Chiang Hau Leung v. Max River Ltd

[English Translation - 英譯本]
HCLA 52/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 52 OF 2005

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 742 OF 2005)

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BETWEEN

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Before: Hon Cheung J in Court

Dates of Hearing: 16 November 2005

Date of Judgment: 30 November 2005

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J U D G M E N T

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1.Since May 1988, the Claimant had been in the employ of the Defendant as a car park attendant and had worked at different car parks in Kowloon and the New Territories.  In early November 2004, the Defendant informed the Claimant that the company would transfer him to the car park in Sai Wan Ho on Hong Kong Island with effect from 15 November 2004.  However, the Claimant claimed that there was no practical necessity for such a transfer and that the Defendant deliberately made the transfer in order to make life difficult for him.  Therefore, he refused to follow his employer’s instruction to go to the car park in Sai Wan Ho to work.  On 29 November 2004, the Defendant terminated the employment contract with the Claimant by writing, on the ground that he had wilfully disobeyed a reasonable and lawful order which required him to go to Sai Wan Ho to work.

2.Following the termination of employment, the Claimant instituted proceedings in the Labour Tribunal, claiming severance pay or long service pay against the Defendant on the ground that it had unfairly dismissed him.  After hearing, the Tribunal ruled that the Defendant had unjustifiably terminated the employment contract.  Therefore, although the dismissal was not in the nature of a redundancy, the Defendant was liable to pay the Claimant long service pay in the sum of HK$59,071.04.

3.Having been granted leave, the Defendant now appeals to the court against the Tribunal’s decision.

4.According to the verbal and written reasons for decision given by the learned Deputy Presiding Officer (“Presiding Officer”), he found that the Defendant had unjustifiably dismissed the Claimant because the order which transferred the Claimant to Sai Wan Ho to work was unreasonable.  Put simply, the Presiding Officer took the view that, although the employment contract allowed the employer to transfer the Claimant to different car parks to work, the order for transfer must be reasonable.  The Presiding Officer stated that the Defendant had failed to provide good reasons at the hearing to explain why it chose to transfer the Claimant but not any of the dozens of employees (including the Claimant) who were suitable for being transferred to the Sai Wan Ho car park to work.  On this basis, the Presiding Officer held that the Defendant’s order for transfer was unreasonable and that the Claimant could refuse to follow the order.  Under such circumstances, the Defendant did not have sufficient grounds for dismissing the Claimant.

5.Paragraph 4 of the employment contract between the parties provides that “The employee should take note that he is required to work on shifts and be transferred to different workplaces.”

6.The Presiding Officer pointed out that whether the order for transfer was reasonable or not depended on whether there was a “need” for the transfer.  He cited my judgment in the case of Wong Yuk Ling v East East Food Products Limited, HCLA 95/2002 (22 August 2003) in support.

7.I must point out that in Wong Yuk Ling, the employment contract provided that “If there is such a need, the Company is entitled to reasonably transfer you to another place of business of the Company.”  In that case, the Tribunal made a finding of fact that the transfer made by the employer was not based on any actual need but had an ulterior motive.  In light of that finding, the court ruled that the contractual provision regarding transfer did not apply and that the employer was not entitled to transfer the employee to another branch to work.

8.The judgment in Wong Yuk Ling rests solely upon the wording of the relevant clause of the employment contract in that case and the Tribunal’s finding of fact.  The case does not establish a general legal principle that only “upon the presence of a need” can an employer exercise any power conferred upon him by the employment contract to transfer an employee to another workplace.  Furthermore, the judgment in Wong Yuk Ling neither concerns the “reasonableness” of an employer’s decision nor associates “need” with “reasonableness”.  In other words, with respect, the Presiding Officer misinterpreted the judgment when he cited it to support his view that it was necessary to consider whether a transfer was “needed” when determining whether an order for transfer was “reasonable”.

9.In my judgment, as far as the exercise of an employer’s power to transfer an employee to another workplace is concerned, whether the employer may do so only “upon the presence of a need” must depend on the relevant clauses in the employment contract which grant him the power to make such a transfer, and the relevant common law principles (see below) must also be taken into account.  No sweeping generalisation can be made.

10.In my view, the Presiding Officer has misinterpreted the judgment in Wong Yuk Ling.

11.Paragraph 4 of the employment contract in the present case provides that the employee is “required” to be transferred to different workplaces.  It refers to the possibility of the employee being transferred to different workplaces by the employer, not to the question of whether the employer can transfer the employee to different workplaces only “upon the presence of a need”.

12.In any event, I do not consider the above discussion on the “need” for transfer to be the key issue in this case.  This case turns on the Presiding Officer’s ruling that the decision of the employer in exercising his power to transfer the employee to different workplaces must be “reasonable”.

13.It is beyond doubt that the employer in the present case was entitled under the employment contract to transfer the employee to different places of work.

14.On the facts, the Presiding Officer had clearly accepted that there was a “need” for the employer to transfer one of its employees to the Sai Wan Ho car park to work.

15.However, as mentioned above, the Presiding Officer took the view that many of the Defendant’s employees (including the Claimant) were suitable for being transferred to the Sai Wan Ho car park, and the Defendant had failed to provide a reasonable explanation as to why it did not consider whether other staff members were more suitable than the Claimant for being transferred to the Sai Wan Ho car park, or why the Claimant was chosen in particular for the transfer.

16.With respect, the Presiding Officer has, in my judgment, misinterpreted the law.  As Lam J explained in paragraphs 35 to 37 of his judgment in Wong Yin Fong v ISS Hong Kong Services Limited [2005] 2 HKLRD 648 (for Chinese translation, see [2005] 2 HKLRD 687), under the common law, where an employer wishes to exercise his power to transfer an employee to different places of work, his only legal obligation is not to make a decision which is “irrational” or “perverse” or one which no reasonable employer would have made.  The law does not impose on the employer a duty to make “reasonable” decisions.

17.In my judgment, if an employer makes an order for transfer when there is no actual “need” to do so, then the decision may be one which no reasonable employer would have made and may be irrational or perverse.  However, this is by no means a general rule.  The court must take into account all the relevant circumstances of the particular case, including the provisions of the contract, before making a decision.

18.More importantly, as noted by Lam J, the test at law is not whether the decision is “reasonable”, and it is not the role of the court to make, on behalf of the employer, what it considers a “reasonable” decision.

19.Needless to say, if the contract itself expressly provides that an order for transfer made by the employer relating to workplaces must be “reasonable”, the aforesaid common law principle will not apply.  However, this is not what happened in the present case.

20.The Presiding Officer took the view that the Defendant should first have found out which employees were suitable for being transferred to Sai Wan Ho, and then made individual comparisons to determine who were more suitable for being transferred, before making the final decision on who was to be transferred.  This analysis is clearly set out in lines C-Q on page 23 of the transcript of the hearing.

21.With respect, I do not agree with the aforesaid analysis.  In my view, there are many ways through which an employer can decide which one of his many employees is to be transferred to another workplace, and the approach suggested by the Presiding Officer is merely one of the feasible ways.  That approach may well be the most logical, objective and reasonable one.  However, when the employer in the present case decided on the transfer, he was not playing the role of the decision-maker in an open selection.  Were the law to require otherwise, it would pose substantial and unnecessary difficulties and inconvenience to employers in various situations, trades and circumstances, while bringing no real and necessary benefits to employees.  When an employer makes a decision on a transfer and a choice as to which employee is to be transferred to a certain place of work, considerable flexibility is needed both in the actual decision-making and in the process leading to that decision.  The factors which can be taken into account do not only include the objective and reasonable factors, but also include commercial considerations and issues of expediency or convenience.  The law only requires the decision not to be “irrational”, “perverse”, or one which no reasonable employer would have made.  Apart from this, it is improper to impose any other requirement, unless the relevant employment contract contains express provisions to that effect.

22.Clause 6 of the employment contract provides that, where the employee fails to obey a “reasonable” instruction from his superior, the employer may dismiss the employee summarily without having to make dismissal payment or compensation in lieu of notice.  In my judgment, the reference to “reasonable instruction” does not mean that the order for transfer made by the employer must be “reasonable” as defined by the Presiding Officer.  In my view, an order for transfer made by an employer is a “reasonable instruction” as long as it is neither irrational nor perverse, and is not one which no reasonable employer would make.  I do not think that the provision and wording of Clause 6(2) of the employment contract, properly construed, would affect the applicability of the relevant common law principles.

23.The provision of Clause 6(2) of the employment contract is nothing more than a reiteration of one of the grounds for summary dismissal under the common law: see Halsbury’s Laws of England (4^th Edition, Reissue), Volume 16(1B), paragraph 618, note 2.  This being the case, the term “reasonable instructions” in Clause 6(2) must be interpreted by reference to the common law principles governing the employer’s exercise of his power to transfer his employee to different workplaces and the limitations thereto.  As explained above, the employer’s power in that regard, if any, is only subject to the limitation that his decision cannot be irrational or perverse or one which no reasonable employer would make.  In my judgment, on the basis of the above analysis, Clause 6(2) has not imposed a requirement of “reasonableness” on top of the aforesaid common law limitation.  In other words, the provision of Clause 6(2) of the employment contract does not, in my view, affect the above analysis on the employer’s power to transfer his employee to another workplace and the limitations thereto.

24.I therefore conclude that, in this regard, the Presiding Officer has erred in law, and such error has directly affected the correctness of his ruling.

25.It also appears that the Presiding Officer had, as a finding of fact, refused to accept the reasons given by the Defendant for choosing to transfer the Claimant to the Sai Wan Ho car park.  In this connection, it is clear from his verbal and written reasons for decision that the Presiding Officer was very much influenced by his understanding that the employer’s decision on transfer and choice of employee must be “reasonable”.  In my judgment, even if the Presiding Officer did make a finding of fact regarding the explanations given by the Defendant on his decision on transfer, the finding is not reliable and must be quashed.

26.For the above reasons, I conclude that the Presiding Officer’s judgment against the Defendant is unsafe and must be set aside.  The case is to be remitted to the Tribunal, which should make a finding of fact again on the reasons for the transfer as well as a ruling on whether that decision was irrational or perverse or one which no reasonable employer would have made.  Only then will the Tribunal be able to adjudicate correctly on whether the Defendant was contractually entitled to dismiss the Claimant without notice or compensation and, accordingly, on the Claimant’s claim for long service pay.

27.For the above reasons, I order that the appeal be allowed and the case be remitted to the Tribunal for re-hearing before another Presiding Officer.  The parties have agreed not to claim costs against each other in the event that the appeal is allowed and the case is remitted for re-hearing.  Therefore, I make no order as to costs of this appeal.

The Claimant (Respondent) in person

Ms. Maggie Wong, instructed by TH Koo & Associates, for the Defendant (Appellant)

Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. Edmund Cham, Solicitor