In Blakeney-Williams Campbell Richard and Others v. Cathay Pacific Airways Ltd. and Others, FACV13/2011, 26 September 2012, the employers - Cathay Pacific Airways Limited and its two subsidiaries (collectively referred as “Cathay”) were held to have infringed their employees’ legal rights to be a member of a registered trade union and to take part in the activities of the trade union.  In this article, we shall examine the extent of such legal rights conferred to the employees by section 21B of the Employment Ordinance Cap. 57 (the “Ordinance”).

The dismissal

The dismissed pilots were members of a trade union registered under the Trade Unions Ordinance (Cap. 332) (the “Union”).  In July 2000, the Union initiated ‘contract compliance’ regime involving ‘rigid adherence’ to the strict terms of the pilots’ employment contracts.  Flight delays or cancellations of flights were caused as a result.  After a year in June 2001, the Union contemplated escalation of industrial action to ‘Maximum Safety Strategy’ which, as the Union recognized, would lead to more substantial flight delays.  With the announcement of the escalation of industrial action, some 49 ‘involved’ pilots were dismissed with payment in lieu of notice by Cathay.  In all cases, the termination was by way of three months’ pay in lieu of notice, and no reason for the dismissal was identified in the respective dismissal letter.  On the same day, Cathay made defamatory statements against the pilots in public, alleging that those pilots were “unprofessional” and not caring for Cathay's best interests.

The dismissed pilots then commenced legal action against Cathay to claim damages for (i) breach of statutory duty, (ii) breach of contract, and (iii) defamation.  We shall focus on claims (i) and (ii) in this article.

Decisions of the lower Courts

At the Court of First Instance, the pilots won all three heads of claims above.  At the Court of Appeal, the pilots won claims (i) and (iii) but the damages for defamation under claim (iii) was substantially reduced.

The issues before the Court of Final Appeal

Both Cathay and the pilots cross-appealed to the Court of Final Appeal.  The issue before the Court of Final Appeal was whether Cathay had “terminate[d] the contract of employment of” each of the pilots “by reason of his exercising” “the right, at any appropriate time, to take part in the activities of the [Union]”.  The determination of this issue turns on (i) Cathay’s reasons for dismissing the pilots, and (ii) the meaning and effect of s 21B of the Ordinance.

Whether in breach of the Ordinance

The Court of Final Appeal examined in detail the constitutional framework for employee protection in trade union activities in Hong Kong.  The Court of Final Appeal concluded that in order to give proper effect to the employee’s right to join a trade union, this legal right encompasses not only a right to become a member of a trade union, but also a right to be able to join in the activities of that trade union; and that (i) the scope to be given to the expression “activities of the trade union” is broad, which produces a coherent and practical outcome involving relatively wide protection for employees, but (ii) such protection is circumscribed by the concomitant protection for employers, which is embodied in the “appropriate time” limitation by s21B(3).  

Section 21B(3) defines (i) “appropriate time” as being either (a) “outside [the employee’s] working hours” or, (b), if “within his working hours” is a time “at which, in accordance with arrangements agreed with … his employer, it is permissible for him to take part” in “any activities of [the] trade union”, and (ii) “working hours” as meaning any time when, “according to his contract of employment, [an employee] is required to be at work”.

Accordingly, most (possibly all) union-sponsored action is potentially protected by s 21B(1)(b) of the Ordinance, but if the action is not carried out “at [an] appropriate time”, it is excluded from the provision.

In applying the above to the facts of this case, the Court of Final observed that none of the activities of the pilots formed an integral part of contract compliance that took place at a time when the pilots were required to be at work; and Cathay’s predominant reason for dismissing the pilots was for their having been a member or engaged in union activities.  As such, ruled that Cathay was in breach of the Ordinance and was liable to compensation payable to the pilots.

Whether in breach of the employment contract

Further, the Court of Final Appeal held that on a true construction of the employment contracts in question, if the dismissal was not based on any wrong-doing by the employee, he would merely be entitled to three months’ notice, or three months’ pay in lieu.  However, if the employee was to have the “stigma” of a disciplinary reason for his dismissal, then, he would be entitled to have the protection of the disciplinary and grievance procedures set out in the employment contract first.  The fact that this may give him a few extra weeks in his job, as against someone who is dismissed for reasons involving no wrong-doing on his part, was merely the consequence of this entitlement of being protected by the disciplinary and grievance procedures.  On the facts of this case, Cathay was found to be in breach of the employment contracts for failing to go through the disciplinary and grievance procedures.  The Court of Final Appeal therefore restored the award of one month’s pay made by the Trial Judge to each pilot.

Conclusion

Other than contracting liability to pay compensation to an employee, a breach by an employer of an employee's rights conferred by the Ordinance may, in certain circumstances, constitute a criminal offence.  Therefore, dismissal of employees should always be treated with caution so as to ensure their legal rights are not infringed.