Chan Yat San v. Future Lucky (296) Ltd

HCLA 18/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 18 OF 2012

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1265 OF 2012)

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REASONS FOR DECISION

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1.This is an application for leave to appeal against the decision and award of the Presiding Officer of the Labour Tribunal (“Tribunal”) made on 8 October 2012 (“Award”), whereby the Defendant (“Company”) was ordered to pay to the Claimant wages in lieu of notice, annual leave and holiday pay, and long service payment totalling $59,907.35, together with interest and costs. At the conclusion of the adjourned hearing on 24 January 2013, I granted leave to appeal. The following are the reasons for my decision.

2.The Claimant instituted proceedings in the Tribunal in April 2012.  Witness statements were filed by the parties in April and May 2012.  The case was set down for “mention” hearings on 3 July 2012 and 31 July 2012 respectively.  Supplemental witness statements and documents were filed in the interim.  A further hearing was set for 19 September 2012, again “for mention”.  The Company applied for an adjournment of the hearing on 19 September 2012, on the ground that its representative, Mr Lau Tak Kin (“Lau”), was not in Hong Kong.  Such application was granted, and a further mention hearing was fixed to take place on 8 October 2012.  The Company was at all material times represented by Lau, the sole director and shareholder of the Company, who signed and filed all the documents used in the Tribunal proceedings on behalf of the Company.   

3.On 3 October 2012, Lau was admitted to the intensive care unit of the Prince of Wales Hospital for neurosurgical treatment.  He was comatose and remained in intensive care on 8 October 2012.  On that ground, Mrs Lau wrote to the Tribunal on 4 October 2012 to request a postponement of the hearing scheduled for 8 October 2012.  Due to the fact that the hearing for mention had already been postponed from September 2012, the Tribunal refused Mrs Lau’s application for a further adjournment, and required the Company to send another representative to attend the hearing on 8 October 2012.

4.When the hearing commenced on 8 October 2012, the Company was unrepresented.  The Tribunal officer contacted Mrs Lau and, having made inquiries with the Claimant who claimed that a Mr Lee could represent the Company, requested that Mr Lee should appear at the hearing for the Company.  Mrs Lau informed the Tribunal that Mr Lee could not represent the Company, as he was not an employee of the Company and was only a driver with the same status as the Claimant, and that as Lau was not able to attend, the Company could not send any representative to the hearing. 

5.The Presiding Officer decided to proceed with the hearing on 8 October 2012 in the absence of the Company.  Being satisfied that the facts relating to the claim had been sufficiently established, the Presiding Officer made the Award in favour of the Claimant, exercising her power under section 21 of the Labour Tribunal Ordinance (“Ordinance”). 

6.On 17 October 2012, the Company applied to this Court for leave to appeal against the Award, on the ground that the Presiding Officer had erred in law, inter alia, in deciding to proceed with the hearing and to make the Award in the absence of the Company, in failing to conduct a fair trial and to hear the evidence of the Company’s witnesses, and in ruling that the Claimant was an employee of the Company and not a self employed contractor. 

7.Under section 32 of the Ordinance, any party dissatisfied with an award, order or determination by the Tribunal on the grounds that the award, order or determination is erroneous in point of law, or outside the jurisdiction of the Tribunal, may apply for leave to appeal.  The onus is on the applicant for leave to show that the intended appeal has arguable grounds of appeal (Chan Kwok Hung v Hotel Pennell Rama Company Ltd [2009] HKCU 1818).

8.In support of the Company’s application for leave to appeal, Counsel has relied on cases which highlight the right of a party to challenge the evidence of its opponent by cross-examination.  It was argued that the Company has been deprived of the opportunity to call its witnesses to give evidence, to test the Claimant’s case and to cross examine the Claimant.  The Company claims that the Award is “unsafe” and that it has been deprived of a fair trial.

9.There is no question that the Tribunal has power, under section 21 of the Ordinance, to hear and determine a claim in the absence of a defendant, “if the Tribunal is of the opinion that the facts relating to the claim are sufficiently established”.  It is also clear that under section 20 of the Ordinance, the role of the Presiding Officer is inquisitorial (Chan Suk Bing Angie v Harbour Phoenix Ltd [1992] 2 HKC 459), such that the Presiding Officer has to discharge a statutory duty to investigate all relevant matters. However, as the late Deputy Judge Jerome Chan explained in Chan Suk Bing, there is a limit to that duty to investigate, which is not absolute:

“It is obvious that not every failure to investigate a relevant matter will give rise to an appeal for a failure to discharge a statutory duty. The relevant matter forming the subject matter of the complaint must not only be relevant but be of such a nature that the lack of investigation will give rise to injustice, in that, a fair and proper determination of the claim cannot be attained. All the circumstances of the case as well as all of the findings must be given all due regard before such a complaint could be upheld. …To suffice, it must be a clear and obvious case that the inadequacies of an investigation will render an ordinary reasonable man on the tram to Shaukiwan to conclude that injustice has resulted in that a fair and proper determination of the claim cannot be attained.”

10.In her Reasons for the Award, the Presiding Officer stated that in choosing not to send a representative to attend the hearing on 8 October 2012, the Company had waived its right to present its evidence.  The Presiding Officer also made it clear in her Reasons that she had considered the witness statements of all the witnesses and the related evidence, before making the Award. 

11.The key issue for determination by the Tribunal is whether the Claimant was an employee of the Company, or an independent and self employed contractor providing services for the Company.  The Company provided vehicles for hiring by clients, and made oral contracts with drivers whereby the latter would accept orders from the Company to drive the Company’s vehicles and provide services to the Company’s clients.  The Claimant was one of such drivers.  The hiring charges paid by the client were shared between the Company and the driver.  The driver had to pay fuel charges as well as any traffic penalties, whereas the Company bore the costs and expenses of insurance, repair, maintenance, licensing and parking of the vehicle.  The Presiding Officer considered all the indicia set out in Poon Chau Nam v Yim Siu Cheung [2007] 10 HKCFAR, and concluded that the more important features of the case were that the Company had control over the Claimant’s work, and that the Claimant did not bear any risk of the business nor enjoyed the benefit of profit from the business, such that as an overall impression, the relationship between the parties was one of employment.  It is clear that the Presiding Officer had applied the correct legal principles. 

12.Nevertheless, it is true that, from the evidence filed before the hearing, there is a disparity in the parties’ evidence as to important aspects of the case, namely whether the Claimant had the right to refuse work orders given to him by the Company.  The Claimant alleges that he had no control over the work given to him, which was decided by the Company, and further, that he could not undertake any work other than the Company’s work orders.  According to the Claimant, the Company’s representative would telephone him the night before any work was assigned to him, but if no work was assigned to him in the evening, he would not have to report for work the following day.  According to Lau’s witness statement, the Claimant had the right to accept or refuse any work order assigned to him.  Lau claims that the Claimant had refused work orders relating to particular companies, and work relating to half a day only. The Company further claims that the Claimant was free to accept any other work assignment from or engagement by third parties, but in the event that the Claimant required use of the Company’s vehicle to carry out such work, then the Claimant had to first notify the Company and obtain its approval.  The statements of 5 drivers who filed evidence on behalf of the Company support the Company’s case that the drivers had the freedom of choice whether to accept, or reject, work orders of the Company.

13.Although the Presiding Officer states in her Reasons for the Award that she had considered all the evidence, there was no reference to, or reasons given for rejecting, the Company’s evidence relating to the Claimant’s freedom of choice of work, other than to the Claimant’s explanation for not working on Saturdays, Sundays and public holidays. 

14.The issue of the Company’s control over the Claimant’s work is clearly a relevant and indeed important issue for determination.  The Presiding Officer should have investigated this relevant issue before determining the case.  Instead of deciding on the claim in the absence of the Company, the Presiding Officer should have given the opportunity to the Company to call its witnesses to give evidence on the issue of its lack of control of the Claimant’s work, and to test the Claimant’s case by reference to the evidence of Lau and the drivers who had given statements for the Company.  I agree that on the face of the Reasons for the Award, it is at least arguable that there was inadequacy in the Tribunal’s investigation in this important aspect, such as to render an ordinary reasonable person to conclude that injustice has resulted, in that a fair and proper determination of the claim cannot be attained. 

15.The Presiding Officer referred in her Reasons for the Award to documents signed by Lau and by Lau’s father, certifying that the Claimant had received wages and other payments from Future Lucky Ltd, the company formerly operated by Lau’s father before his death, in respect of the period covering 1 April 2007 to 31 March 2011.  The Presiding Officer considered that these documents evidence the fact that the Company had regarded the Claimant as part of the Company’s organization.  The Company was only acquired by Lau in April 2010, to continue the business formerly operated by Lau’s father.  As Counsel for the Company pointed out, the Company is a separate legal entity and distinct from the company operated by Lau’s father.  It is reasonably arguable that the Presiding Officer had erred in law in having considered irrelevant materials in reaching her decision on the existence of a relationship of employment between the claimant and the Company. 

16.For the above reasons, I consider that the Company has arguable grounds of appeal, and granted leave to the Company. 

Mr Henry LW Fung, instructed by Li, Wong, Lam, & WI Cheung, for the defendant/appellant