Scott Williams v. Cathay Pacific Airways Ltd

HCLA24/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 24 OF 2009

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. LBTC 1003/2009)

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Before : Hon Chu J in Court

Date of Hearing : 24 and 25 February 2010

Date of Decision : 10 November 2010

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J U D G M E N T

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1.This is the defendant’s appeal against the decision of the Deputy Presiding Officer made on 3 July 2009, holding that the claimant is eligible to receive bypass pay as from 1 March 2008 under the Conditions of Service 1999. Leave to appeal was granted on 23 September 2009.

The claim

2.The claimant is a Second Officer (SO) employed by the defendant (“CPA”).   By a letter of employment dated 13 June 2006, the claimant was employed as a Direct Entry Second Officer (DESO).  Before joining CPA, the claimant worked with the Royal New Zealand Air Force where he started pilot training in 1995. 

3.The claimant’s employment with CPA commenced on 21 August 2006.  He completed his 12 months’ probation on 21 August 2007.  On 20 November 2007, the claimant achieved Grade A status. He then underwent and completed three training modules, the last of which was completed on 22 April 2008.  On 19 May 2008, he had his technical assessment (STI) and was assessed to be satisfactory. 

4.On 20 October 2008, the claimant was assessed by the Upgrade Review Board (URB) to be suitable for promotion to Junior First Officer (JFO).  As from 20 October 2008, he has been paid a bypass pay (BPP) pursuant to clause 10.2 of the Conditions of Service 1999 (COS 99). 

5.On 3 February 2009, the claimant commenced proceedings in the Labour Tribunal.  The basis of his claim as stated in Form 2 was CPA’s failure to pay bypass pay prior to 20 October 2008.  In the Supplementary Statement sent on 16 February 2009, the claim is put on the basis of compensation represented by the amount of BPP that the claimant would have received before 20 October 2008.  The stated ground is that CPA had delayed in reviewing or assessing the claimant’s suitability for promotion.  The period of delay is said to be from 21 February to 20 October 2008 (i.e. six months). 

6.The trial before the Deputy Presiding Officer was only to determine whether CPA is liable for the claim.  The parties had agreed that the quantum of the award, in the event CPA is held liable, is to be reserved and determined after the determination of the issue of liability.  The determination of quantum is now pending the outcome of this appeal.

Conditions of Service 1999(COS 99)

7.The letter of employment dated 13 June 2007 under which the claimant was employed expressly incorporated the Conditions of Service 1999 (COS99). For the purpose of this appeal, the following provisions in COS 99 are relevant:

Clause 1.2

These conditions of service shall be read in conjunction with the Operations Manuel Volume 1, as the same may be amended from time to time, subject to the provisions of Section 22.

Clause 6 Career Structure

6.1 It is the Company’s aim to recruit Pilots suitable for full career progression to Command. All newly recruited Pilots will join the Company at one of the following three entry levels:

a. Second Officers by Cadet Pilot Programme

b. Second Officers by Direct Entry

c. First Officers by Direct Entry

6.2 Recruitment of First Officers by Direct Entry will normally only take place when there are no Second Officers suitable for promotion.

6.3 In the event that recruitment of First Officers by Direct Entry occurs, other than in accordance with 6.2, Second Officers suitable for promotion will not normally have their promotion to Junior First Officer delayed by more than twelve (12) months whilst such First Officer recruitment by Direct Entry is taking place.

Clause 7 Promotion

7.1 Selection

a. Selection of Officers for promotion to higher rank will be in accordance with seniority on the Officers’ relevant seniority list and is subject to a Selection Panel recommendation.

b. Officers assessed as unsuitable for promotion to higher rank, or as “Category D”, will be informed in writing, stating reasons, at the time of such assessment.

7.2 Second Officer to Junior First Officer

a. Second Officers joining by the Cadet Pilot Programme will serve as Second Officers for approximately thirty six (36) months.

b. Second Officers joining by Direct Entry will serve as Second Officers for approximately eighteen (18) months.

c. Promotion to Junior First Officer will occur when the Second Officer is allocated a conversion course, the effective date of promotion being the course start date. The number and timing of Junior First officer upgrade courses is dependent upon Company requirements.

d. Second Officers who are assessed as unsuitable for promotion to Junior First Officer after two upgrade attempts may have their service terminated.

Clause 10 Entitlement to BPP

10.1 In any case of retention of Captains beyond the Retirement Age, subject to 10.2 & 10.4, the next most senior First Officer on the Aircrew Seniority List will receive Command Bypass Pay in the form of Captain’s Salary, allowances and benefits on a one for one basis commencing upon the date that the retained Captain reaches the Retirement Age. The Payment of Command Bypass Pay will cease when the retained Captain retires.

10.2 In any case of retention of Captains beyond the Retirement Age, the next most senior Second Officer suitable for promotion will receive First Officer Bypass pay in the form of Junior First Officer’s Salary, allowances and benefits on a one for one basis commencing upon the date that the retained Captain reaches the Retirement Age. The payment of First Officer Bypass pay will cease when the retained Captain retires.

…

10.5 In any case of recruitment of First officers by Direct Entry, other than in accordance with 6.2, the next most senior Second Officer suitable for promotion will receive First Officer Bypass pay in the form of Junior First Officer’s Salary on a one for one basis commencing three (3) months after the date of joining of the First Officer recruited by Direct Entry. The payment of First Officer Bypass Pay will cease when the Second Officer receiving bypass pay commences Junior First Officer training.

Operations Manual (Ops Manual)

8.Volume 1, Part 3 of the Operations Manual (Ops Manual), which is incorporated into the employment contract by clause 1.2, contains provisions relating to the training and progression of SO to JFO. The important provisions for the purpose of this appeal are under paragraph 7.

9.Paragraph 7.1 deals with the holding of URB and provides that:    

“Second Officers Upgrade Review Board meetings are called as

required to assess SO’s suitability for upgrade to JFO.”

10.Paragraph 7.2 sets out the system for monitoring and assessing pilots and also the grading system.  Specifically, it provides that:

“Only SO’s who are grade A and are able to maintain that standard will be eligible for upgrade to JFO. In addition a technical review will be rostered and must be successfully completed before the SO can be considered for upgrade.”

11.Paragraph 7.3 relates to progression of SO to JFO and provides that:

“SO progression to JDO will be as follows:

A. Approximately two years from the date of joining, or at an earlier time, if required, each SO will be rostered for a technical assessment. … The technical assessment does not affect the SO grade (A/B/C), but it must be completed satisfactorily before the SO can be considered for JFO upgrade review board.

B. Only SO’s who are assessed as Grade A and who are able to maintain that standard will be eligible for upgrade to JFO. Selection and upgrade will be via Second Officer Upgrade Review Board.”

The decision of the Deputy Presiding Officer

12.The focus of the trial in the Tribunal was the claimant’s entitlement to BPP prior to 20 October 2008.  In the Reasons for Decision, the Deputy Presiding Officer identified six issues fordetermination.  They are:

(1) Whether CPA was in breach of clause 6.2 of COS99 by failing to consider the claimant’s suitability for the position of JFO before and during the recruitments of Direct Entry First Officer (DEFO) in 2007 and 2008.

(2) Whether CPA was in breach of clause 7.2 of COS99 by failing to assess the claimant for suitability as a JFO, after he had served for approximately 18 months.

(3) Whether CPA was in breach of clause 7.2 of COS99 by failing to upgrade him to the position of JFO, after he had served as a DESO for approximately 18 months.

(4) Whether CPA was in breach of the employment contract by failing to consider the claimant’ suitability for the position of JFO at a time when CPA was retaining captains beyond the retirement age of 55 by offering contract extensions and/or contracts under Conditions of Service 2008.

(5) Whether, as a direct result of all or any of the breaches identified in (1) to (4) above, CPA was prior to 20 October 2008 in breach of clauses 10.2 and 10.5 of COS99.

(6) Whether, as a direct result of all or any of the breaches identified in (1) to (5) above, CPA was liable to pay the claimant damages for breach of contract.

13.The major findings of the Deputy Presiding Officer can be summarized as follows:

(1) Clause 6.2 of COS99 gives rise to an implied obligation on CPA to exhaust assessments of SO before embarking on recruitment of DEFO.

(2) Under paragraph 7.1 of the Ops Manual (Vol.1, Part 3), the holding of JFO upgrade (or conversion) courses is not at the discretion of CPA. Instead, CPA is required to conduct assessments and URB reviews for SO when: (i) there are openings of First Officer positions; (ii) CPA does not have suitable SO to fill the vacancies; and (iii) when there are SO ready for assessments.

(3) As CPA had in 2007 and 2008 recruited DEFO and it lacked suitable SO to fill the vacancies, CPA was required to hold STI and URB assessments for all SOs who were ready for assessment during that period.

(4) To be eligible to BPP under clauses 10.2 and 10.5 of COS99, the claimant had to show: (i) a retention of captain beyond the retirement age or a recruitment of DEFO other than in accordance with clause 6.2 of COS99; (ii) he is the next most SO; and (iii) he is suitable for promotion.

(5) The claimant would be assessed as suitable for promotion had CPA arranged to assess him earlier than October 2008 in that he was ready for STI as soon as he attained Grade A standard on 20 November 2007, and thatit was probable that he would have been assessed by the URB as suitable for upgrade to JFO.

(6) The claimant would also have been the next most senior SO suitable for promotion if he had been arranged for STI and URB assessment earlier than October 2008.

(7) As CPA had to recruit DEFO, it was required to hold STI for the claimant earlier than 19 May 2008. Allowing time for CPA to make arrangement for the STI and URB assessment, the claimant would have completed STI by about January 2008 and then assessed by URB as suitable for upgrade to JFO by about February 2008.

14.Accordingly, on Questions (1), (5) and (6), the Deputy Presiding Officer held that CPA was in breach of clause 6.2 of COS99 by failing to assess the claimant’s suitability for progression to JFO after about 1 February 2008.  On this basis, he further held that the claimant was eligible to receive BPP as from 1 March 2008.  He however left the question of whether the claimant should be paid pursuant to clause 10.2 or clause 10.5 of COS99 to be dealt with when determining the quantum of the award.     

15.As to Questions (2) and (3), the Deputy Presiding Officer rejected the claimant’s argument that he is entitled, under clause 7.2.b of COS99, to automatic progression to the position of JFO after he had joined CPA for 18 months.  The Deputy Presiding Officer felt it was not necessary and he did not decide on whether CPA was obliged under clause 7.2.b to have the claimant assessed for suitability for progression to JFO after he had served for approximately 18 months.

16.As for Question (4), the Deputy Presiding Officer held there was nothing in COS99 to the effect that CPA should have assessed the claimant before retention of captains beyond the retirement age arises.  

Grounds of appeal

17.The Grounds of Appeal, which had undergone several revisions,weredrafted in meticulous details.  The broad grounds that had been argued in this appeal can be summarized as follows:

(1) The finding of an implied obligation under clause 6.2 of COS99 is unnecessary, not required by law and inconsistent with the express terms of the employment contract.

(2) The finding that CPA is required under paragraph 7.1 of the Ops Manuel (Vol.1 Part 3) to hold URB meetings for SOs when (i) there are openings of FO positions; (ii) CPA is lacking suitable SO to fill the vacancies; and (iii) there are SO ready for assessments is erroneous in law, having regard to clause 7.2.c of COS99 and that a requirement to fill FO vacancy is different from a requirement to promote SO to JFO.

(3) The finding that the claimant was ready for STI as soon as he attained Grade A standard, that had he been assessed earlier, it was probable he would have been assessed as suitable and that he would have completed STI by about January 2008 and assessed as suitable for upgrade to JFO by about February 2008 is not supported by evidence and is further contrary to the evidence before the Tribunal.

(4) The finding that the claimant would be the next most senior SO suitable for promotion had he completed the STI and assessed as suitable by the URB in February 2008 has no proper legal or evidential basis.

(5) The finding that “captains” in clause 10.2 of COS99include freighter captains so that retention of freighter captains beyond their retirement age after 1 January 2008 will trigger entitlement to BPP is based on an erroneous construction of the provision and that freighter captains should have been excluded in reckoning the claimant’s seniority in February 2008.

(6) The finding that the claimant became eligible to receive BPP under either clause 10.2 or clause 10.5 of COS99 as from 1 March 2008 is erroneous in law in that the two provisions have different commencement date for BPP.

(7) The decision to reserve to the hearing on quantum the question of whether the claimant’s entitlement to BPP arose under clause 10.2 or clause 10.5 of COS99 is erroneous in law in that it is an issue of liability.

The Respondent’s Notice

18.Before discussing CPA’s appeal, I shall deal firstly with the Respondent’s Notice filed by the claimant on 2 November 2009.  By the Respondent’s Notice, the claimant seeks to affirm the Decision on the basis that the Deputy Presiding Officer should have found that clause 7.2.b of COS99 obliges CPA to promote a DESO to SO within 18 months of confirmation as SO if not assessed as unsuitable for such promotion.  This is seeking effectively to overturn the Deputy Presiding Officer’s finding under Question (3) that the claimant was not entitled under clause 7.2.b to automatic progression to the position of JFO after he had joined CPA for 18 months.

19.CPA takes objection to the Respondent’s Notice, pointing out that no leave to appeal against the determination of Question (3) had been applied for or granted.   Under section 32(1) of the Labour Tribunal Ordinance, Cap.25, any party who is dissatisfied with a determination of the Labour Tribunal requires leave to appeal against the determination.  Hence, a respondent to an appeal, who wishes to cross appeal or vary some parts of the decision of the Tribunal, has to apply for leave to appeal: see, by way of reference, Hong Kong Civil Procedure 2011, Vol. 1 para.59/0/55. 

20.Mr Scott SC accepts that there is no procedure in an appeal from the Labour Tribunal for the filing of a respondent’s notice, arguing at the same time that the claimant is not seeking to make a cross appeal.  In my view, although the claimant supports the ultimate decision of the Deputy Presiding Officer on liability, his Respondent’s Notice in fact seeks to vary the determination on Question (3), which is one of the two bases, hence a material aspect of his claim.  As such, he requires leave to argue against the determination.   As no leave has been granted, the Respondent’s Notice filed by the claimant in this appeal is irregular and falls to be dismissed.    

An overview

21.The thrust of the claimant’s claim in the Tribunal is twofold.  First, it is argued that he is entitled to be promoted after about 18 months of service.  As noted above, this argument, which is founded on clause 7.2.b of COS99, was rejected by the Deputy Presiding Officer. 

22.Second, the claimant says he is entitled to be compensated by reason of CPA’s delay in assessing his suitability for promotion.  This aspect of the claim was upheld by the Deputy Presiding Officer.  Critical to the decision are the findings that clause 6.2 of COS99 gives rise to an implied obligation on the part of CPA to exhaust assessments of SO before recruiting DEFO, that CPA was in breach of this obligation and that consequently the claimant had been deprived of the opportunity to receive BPP because had he been arranged for STI and URB assessment earlier, he would have been the next most senior SO suitable for promotion by February 2008.  It is on these several aspects that the present appeal turns.

The implied term under clause 6.2

23.On the finding of implied term, CPA’s argument in this appeal is that there is no legal basis for implying into clause 6.2 an obligation on its part to exhaust assessments of SO before embarking upon recruitment of DEFO and that the implied term as found is inconsistent with the express term of the employment contract.   

24.A term is not to be implied merely because in all the circumstances it would be reasonable to do so or because it would improve the contract or make its carrying out more convenient; the touchstone is always necessity and not merely reasonableness. The term to be implied must be capable of being formulated with sufficient clarity and precision. It is also trite law that a term will not be implied if it would be inconsistent with the express term of the contract: Chitty on Contracts (30^th edition) vol.1 para.13-009.  

25.It is evident from his Reasons for Decision that the Deputy Presiding Officer based the implied term on clause 6.2, but there was no elaboration on the basis.  In the Tribunal, the claimant had argued that it was open to CPA to circumnavigate the requirement under cause 6.2 by not assessing SO who meets the requirements so that there would be no suitable SO for upgrading, thereby enabling CPA to recruit DEFO.   It is not clear from the Reasons for Decision whether this argument was accepted by the Deputy Presiding Officer. However, Mr Scott SC who appears for the claimant makes a similar point in this appeal.  He submits that the implied term is necessary to prevent CPA unilaterally circumventing the contract and frustrating the operation of clause 6.2 by not arranging or delaying STI or URB assessments.

26.In considering this issue of implied term, it is necessary to ascertain what are the parties’ rights and obligations under clause 6 and to see whether there is any necessity for it.  The important clauses are 6.2, which provides that: “Recruitment of [DEFO] will normally only take place when there are no [SOs] suitable for promotion”; and clause 6.3, which provides that where there is recruitment of DEFO other than in accordance with clause 6.2, SOs suitable for promotion will not normally have their promotion to JFO delayed by more than 12 months while the recruitment of DEFO is taking place. 

27.Four points become clear from reading the two clauses together.  First, under the contract, CPA may recruit DEFO instead of promoting SO.  Second, CPA will normally only recruit DEFO when there are no SOs suitable for promotion.  Third, CPA may recruit DEFO notwithstanding there are SOs suitable for promotion (i.e. other than in accordance with clause 6.2).  One possibility of this happening will be when the situation is other than normal.  In other words, CPA is entitled under clause 6.2 and/or clause 6.3 to recruit DEFO irrespective of whether there are SOs suitable for promotion.   Fourth, it follows that the extent of the rights of the SOs under clauses 6.2 and 6.3 is that: (i) when there are SOs suitable for promotion, there will normally be no recruitment of DEFO; and (ii) if, notwithstanding the availability of SOs suitable for promotion, there is recruitment of DEFO, then the promotion of these SOs to JFO will not normally be delayed for more than 12 months while the recruitment is taking place. 

28.Thus analyzed, it is difficult to see how it can be implied into clause 6.2 an implied obligation to exhaust the assessments of SO before CPA proceeds to recruit DEFO.  The restriction sought to be placed on CPA’s right to recruit DEFO by the implied term is neither warranted nor necessary in light of the parties’ contractual rights and obligations on the matter of recruitment of DEFO.  CPA cannot be put under a duty to make assessments for the purpose of determining whether there will be SO suitable for promotion when it is not contractually bound to promote SO who has been assessed as suitable to the position of JFO.  The argument that without the implied term, CPA can circumvent the operation of clause 6.2 by not carrying out STI and URB assessments is likewise misplaced.   

29.In this connection, it is relevant to note the provisions in clause 7.2 of COS99 dealing with promotion of SO to JFO.  Clause 7.2.c, which provides that promotion to JFO occurs when a SO is allocated a conversion course, also expressly provides that the number and timing of JFO upgrade courses is dependent upon CPA’s requirements.  In so providing, clause 7.2.c confers on CPA the right to determine not only when, but also whether there will be promotion of SO to JFO.  The implied term, in requiring CPA to exhaust assessments of SOs before recruiting DEFO, is therefore at odd with CPA’s contractual right to determine the need and timing of URB assessment and, in turn, the promotion of SO to JFO.    

30.The Deputy Presiding Officer had rejected the claimant’s argument that clause 7.2.b, which provides that SO joining by direct entry (DESO), will serve as SO for approximately 18 months, mandates CPA to promote a DESO to JFO at approximately 18 months after joining.  He held that the progression from SO to JFO is not automatic, noting that suitability for upgrade to JFO is determined by URB review and that in the past a significant percentage of SO had been assessed as unsuitable for upgrade by the URB.  The Deputy Presiding Officer further left open the question whether clause 7.2.b obliges CPA to have a DESO assessed for suitability for progression to JFO after he has served for approximately 18 months.  The Deputy Presiding Officer’s view on clause 7.2.b is thus in line with the express provision in clause 7.2.c that it is within CPA’s power and discretion to determine the need and timing of promoting SO to JFO.  The finding of an implied obligation under clause 6.2 to exhaust assessments of SO before embarking upon the recruitment of DEFO is irreconcilable with the express power of CPA under clause 7.2.c.

31.Mr Scott SC submits that the implied term could be supported by reference to the implied term of co-operation and the implied term of non-prevention of performance: Chitty on Contracts (30^th edition) vol.1 paras.13-011 & 13-012.  However, no matter for what type of implied term, the necessary conditions for the implication of a term must be satisfied

32.In finding clause 6.2 gives rise to the implied term, the Deputy Presiding Officer does not appear to have considered clause 7.2.c and the interplay between the two contractual provisions; and whether the implied term is necessary and compatible with the express contractual provisions.  In my view, the implied term found by the Deputy Presiding Officer does not havea proper legal basis and is also inconsistent with the express term of the contract between the parties.

33.Mr Huggins SC has additionally averted to the difficulties in the implementation of the implied term, including whether the duty to assess should extend to all those SOs who had attained Grade A, or only those who had maintained the standard for three months after completing the training modules or those SOs who had completed STI.  There is force in this argument in that the implied term so found has not been formulated with sufficient clarity and precision.    

Paragraph 7.1 of Ops Manual (Vol.1 Part 3)

34.It is convenient at this juncture to deal with the Deputy Presiding Officer’s finding on paragraph 7.1 of the Ops Manual (Vol.1 Part 3), which provides that URB meetings are called as required to assess SO’s suitability for upgrade to JFO.  It was CPA’s argument that it may hold JFO upgrade (or conversion) courses at its discretion.  This was rejected by the Deputy Presiding Officer, who held that CPA is required to call URB meetings to assess SO’ suitability for promotion when: (i) there are openings of FO positions; (ii) CPA does not have suitable SO to fill the vacancies; and (iii) when there are SO ready for assessments.   

35.Although paragraph 7.1 does not expressly state that URB meetings are called as required by CPA, in construing the paragraph, one must have regard to the other contractual provisions, noticeably clause 7.2.c of COS99.  The two contractual provisions are inter-related.  URB assessment is a necessary part of the process of upgrading a SO to JFO.  Given that under clause 7.2.c, promotion of SO to JFO is dependent on the requirement of CPA, it must follow that when paragraph 7.1 provides that URB meetings are called as required to assess SO’s suitability for upgrade to JFO, it is referring to the requirement of CPA. 

36.Further, the evidence in the trial in the Tribunal shows there are practical differences in the duties, function and responsibilities between a FO and a JFO; the latter is not a full-fletched FO.  It is provided in clause 7.3 of COS99 that promotion to FO will occur when a JFO is assessed for full line duties.  Mr Huggins SC has also submitted, and I agree, that a requirement by CPA for more FOs may not be the same as, and cannot be taken as equivalent to, a requirement to promote suitable SOs to become JFO.  The commercial realities would be one of the relevant factors, and certainly an important factor, that impacts upon the promotion of SO to JFO.  I am unable to agree with the claimant’s argument that the question of requirement should only be viewed from the employee’s perspective. It appears that, in rejecting CAP’s construction of paragraph 7.1 and finding that CPA is contractually bound to hold URB meetings once there are the three criteria, the Deputy Presiding Officer had not considered CPA’s express power under clause 7.2.c of COS99 and the practical considerations as demonstrated by the evidence.  In these regards, his finding in relation to paragraph 7.1 cannot be supported.

The finding of breach

37.I turn next to the holding that CPA was in breach of its contractual obligation to assess the claimant earlier and that consequently the claimant had been deprived of the opportunity to receive BPP.  Underlying this holding are the findings that had the claimant been arranged for STI and URB assessment earlier, he would have been suitable for promotion and also the next most senior SO by February 2008.  It is CPA’s argument that there was no evidence before the Tribunal on which the Deputy Presiding Officer could have reached such conclusions. 

Section 32(1) of Labour Tribunal Ordinance

38.The claimant objects to this aspect of the appeal, which it says isa challengeto the factual findings and falls outside the permissible scope of appeal under section 32 of the Labour Tribunal Ordinance.  Under section 32(1), leave to appeal from a decision, determination or an award of the Tribunal will only be granted where the decision, determination or award is erroneous in points of law or is outside the jurisdiction of the Tribunal.  Appeals on facts are therefore not permitted.   However, it does not mean that findings of fact can never be challenged on appeals from the Labour Tribunal.  A finding of fact or inference from the facts which is perverse or irrational, or where there is no evidence tosupport it or where the decision is made by reference to irrelevant factors or without regard to relevant factors may amount to an error of law: Guido Ferrando v. Hua Dao Shipping (Unreported) HCLA 44/2007, 31 October 2008 at paras.18-21.  As seen below, the thrust of CPA’s appeal against the findings that the claimant would have been the next most senior SO suitable for promotion in February 2008 is that the Deputy Presiding Officer had proceeded on an absence of evidence and a misunderstanding of the evidence.  These errors, if made good, are errors in law and are within the scope of appeal under section 32(1) of the Labour Tribunal Ordinance.

Suitability for promotion

39.It is CPA’s case that “suitable for promotion” in thecontext of clauses 6.2, 10.2 and 10.5 of COS99is an established status that involves the three-stage process of: (i) achieving Grade A standard and maintaining it over a period of three months and completion of three training modules; (ii) satisfactory completion of STI; and (iii) being assessed as suitable for upgrade by the URB.  This is borne out by paragraphs 7.2 and 7.3 of the Ops Manual (Vol.1 Part 3) and the evidence of CPA’s witness, Captain Alan Wilson, including his witness statement.  The Deputy Presiding Officer’s conclusion on the claimant being suitable for promotion is premised on his views that: (i) the claimant was ready for STI as soon as he attained Grade A standard on 20 November 2007; (ii) as and when he completed the STI, he would be ready for URB assessment; and (iii) had CPA arranged STI and URB assessment for the claimant earlier, it is probable that the claimant would have successfully completed the STI by about January 2008 and assessed by the URB as suitable for upgrade to JFO by about February 2008.  

40.I agree that the determination on the claimant’s suitability for promotion at an earlier time must be based on evidence.  The Deputy Presiding Officer’s views on the claimant’s readiness for assessments and the probable outcome of the assessments are, however, not supported by any primary facts.  It seems his view that the claimant would probably have been assessed as suitable had he been assessed earlier is deduced from a posterior fact, namely, the claimant was assessed in October 2008 to be suitable for upgrade to JFO by the URB.  I accept that as the claimant was not assessed until later in 2008, there would be no direct evidence as to his suitability for promotion at an earlier time.  But that does not dispense with the need for a proper evidential foundation.  There ought, for instance, to be some form of expert evidence or primary facts in relation to the assessment criteria and the claimant’s status of readiness for assessments at an earlier time in light of the assessment criteria.  The Deputy Presiding Officer erred as a matter of law in proceeding to make findings as to the claimant’s suitability for promotion prior to October 2008 when there was an absence of evidence and primary facts. 

41.The Deputy Presiding Officer had also overlooked the evidence on the requisite steps for being assessed.  Paragraph 11.1 in Section 5 of the Ops Manual (Vol. 7 Part 1) provides that to meet the requirement for maintaining a Grade A status, there must be a minimum of three training modules at Grade A spread evenly over a period of three months and that the technical assessment will be scheduled approximately six months before an anticipated upgrade.  Although volume 7 of the Ops Manual is not expressly incorporated into the employment contract, the claimant, when being cross-examined, accepted that volume 7 stated the steps he had to go through to achieve suitability: Transcript pp. 24F & 25B-E.   Paragraph 11.1 is also relevant to explain what is entailed by the requirement of maintaining a Grade A standard under paragraphs 7.2 and 7.3.B of the Ops Manual (Vol.1 Part 3).  On the evidence, when the claimant attained Grade A standard in November 2007, he had yet to maintain the standard and to complete three training modules.  Before meeting these requirements, the claimant could not have been arranged for STI.  It follows that he could not have completed STI satisfactorily by January 2008 or have been assessed suitable by the URB by February 2008.

Seniority of the claimant

42.As to the finding that the claimant would be the next most senior SO had he been assessed earlier, the evidence at the trial is that in February 2008, he was no.129 on the seniority list. At the Deputy Presiding Officer’s request, CPA had prepared a table (Table D32), setting out,inter alia, the number of DEFO recruitments, extensions of passenger and freighter captains beyond retirement age and the number of SO receiving BPP for the period from January 2007 to October 2008.  The Deputy Presiding Officer took the view that had the defendant undergone technical assessment in February 2008, it was probable that some of the more senior SOs would have been assessed as unsuitable.  Based on the previous SO URB results(i.e. from July 1998 to October 2008), he worked out the average failure rate to be 18.1%.  After deducting 10 SOs who had been assessed as unsuitable and another 31 SOs who were receiving BPP, he applied the 18.1% failure rate to the remaining SOs that were more senior than the claimant and adjusted the claimant’s seniority to no.103.  From the Table, he further worked out there were a total of 106 DEFO recruitments and passenger captains’ extensions and freighter captains’ extensions.  Accordingly, he concluded that the claimant would have been the next most senior SO suitable for promotion had he completed the STI and was assessed as suitable by the URB in February 2008.

43.The findings and reasoning of the Deputy Presiding Officer on the seniority of the claimant are fraught with several evidential difficulties.  First, the adoption of the 18.1% notional failure rate is arbitrary.  The failure rate in fact fluctuated from year to year.  As in the case of the suitability of the claimant for promotion, there is no evidence on the suitability of the other 128 SOs who were more senior than the claimant.   The Deputy Presiding Officer therefore resorted to the use of statistical data to gauge the outcome of the assessments of these SOs.  However, thereis no evidential support for the appropriateness and reliability of the method that he had adopted. There is nothing to show that the previous results of URB assessments are reliable indicator of the performance of other SOs in future assessments.   

44.Second, which is also a point on the methodology used, there is no explanation for the assumption that the claimant would have been found to be suitable instead of being unsuitable when applying the 18.1% notional failure rate to the group of SOs that included the claimant.  Mr Scott SC says that this is because the claimant passed the assessments the first time he took them.  In my view, the fact that the claimant was assessed to be suitable some months later cannot, in the absence of further evidence, provide a solid basis for concluding that he would surely be assessed as suitable in February 2008.  As a matter of fact, the claimant was by then not yet qualified for assessment. 

45.Third, the 106 DEFO recruitments and passenger and freighter captain retentions in February 2008 had included the extensions of 41 freighter captains formerly employed by ASL.  Out of them, 23 reached the age of 55 and had theircontracts extended before January 2008.  Under the terms of the Annex to COS99 on Freighter Aircraft Crewing (“the Annex”), which expired on 31 December 2007, the extensions of these freighter captains will not trigger entitlement to BPP.  This is common ground.  The retentions of these 23 freighter captains therefore should not have been taken into account when reckoning the seniority of the claimant and his entitlement to BPP.   The claimant argues that because the freighter captains remained on the seniority list and their extensions continued after the expiry of the Annex, the Deputy Presiding Officer was correct to have included them.  I am unable to accept this argument.  Although the freighter captains remained on the seniority list, their extension upon attaining the age of 55 was a past act.  There could not have been a second extension after the expiry of the Annex.  Further, the argument is directly contrary to the terms of the Annex.  It was not provided in the Annex that the entitlement to BPP would be suspended during its occurrence and revived after its expiry.

46.Mr Huggins SC had in his submissions referred to a wider question about the inclusion of all 41 freighter captains in ascertaining whether the claimant would have been the next most senior SO in February 2008.  The issue that was before the Tribunal was whether the retention of freighter captains beyond the age of 55 would trigger entitlement to BPP under clause 10.2 of COS99.  It was CPA’s case that when COS99 was issued, CPA itself did not employ freighter captains.  After CPA began to offer employments to freighter captains employed by ASL (for the use of CPA) in about 1999 or 2000, the Annex was introduced, the effect of which is that retention of freighter captains would not trigger BPP entitlement.  It was accepted by the claimant that the Annex formed part of his contract.  When the Annex expired by the end of 2007, CAP introduced a “Policy on Crewing Freighter Aircraft – 2008” that contained, inter alia, similar terms on BPP entitlement.  The Deputy Presiding Officer found as a fact that this document was introduced unilaterally by CPA and did not form part of the claimant’s contract.  He considered that the word “captains” in clause 10.2 of COS99, given its natural and ordinary meaning and as understood by a reasonably well-informed man in 2006, would include both passenger and freighter captains.

47.CPA’s argument on appeal is that by reason of the Annex, which formed a part of the contract, the word “captains” in clause 10.2 of COS99 did not include freighter captains and this remains to be the position notwithstanding the expiry of the Annex.  Therefore freighter captains continue to be outside the meaning of “captains” under clause 10.2 and the Deputy Presiding Officer fell into error in construing clause 10.2 and in including the 41 freighter captains when reckoning the seniority of the claimant in February 2008. 

48.In the course of his submissions, Mr Huggins SC advanced a further argument on the 18 freight captains (i.e. 41 – 23).  It was pointed out that they were employed by ASL before and were transferred to and became employed by CPA for the first time when the Annex expired.  Hence, it is not a case of retention by CPA and falls outside the scope of clause 10.2 of COS99. 

49.Having regard to my other conclusions on the finding that the claimant’s seniority, it would be not be necessary to resolve this problem of the definition of captains under clause 10.2 of COS99.  I need only make this observation: The arguments advanced by CPA in this appeal cannot be decided without examining the factual circumstances surrounding the retention and employment or transfer of the freighter captains.  I do not consider that there is sufficient evidence or analysis of the facts in this appeal to enable a concluded view be taken on the issue whether freighter captains are within the meaning of clause 10.2.      

50.In summary, the findings on the claimant’s suitability for promotion and seniority are problematic in that there is no proper evidence before the Tribunal.  Mr Scott SC refers to the case of Ashcroft v. Curtin [1971] 3 All ER 1208, which was an appeal against the award of damages in a personal injury case.  Edmund Davies LJ, with whose judgment the other members of the court agreed, felt that while the probability was that some loss to the plaintiff would have resulted from the accident, it was quite impossible to quantify it.  He however did not accede to the defendant’s submission that this should result in a “nil” award because this would not meet the justice of the case and also it would mean that “arithmetic has failed to provide the answer which commonsense demands” (at p.1213g-i).   The claimant asks this court to take the same view and approach in this case.  It is submitted that where there is a breach, the court will do its best to assess loss even if there is limited materials for the purpose.

51.The position of the present claim is rather different from that in Ashcroft v. Curtin.  The problems underlying the issues of the claimant’s seniority and suitability for promotion do not relate to quantification of damages or loss to the claimant, but go to the fundamental question of liability and of establishing a breach on the part of CPA. If, as in this case, there is no or insufficient evidential basis for making the necessary findings, the court cannot resort to hypothesis and assumptions or commonsense and find for the claimant on these bases.     

Eligibility to receive BPP as from 1 March 2008

52.The last of the broad grounds of appeal relates to the finding that by reason of the breach, the claimant was eligible to receive BPP as from 1 March 2008 under either clause 10.2 or clause 10.5 of COS99, and to the ruling that the question of whether the BPP should be payable under clause 10.2 or clause 10.5 is to be dealt with at the determination of the quantum.  Under the two clauses, the commencement dates for BPP are different.  In the case of clause 10.2, it commences on the date that the retained captain reaches the retirement age.  In the case of clause 10.5, it commences three months after the date of the joining of the DEFO.  In either case, it is not the same as the date the claimant should have been assessed as suitable for promotion.  Thus viewed, the finding that the claimant is eligible to receive BPP as from 1 March 2008 runs counter to the contractual provisions in clauses 10.2 and 10.5.

53.It is further incorrect to leave the question of whether the claimant was entitled to be paid BPP under clauses 10.2 or 10.5 to the determination of quantum.  The Deputy Presiding Officer was obliged to make a finding of fact that the claimant was the second most senior SO suitable for promotion, in the case of clause 10.2, after the retention of a relevant captain beyond the retirement age, and in the case of clause 10.5, after the recruitment of a particular DEFO.  It is a necessary finding of fact relating to an issue of liability; it is not a matter of quantum. 

Conclusion

54.For the reasons set out above, the appeal is allowed. 

55.Applying the normal rule of costs follow event, there is an order nisi that the claimant pays the respondent the costs of the appeal, including the costs of the application for leave to appeal, but excluding the costs of amending the grounds of appeal and to be taxed if not agreed.

56.Counsel had indicated they would wish to be heard on the consequential orders.  I would invite the parties, having regard to the reasons set out in this Judgment, to try to agree on the consequential orders and directions within 14 days from the date of this Judgment.  Failing agreement, the parties shall approach the listing officer to fix a hearing to deal with the consequential orders and directions.

Mr John Scott SC instructed by Messrs Robertsons for the  claimant (respondent).

Mr Adrian Huggins SC instructed by Messrs Mayer Brown JSM for the defendant (appellant).

Please refer to HCMP2399/2010 for the relevant appeal(s) to the Court of Appeal.