The case of Chu Yeut Lin and Another v. Everbright Groups Limited [2024] HKCFI 1626 relates to a claim by several employees (“Employees”) against their employer (“Employer”) for severance and long service payments. The Presiding Officer of the Labour Tribunal (“Tribunal”) found that there was delay in the Employer’s conduct of its defence to the claims made and the Employer was then ordered to pay security into Court in the sum of HK$231,166.37 for the claims made by the Employees. The Employer applied to the Court of First Instance (“CFI”) for leave to appeal on a question of law against the Order of security for cost made at the Tribunal.
Brief facts
The Employer’s application for leave to appeal was made under section 32 of the Labour Tribunal Ordinance (Cap.25) (“LTO”) on the ground that the Order was erroneous in law. The Employer argued that the Presiding Officer had (1) wrongly taken into account the merits of the case, (2) formed a preliminary view on the merits of the Employer’s case before the filling of its defence, (3) erred in his finding of the Employer’s delay, and (4) failed to give sufficient weight to the Employer’s explanation for asking a time extension for filing its defence.
The Employer contended that under section 30 of the LTO, the Presiding Officer should only exercise his power to order security if there is undue delay or undue delay which led to an abuse of process, but neither situation applied to this case. The Employer also argued that the Presiding Officer should not have taken into account the merits or absence of merits of the defence when deciding whether to order security to be paid.
The Court’s decision
Power of the Labour Tribunal to order payment of security
Section 30(1) states that “the tribunal may order a party to give security for the payment of an award or order that has been or may be made if the tribunal considers it just and expedient to do so”. Subsection 30(4) provides the various circumstances an order for payment of security may be made, clearly stating that such circumstances are “without limiting” the provisions in section 30(1).
The CFI therefore concluded that the Tribunal may order a party to give security for payment of an award that may be made if it considers it as “just and expedient” or “just and convenient” or “just” to do so. The Employer’s argument that the Tribunal’s power to order payment of security is only confined to where there is abuse of process or undue delay. It was found that both were absent in the case. The CFI also emphasized that the powers sought to be conferred on the Tribunal were not intended to be confining in nature. Therefore, the Employer’s argument was rejected.
The Court’s consideration of the merits when exercising its discretion
The CFI held that in the Labour Tribunal’s exercise of its power and discretion to order payment of security, the Tribunal would consider all the relevant circumstances of the case to weigh the justice or injustice of granting the order made. Thus, the Tribunal is entitled to take a preliminary view of the claims made by or against the party based on the available information.
In this case, the Tribunal had already issued a letter to the Employer on 1 February 2024, requesting the Employer to send all relevant documents in relation to its defence to the Tribunal before 15 February 2024 (“Letter”). However, the Employer filed to extend the deadline for the submission of the documents specified in the Letter instead. The CFI agreed with the Reasons for Decision by the Presiding Officer that it was wishful thinking on the Employer’s part, that an extension of submission and an adjournment would eventually be granted.
During the Tribunal hearing, the Employer’s representative was asked to explain the basis of its defence to the Employees’ claims, but she was unable to give any details and instead asked for an adjournment of the hearing. The CFI stated that the Tribunal was entitled to expect the Employer to inform the Tribunal and the Employees of the facts on which it relies on to substantiate its opposition of the claims made in the proceedings. The CFI therefore ruled that the delay in submitting the relevant documents and the failure to present its own case would justify the Tribunal’s decision as just and expedient to order security.
For the reasons above, the CFI considered there was no arguable ground for the appeal against the Tribunal’s Order and declined leave to appeal.
Takeaways
The decision confirms the wide scope of power that the Tribunal has to order security when it believes it is just and expedient to do so. Thus, it is of vital importance to follow the deadlines set by the Tribunal. If the deadline is likely to be missed, an extension should be applied for as soon as possible.
Also, since the Tribunal is entitled to expect any litigant in person to be able and under duty to present the facts of its own case on which it relies on, employers should make sure that the representative attending the hearing at the Tribunal is familiar with the case and the defence, even if it is only intending to request for an adjournment.
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For further information, please contact:
Angela Wang, Partner, Angela Wang & Co
angelawang@angelawangco.com
