsels for both parties appreciate and accept so much. Section 70 of the Ordinance provides thus: “Any term of a contract of employment which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by this Ordinance shall be void.” The employer can of course confer more and better benefits on the employee. 35.Payment in lieu of notice PW1 mentioned that he told the Defendant sometime in January or February 2004 that the 2nd Employment Contract would terminate by lapse of time come end of March. I have already rejected such evidence for reasons explained. In any event, I consider this at most an erroneous expression of PW1’s interpretation of the contract and not any notice of termination. Clause 5 of the 2nd Employment Contract provided that within the first 2 years the Plaintiff could terminate employment only by paying off the Defendant and not by advance notice. There is a difference between the two. In the latter case, the Defendant has to carry on working until the end of the notice period (unless waived by the employer). In the former case, the Defendant gets the money and is immediately free, as of right, from the Plaintiff. The Defendant will be better off in this scenario. The termination by notice mode only starts to kick in for the Plaintiff after 31 March 2004. Defence took the point that, in any event, the 2nd Employment Contract stipulated notice of termination in writing. I do not think the parties made it a condition that termination notice must be in writing. I am willing to hold that provided it was made clear employment was terminated, it did not matter whether the notice was in writing or merely oral. 36.Did the May Letter constitute notice of termination? I do not think so. At best it expressed PW1’s view that the 2nd Employment Contract had ended earlier. In any event, I find that PW1 had all along considered the 2nd Employment Contract continuing (see paragraph 22 above). PW1 was merely playing a game of bluff in the May Letter. 37.I do not discern anything else from PW1 or the Plaintiff capable of being interpreted as notice of termination. What happened to the Defendant on 16 September 2004 constituted constructive dismissal of her (see paragraph 15 q) above). 38.The Defendant is entitled to 3 months’ “payment (including bonus) in lieu” (Clause 6 of the 2nd Employment Contract. See paragraph 28 above). I construe reference to bonus to mean 3 months’ pro rata of the annual “gratuity bonus” i.e. ¼ of $47,000 (see paragraph 39 below as to why the figure of $47,000 is adopted). The other components of this payment will be the basic salary and position allowance i.e. $68,000. The Defendant is thus entitled to payment in lieu of notice in the sum of $215,750 ([$68,000 x 3] + $11,750). 39.Gratuity bonus Clause 3 of the 2nd Employment Contract provided for this (see paragraph 28 above).Section 11AA(1) of the Ordinance, provides thus: “It shall be presumed that an annual payment or annual bonus is not of a gratuitous nature and is not payable only at the discretion of the employer unless there is a written term or condition in the contract of employment to the contrary.” This section is relevant to the “gratuity bonus” under consideration. I do not think the word “gratuity” as a prefix to “bonus” and that the amount is “not less than one (1) month’s salary” are sufficient to rebut the statutory presumption. I hold that the Plaintiff is contractually bound to pay the “gratuity bonus” of at least 1 month’s “salary” and I order that this bonus be calculated at 1 month’s “salary” for each year (12 months) of service. This “salary” must mean the basic salary of $47,000 (see Clause 2 of the 2nd Employment Contract and paragraph 28 above). 40.The claim for gratuity bonus is for the period 1 January 2004 to 16 September 2004. (In the exercise of calculating this bonus, I do not see the Plaintiff disputing the commencement date.) The Defendant appeared at the office of the Plaintiff on the morning of 16 September ready and willing to work. She was told to leave. I take the view that her last date of employment was 16 September. The Plaintiff is entitled to gratuity bonus for the period claimed. The amount of gratuity bonus is in the sum of $33,388 ($47,000 X 260/366; 2004 was a leap year). 41.Medical expenses The claim is based on a staff-handbook. This handbook was not referred to in the 2nd Employment Contract (or the 1st Employment Contract). According to the Defendant, she seemed to have first seen this handbook after October 2001. She seemed to have found it from a file in her Department. It was a handbook of the year 2000. She even said that parts of the handbook were outdated. It may be that the Plaintiff had been paying medical expenses of the Defendant or arranging for such payments to be made by an insurance company, Mitsui Sumitomo Insurance Co.(HK) Ltd. I fail to see, however, any contractual obligation to do so based on the handbook. I dismiss the claim for medical expenses. 42.The ORSO Scheme claim The ORSO Scheme was set up with and administered by the Hang Seng Life Limited. I do not consider that any contribution made to the ORSO Scheme is earmarked for any particular employee. There is just a pool of funds pending distribution. Under Clause 5 of the 2nd Employment Contract (see paragraph 28 above), the Defendant may be entitled to the Plaintiff’s share of contributions in the ORSO Scheme. This is, however, a far cry from saying that contributions that should have been made for a particular period are to be paid direct to the Defendant or that the Plaintiff is to be ordered to pay into the ORSO Scheme. The Defendant’s entitlement is to claim against the pool of funds in the ORSO Scheme. Counsels did not really assist me on this aspect of the Counterclaim. The relevant evidence can only be described as sketchy. He (or in this case, she) who alleges must prove. The Defendant has failed to satisfy me that she is entitled to the relief claimed under this head. 43.Annual leave pay The Defendant’s employment with the Plaintiff commenced on 3 July 2001. I find the last day of employment to be 16 September 2004 (see paragraph 40 above). 44.Under the Ordinance and for a continuous contract of employment (as in the case of the 1st and 2nd Employment Contract), annual leave with pay is earned after employment for not less than 12 months. Clause 9 of the 2nd Employment Contract is consistent with this in that it provided for annual leave with pay on completion of a “whole year of service”. 45.It is clear from the written final submissions of Counsels that parties agree annual leave with pay in this case is earned after completion of 12 months’ employment commencing on 3 July. The written final submissions of Counsels indicate agreement that “leave year” (see Section 41A of the Ordinance) is the period of 12 months commencing on 3 July and that “appropriate day” (see Section 41A of the Ordinance) is 3 July of each year. It is also clear that parties agree that up to 2 July 2003 there were 7 days of annual leave outstanding to the Defendant. 46.The Defendant remained in employment up to and including 16 September 2004. The Defendant has thus earned her full entitlement to annual leave for the 12 months ending 2 July 2004. This entitlement is, as indicated by Counsels’ written submissions, 11 days (see also Clause 9 of the 2nd Employment Contract, which provided for 11 days annual leave for the “Completed 3rd whole year of service” and Clause 13, which provided that “the length of service is counted from July 03, 2001”). 47.The Defendant’s employment for the following 12 months commencing 3 July 2004 lasted about 2.5 months only. Is the Defendant entitled to pro rata annual leave? The 2nd Employment Contract does not cater for this. I cannot see anything suggesting contractual obligation on the part of the Plaintiff to pay pro-rata annual leave pay. Section 41D of the Ordinance does not avail the Defendant because although the Defendant’s employment ceased “otherwise than on the expiration of a leave year,” the termination did not occur “at least 3 months after the appropriate day” (i.e. 3 July 2004).The Defendant cannot succeed in her claim for pro rata annual leave. 48.In the outcome, the Defendant is entitled to a total of 18 days (7 days + 11 days) of annual leave pay. In order to determine the Defendant’s daily pay, Counsels divided her monthly pay (basic salary plus position allowance making the sum of $68,000) by 30 (days). This proceeds on the basis that she is paid for every calendar day in the month. The Defendant is paid on a monthly basis. Unless there is anything to indicate otherwise, I accept that the Defendant is paid for every day of the month regardless of whether she is required to work. There is nothing in this case to indicate otherwise. The Defendant is entitled to the sum of $40,800 under this head ($68,000 x 18/30). 49.The Plaintiff maintained that in the calculation of pro-rata annual leave entitlement, there is no rounding up of fractions of a day to one day (see Bundle A, page 93, paragraph 10 and calculation in written final submission of Counsel for the Plaintiff). I am not clear the basis for such insistence. Be that as it may, I will consider this point on the assumption that parties have contractually agreed that it be so. 50.I refer to Section 41AB and 41F of the Ordinance. Section 41AB deals with the situation where the employer elects to use a particular 12 month period as the leave year for calculating annual leave. Section 41AB(4) provided to the effect that where an employee is already in employment when the employer made such election, then in calculating the employee’s pro rata entitlement up to the day preceding the commencement of the elected 12 month period “any fraction of a day resulting from the calculation shall be counted as a full day’s leave”. Section 41F deals with the situation where the employer closes down his business for the purpose of granting annual leave. Section 41F(4)(b) provides that in calculating the employee’s entitlement of annual leave “where the result is not a whole number, the result shall be rounded up to the next whole number.” I do not think legislature intended the rounding-up exercise applicable to only the 2 situations just mentioned. What good reason can there be for such restriction? I am of the view that the maxim expressio unius est exclusio alterius is not applicable here. Legislature must have intended that in the calculation of pro rata annual leave any fraction of a day is counted on its own as a full day’s leave. Any provision in the contract of the parties providing that a fraction of a day is not to be given effect as a full day is void pursuant to Section 70 of the Ordinance (see also paragraph 34 above). However, since I have decided that the Defendant is not entitled to pro-rata annual leave, the point under discussion has now become academic. 51.The Plaintiff argued that the “pre-marriage check-up and marriage leave” taken by the Defendant should be used to reduce the entitlement to annual leave. It is clear that such leave was granted without any condition attached. It is not in dispute that it was only later that someone wrote on the leave application form the words “approved only upon the presentation of marriage certificate” (see Bundle C, page 22). I do not see anything arising out of the addition of such words. I did not hear Counsel for the Plaintiff argue that such leave was somehow invalid and thus the Defendant had to account for the same. I see no legal basis for saying that because the Defendant was granted extra or special leave (see PW1’s statement at Bundle B, page 91, paragraph 4) then her entitlement for annual leave should be diminished accordingly. I lament that acts of generosity can go unrequited. 52.Sickness allowance and arrears of wages The main difference of the parties is in their method of calculation. The Plaintiff’s approach is simple and straight forward : the Defendant will be given sickness allowance (4/5 pay) for the period covered by sick leave/ medical certificates. This is regardless of whether the period includes rest days or holidays. For example, if the certificates cover the whole month of May then the Defendant will be entitled to $68,000 x 4/5 i.e. $54,400. I understand that this is the approach adopted in the Labour Tribunal. The approach of the Defence is a bit convoluted: even though rest days or holidays fall within the period covered by the certificates, the Defendant will be entitled to full pay for rest days as well as holidays and sickness allowance (4/5 pay) for the other days. Having said that, I note a difference between the calculation of Defence Counsel in his written final submission and that of the Defendant herself (Bundle B, page 75 to 82). The difference is in the treatment of Saturdays when the Defendant had only to work ½ day. The approach of the Defendant is that the full pay for that day be divided into two ½ shares. She will get 4/5 of one ½ share by way of sickness allowance and the whole of the other ½ share. Defence Counsel’s approach is simply to calculate pay for that (whole) day at 4/5 rate. I proceed on the basis that Defence Counsel’s approach must mean abandonment of any other approach indicated by the Defendant herself. 53.Calculations of Counsels in their written final submissions show no dispute on the method of ascertaining daily pay i.e. by dividing monthly pay of $68,000 by the number of calendar days in the relevant month (see also paragraph 48 above). The Defendant is therefore paid for every calendar day of the month. 54.To put it simply, sickness allowance is pay made to an employee on a “sickness day” (see generally Part VII of the Ordinance). “Sickness day” is defined under Section 2(1) of the Ordinance to mean “a day on which an employee is absent from his work by reason of his being unfit therefor on account of injury or sickness.” This definition presupposes there is the need to work that day. The corollary is that when there is no need to work, then that day does not qualify as a “sickness day” and considerations of sickness allowance are irrelevant. The Defendant is entitled to full (and not only 4/5) daily pay for rest days and holidays (when there is no need to work) within the sick leave period covered by sick leave or medical certificates. 55.PW1’s evidence (see Bundle B, page 94, paragraph 13) was that the Defendant had been overpaid for April 2004 in the sum of $2,039.99. PW1 asked for refund or reimbursement. This was mentioned by Counsel for the Plaintiff in his written final submission (“Explanatory Notes on P’s calculations”). Nowhere in the pleadings is this request for refund, reimbursement or credit ever mentioned. I do not think the Plaintiff is entitled to raise this at trial. In any event, the amount $2,039.99 is based on calculations which do not provide for full day’s pay for rest days or holidays (within the period covered by sick leave or medical certificates). PW1 also said that “the Company has taken into account the practice contained in the Internal Memo…” (see Bundle C, page 187). There was nothing to indicate that “the practice contained in the Internal Memo” became a contractual term binding on the parties. In any event, the practice would yield benefit to the employee less than that conferred by the Ordinance and would be void pursuant to Section 70 of the Ordinance. There is nothing else to indicate calculations by the Defendant for April 2004 (Bundle C, page 91. See also page 92) are incorrect. I make no deduction for the $2,039.99. 56.The Counterclaim for sickness allowance (and arrears of wages) is from 1 May to 16 September 2004. 57.For each of 3 and 4 May, the Defendant asked for ½ day full pay and ½ day sickness allowance. This is on the basis that the Defendant did ½ day work at home for the Plaintiff (see Bundle C, page 93). It was clear that the Defendant was on sick leave for those days. She had every right not to do any work. I regarded her so working as merely voluntary in nature. She can only claim sickness allowance for those days. 58.For each of these 5 months, the Defendant claimed 1 day full pay for 1 Saturday on the basis that it was the Plaintiff’s “practice that one Saturday per month would be fully paid rest day”. I am not satisfied that on such evidence the Defendant can legally insist on those Saturdays being treated as rest days. 59.1 May was a statutory holiday (Labour Day. Section 39 of the Ordinance) and there were 5 Sundays (rest days. Part IV of the Ordinance). The Defendant is entitled to full day’s pay for these 6 days and sickness allowance for the balance of 25 days for that month. 26 May was a general holiday, it being Buddha’s Birthday. General holidays are prescribed by the General Holidays Ordinance, Cap 149. General holidays are holidays for banks, educational establishments, public offices and government departments. Private businesses like the Plaintiff are not obliged to grant any general holiday. The evidence in this case is not clear whether the Plaintiff was contractually bound to grant a holiday on 26 May. I treated that day as a sickness day for which the Defendant was entitled to sickness allowance. 60.For May 2004, the Defendant is entitled to 25 days of sick leave allowance of $43,870.96 calculated as $68,000 x 25/31 x 4/5. She is entitled to 6 days arrears of wages of $13,161.29 calculated as $68,000 x 6/31. 61.22 June was a statutory holiday (Tuen Ng Festival. Section 39 of the Ordinance) and there were 4 Sundays (rest days. Part IV of the Ordinance). The Defendant is entitled to full day’s pay for these 5 days and sickness allowance for the balance of 25 days for that month. 62.For June 2004, the Defendant is entitled to 25 days of sick leave allowance of $45,333.33 calculated as $68,000 x 25/30 x 4/5. She is entitled to 5 days arrears of wages of $11,333.33 calculated as $68,000 x 5/30. 63.1 July was a statutory holiday (Hong Kong Special Administration Establishment Day. Section 39 of the Ordinance) and there were 4 Sundays (rest days. Part IV of the Ordinance). The Defendant is entitled to full day’s pay for these 5 days and sickness allowance for the balance of 26 days for that month. 64.For July 2004, the Defendant is entitled to 26 days of sick leave allowance of $45,625.80 calculated as $68,000 x 26/31 x 4/5. She is entitled to 5 days arrears of wages of $10,967.74 calculated as $68,000 x 5/31. 65.There were 5 Sundays (rest days. Part IV of the Ordinance) in August 2004. The Defendant is entitled to full day’s pay for these 5 days and sickness allowance for the balance of 26 days for that month. 66.For August 2004, the Defendant is entitled to 26 days of sick leave allowance of $45,625.80 calculated as $68,000 x 26/31 x 4/5. She is entitled to 5 days arrears of wages of $10,967.74 calculated as $68,000 x 5/31. 67.There were 2 Sundays (rest days. Part IV of the Ordinance) for September before termination of employment on 16 September. The Defendant is entitled to full day’s pay for these 2 days and for 16 September when she turned up at the Plaintiff’s office ready and willing to work (i.e. total of 3 days). This leaves a balance of 13 days. By July 2004, the Defendant had already accumulated the maximum 120 paid sickness days provided for in the Ordinance (Section 33(2) of the Ordinance). For April 2004, the Defendant took 9.5 days sick leave (Bundle C, page 91).She is entitled to sickness allowance for 102 days up to the end of August 2004. The Defendant is only entitled to claim sickness allowance for 8.5 days in September (thus exhausting her accumulated 120 paid sickness days – 9.5 + 102 + 8.5). She is entitled to sick leave but without any pay for 4.5 days in September 2004. 68.For September 2004, the Defendant is entitled to 8.5 days of sickness allowance of $15,413.33 calculated as $68,000 x 8.5/30 x 4/5. She is entitled to 3 days arrears of wages of $6,800 calculated as $68,000 x 3/30. 69.Section 33(2) of the Ordinance provides that the maximum number of sickness days on which the employee is entitled to sickness allowance is 120. Section 37 provides that the employer has to keep a record of such days. The record has to divide the days into Category 1 and Category 2. The first 36 days will be recorded under Category 1 and any day in excess goes under Category 2. The bulk of the Defendant’s present claim for sickness allowance is based on her accumulated days under Category 2. 70.Section 33(5) of the Ordinance provides as follows:
71.Section 33 (5A) provides as follows:
72.In the Summary of his written final submission, Counsel for the Plaintiff asked for a medical certificate under Section 33 (5A) i.e. one issued by a medical practitioner attending the Defendant as an out-patient or in-patient in a hospital in relation to sickness days from 23 to 27 May 2004. 73.Medical certificates produced by the Defendant can be seen at Bundle C, page 75 to 88. Certificates complying with Section 33 (5A) commence at page 81 and start from the sickness day on 28 May 2004. On my above calculation of sickness days taken by the Defendant, she only started taking her Category 2 days in early June 2004. Even if Section 33 (5A) is applicable, its requirement has been satisfied. 74.In any event, I do not think that the request under Section 33 (5A) is properly made during final submission at trial some 2 years later. It must be made in such time and under such circumstances that the request can reasonably be met. 75.I end by referring to what I consider a curious provision in the 2nd Employment Contract. It is Clause 12 which provided as follows:
76.One is entitled to wonder why parties bothered entering into the 2nd Employment Contract if Clause 12 was intended to be given effect to. Neither Counsel addressed me on this Clause. I tend to think there is consensusthat Clause 12 can be ignored as being nonsensical and the less said about it the better.
Representation: Mr Hectar Pun, instructed by Messrs Hioe & Poe, for the Plaintiff Mr. Jonathan Chang, instructed by Messrs Hampton, Winter & Glynn for the Defendant |
Further hearings and rulings under DCCJ 5251/2004