Podcast S4E2 | Employment: Labour Tribunal Proceedings

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TRANSCRIPT

Tune in for Series 4 of The HIP Talks podcast: a series of discussions on legal issues hosted by Hugill & Ip Solicitors – an independent boutique law firm in Hong Kong providing bespoke legal services and exceptional client service to individuals, families, entrepreneurs and businesses, locally and internationally. Clients have diverse issues: some require immediate attention and speedy outcomes; others require the building of a long-term partnership between solicitor and client. In all situations and for all clients, Hugill & Ip provides clear practical advice to help achieve the best results. The firm has achieved outstanding recognitions in the most recent editions of the major legal directories, as well as remarkable results in the areas of Dispute Resolution, Corporate & Commercial, Trusts & Estates, Family, Employment & Business Immigration and Data Privacy.

Harry Tang  00:53
Hello, everyone, I am Harry Tang from Hugill & Ip. Today I have the pleasure to discuss Labour Tribunal proceedings in Hong Kong with our firm’s founding partner, Adam Hugill.

Adam Hugill  01:02
Morning, Harry.

Harry Tang  01:03
Morning. Adam, surely it is inevitable that in employment relationships employment-related disputes arise between an employee and employer. Thankfully, the Labour Tribunal has adjudicated disputes between employees and employers since its establishment in 1973. To start off, Adam, could you first share with us some key points regarding the Labour Tribunal in Hong Kong?

Adam Hugill  01:27
Thank you, Harry. The key purpose of the Labour Tribunal is to offer a quick, informal and inexpensive way of settling monetary disputes between employers and employees. Both employers and employees can bring claims against one another, but the important matter to keep in mind is that it must relate to either the Employment Ordinance or the employment contract. Also, the claim can only be for a sum of money, you cannot seek other forms of relief such as injunctions and the like. The other key thing to remember is that no legal representation is allowed in the Labour Tribunal. In order to keep costs down, lawyers are not permitted to represent their clients. So, this means that the Labour Tribunal officers need to provide some assistance to employees when they file the claim. So, they often helped draft the claim, interview the employee and set out the key facts. And then the role of the presiding officer – which is the Labour Tribunal judge – is much more inquisitory than it is in the regular court system. And so the presiding officer is under a duty to fully investigate all of the facts before arriving at a decision. This being said, lawyers are often in the background. We’re often involved in preparing a lot of the written documentation, the evidence, and should it come to trial submissions, cross examination questions, and like.

Harry Tang  02:45
I see. What are the common types of claims which are presented before the Labor Tribunal in your experience?

Adam Hugill  02:52
Well, as I say, the claims will always be for a sum of money, and that money usually relates to unpaid wages, unpaid bonuses, underpaid bonuses, or non-payment of annual leave, statutory severance pay, statutory long service pay and the like. While the Labour Tribunal doesn’t impose a maximum on the amount that can be claimed there is a minimum of 15,000 Hong Kong Dollars and claims for less than that some have to be dealt with in a different forum, which is the Minor Employment Claims Adjudication Board.

Adam Hugill  03:23
The other important thing to remember when bringing a claim is limitation periods. Most claims arise under contract and the limitation period for breach of contract is six years. However, claims for severance and long service pay must be brought within a shorter period of time, which is within nine months. In addition to claims being brought by employees, employers can also bring claims against their former employees. These are often claims that relate to notice pay, so when an employee leaves the job but doesn’t see through their notice period, or if there’s been an overpayment of wages.

Harry Tang  03:57
I see, Adam. There may be instances where employees were treated unfavorably in the workplace, sometimes based on their race, sex or disability. Would the Labour Tribunal assist in these cases?

Adam Hugill  04:11
Not really, it’s not uncommon for claims to be a mixed bag, so they include aspects of breach of contract, but also breach of Discrimination Ordinance(s). I think that’s what you’re referring to there. And so, claims for sex race, disability discrimination, are often featured in Labour Tribunal proceedings, but it’s not something that the Labour Tribunal can adjudicate on. Those cases would have to be dealt with by the Equal Opportunities Commission, and if the Equal Opportunities Commission cannot find a resolution, then the employer would need to bring the claim in the District Court. There’s the famous case of Sunny Tadjudin v Bank of America, where she had a mixed bag of claims, including bonus claims, which ran for at least a decade, but underneath that there are also claims in the District Court for sex discrimination that has been brought. And so even though everything arose from the same series of facts, she actually had to fight the case on two different forums.

Harry Tang  05:01
Thank you, Adam. I also understand that cases can be transferred to the High Court. Could you elaborate more on that point?

Adam Hugill  05:08
Yes, the Tribunal has authority to transfer a case that it’s unable to handle to the High Court or the district court for adjudication. This usually happens where the case contains aspects of tort, which is something that the Labour Tribunal is not entitled to deal with, if the case is very complex and requires expert evidence, if the areas of law are very complicated, or if there’s a very high risk of appeal, and so the Tribunal will make an order that the case has to be transferred either to the District Court, if it’s worth under HK$3 million, or the High Court, it’s worth more than HK$3 million.

Harry Tang  05:45
I see. Adam, let’s elaborate more on the claim process. So, what should I do, for example, if I decided to file a claim?

Adam Hugill  05:54
Okay, the process is very simple, it actually works very well. And so, there’s a 24-hour hotline that you can contact. And the information relating to all of this is on the Judiciary website, it’s very easy to access. You need to make an appointment to meet with a tribunal officer. And it’s usually possible to get an appointment within, say, two weeks of making the telephone call. During recent times with COVID restrictions and the like, these times have been pushed out a little, but things are normalizing now. Once you meet with the tribunal officer, the tribunal officer will interview you and take down all of the facts of the case, as well as your personal details and details of your employer. It’s important to bring everything with you to that meeting, so your employment contract usually, any correspondence that relates to your claim, and importantly, documentation to establish who your employer is, because the Labor Tribunal actually serves your employer with the proceedings not you directly, which is a different to the usual court system.

Adam Hugill  06:51
Once your claim has been accepted, the tribunal officer will print off three key forms that you must be aware of:

1. Form One is very straightforward. It’s your personal details and the details of your employer. And you just need to make sure that they’re recorded correctly.
2. Form Two is a summary of your case. And so, it breaks down your case into various components, whether it’s wages, bonus, unpaid salary, severance pay, etc. and simply quantifies the value of each claim, there’s no explanation that goes with it.
3. And then Form Three is notice of the first appointment. Now, the first appointment hearing must take place within one month of you filing your claim – that’s actually written into statute. And one of the things that a number of employees come to us is they say, “oh, my goodness, I’ve just been served with these papers, and the first appointment is in 20 days’ time, we have no time to prepare for it”. And the answer is, unless both sides agree, and there’s never very much agreement in these situations, the first appointment will go ahead. And so that’s the key dates to put in your diary and that’s essentially unmovable.

Harry Tang  07:54
I see, Adam. Are there any substantial filing fees to file a claim?

Adam Hugill  07:59
Again, because the process is intended to be very inexpensive. The filing fees are very cheap. It’s about HK$50 to file a claim, which is significantly less than court fees, which are often a few hundred, if not a couple of HK$1,000.

Harry Tang  08:12
Thank you, Adam. I understand that some employees or employers would seek a quick settlement of the employment disputes. What happens when the defendant agrees to pay the claim in full?

Adam Hugill  08:25
If you end up in a situation where once the claim has been filed, the defendant sees the pleadings, sees the case against them and decides to pay, then the person can simply contact the Labour Tribunal admits to the claims against them. The Tribunal will draw up an order. Often money gets paid into the tribunal that would then be paid out again to the claimant, but sometimes you can strike a deal between yourselves and as part of that deal, the claimant would agree to withdraw the case. The difference is many employers don’t want to admit to wrongdoing and so would prefer to reach a deal without admission of liability. In order to do that, there would need to be – if you’d like – a private settlement between the claimant and the defendant, whereby the defendant then withdraws his case rather than it being adjudicated and instantly awarded by the tribunal.

Harry Tang  09:11
And are the settlement negotiations stressful for both employees or employers in your experience?

Adam Hugill  09:18
Often, yes, because the reason it’s got to this stage is because there’s been a substantial falling out between the employer and employee. Often lawyers have been instructed on at least one side and that can raise the tension for everybody involved. Putting settlement discussions to one side, the Labour Tribunal process itself can be fairly stressful. As I say it’s intended to be quick, informal and inexpensive, but for people involved in the process, it never feels informal.

Adam Hugill  09:46
The Labour Tribunal itself is set up like a courtroom and so the presiding officer is in a black gown and sits high up on a chair in front of everybody. There’re two desks facing the presiding officer and a court clerk and then a public gallery, so it feels very much like a court. And whilst you or I are very familiar with standing up and speaking in court, people who aren’t lawyers are not used to this, find it a very intimidating process. Everybody’s concerned about saying the wrong thing. They’re concerned about being asked a question and not being able to find the answer. They’re concerned about not being able to find a document that gets referred to – as for this reason, many of our clients actually ask me or one of my colleagues to sit behind them in the courtroom. And whilst we can’t do anything to address the court directly, we can assist them if a question gets asked out of the blue that they feel that they can’t answer, or to shuffle through papers, because we’re much more familiar with the way that the bundle or the packets been put together. And so, through hand holding like that, we can alleviate the stress. But that being said, it’s very stressful process for everybody involved.

Adam Hugill  10:52
The other thing that people fail to appreciate, is that whilst we say it’s a quick process, unless the matter settles, it will take a long time for the case to go to trial, at the moment, is taking about 18 months for cases from start to finish to go to trial. Now it’s possible to get a case that goes much quicker, if the facts are very simple. But often it takes longer than people expect. And there are a number of hearings, people need to attend. The Labour Tribunal process checklists, everything that happens as it goes through. So, at the first appointment, we’ve just talked about the likely order made by the court will be to file more documents, what they often do is they get people to file documents at the same time and essentially cross them over, and then file another round of documents and cross them over. And then a few weeks after that, there’s another hearing where the tribunal make sure everybody’s followed the directions, learns a bit more about the case, identifies whether there are any holes in the case or holes in the evidence, and then may even issue a round of requests for more documents to be filed. And so, it’s not uncommon for a case that doesn’t settle to go through three or four interim hearings before it goes to trial.

Harry Tang  12:00
Thank you, Adam. Could you elaborate more what goes on in trial?

Adam Hugill  12:05
Okay. Recently, I’ve had three cases, all going to trial in the Labour Tribunal. And they’re very much dependent on the facts on the parties and on the way that the presiding officer wants to conduct the case. And so, one of the cases was very straightforward. It was an individual, and the other side didn’t show up. And so that was the presiding officer making inquiries of the individual following through their investigatory powers, and then making a very quick outcome.

Adam Hugill  12:33
The other case was a case that ran for two weeks solidly, with four or five claimants, and each of those claimants bringing five or six witnesses, and so it is a very long and slow process. The process is also complicated and slowed down, because quite often, evidence is given both in English and in Cantonese. The presiding officers are bilingual. But quite often, they need to choose a dominant language that the case will be conducted in, and then a translator will appear to help translate for the other party. So, of the cases, we talked about two of those cases were conducted entirely in English. The very long case, which we talked about was conducted in Cantonese, with our witness, having a translator translate all of the proceedings to them, which obviously slows things down.

Adam Hugill  13:18
The other thing that the clients always get very anxious about at trial is how to address the judge, how to address the court, and how to cross examine. It’s an intimidating process, and people aren’t trained in it. And it does require special skills. And so, the presiding officers don’t tend to be too precious. And if you refer to them as Sir, or Madam or Presiding Officer, that’s fine. Although quite often, you see them being referred to as Your Honour and Your Lordship. It’s just nerves that come out. And this is how people express themselves.

Adam Hugill  13:50
The other thing that always helps is try and dress professionally: you are in a court and the judge will appreciate if you’re showing that it is a solemn court process, and it should be followed correctly. The other thing that individuals (and companies) need to be aware of is that they have responsibility for ensuring their witnesses turn up. Nobody’s going to marshal them on your behalf. And so, you need to make sure that your witnesses are ready and available. And quite often it’s impossible to say exactly when the witness will be called if the case is listed for a week, for example, the witness might not be required until Monday or Tuesday. And so, if they show up on Monday morning, they’ll be sat doing nothing, possibly not even let into the courtroom. And then they’re not available when they actually need to give evidence.

Adam Hugill  14:34
One of the things that we do see and try and manage, especially with lay clients that are representing themselves is that they prefer to put in lots and lots of witness evidence. And so, they will call ten witnesses, all of their friends that worked with them in the department to give evidence, and that really does frustrate the tribunal. It takes a long time to go through all of the witnesses and quite often their evidence doesn’t add very much. So, the rule of thumb is that one good witness is certainly worth more than five or six witnesses that don’t have that much to say or don’t have that much to add to the case.

Adam Hugill  15:08
Another question we get asked a lot is what happens if we have somebody who can give evidence, but they’re unwilling to appear? The tribunal does have power to subpoena witnesses. In all my time in Hong Kong, I’ve only ever seen subpoenas issued twice. And those witnesses were employees of the company that I was representing. And the difficulty with that is the claimant – the other side – thought that these witnesses were going to be very helpful to their case, but they weren’t, they were employees of the company. And of course, they have to give truthful evidence, but they’re going to give evidence, which aligns with what the company stances. And so, it’s always dangerous to subpoena a witness because you don’t know what they’re going to say. And if you subpoena that witness, and they say something which is damaging to your case, you’re the person that made that happen. So, you have to be very careful.

Adam Hugill  15:56
And as I mentioned earlier, cross examination is something that the lay person is expected to do, and they’ve got no real skill or training with it. Now, what normally happens is the presiding officer will do the cross examination first. And so, they will have been through all of the evidence, all of the documentation, and they will have scripted themselves, what they want to ask that particular witness, but they will also give you the opportunity to cross examine. And it can be quite fun, especially if you’ve got somebody that you can catch out in a lie, and you’ve got documentation to prove it. And so, what we often do there is we prepare sort of Q&A-style scripts. And so, you can flow through depending on what the person’s answer is to try and catch them out by referring them to documentation that proves their case to be wrong.

Harry Tang  16:40
I see Adam, given that COVID is quite prevalent now and that travel restrictions are normally in place. Would it be common for witnesses to give evidence through video link or video conference?

Adam Hugill  16:54
It’s not common, but it’s becoming used much more regularly, certainly because of COVID and the travel restrictions, it does make it incredibly difficult for both employers and employees to actively fight their cases. In the case of employers quite often the cases we handle, there’s an international element to it, whether it’s a European or US-based headquarters or a decision makers based in Australia, a case that’s coming up, the key decision maker is based in Japan. And it’s just impossible for them to travel to Hong Kong. The recent cases we had where people needed to come from the UK, it was absolutely impossible for them to come because they’re non-resident individuals, and their evidence is critical. And so, the Labour Tribunal do make arrangements for video conferencing. They don’t like it; it’s expensive… whenever video conferencing takes place, it always slows things down as well. And whenever you need to rely on technology, it often fails you. And so, the Tribunal will try and discourage it, but if it’s essential, they will allow it. They are a little bit more relaxed in how you apply for video conferencing and the tests that they will add to it. So, there’s recent High Court authority that comes out as to what you need to have in place if you’re applying for video conferencing in the High Court. Whilst those rules apply, they’re a bit more relaxed in the Labour Tribunal. So, the Labour Tribunal would want to ensure that you’re in a quiet and solemn environment, that you have technology that will work and you have technology support that will assist you and that you will be available when they require you which when dealing with video conferencing to the (United) States is often very inconvenient for the Hong Kong time zone.

Harry Tang  18:35
Thank you, Adam. Moving on to the determination of the case. Let’s say the employee or employer is not content with the outcome. Could they appeal to a higher court in Hong Kong?

Adam Hugill  18:48
Yes, there’s a right to review and a right to appeal. The appeal must be filed within seven days to the High Court, a review application must be filed within 14 days. The difference between the two is this. A review is essentially asking the same presiding officer to go back and look at their decision and essentially change it, whereas an appeal is going to a higher authority. So, in this case, it would be a High Court judge and asking the judge to essentially replace the finding. Review is less common and tends to be used in when directions or interim awards are made, which can be quickly fixed if something went a little bit wrong. Whereas an appeal is what would happen at the end of a formal trial.

Adam Hugill  19:31
The appeal process is a two-stage process. And so, the first stage is an ex parte application. So, one side applies to the High Court without telling the other side that it wants leave to appeal, which is asking the court for permission to appeal. A hearing will be fixed for about half an hour and at that hearing a preliminary bundle of evidence will be put in front of the judge and someone will make submissions either the individual directly or then at this stage they can instruct legal counsel to make submissions to essentially ask for permission or leave to appeal. If leave is granted, then the matter will go to a full contest of appeal hearing and the other side receives notice of that. And it’s prepared very much like another mini trial, but without witnesses present, it’s all legal argument based on papers.

Adam Hugill  20:19
The two grounds on which you can apply to appeal is essentially if the judge has got the evidence wrong, manifestly wrong, or applied the law wrongly. And so, it’s very limited grounds on which you can actually apply to appeal. That being said, because the application for leave to appeal is dealt with pretty quickly at a half hour hearing, especially one side is instructing counsel, it can be relatively straightforward to obtain leave to actually appeal. The danger of that, though, is if your underlying case isn’t good, when it comes to full hearing, you will lose and you will have to pay the other side’s costs. And so, appeal has consequences, which aren’t necessarily applicable in the Labour Tribunal.

Harry Tang  21:04
Ah, you’ve mentioned that there are no cost consequences in the Labour Tribunal. Could you elaborate more on that?

Adam Hugill  21:11
Yes, when we refer to costs, lawyers typically refer to legal costs. And so, the time spent by lawyers, because lawyers are not permitted in the Labour Tribunal, you’re not entitled to recover legal costs associated with your case. And so, if you do decide to instruct lawyers to advise you and help in the background, it’s very, very unlikely they’re ever going to recover those costs. So, you need to make sure that the costs you incur are proportionate.

Adam Hugill  21:35
The costs that can be awarded in the Labour Tribunal tend to be more in the form of expenses. And so traveling expenses, copying expenses, if documentations need to be produced, possibly even expert reports are recoverable. So, we say costs, but it’s more akin to expenses. That doesn’t mean that there are they can’t be serious. If somebody needs to travel from the United States, and say they’re a senior manager, it wouldn’t be unreasonable for that person to want to travel business class, and stay in a five star hotel. And if they’re here for a four or five day trial, those costs can be pretty high. And so, if you’re suing for HK$100,000 for unpaid wages, or breach of notice period, or something like that, and somebody needs to travel from overseas, their expenses costs associated with that travel could almost be as much as you’re claiming. So, you need to make sure that you’ve got a strong case, and the Labour Tribunal will often refer to costs to discourage people from pursuing cases which they perceive as being very weak. And two, you’ve got to be prepared that there could be cost consequences, especially if there’s international travel involved.

Harry Tang  22:46
Thank you, Adam. That was very informative and useful, especially for employees and employers who wants to know the ins and outs of Labour Tribunal proceedings. I’m very sure that both employees and employers can benefit from learning more about their legal options in the course of employment disputes.

Adam Hugill  23:03
Thank you, Harry.

23:06
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This podcast is for informational purposes only. Its contents do not constitute legal or professional advice.