Leung Ka Lau and Others v. The Hospital Authority
Read the full judgment text of FACV 22/2008 on BabelCite. This FACV judgment was delivered on 20 October 2009 before Bokhary PJ, Chan PJ, Ribeiro PJ, Mortimer NPJ, Lord Millett NPJ.
Employment law – contractual interpretation – overtime – on-call duties – rest days – statutory and public holidays – honoraria – representative action – Hospital Authority – doctors – Employment Ordinance – whether doctors have contractual entitlement to time off in lieu or damages for overtime worked on non-resident call beyond normal conditioned hours of work – construction of clause E4.2.3 of HA Human Resources Policy Manual providing that overtime work should normally be recompensed by time off in lieu – whether the clause confers a free-standing entitlement on employees ineligible for overtime allowance – 1991 edition of HRPM expressly excluded time off in lieu for overtime not qualifying for overtime allowance – absence of capping mechanism for accumulated time off contrasted with stringent annual leave caps – conclusion that the clause merely re-orders the preferred modes of recompense for eligible employees and does not create an open-ended entitlement to time off in lieu for doctors – claim by Dr Leung for 3,757 days (10.3 years) of accumulated time off held implausible – overtime and additional overtime claims dismissed – rest day claim – section 17 of Employment Ordinance requires one rest day in every period of 7 days – section 2 defines rest day as continuous 24 hours during which employee entitled to abstain from working – doctor on non-resident call not entitled to abstain from working and so deprived of rest day – whether damages should be nominal where no patient treatment given, or substantial for loss of entire day – held substantial damages appropriate based on full day's wages – whether damages limited to hours actually worked when treatment given – held entire day is the measure – holiday claim – section 39 of Employment Ordinance and General Holidays Ordinance – whether compensation for lost holidays should differ from rest days due to absence of statutory definition – held natural meaning of holiday is a day on which employee entitled to abstain from working – same full-day measure of damages applies – Compensatory Leave Scheme – whether half-days off should be credited – held only whole days off qualify – interns – no different contractual position – declaratory relief granted in light of representative nature of proceedings – doctors' appeal allowed in part; HA's appeal dismissed – order nisi that HA pay 50% of doctors' combined costs.
Legal issues: Whether doctors have contractual entitlement to time off or damages for overtime worked on non-resident call · Whether doctors deprived of rest days by on-call rostering but not called to treat patients are entitled only to nominal damages · Whether compensation for a lost rest day should be the entire day or only hours actually worked · Whether statutory holidays should be treated differently from rest days for compensation purposes · Whether half-days off under the Compensatory Leave Scheme must be credited against rest day and holiday claims · Whether interns are in a different position from fully qualified doctors on the overtime claims · Whether the doctors should be granted declaratory relief
Outcome: The doctors' appeal was allowed in part and the Hospital Authority's appeal was dismissed. The overtime and additional overtime claims were dismissed; the doctors succeeded on the nominal damages issue regarding rest days and holidays; the HA's appeals on the entire day issue, the Compensatory Leave Scheme issue, and the holiday compensation issue were dismissed.
Cited by 6 cases · Cites 4 cases
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IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NOS. 22 ANd 23 OF 2008 (Civil) (ON APPEAL FROM CACV No. 57 of 2007) _______________________ Between:
_______________________ Court: Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Mortimer NPJ and Lord Millett NPJDates of Hearing: 29-30 September 2009 Date of Judgment: 20 October 2009 _______________________ J U D G M E N T _______________________ Mr Justice Bokhary PJ: 1.I agree with Mr Justice Ribeiro PJ’s judgment, adding only an expression of my recognition of service in public hospitals as a particularly worthy and arduous way in which to pursue the noble profession of medicine. Mr Justice Chan PJ: 2.I agree entirely with the judgment of Mr Justice Ribeiro PJ. I only wish to make two general observations. 3.Doctors in the public sector have undoubtedly served the Hong Kong community well for decades, particularly at a time when there was a great shortage of doctors. They are expected and indeed required to work extremely long hours. But entitlement for recompense for overtime, be it in the form of time off in lieu, overtime allowance or damages, must be based on the terms of their contracts of employment. And unfortunately this is not part of their contractual entitlements. The payment of honoraria, as its history shows, was not intended to be made as compensation for overtime worked. It was meant as a recognition that doctors employed in the public sector are, faithfully and consistently with the time honoured traditions of the medical profession, willing to attend to the needs of patients without recompense as and when they are required to do so. 4.Unlike overtime, rest day and statutory holiday are statutory entitlements. They are concerned with rest, not with work. The law provides for a day of rest for an employee on a rest day or a statutory holiday and what he does on that day is a matter entirely up to him. That being the rationale behind these entitlements, notwithstanding the difference in definition between rest day and statutory holiday in the statute, I do not think there should be any difference in the application of the same principle to these entitlements in the present case. In fact, the presence of a statutory prohibition, in the case of a statutory holiday, on payment of wages in substitution for a holiday underlines the legislative intention that like a rest day, it is meant to be a day of rest and absence from work. If an employee is deprived of a rest day or a statutory holiday, he loses a day of rest and should be compensated for such loss. Nominal damages are clearly not the appropriate remedy. Mr Justice Ribeiro PJ : 5.In this appeal, the Court is asked to determine the extent, if any, to which doctors employed by the Hospital Authority (“HA”) are entitled to compensation (monetary or otherwise) in consequence of being assigned on-call duties beyond their normal hours of work. A. Introduction A.1 The parties 6.On 15 March 2002, proceedings were brought against the HA by 165 doctors in the Labour Tribunal which then transferred the claims to the Court of First Instance. The proceedings have been conducted as a representative action in which three of the claimants, namely, Dr Leung Ka Lau (“Dr Leung”), Dr So Yung Pak (“Dr So”) and Dr Choi Chi Yee (“Dr Choi”) act as the lead plaintiffs, with the other plaintiffs agreeing to be bound “by any determinations of law or principle in the lead cases”. The lead plaintiffs are the appellants in FACV No. 22 of 2008 (“the doctors’ appeal”) and the respondents in FACV No. 23 of 2008, (“the HA’s appeal”). As the issues in the two appeals overlap, it will be convenient to refer to the parties simply as “the doctors” and the HA respectively. 7.It is common ground that the doctors are employees of the HA and that the Employment Ordinance[1] (“the Ordinance”) is applicable. 8.Each court hearing this case has been requested to deal solely with questions of law and principle, leaving case-specific factual questions to be determined later and in some other forum in so far as necessary. A.2 The doctors’ main claims 9.It is not in dispute[2] that contractually, the doctors’ normal working hours are stipulated to be 44 hours per week, that is, a 5½ day week working from 9.00 am to 5.00 pm on weekdays and from 9.00 am to 1.00 pm on Saturdays, with Sundays off. Obviously, however, patients in the HA’s hospitals require 24 hours’ care seven days a week and doctors regularly work outside the stipulated normal hours. The particular practice with which the present proceedings are concerned involves the HA’s system of rostering doctors to be on-call so as to be able to respond, as and when necessary, to patients’ needs after normal hours. 10.Doctors may be rostered to be on what is known as “resident call”, that is, to be on-call while remaining within the hospital’s precincts. Or they may be rostered on “non-resident call”, that is, to be on-call while away from the hospital. We are only concerned with claims relating to non-resident call duties (which I shall refer to simply as “on-call” duties), it being common ground that resident call duties constitute work by the doctors qualifying for recompense in every respect. 11.As the evidence shows, the pressure on available resources in many units is such that doctors are often required to work very long hours. They regularly assume on-call duties immediately before or after working their normal eight-hour day, spanning the period extending from the end of one normal day to the start of the next. Such on-call duties may fall on a statutory holiday. Moreover, as a result of on-call duties, a doctor may miss out on being granted a statutory rest day. 12.Being on-call raises different legal issues depending on whether a rest day or holiday is involved. This has led to the doctors’ claims being advanced under four heads, namely:
13.The doctors seek declarations of their claimed entitlements with a view to asserting those rights in the future and damages in relation to alleged past breaches. Accepting the constraints of the Limitation Ordinance,[3] the doctors do not assert any claims regarding alleged breaches occurring before 15 March 1996, being claims arising more than six years before proceedings were instituted in the Labour Tribunal. A.3 The decisions in the courts below 14.At the trial, Stone J dismissed the overtime claim and the additional overtime claim. [4] He found for the doctors on the rest day and holiday claims and ordered that damages should be assessed by reference to the hours actually worked on rest days and statutory holidays at their then prevailing salaries. He also ordered that credit should be given for any half day off “or other administrative relief” that the HA may have given a particular plaintiff. Declaratory relief was refused. 15.The Court of Appeal[5] (with Yuen JA dissenting in certain respects) upheld Stone J’s dismissal of the overtime and additional overtime claims. It also upheld his Lordship’s judgment regarding liability on the rest day and holiday claims but varied his order as to how damages should be assessed, holding that:
Like Stone J, the Court of Appeal (with Yuen JA differing on this point) refused declaratory relief. A.4 The issues before this Court 16.The first issue involves the doctors’ challenge to the Court of Appeal’s rejection of the overtime claim. The doctors argue that they have a contractual entitlement to time off for the time worked while rostered on-call and, in default of being given time off, they assert an entitlement to damages. The same argument is advanced in relation to the additional overtime claim. The HA contends that there is no contractual entitlement to any overtime and alternatively, that if such an entitlement exists, it has been extinguished by the HA’s payment of honoraria to the doctors (to which I shall return). I shall call this “the overtime issue”. 17.It should however be noted that while the legal issues on overtime remain the same, the quantum of the claim advocated by the doctors under both heads of overtime became much reduced in this Court. Mr Denis Chang SC, appearing for the doctors,[6] indicated that he would not pursue the argument previously advanced that the mere fact of being rostered on non-resident call constituted work attracting compensation under the overtime claim and the additional overtime claim. Recompense for overtime worked would only be claimed in relation to the time estimated to have actually been devoted to providing treatment to patients while thus on-call. This was estimated at 10% or 20% of the time spent on-call and led to a drastic reduction in the sums claimed. Thus, Dr Leung’s claim at the trial[7] and in the Court of Appeal[8] was for a total of $20,929,836 in respect of overtime and additional overtime for the period between 15 March 1996 and 30 June 2005. On his estimates provided to the Court, the total overtime and additional overtime claim was reduced to $2,726,016. 18.The doctors also adopted two alternative fall-back positions in their overtime claims.
19.The second issue concerns the rest day claim, but only regarding the proper approach to the assessment of damages since the HA accepts that a breach of its obligations under section 17 of the Ordinance (discussed further below) occurs in cases where on-call rostering results in a failure to grant a rest day.
20.Thirdly, the HA contends that the Court of Appeal was wrong not to distinguish between rest days and statutory holidays since they do not share the same statutory definition. In consequence, the HA argues, compensation is claimable in relation to statutory holidays only if and to the extent that the rostered doctor actually has his holiday interrupted by being required to administer patient treatment. The doctors naturally seek to uphold the Court of Appeal’s decision that compensation in such cases should cover the entire day. I shall call this “the holiday compensation issue”. 21.Three ancillary issues also arise:
B. The overtime issue B.1 The background 22.On 1 December 1991, the HA took over the management and control of public hospitals in Hong Kong pursuant to the Hospital Authority Ordinance,[11] funded by Legislative Council appropriations. Doctors, who had all previously been civil servants, were given the option of taking up employment with the HA, Dr Leung being among those who agreed to the transfer. Dr Choi and Dr So joined the HA as interns in 1997 and 1999 respectively and remained in its employment upon full qualification. In 2004, Dr So resigned and entered private practice. 23.There is no doubt that in the late 1980’s, Hong Kong’s public health care system was seriously under-resourced with doctors and other personnel having to bear the brunt of the system’s inadequacies by working unacceptably long hours. In September 1988, Dr Dickson Chang, writing as Chairman of the Government Doctors’ Association, warned that the “perennial problem” of losing experienced staff had become critical and threatened the system with “imminent collapse”. He complained that doctors were averaging 80 hours per week and working “on all days of the year irrespective of weather, holidays, festivals and weekends” to the detriment of their social and family lives. He called for a revision of the pay scale and proposed that doctors should be paid overtime pay or a professional allowance “at 20% average for all grades” which he indicated was “acceptable to staff”. He contended that “no doctor should be safely allowed to work continuously in the hospital for more than 16 hours and there must be at least 80 hours of total duty and call free rest per week”. It is self-evident that it is a lamentable situation, bad for patients and doctors alike, if doctors are consistently and severely overworked. 24.The government, and after 1991 the HA, recognized the highly unsatisfactory state of the system and took various measures to address it. These were measures aimed at stemming the outflow of doctors from the public service and at improving their working conditions. They included the implementation of the honorarium scheme, the Compensatory Leave Scheme, pay increases and, more fundamentally, substantial increases in the resources channelled into public health services. B.1a The honorarium scheme 25.In its immediate response to Dr Chang,[12] the government proposed the payment of an “honorarium” to doctors, stating:
26.In its paper dated 8 March 1989 seeking funding for the scheme from the Legislative Council’s Finance Committee, the government acknowledged that:
It stated that the on-call system was essential to maintain 24-hour patient care but recognized that this had led to doctors being on-call for very long periods, its survey of five major government hospitals revealing that each medical officer was on-call for an average of 87 hours during October 1988. It continued:
27.The proposal which the paper went on to make was for honoraria to be paid to the doctors concerned at fixed rates, namely, $3,500 per month for medical officers and senior medical officers working in specified units considered particularly busy, and $1,750 for those working in less busy units.[13] At that time, a payment of $3,500 represented about 16% and 11% of the average salary of medical officers and senior medical officers respectively. 28.The proposal was approved by Finance Committee on 8 March 1989 and on 24 April 1989, the Hospital Services Department issued a circular explaining the scheme which it described as “a temporary measure to compensate the substantial amount of overtime work performed by [doctors] in order to maintain adequate medical services for patients.”[14] 29.The measure has proved more durable than then anticipated. The scheme was continued by the HA and the honorarium is still being paid to eligible doctors at the same rates as those set in 1989 which, in the light of substantially increased salaries, now appear to involve, as Mr Chang puts it, token sums of money. B.1b Better pay and prospects 30.However, the evidence shows that in tandem with introduction of the honorarium scheme, public doctors were upgraded on the government pay scales. Thus, on 29 March 1990, a Salary Structure Review report[15] noted that promotion prospects had been enhanced by the creation of over 100 senior medical officer posts and 40 consultant posts and recommended positioning the starting pay of doctors one or two points higher on the pay scale and then providing them with a three-increment jump on completion of three years’ service and a further three-increment jump after an additional year. It added:
B.1c The Compensatory Leave Scheme 31.On 23 October 1995, the HA implemented the Compensatory Leave Scheme which is designed to compensate an employee who “has worked overtime either for a full day or for less than a full day on a statutory holiday”.[16] It referred to this as supplementing and not affecting the payment of honoraria. B.1d More medical resources 32.The evidence also indicates that substantial progress was made in addressing the fundamental problem of inadequate manpower resources. Thus, in November 2000, the HA noted that more than 300 new doctors had been recruited that year.[17] And in January 2002, the Health and Welfare Bureau informed Legco that the HA had recruited 312 doctors in 2000/2001 and another 303 doctors in 2001/2002, the total number of doctors having been increased by about 12% since March 2000. 33.The increase in staff numbers has continued. Thus, in April 1989, it was noted in Standing Circular No 7/89 referred to above that there were then “nearly 2,500 doctors employed in the public sector” whereas, at the time of the trial before Stone J in January 2006, some 4,600 doctors were employed by the HA. Several new hospitals have also been established. 34.The developments outlined above indicate that there have been significant improvements in the system. Nonetheless, doctors are still being subjected to long – sometimes unacceptably long – hours of on-call duty and are still being deprived of rest days and holidays without substituted days off. With about 93% of patients in Hong Kong being dealt with by the public sector, the HA is constantly trying to catch up with a burgeoning demand for medical services, spurred by a population that is both ageing and more assertive in its demands for a quality public health system. 35.It must however be emphasised that it is not for the Court to pass judgment on the adequacy or otherwise of the resources allocated to our public health services. Nor is it the role of the Court to decide in this appeal what does or does not constitute an acceptable level of overtime to be worked by doctors in public service. Other channels exist for such issues to be debated. The Court is simply concerned with determining what, if any, legal entitlements are conferred on the doctors by statute and by their contracts of employment. It is against the background described above that those legal issues fall to be considered. B.2 The contractual provisions 36.It is common ground that the overtime claim depends on the proper construction of the doctors’ contracts of employment and that the contractual documents consist of their letters of appointment which incorporate the provisions of the HA’s Human Resources Policy Manual (“HRPM”) in its 1994 edition, its Human Resources Administration Manual (“HRAM”) and its rules and regulations promulgated from time to time, including the Circulars on matters such as the honorarium scheme referred to above. 37.The parties also accept (in my view correctly) that construction of those documents should be approached applying the well-known principles stated in Jumbo King Ltd v Faithful Properties Ltd,[18] where Lord Hoffmann NPJ described the process as “an attempt to discover what a reasonable person would have understood the parties to mean” which involves “having regard, not merely to the individual words [the parties] have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve”. Furthermore, as his Lordship stated in Investors Compensation Scheme Ltd and West Bromwich Building Society,[19] the interpretation of a document involves “ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. 38.Applying that approach to the contractual documents in the present case, are they properly to be construed as conferring on the doctors an entitlement to time off to match time spent providing patient treatment while on-call outside normal working hours? B.3 The contracts construed B.3a The letters of appointment 39.The letters of appointment are the starting-point. In each case, the letter states that the employment is contracted upon its terms and on the terms of the HRPM and the HA’s rules and regulations, with the letter of appointment being the prevailing document. 40.In each case the letter identifies the post to which the doctor is appointed and states that he is required to perform the duties associated with such post or such duties as may be assigned by the medical unit in which he works. 41.Each letter also gives details of remuneration. Thus, Dr Leung’s letter dated 26 June 1995, appoints him at point 47 on the pay scale, identifying his then basic monthly salary and states that he is also entitled to a cash allowance equivalent to 60% of that basic salary. In later letters of appointment, for instance, Dr So’s letters dated 19 June 2000 and 7 May 2003, additional items of remuneration form part of the package. Apart from specifying Dr So’s basic salary and point on the pay scale, the letters state that he is eligible for a monthly allowance, a contract gratuity on completion of the contract and housing benefits. 42.The letters also stipulate the hours of work and make reference to the honorarium in the following terms:
43.In my view, taking them on their own, the letters of appointment provide no discernible basis for the doctors’ overtime claim. They make it clear that the doctors are expected to work overtime and to perform on-call duties, sometimes working on shifts to provide 24-hour coverage, nowhere suggesting that there is to be any extra recompense for such work. There is certainly no suggestion that the doctors are to be recompensed by reference to hours worked beyond normal office hours. Instead, the letters all require the doctors to devote their time according to the exigencies of their work and the operational requirements of each specialty. A system of remuneration for work dictated by patient needs rather than one calculated by reference to normal office hours is what one would expect in relation to doctors discharging their professional obligations. Taken on their own, the letters suggest that the package offered and accepted by the doctors consists of the remuneration and benefits they specify, in return for the work stated, including overtime, on-call and shift duties. B.3b The doctors’ reliance on the HRPM and HRAM 44.The doctors’ main argument on the overtime issue relies on the provisions of the HRPM and the HRAM. It runs as follows:
B.3c The proper construction of the HRPM provisions 45.For a number of separate and cumulative reasons, I am unable to accept the doctor’s main argument of construction. B.3c(i) The first sentence of clause E4.2.3 46.As noted above, crucial to Mr Chang’s argument is the first sentence in clause E4.2.3 which states: “Overtime work should normally be recompensed by time-off in lieu”. Those are the words which, he submitted, confer the necessary entitlement on the doctors. In my view, that sentence is quite incapable of bearing the weight of the argument sought to be founded upon it. 47.It is convenient once more to set out clause E4.2.3 in full as follows:
48.The first sentence cannot be read in isolation from the rest of the clause. It is followed by the second sentence which refers to and expressly qualifies the first, addressing the position “Where this is operationally impracticable within a reasonable period”. The word “this” is obviously a reference to the “normal” recompense of time off in lieu mentioned in the first sentence. What the second sentence tells us is that where it is operationally impracticable to grant such time off within a reasonable time, the prescribed course is to pay an overtime allowance to eligible employees. The third sentence goes on to qualify in turn the second sentence by conferring on eligible employees an option to take time off in lieu at a later date. 49.The first sentence is therefore an essential part of the overall scheme of clause E4.2.3. It is concerned with prescribing the preferred option while the remainder of the clause stipulates what should follow if that option is unavailable. Time off is the first option where overtime is worked, expressed in terms of what should “normally” happen. The clause then caters for what should happen if “this” is impracticable. It does so by prescribing payment of an overtime allowance in such cases while giving the eligible employee the option of taking time off at a later, mutually convenient date. Read as part of the clause as a whole, the first sentence, like the rest of E4.2.3, is concerned with regulating the position of HA employees who qualify for overtime allowances. It does not create a separate entitlement for ineligible employees. 50.Nowhere in E4.2.3 is there any mention of employees other than those eligible for payment of an overtime allowance. Nor is there any mention of what is to happen where time off cannot practicably be given to employees who, like the doctors, are ineligible for overtime allowance – a most surprising omission if such employees were intended beneficiaries since the draftsman was obviously alive to the need for provision to be made for the operational impracticability of time off when dealing with eligible employees. B.3c(ii) Clause E4.2.3 in its historical setting 51.Both sides invited the Court to construe the contracts against the background of earlier employment provisions applicable to doctors working in the public sector. I do not think it proper to have regard to the Civil Service Regulations applicable prior to the HA’s takeover of the doctors’ employment (much less to the CSRs in force after such takeover) because the HA was self-evidently making a fresh start and exercising autonomy in determining its own rules and regulations (as the letters of appointment indicate). However, it would, in my view, be legitimate to take into account the 1991 version of the HRPM, at least in Dr Leung’s case, since that version had originally formed part of his contract of employment with the HA and forms part of the background knowledge available to the parties at the time of entering into the later contracts incorporating the 1994 edition of the HRPM. 52.In my view, the edition of the HRPM dated 26 November 1991 goes a long way towards dispelling any ambiguity that might exist regarding the effect of the first sentence in clause E4.2.3 as it appears in the 1994 edition. 53.The 1991 edition[22] contains a definition of overtime as work undertaken over and above an employee’s conditioned hours of work which is identical to that found in the 1994 edition. However, the 1991 edition proceeds in its clause E4.2.1 to state: “Overtime Allowance is to compensate employees for the overtime worked”. In other words, it makes payment of the allowance the preferred or first option. 54.As with the 1994 edition, only employees at or below a specified pay scale point are eligible for an overtime allowance, doctors being excluded.[23] 55.The 1991 edition then expressly provides in its clause E4.3.5 under the heading of “Eligibility” that:
56.The 1991 edition carries on to provide in its clause E4.3.6 that:
57.It therefore makes time off in lieu the secondary option, open only to employees eligible for the overtime allowance. Plainly, none of this affected doctors who were ineligible for overtime allowance. They were not being given any entitlement to time off in lieu since that form of recompense was only available to employees eligible for an overtime allowance. E4.3.5 made this doubly clear by expressly excluding the grant of time off in lieu in cases where there was no entitlement to an overtime allowance. 58.Mr Chang questioned the meaning of clause E4.3.5 (which, as we shall see was reproduced in a different place in the 1994 edition), submitting that it is overtime work and not “time off in lieu” which is to be recompensed. The sentence in the clause is no doubt elliptical. But read in the abovementioned context, it must plainly be understood to be saying that no time off in lieu would be recompensed for overtime work done if the overtime work does not qualify for overtime allowance. 59.It can therefore readily be seen that the significant change which was made in the 1994 edition was to relegate the payment of overtime allowances from the first to the second option as the means of recompense for overtime work done. That is what the first sentence in clause E4.2.3 conveys by stipulating that “Overtime working should normally be recompensed by time off”. Viewed in this context, it becomes clear that first sentence is not intended to confer a fresh, free-standing entitlement to time off in lieu upon doctors ineligible for the overtime allowance. It seeks merely to re-order the preferred modes of recompense for overtime in relation to employees who are eligible for the allowance. B.3c(iii) The problem of accumulated time off 60.As noted above, the doctors’ main argument on construction is that their contracts give them an open-ended entitlement to time off in lieu (or damages in default) capable of being accumulated without limit. That proposition has produced some startlingly large claims for accumulated time off.
61.Even on the reduced figures placed before this Court in respect of his overtime and additional overtime claims,[24] Dr Leung asserted a pre-writ entitlement of 39.75 days per year and a post-writ entitlement of 67 days per year (in addition to his rest day and holiday entitlements). The claims of Dr Choi and Dr So are for entitlements pre-writ of 175 days and 145 days per year respectively and post-writ of 101 days and 50 days per year respectively (again in addition to their rest day and holiday claims). I assume that the doctors also maintain their additional entitlements to annual leave. 62.The sheer size of the overtime and additional overtime claims undermines their plausibility. It cannot seriously be suggested that any public hospital is able to function on the basis of such time off in lieu entitlements. It stretches credulity beyond its limits to suggest that the parties ever intended such entitlements to be part of the practical objects achieved by their employment contracts. 63.It is telling that the HRPM expressly places stringent limits on the accumulation of annual leave. Thus, relevant HA employees are entitled to 21 days’ annual leave if they have less than 10 years’ service and to 28 days’ leave after 10 years’ service or more.[25] “Accruement” of such leave is permitted if an employee is unable to take leave due to operational needs but this is subject to the minimum requirement of taking at least ten days’ leave in a year of which 7 days must be consecutive.[26] In the following year, the employee must take any leave carried over as well as the minimum ten days of leave earned in the current year. He might exceptionally be allowed further to carry over untaken annual leave, but only with the approval of the HA’s Chief Executive or the Hospital Chief Executive while taking the minimum 10 days’ leave for the current year.[27] In any event, accrued leave is capped at a maximum of 32 days and 46 days for employees with under 10 and with 10 or more years’ service respectively.[28] In the alternative (subject to taking the minimum 10 days’ leave in any event), an employee “may be given an option ... to encash the untaken annual leave”.[29] 64.Those provisions demonstrate a contractual intention which is wholly inconsistent with permitting the open-ended accumulation of time off. If it had been the parties’ intention that doctors should have an entitlement to time off for overtime worked while on-call, it is inconceivable that similarly stringent caps on accumulating such time off would have been omitted. Their absence is a strong indication that no such entitlement exists. 65.Mr Chang was well aware of the difficulties placed in the way of the doctors’ main argument by the problem of accumulated time off. In his printed case, he submitted that “there is no conceptual difficulty for [time off in lieu] to be accrued, subject perhaps to a maximum number of days; and in excess thereof to be encashed”. The proviso in the latter part of this submission amounts to an invitation to the Court to invent the equivalent of the annual leave capping mechanisms laid out in detail in Chapter F1 of the HRPM referred to above. It is obviously not open to the Court to manufacture such provisions and the submission merely serves to highlight the absence of what would have been an essential clause if the doctors’ main argument were sound, underlining the implausibility of that argument. B.3c(iv) Clause E4.4.3 66.As we have seen, the 1991 edition contained clause E4.3.5 which provided that:
I have construed this as an elliptical sentence which should be understood as referring to time off in lieu recompensed “for overtime work done”. 67.In the 1994 edition, the identical words appear, but they have been moved from the section headed “Eligibility” in the 1991 edition to the section headed “Basis of Calculation” (of overtime allowances) in the later edition. The relevant provision (E4.4.3) now states:
68.Mr Chang submits, and I agree, that moved to its present place, those words must be understood to concern merely the mechanics of totting up overtime allowances and are no longer concerned with addressing eligibility for time off in lieu. The clause must now be understood to be stating that “left-over” periods of overtime which might otherwise have been recompensed by time off in lieu but which are excluded from the calculation of overtime allowance by the provisions of E4.4.3, are not subsequently to be relied on as a basis for claiming recompense by way of time off in lieu. 69.It follows that this move eliminates from the 1994 edition a provision which had been a clear indication (among others) in the 1991 edition that persons not entitled to an overtime allowance are excluded from recompense by way of time off in lieu for overtime work done. However, the same conclusion is arrived at on the other grounds presently being discussed. B.3c(v) The six-month expiry period as a fall-back position 70.Mr Chang’s adoption as a fall-back position of what he submits is Le Pichon JA’s suggestion that a positive obligation exists to grant time off in lieu for overtime worked, subject to such entitlement expiring if not enjoyed within six months, was an attempt to meet the problem of unbridled accumulation. It is not clear that that proposition is properly attributable to Le Pichon JA but in so far as her Ladyship was indeed putting forward the same, I am, with respect, unable to accept it. 71.As we have seen, clause E4.2.3, which is central to the doctors’ claim, provides that overtime worked is normally recompensed by time off in lieu and then goes on to stipulate that where this is operationally impracticable within a reasonable period from the date on which the overtime is worked, the eligible employee is to have the option of being paid the overtime allowance or having time off deferred to a later, mutually convenient, date. That clause provides no basis for suggesting that a right to time off in lieu with a built-in six-month “use-by date” ever came into existence. The clause does not mention six months, but refers to impracticability with “a reasonable period”. Moreover, at the end of such a period of impracticability no right is extinguished. The clause merely proceeds to offer as the second option of recompense, payment of an overtime allowance to eligible employees. Where then does the six-month notion come from? 72.It appears to derive from construing clause E4.1.5 in the HRAM dated May 2005 as producing, in combination with clause E4.2.3 of the HRPM, the six-month entitlement contended for. Clause E4.1.5 states:
73.I cannot accept such a construction. Clause E4.1.5 is not concerned with creating or defining an entitlement to time off in lieu or an overtime allowance. What the relevant HRAM chapter sets out are rules dealing with how time off in lieu is to be quantified and the manner in which it should be taken. In doing so, it assumes that the employee being given such guidance is eligible for the benefit. Thus, it stipulates, for instance, that time off in lieu “should be granted as compensation for approved overtime work, based on actual duty hours that have been worked which should exclude meal breaks, travelling time to and from employee’s home to working places.”[30] It is in that vein that E4.1.5 states that time off in lieu should “as far as applicable” be taken within six months from the date of overtime work. The HRAM provision therefore cannot be construed as part of a contractual definition of a time-limited entitlement to time off in lieu. This fall-back position must accordingly be rejected. B.3c(vi) The fall-back position based on Yuen JA’s judgment 74.The other fall-back position adopted by Mr Chang is founded on the passage in Yuen JA’s judgment[31] in which her Ladyship held that :
75.With respect, I cannot accept the correctness of this approach. It impermissibly involves the re-writing of the contract to insert a new clause fashioned to mirror E4.2.3 in which the overtime allowance is replaced by the honorarium. The honorarium scheme is discussed in detail above.[32] The honorarium is payable automatically to doctors working in eligible units and, unlike the overtime allowance, does not depend on whether time off in lieu cannot practicably be granted. Nor has there ever been any basis for suggesting that doctors are entitled to decline the honorarium and to opt for time off instead. This fall-back position untenably postulates the existence of such features without any contractual basis. 76.Both fall-back propositions rest on the premise that the first sentence of E4.2.3 does confer an entitlement to time off in lieu to the doctors and each then endeavours to suggest how such entitlement may be given effect. In the preceding discussion, I have rejected that premise, holding that that is not the effect of the much-discussed first sentence. It necessarily follows that on this ground as well both fall-back positions must be rejected. B.4 Conclusion on the overtime issue 77.For the foregoing reasons, it is my view that there is nothing in the HRPM, the HRAM or the HA’s rules and regulations to displace the position evident in the letters of appointment which take effect as the prevailing contractual document. The overtime and additional overtime claims are without foundation and accordingly fall to be dismissed. 78.In the light of this conclusion, the HA’s submission that any entitlement to time off in lieu is satisfied or extinguished by payment of the honorarium does not arise. As the history of the honorarium scheme discussed above shows,[33] honoraria were not paid to satisfy any perceived or actual entitlement to time off in lieu. The payments represented merely an acknowledgment of the unusually long hours worked by doctors without recompense, whether by way of overtime allowance or otherwise, and were made with a view to persuading doctors to remain in the public health service notwithstanding the heavy, unrecompensed demands made upon them. 79.It is also unnecessary to deal separately with the intern issue. Interns are contractually in no better position than the doctors. Their appeal on the overtime claims must be dismissed alongside the claims of fully qualified doctors. C. The rest day claim C.1 The basis of the HA’s liability 80.The doctors’ rest day claim is based on rights conferred by the Ordinance. Such rights take effect as contractual terms implied by law or by modifying existing terms in the relevant contracts of employment. The obligation on employers to grant rest days is provided for in Part IV of the Ordinance in which section 17 states as follows:
81.Section 2 tells us what granting a rest day requires, defining the concept as follows:
82.Accordingly, a day when an employee is not entitled to abstain from working for his employer does not constitute a rest day. When a doctor is on non-resident call it is common ground that he must remain within 30 minutes of the hospital; he must not drink alcohol; and he must remain mentally ready to respond to calls for his services. Clearly, when a doctor is on-call, he is required to provide patient treatment should the need arise. He is not entitled to abstain from working for the HA. It follows that a day rostered on-call cannot qualify as a rest day under the Ordinance. It also follows that rostering doctors on call may result in a failure to grant them one rest day in every period of seven days as required by section 17 and that such a failure would constitute a breach of the HA’s obligations. 83.In this Court, the HA accepts that where such a situation arises, it is in breach, hence the issues outstanding between the parties concern only the proper assessment of damages. C.2 The nominal damages issue 84.Mr Adrian Huggins SC[34] sought to defend the Court of Appeal’s decision in relation to nominal damages. The argument is that where a doctor rostered on-call is not in fact called upon to work, he is able to engage in his own activities on the relevant day without interruption and therefore suffered no loss so that nominal damages are appropriate in such cases. 85.That argument is, with respect, plainly fallacious. The doctor’s loss in such a case is the loss of a rest day, that is, of a day when he should have been entitled to abstain from working for the HA over a continuous 24-hour period. His complaint is that he was not granted such a day, being placed on-call instead. The fact that he may or may not actually have been required to treat any patient during that on-call day is beside the point. Missing a rest day involves a real and substantial loss. Nominal damages, which are awarded where there has been a breach but no actual loss,[35] are therefore quite inappropriate. The damages awarded should aim to place the doctor in the position he would have been in if the HA had duly granted him a rest day in accordance with its obligations under section 17. He should therefore, if practicable, be granted an alternative day off. Where this is impracticable, he is entitled to damages designed to compensate him for the entire day lost. 86.Mr Chang has submitted that a practical measure of damages acceptable to his clients would be payment of the equivalent of a full day’s wages (at the doctor’s then applicable salary) where a rest day has been missed and cannot practicably be replaced by an alternative day off. In my view, the doctors are plainly entitled to such relief as a matter of practical justice and are entitled to succeed in their appeal on the nominal damages issue. C.3 The entire day issue 87.It follows from the foregoing discussion that the HA must fail in its appeal against the Court of Appeal’s decision that doctors who have actually worked on what ought to have been a rest day are entitled to be compensated on the basis of the loss of an entire day. 88.As stated above, my view is that doctors are entitled to compensation for loss of a whole day even if they are on-call without being required to provide any patient treatment on the day in question. Such entitlement applies a fortiori where they have had to respond to calls for their services. The doctors’ loss in each case is the deprivation of a rest day as defined by section 2 of the Ordinance. Whether or not they were required to provide their professional services and for how long in the course of the day spent on-call is not relevant. They are entitled to damages designed to compensate them for the entire rest day which they should have been, but were not, granted. C.4 The Compensatory Leave Scheme issue 89.Since the obligation to grant a rest day involves the grant of a continuous period of not less than 24 hours during which the employee is entitled to abstain from working for his employer, the grant of half a day off under the Compensatory Leave Scheme is not an effective substitution for a missed rest day. A half day off would have been relevant to the doctors’ overtime claim if it had succeeded, but it does not compensate for the loss complained off under the rest day claim. I would therefore dismiss the HA’s appeal in relation to the Compensatory Leave Scheme issue. D. The holiday compensation issue 90.The doctors’ holiday claim is founded partly on section 39 of the Ordinance and partly on their contract. 91.Section 39(1) deals with statutory holidays with pay and provides that “an employee shall be granted a statutory holiday by his employer” on 12 specified days. Sections 39(2) and 39(3) contain provisions for alternative holidays to be appointed or agreed subject to certain conditions. Section 40A prohibits the substitution of payment for a statutory holiday. 92.Clause F1.2.1 of the HRPM, forming part of the doctors’ contracts, provides that “all employees ... are eligible for ... public holidays”. 93.There is no dispute that, for the purposes of these proceedings, “public holidays” should be understood to cover all of the 17 specified holidays[36] listed in the Schedule to the General Holidays Ordinance,[37] giving the doctors an entitlement to 17 public holidays each year, comprising five specified general holidays in addition to the 12 statutory holidays referred to in the Ordinance. 94.The HA’s stance on holidays is based on the fact that neither in the abovementioned Ordinances nor in the contracts is there any definition of a holiday comparable to the definition of a “rest day” as a 24 hour period when the employee is entitled to abstain from working for his employer. The absence of such a definition has led the HA to argue that compensation is claimable in relation to holidays (both statutory and general) only if a doctor rostered on-call actually has to interrupt his holiday by being required to treat a patient on the day in question and then only to the extent of the interruption’s duration. I cannot accept that argument. 95.While it is true that there is no definition of “holiday” along the lines of the “rest day” definition, it is my view that the word “holiday” in the present context should be construed as bearing the same meaning, that is, as a day on which an employee is entitled to abstain from working for his employer and is free to spend as he sees fit. That, in my opinion, is the natural and ordinary meaning of the word “holiday”. 96.A degree of support for this approach is implicit in section 39(2) of the Ordinance which deals with substituting alternative holidays. It provides:
97.The requirement that the employee must be given not less than 48 hours notice if a statutory holiday is to be substituted is plainly intended to enable the employee to make plans as to how he will spend his holiday. If he is being asked to work on the public holiday, he must be informed of this in advance and must be told what day he can take off instead to allow him to make his holiday arrangements. The implicit legislative intention is that the statutory or alternative holiday is the employee’s to spend in accordance with his own plans, free of any obligation to work for his employer. 98.This is reinforced by section 40A’s prohibition against an employer requiring his employee to give up a statutory holiday in return for payment. The statutory intention is evidently to give employees the right to have time off without being under any obligation to work for their employers even where extra pay may be offered. 99.So construed, the legal consequences of rostering a doctor on-call are the same whether such rostering falls on a statutory holiday or on what ought to be a rest day. Being on-call prevents the day in question from counting as a rest day or a statutory holiday and entitles the employee to an alternative day off and, in default, to damages calculated on an entire day basis. 100.As with rest days, a doctor who is on-call during a statutory or public holiday is thereby deprived of that holiday and such breach on the part of HA sounds in substantial damages equivalent to a full day’s wages (at the doctor’s then salary) and not merely in nominal damages. I should make it clear that what I have said about the rest day and holiday claims applies equally to interns. E. Conclusions 101.For the reasons given above, I would:
102.Although the HA had previously resisted the grant of declaratory relief and had sought to uphold the refusal of such relief in the courts below, it no longer does so, recognizing that the representative nature of these proceedings and the need for future guidance favour the making of declarations regarding the parties’ respective entitlements. 103.Accordingly, I would make the following orders, namely:
Mr Justice Mortimer NPJ: 104.I agree with the judgment of Mr Justice Ribeiro PJ. Lord Millett NPJ: 105.I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Bokhary PJ: 106.The Court is unanimous. On the terms and with the order nisi as to costs set out under the heading “Conclusions” in Mr Justice Ribeiro PJ’s judgment, the doctors’ appeal is allowed in part and the Hospital Authority’s appeal is dismissed.
Mr Denis Chang SC, Mr Benjamin Chain and Mr Tim Kwok (instructed by Messrs LCP) for the appellants in FACV No. 22 of 2008 and respondents in FACV No. 23 of 2008 Mr Adrian Huggins SC and Mr Godfrey Lam SC (instructed by Messrs JSM) for the respondent in FACV No. 22 of 2008 and appellant in FACV No. 23 of 2008 [1] Cap 57. | |||||||||||||||||||||||
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