Justice Bokhary PJ
Question of law
The question of law in this case concerns the operation of Part VI A of the Employment Ordinance, Cap. 57 (“the Ordinance”). What is the correct approach to adopt when deciding whether the employer has shown that his intention in dismissing the employee was not an intention to extinguish or reduce any right, benefit or protection conferred or to be conferred on the employee under the Ordinance? In this case that question arises in circumstances made up of the following primary facts.
For 4 years and 11 months the appellant journalist worked for the respondent publishers on their daily newspaper the South China Morning Post (“the SCMP”). His employment with them began on 1 February 1994 when they took him on as a sports sub-editor. In mid-1996 they made him the editor of Premier Soccer, a brain-child of his in the form of a supplement to Friday editions of the SCMP. On 11 December 1998, while he was holding that position, they gave him one month’s notice of termination. And his employment with them ended upon the expiry of that notice on 10 January 1999.
Even though they gave him notice and did not dismiss him summarily, their reason for terminating his employment will, as we shall see, have to be examined. As to that reason for termination, the salient facts are as follows.
At one stage there was a licensing arrangement between the respondent publishers and Times Newspapers Ltd which publishes the British daily newspaper the Times and the British weekly newspaper the Sunday Times. The arrangement was for the reproduction in the SCMP of materials from those British newspapers. It was a term of the arrangement that any such reproduction be accompanied by an acknowledgement of Times Newspapers Ltd’s copyright ownership. On 14 November 1998 the arrangement came to an end. The appellant learned of this on the 29th of that month when he read an e-mail sent to him two days earlier on the 27th by Mr Jonathan Fenby who was the editor of the SCMP at all times material to the present case. In that e-mail Mr Fenby said: “we’ve stopped the Times and Sunday Times news services so you shouldn’t pick up copy for premier soccer .... for the moment we’re not entitled to use materials from Times/Sunday Times”.
On 4 December 1998 Premier Soccer carried an article entitled “Stage set in Theatre of Dreams” under the appellant’s byline. It was about an eagerly anticipated football match to be played between the English club Manchester United and the German club Bayern Munich at a famous venue in England on 9 December 1998. The trial judge (Deputy Judge Muttrie) found that substantial portions of this article were copied directly from an article on that upcoming match by the British sports writer Mr Hugh McIlvanney which had appeared in the Sunday Times on 29 November 1998 under the title “Giants square up for the Cup”. On 7 December 1998 Mr Fenby wrote to the appellant about this copying. The appellant replied two days later by a memorandum dated 9 December 1998. Two days after that, by a letter dated 11 December 1998 from Mr Fenby, the appellant was given one month’s notice of termination.
To be fair to both sides in regard to the facts, I will set out the material parts of that correspondence in full. In his letter of 7 December Mr Fenby referred to his e-mail of 27 November and continued:
I was shocked to see in last Friday's Premier Soccer, dated December 4, that you had run around 1,500 words of copy lifted directly from the Sunday Times on the forthcoming Manchester United-Bayern match, and had done so under your own byline.
This raises very serious professional, ethical and legal questions. It is a clear case of copyright infringement despite my message to you. It is also a clear case of plaigarism on a large scale. This newspaper cannot condone either.
I would be grateful to know if there is any explanation for what happened before I decide what action to take.
The appellant began his memorandum of 9 December by saying that he was “mystified” by Mr Fenby’s letter of 7 December, and then went on to make the following points:
I received your November 27 message on November 29 (Sunday, Friday and Saturday being my rota days off). By the time I read the message on the office system 1 had already copied several articles to disk from home. At that point I disregarded Times copy from my thoughts for the coming week’s edition.
Unfortunately, available copy was practically non-existent that week and, quite frankly, rewriting the Times piece was the only option I had and after discussing the matter with Stan James decided to change my centrespread plans on the Wednesday. The Times piece was mainly reflective of the Manchester United v Barcelona match at the Nou Camp whereas my aim was to be projective to tomorrow's match at Old Trafford.
To analyse the Sunday Times piece and my copy (see attached), you will find that the original runs to 1600 words, whereas my copy runs to 1790. There are 11 substantial paragraphs of quotes which I could have legitimately received from Alex Ferguson and which were not changed. There were six small paragraphs directly lifted and six others updated and rewritten. I considered the work to be a comprehensive reworking of source material, hence the use of my byline, and not, as you contend, copyright infringement or ‘plagiarism on a large scale’.
Having made those points, the appellant became somewhat more conciliatory, saying in this memorandum that he would however desist from using Times copy as source material in the future, that he noted Mr Fenby’s concern over copyright and that he i.e. the appellant would be vigilant as to that in the future.
Mr Fenby began his letter of 11 December by giving the appellant one month’s notice, putting it thus:
Your letter of December 9 replying to mine of December 7, coming on top of your handling of the Premier Soccer centre spread story in the issue of December 4, make it clear that the standards you apply to your work are very different from those we must adopt at this newspaper. I am therefore relieving you of the editorship of Premier Soccer with immediate effect, and giving you one month's notice.
He then said that the appellant’s memorandum of 9 December showed that he did not “recognise basic points of journalistic ethics and standards”, and demonstrated how he had “ignored a specific editorial instruction”.
As to the points made by the appellant in that memorandum, Mr Fenby said:
You say you received my message telling you not to use Times or Sunday Times copy at the beginning of the week of November 29. But you then add that, on Wednesday of that week, you decided tochange your plans to run the story from the Sunday Times in direct contravention of my message.
You say the Sunday Times piece was mainly 'reflective' of the match in Spain where your aim was to be 'projective' of the Old Trafford game. This is simply not the case. The first mention of football in Hugh McIlvanney’s story in the Sunday Times read ‘It would be silly to suggest that a group decider in the Champions League is comparably momentous (to the Ali-Frazier fight) but so many hopes and dreams are rising on Manchester United’s collision with Bayern Munich that anybody capable of watching in a mood of objective calm should be barred from the ground on principle’. The bulk of the Sunday Times piece was identical to what you ran, so the distinction you seek to draw does not stand up.
You say the Sunday Times piece contained ‘11 substantial paragraphs of quotes which I could have legitimately received from Alex Ferguson and which were not changed.’ The fact is that you did not have any quotes of your own from Ferguson, and simply lifted them from McIlvanney’s copy. I do not know what ‘could have legitimately received’ means. To lift copy in this manner is clearly unprofessional and unacceptable, and I am shocked thatyou seek to excuse it. Hugh McIlvanney has confirmed to me that the quotes came from an exclusive interview he had with Alex Ferguson.
You then say that 'six small paragraphs' were directlylifted from the Sunday Times copy, that six others were updated and rewritten, and that you consider this ‘a comprehensive reworking of source material’.
Again, this is simply not the case. In the story which appeared in Premier Soccer, nine paragraphs were yours and 34 were from McIlvanney. How you can describe that as a comprehensive reworking which justified the use of your byline is beyond me.
You concludethat this was neither copyright infringement or plaigarism on a large scale. The facts as set out above show it to have been both, and your failure to recognise this is further cause for concern.
Taken together these elements lead me to the conclusion that we cannot continue employ you at the Post.
On 19 December 1998 the appellant commenced proceedings against the respondent publishers in the Labour Tribunal. But the proceedings were later transferred to the High Court where they eventually came on for trial in 2002. The trial judge awarded the appellant a total of $171,426.70 with interest thereon from the date of termination until payment at the judgment rate, and costs. This total of $171,426.70 was made up of $92,306.70 for terminal payments under the Ordinance and $79,120.00 for year-end bonus under the contract of employment. As it happens in the present case, what the appellant would otherwise have been entitled to by way of long service payment after five years’ continuous service was reduced to nothing by the gratuities and benefits to be deducted therefrom under s.31Y. The Court of Appeal (Yuen JA and Gall and Sakhrani JJ) affirmed the year-end bonus award but set aside the terminal payments award. By leave of the Appeal Committee, the appellant now appeals to us seeking the reinstatement of the terminal payments award.
Long service payments and employment protection
It will be remembered that, despite the strictures which Mr Fenby had directed against the appellant’s conduct, this is a case of termination by notice and not of summary dismissal. With that in mind, I turn now to the provisions of the Ordinance relevant to the present case. They are in particular those dealing with long service payments and those dealing with employment protection. Long service payments are dealt with in Part V B consisting of sections 31R to 31ZE. Employment protection is dealt with in Part VI A consisting of sections 32A to 32Q.
As soon as an employee has been employed under a continuous contract for not less than five years, the question of a long service payment from his employer arises. It will be convenient to refer to such an employee as a “long service employee”. Subject to certain exceptions irrelevant to a case like the present one, s.31R provides for the making of a long service payment to a long service employee upon the termination of his employment. Similarly, s.31RA provides for the making of such a payment to the spouse, issue, parent or personal representative of such an employee upon his i.e. the employee’s death.
Entitlement to a long service payment upon termination of employment is not dependent on the termination being wrongful. A long service employee can be entitled to such a payment even if he has been given due notice of termination or wages in lieu. Indeed, if he is not less than 65 years of age, he can be so entitled even if it was he rather than his employer who terminated the employment.
What is there to discourage an employer from terminating an employee’s employment just to prevent him from attaining five years’ continuous service? Or to afford the employee relief if the employer does so?
Various remedies are available under Part VI A. They are reinstatement under s.32N, re-engagement also under s.32N, terminal payments under s.32O and compensation under s.32P. Section 32A(1)(a) provides that an employee may be granted remedies against his employer under Part VI A where he has been employed under a continuous contract for a period of not less than 24 months ending with the relevant date and he is dismissed because the employer intends to extinguish or reduce any right, benefit or protection conferred or to be conferred upon the employee by the Ordinance. “Relevant date” is defined by s.2(1). Where the contract of employment is terminated by notice, the relevant date is the date on which the notice expires.
The appellant easily meets that 24-month requirement. And by virtue of s.32B(2), even termination with notice is treated as dismissal within the ambit of s.32A(1)(a). So I turn to s.32A(2). It reads:
For the purposes of subsection (1)(a), an employee who has been dismissed by the employer shall, unless a valid reason is shown for that dismissal within the meaning of section 32K, be taken to have been so dismissed because the employer intends to extinguish or reduce any right, benefit or protection conferred or to be conferred upon the employee by this Ordinance.
Section 32K reads:
For the purposes of this Part, it shall be a valid reason for the employer to show that the dismissal of the employee or the variation of the terms of the contract of employment with the employee was by the reason of -
So the employer who relies on the dismissed employee’s conduct has to show that the dismissal “was by the reason of” such conduct.
Next comes s.32L which reads:
And then s.32M(1) provides that:
On a claim for remedies under this Part if the court or Labour Tribunal finds that the employer has not shown a valid reason as specified under section 32K, the employer is deemed to intend to extinguish or reduce any right, benefit or protection conferred or to be conferred upon the employee by this Ordinance and the dismissal or the variation is deemed to be unreasonable and the court or Labour Tribunal may make an order under section 32N or an award of terminal payments under section 32O.
Trial judge’s findings
The trial judge found that the appellant’s conduct in respect of the 4 December 1998 article “amounted to disobedience of a general instruction concerning the use of material from The Times or Sunday Times, breach of copyright and plagiarism”. He also found that it “amounted to serious professional misconduct for a journalist”. And as to the appellant’s suggestion that he had been removed for an ulterior motive, the trial judge felt unable to infer that the appellant had been dismissed for any reason other than the reason given in Mr Fenby’s witness statement. In that statement Mr Fenby gave this reason for dismissing the appellant:
I considered that his. original conduct, compounded by his refusal to recognise any wrongdoing, constituted grave professional offences which left mewith no alternative but to dismiss him, giving him one month's notice. As an editor, there was noway in which I could continue to allow him to remain working at the newspaper in view of his conduct in this matter.
His failure to abide bybasic journalistic standards, and his inability to realise how hehad broken these standards, were the only motivation I had for ending his employment at the newspaper.
“Band of reasonable responses” approach adopted by the trial judge
Notwithstanding those findings as to the appellant’s conduct, the trial judge held that the respondent had failed to discharge the burden which s.32A(2) places on employers to show a valid reason for dismissal within the meaning of s.32K. This holding is made up of two components: one of law and the other of fact. The component of law is the trial judge’s view that for a reason for dismissal to be valid under those provisions, the dismissal must fall within the band of reasonable responses which a reasonable employer might have adopted. And the component of fact is the trial judge’s view that the dismissal of the appellant did not fall within that band.
But rejected by the Court of Appeal
In setting aside the terminal payments award made by the trial judge, the Court of Appeal differed from him on both components. As to the law, Yuen JA (with whose judgment Gall and Sakhrani JJ agreed) rejected the “band of reasonable responses” approach. She adopted instead an approach whereby
the conduct of the employee within the meaning of s.32K must be something factual and real, such as to give substance to the employer's decision to terminate, and not merely any act which the employer finds he does not like.
That use of the word “substance” is based, she explained, on the reference in item (e) of s.32K to “any other reason of substance”. The expression “conduct of the employee” in item (a) of s.32K is of course to be given the reading called for by its context. But I accept the submission of Mr Joseph Fok SC for the respondent publishers that the word “substance” in item (e) should not be applied to the other items of the section. None of those other items contain that word. And there is a readily discernible reason why the word is used in item (e). All the other items refer to something specific, namely: (i) “conduct” in item (a); (ii) capability or qualifications” in item (b); “redundancy .... or .... other genuine operational requirements” in item (c); and “contravention of the law” in item (d). But item (e) does not do anything of that kind. One can see, therefore, why the Legislature would limit item (e), but not the other items, by the word “substance”. And there is no warrant for reading that word into the items in which it does not appear.
Turning to the facts, Yuen JA held that the appellant’s conduct provided a valid s.32K reason for his dismissal on the approach which she favoured. And she held that his conduct would provide such a reason even on the “band of reasonable responses” approach if it were the correct one.
Exercise of a different nature
This appeal is about the correct approach to adopt when deciding whether the employer has shown that his intention in dismissing the employee was not an intention to extinguish or reduce any right, benefit or protection conferred or to be conferred on the employee under the Ordinance. The “band of reasonable responses” approach was formulated for the purposes of an exercise of a different nature. It was formulated by Browne-Wilkinson J (as Lord Browne-Wilkinson then was) giving the judgment of the Employment Appeal Tribunal in Iceland Frozen Foods Ltd v Jones  ICR 17. He formulated it for the purposes of answering the question posed by s.57(3) of the Employment Protection (Consolidation) Act 1978 which provides that
.... the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case.
So it was by the express words of the Act that the question of reasonableness was brought in.
At pp 24-25 Browne-Wilkinson J said:
We consider that the authorities establish that in law the correct approach for the industrial tribunal to adopt in answering the question posed by section 57(3) of the Act of 1978 is as follows:
If the dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair.
Under United Kingdom employment legislation, the issue is whether the dismissal was fair or unfair. And that issue turns on whether the employer had acted reasonably or unreasonably in treating the reason for dismissal as a sufficient reason for dismissing the employee. So the “band of reasonable responses” approach springs from reasonableness being the touchstone and the industrial tribunal having to refrain from substituting its own decision for that of the employer.
Our employment legislation is materially different from that of the United Kingdom. The issue under sections 32A(2) and 32K is whether the employer’s intention in dismissing the employee was to extinguish or reduce any right, benefit or protection conferred or to be conferred on the employee under the Ordinance. On this issue, an employee who is dismissed after at least 24 months’ continuous service is assisted by s.32A(2). As we have seen, s.32A(2) provides that the employer is taken to have so intended unless he shows a valid reason for dismissal within the meaning of s.32K.
Mr Russell Coleman for the appellant has diligently subjected the Ordinance to an extremely close examination in his search for anything that might support the “band of reasonable responses” approach. But that search has not yielded anything of reliable assistance. Even on the view most favourable to the appellant, the things which Mr Coleman seeks to rely upon are no more than possible straws in the wind. And Mr Fok has demonstrated that there are matters for them to apply to even in the absence of any concept of reasonable dismissal or variation.
Like the Court of Appeal, I do not regard the “band of reasonable responses” approach as the correct one for the purposes of the provisions in question. Having said that, I should, in fairness to the trial judge who adopted that approach, mention that it was common ground between counsel appearing before him that the “band of reasonable responses” approach was the one which he ought to adopt. In the same vein, I should mention in fairness to Mr Fok that he did not appear at the trial.
In order to come within s.32K, a reason must, first of all, be true. In other words, it must be really why the employee was dismissed or the terms of the contract of employment were varied. Section 32A(2) operates as a deeming provision. If what a statute deems is to be disproved, it naturally must be disproved by the truth and not by a lie. To this may be added the following linguistic consideration. A false reason simply would not come within the words “was by the reason of” in s.32K, for its falsity would mean that it was not the reason of the dismissal or the variation.
Where the s.32K reason put forward by the employer is “the conduct of the employee”, the employee’s conduct relied upon by the employer must be relevant to the question of whether or not to dismiss the employee. That is a necessary implication. For otherwise any conduct, even if it has nothing to do with employment or indeed even if it is good conduct, could be used against the employee qua employee. Since the provisions in question are meant to protect employees, the position would then be absurd and the deeming would then be rendered futile.
If the employee’s conduct relied upon by the employer as a valid s.32K reason for dismissal is trifling, then such conduct would be ignored by the court or tribunal under the de minimis principle by virtue of which the law declines to take notice of trifling matters. And even if the employee’s conduct is not trifling, the commonsense position will be this. The less serious the conduct, the harder it will be for the employer to prove that it was the reason, rather than a pretext, for the dismissal.
Linked to Mr Coleman’s submission that the test is the “band of reasonable responses” one is his submission to the effect that the reason for the appellant’s dismissal is necessarily to be seen as invalid because the process by which he was dismissed was unfair. As to the law, this submission is erected upon English decisions under statutory provisions materially different from those forming the scheme with which we are concerned. Those are decisions like that of the House of Lords in Polkey v A.E. Dayton Services Ltd  AC 344 where an employer, ignoring a statutory code of practice’s call for consultation, made an employee redundant without consultation. Our scheme does not involve any discrete requirement in regard to process. Of course this does not mean that an employer can safely proceed in an arbitrary manner. If the manner of an employee’s dismissal was arbitrary, then such arbitrariness could make it that much more difficult for his employer to show a valid s.32K reason for the dismissal.
But, on the facts, there was nothing arbitrary in what happened in this case. Mr Fenby fairly and squarely indicated his concern to the appellant, and invited him to explain his conduct. Complaint is made on the appellant’s behalf that the matter was dealt with in correspondence rather than face-to-face. Now let us consider that. I do not think that Mr Fenby can be faulted for writing to the appellant. Indeed that course gave the appellant an opportunity to gather his thoughts before responding. When inviting an explanation, Mr Fenby placed no restriction on the method by which the appellant could offer his explanation. If he had so wished, the appellant could have sought a face-to-face meeting. It was his choice to respond in writing. Leaving how the appellant was dismissed, I turn to why he was dismissed - in other words, from process to the merits.
Various points were put forward for the appellant on the merits. They were put forward under an approach which I have rejected. Even so, I will not ignore them. It is only fair that I consider them under the approach which I have adopted. And I will now do so.
As I noted earlier, the trial judge rejected the suggestion that the appellant was dismissed for an ulterior motive. He found that the appellant was dismissed for the reason given by Mr Fenby. That finding satisfies the requirement of truth.
Turning to the requirement of relevance, it is true, as emphasised on the appellant’s behalf, that he had not offended before. But that does not render his conduct on this occasion trifling. Moreover his response, when invited to explain his conduct, was unfortunately far from wholly contrite. And in the light of the attitude which he displayed as to what did or did not constitute copyright infringement, his promise to be more vigilant in future was not really reassuring. Even in the context of unfair dismissal, Lord Denning MR said this in Retarded Children’s Aid Society v Day  ICR 437 at p.442:
.... in the ordinary way for a first offence you should not dismiss a man on the instant without any warning or giving him a further chance. You should warn him that, if it happens again, it would be an offence for which he should be dismissed .... But nevertheless that is not a rule which has to be applied in every case. In some cases it may be proper and reasonable to dismiss at once, especially with a man who is determined to go on in his own way.
It is also true that the appellant was very close indeed to achieving “long service employee” status. But Mr Fenby felt that journalistic ethics demanded his dismissal. Relying on the Employment Appeal Tribunal’s acceptance in Hadjioannou v Coral Casinos Ltd  IRLR 352 that less severe treatment of other employees in truly parallel circumstances can provide a basis for attacking the reasonableness of an employee’s dismissal, the appellant alleged such disparity. Upon investigation of that allegation, the trial judge declined to find that any SCMP journalist has escaped dismissal for conduct as serious as the appellant’s.
The appellant points out that the copyright owner has not sued the respondent publishers. In British Leyland UK Ltd v Swift  IRLR 91, an English Court of Appeal’s decision relied upon by the respondent publishers, the absence of loss to the employer did not prevent the employee’s dismissal from being seen as fair. Just because an employee’s misconduct did not result in loss to his employer, it does not mean that such misconduct must be seen as trifling. Certainly it would be cynical to say that a newspaper cannot successfully defend its strong reaction to a breach of journalistic ethics unless the breach resulted in financial loss to it.
So it would be of little help to the appellant even if it had been known at the material time that the copyright owner would not sue. As it happens however, that was unknown at the material time. Citing the English unfair dismissal cases of Sillifant v Powell Duffryn Timber Ltd  1RLR 91 and Whitbread plc v Hall  1RLR 275, Yuen JA observed that “[t]he reasonableness of the employer’s decision could only be judged at the time the termination took effect”. Her Ladyship’s point is correct. The validity of a s.32K reason for dismissal is to be judged by reference to the situation as fairly viewed at the time of the dismissal. At the time of this dismissal, the situation was that the employee having put the employer in breach of copyright, the employer lay exposed to a possible lawsuit by the copyright owner.
Ultimately the stark reality is that the trial judge found the appellant guilty of disobedience of a general instruction, copyright infringement, plagiarism and serious professional misconduct for a journalist. When responding to his employer’s invitation to explain his conduct, the appellant unfortunately compounded it by refusing to accept that he had done wrong. The trial judge found that such conduct, so compounded, was the reason why the appellant was dismissed. One can wish the appellant well in rebuilding his career. But on those findings, I do not see how one can avoid the conclusion that a true and relevant - and therefore valid - s.32K reason for his dismissal has been shown.
For the foregoing reasons I would dismiss the appeal. As to costs, I would:
leave the costs in the courts below as they stand under the order absolute as to costs made by the Court of Appeal;
award the respondent publishers costs in this Court; and
order Legal Aid taxation of the appellant’s own costs.
That is the order as to costs which the respondent publishers submitted, and the appellant accepted, would be appropriate if the appeal were to be dismissed.
Justice Chan PJ
I entirely agree with the judgment of Mr Justice Bokhary PJ who has very succinctly explained these important provisions which affect a large portion of our workforce. Any employee who has been in continuous employment for 24 months may in appropriate cases invoke these provisions which have therefore to be applied by the Labour Tribunal almost on a daily basis. It cannot have been the intention of the legislature to introduce an unduly complicated scheme which is difficult both to understand or to apply. It is particularly important that the meaning of these provisions is easily comprehensible and that they can be and are applied with ordinary common sense.
Justice Ribeiro PJ
I agree with the judgment of Mr Justice Bokhary PJ.
Justice Nazareth NPJ
I agree with the judgment of Mr Justice Bokhary PJ.
Lord Millett NPJ
I agree with the judgment of Mr Justice Bokhary PJ.
Justice Bokhary PJ
The appeal is dismissed. As to costs, we (i) leave the costs in the courts below as they stand under the order absolute as to costs made by the Court of Appeal; (ii) award the respondent publishers costs in this Court; and (iii) order Legal Aid taxation of the appellant’s own costs.
Russell Coleman (instructed by Messrs Oldham, Li & Nie and assigned by the Legal Aid Department) for the appellant journalist.
Joseph Fok SC and Daniel Wan (instructed by Messrs Deacons) for the respondent publishers.
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