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1 Disciplinary Proceedings Lessons to be Learnt From the Cathay Pacific Pilots Case by Michael Downey It is a common occurrence for employers in Hong Kong to have in place disciplinary policies. Disciplinary policies are frequently found in employee handbooks which typically lay down formalities that are to be followed by employers when responding to different kinds of misconduct. It is not all uncommon for employers to simply ignore their own disciplinary policies when dealing with employees who are engaged in some form of misconduct. Typically, employees who engage in serious misconduct will have their employment terminated without any disciplinary investigation having first being undertaken. The recent Cathay Pacific court case has sent out a terse warning to employer: if they ignore their own disciplinary proceedings, they do so at their own peril. Background In 2000, pilots employed by Cathay Pacific commenced industrial action after the company refused the pilots demands for revised rostering practices, increased salary and pension fund benefits. The industrial action was coordinated by the pilots union and had widespread support amongst Cathay Pacific s 1,500 pilots. Contractual compliance was one form of industrial action undertaken by pilots. The contractual compliance campaign entailed pilots rigidly adhering to their contractual terms. As a result, pilots avoided being contactable and refused to volunteer to work on their scheduled rest days. Other pilots declined at short-notice to undertake their duties by reason of being certified as being too sick to fly. As a consequence of the contractual compliance campaign, Cathay Pacific was compelled to cancel or delay flights. By 2001, the pilots failed to reach any agreement with Cathay Pacific, and as a result intensified their industrial action by implementing the maximum safety strategy. This industrial action strategy entailed pilots strictly complying with the numerous pre-flight safety checks that were laid down in various policies and operating manuals. As a result, flights were frequently delayed or cancelled by reason of the pilots actions. In June 2001, Cathay Pacific became aware that the pilots were planning further industrial action that would likely disrupt the travel plans of passengers during the forthcoming peak summer season. Cathay Pacific decided to take decisive action to forestall the threatened industrial action. Over a period of three days, Cathay Pacific s senior management reviewed the performance and compiled a list of pilots who either: Had attendance problems; Had previously been issued warning letters relating to discipline, or; Were considered to be unhelpful and uncooperative in the performance of their duties. At the end of the review the employment contracts of a total of 49 pilots were terminated by Cathay Pacific paying each pilot a payment of three months wages in lieu of notice. The 49 former pilots commenced legal proceedings against Cathay Pacific, seeking various awards of compensation for wrongfully terminating their employment. The law The Employment Ordinance makes abundantly clear that an employer and an 36 a p r i l

2 employee are equally free to terminate an employment contract at any time by giving the requisite notice of termination or by making a payment in lieu of such notice. Under the law of Hong Kong, notice of termination or a payment in lieu of notice may be given by either an employer or an employee without any need for the party terminating to give any reason or reasons for terminating. The pilots terms of service The terms of service under which Cathay Pacific s pilots were employed contained procedures that were to be followed in the event of disciplinary action being taken against any one or more pilots. The disciplinary procedures which were appended to each pilot s employment terms were very detailed and totaled some eight pages. The disciplinary procedures provided for pilots who were subject to disciplinary proceedings to be treated fairly, to be given means of representation and to be entitled to appeal any disciplinary action that was taken against them by the company. The disciplinary procedures laid down time limits within which disciplinary proceedings should be undertaken as well as the detailed procedures to be followed in the case of an investigation being carried out. a payment in lieu of such notice. The court, however, went on to hold that Cathay Pacific had in fact voluntarily surrendered its statutory right to terminate the employment of pilots when it contractually undertook under the terms that it employed pilots to conduct a disciplinary hearing before terminating the employment of pilots for disciplinary reasons. In holding that Cathay Pacific had acted unlawfully in not following its own disciplinary proceedings prior to terminating the employment of the pilots, the court expressly rejected Cathay Pacific s argument that was not required to follow the disciplinary policy by reason that it had not terminated the employment of the 49 pilots for disciplinary reasons. The court held that while Cathay Pacific had not given the pilots any reason for their dismissal, that fact alone did not mean that the underlying reasons for termination were not based on disciplinary considerations. In reaching this conclusion, the court noted that: Did the disciplinary procedures need to be followed? The 49 pilots argued that it was unlawful for Cathay Pacific to terminate their employment contracts for disciplinary reasons, unless the company first undertook a disciplinary hearing in accordance with the procedures laid down in the company s disciplinary policy. The court agreed with the pilots The court acknowledged that the Employment Ordinance permitted the Cathay Pacific to terminate the employment of the pilots without assigning any reason or cause by giving the pilots concerned notice or by making All-In-One Human Resources Solutions Multi-location payroll and taxation Rostering Payroll outsource Online leave application I.T. consultancy services MPF calculator Online performance appraisal For enquiries, please call (852) or to salesdept@wisetop.net a p r i l

3 Two senior members of Cathay Pacific had made statements in public and private accusing the 49 pilots of having seriously disrupted flight operations; of having shown lack of professionalism; of holding Hong Kong to ransom ; and of having failed to act in the company s best interests. The list of pilots whose employment was terminated was drawn up by a panel of managers who undertook an in-depth review of the respective work performance of all pilots. That panel had concluded that the 49 pilots concerned had engaged conduct that the court held amounted to gross misconduct which was subject to disciplinary proceedings. The court concluded that by reason that Cathay Pacific had terminated the employment of the pilots by reason of their alleged misconduct, the company had acted unlawfully by not first having undertaken disciplinary proceedings. Consequence of the Cathay Pacific s action The pilots sort and succeeded in being award various awards of compensation by reason of their employment being wrongfully terminated. 1. Unfair dismissal The court awarded each pilot HK$150,000 statutory compensation by reason that the pilots employment had (in part) been terminated by Cathay Pacific by reason that they were suspected of having collectively engaged in trade union activities and not by reason of their individual performance. The court noted that Cathay Pacific had openly conceded in court that had it been able to negotiate a settlement with the pilots union, the employment of the individual pilots concerned would not have been terminated. 2. Wrongful termination The court awarded each pilot one month s wages in lieu of the remuneration that each pilot would have received in the event that it had conducted disciplinary proceedings as it was contractually required to do. 3. Defamation The court found that the statements that were made by Cathay Pacific s senior management accusing the pilots of being unprofessional, having bad employment records and for failing to care for the interests of the company were wholly unproven and were thus defamatory. The court awarded each pilot HK$3 million by way of damages for defamation. The court awarded each pilot an additional HK$300,000 damages by way of aggravated damages. Conclusion As this court case amply demonstrates, employers need to be vigilant that they do not ignore employees contractual rights simply by reason that it is convenient or preferable to do so. Employers should be especially mindful that if disciplinary proceedings form part of employees contractual terms that such procedures are given due regard when an employee s employment is being terminated for reasons relating to discipline or performance. Employers should also be careful that when giving reasons for terminating the employment of staff, that such reasons are true. It is a very common practice in Hong Kong for employers to give departing employees reasons for termination that anything but true. As the Cathay Pacific case illustrates, giving reasons that are not true may lead to adverse publicity and substantial damages being awarded to former employees. Michael Downey Hong Kong & China Employment Law Practice Group Paul, Hastings, Janofsky & Walker 38 a p r i l

4 法律新知 紀律處分程序 - 國泰航空飛機師案件的教訓 鄧立文 在香港, 僱主制定紀律處分政策乃是慣常的做法 紀律處分政策往往包括在僱員手冊中, 其中一般都會訂明僱主面對各種不同失當行為時應當遵循的正式程序 然而, 在處理從事某種形式失當行為的僱員時, 僱主卻可能忽略了自己的紀律處分政策, 此類情形並不罕見 通常, 因從事嚴重失當行為而遭解僱的僱員, 事先都未有接受任何紀律調查 最近的國泰航空訴訟案則向僱主發出簡明的警示 : 如果忽略公司本身的紀律處分程序, 則須自行承擔風險後果 背景於 2000 年, 受僱於國泰航空的飛機師發動工業行動 此前, 國泰拒絕了飛機師修訂輪更安排 加薪及增加退休金的要求 這次工業行動由飛機師工會協辦, 得到國泰航空 1,500 名飛機師的廣泛支持 按章工作 是飛機師採取的工業行動之一 按章工作行動要求飛機師嚴格按合約條款行事 結果, 飛機師在休息日拒絕被聯絡, 及不自願工作 有些飛機師則以身體不適, 不宜飛行為由, 籍發出短暫通知拒絕飛行任務 這按章工作行動令國泰航空被迫取消或推遲航班 到 2001 年, 飛機師未能與國泰航空達成任何協議 結果, 他們實施 最大安全策略, 把工業行動升級 依照這項工業 行動策略, 飛機師嚴格遵守各種政策及操作手冊中規定的眾多起飛前安全檢查 結果, 飛機師的行為經常導致航班延誤或取消 於 2001 年 6 月, 國泰航空得知飛機師正在籌劃進一步的工業行動, 很可能打亂旅客在快將來臨的暑期旺季的外出計劃 國泰航空決定採取果斷行動, 先發制人消除工業行動威脅 在三天內, 國泰航空的高層主管評估了飛機師的表現, 並制定下列飛機師名單 : 出勤問題 ; 先前曾收到與紀律有關的警告信, 或者 ; 被認為在履行職責時不勤懇 不合作 評估結束後, 國泰航空終止了合共 49 名飛機師的僱傭合約, 向每位飛機師支付相當於三個月工資的代通知金 這 49 名前飛機師對國泰航空展開法律程序, 要求對不當終止其僱傭的行為判給多項補償 法律 僱傭條例 充分明確規定, 僱主與僱員擁有同等的自由, 可以籍發出必要的終止合約通知或支付代通知金而終止僱傭合約 依照香港法律, 僱主或僱員均可發出終止通知或支付代通知金, 終止一方無須提出任何終止僱傭的理由 飛機師的服務條款國泰航空飛機師受僱的服務條款中, 包含針對任何一名或多名飛機師採取紀律處分時需要遵循的程序 紀律處分程序都附加在每個飛機師的僱傭條款上且非常詳細, 共有 8 頁 紀律處分程序規定, 接受紀律處分程序的飛機師必須得到公平對待, 獲得適當的法律代表, 並有權對公司針對他們採取的任何紀律處分行動提出上訴 紀律處分程序規定了應當行使紀律處分的時限, 以及在開展調查情況下應當遵循的詳細程序 是否必須遵循紀律處分程序? 本案的 49 名飛機師辯稱, 除非國泰航空先根據公司紀律處分政策中規定的程序進行紀律處分聽證, 否則出於紀律理由而終止僱傭合約的行為屬於非法 法院贊同飛機師的觀點法院認可, 僱傭條例 允許國泰航空向飛機師發出相應終止合約通知或支付代通知金後, 便可終止飛機師的僱用, 並無須提出任何理由或原因 然而, 法院繼而認為, 由於國泰航空通過僱用飛機師的合約條款, 承諾在提出紀律理由而解僱飛機師之前, 會先舉行紀律聽證, 故該公司事實上已經自願放棄了終止飛機師僱用的法定權利 法院認為, 國泰航空在終止飛機師的僱用前未能遵循自己的紀律處分程序, 即 a p r i l

5 法律新知 屬非法行為 另外, 法院明確拒絕採納國泰航空的論點, 即 : 國泰無須遵循紀律處分政策, 因為國泰並非出於紀律理由而解僱這 49 名飛機師 法院認為, 雖然國泰航空並未告知飛機師任何解僱理由, 但僅憑這項事實並不能判定解僱背後的原因不基於紀律考慮 為得出這項結論, 法院指出 : 國泰航空的兩名高層主管曾公開與私下發表言論, 指責這 49 名飛機師嚴重擾亂航班運行, 表現缺乏專業質素, 勒索香港, 未能按公司的利益工作 遭解僱的飛機師名單由管理人員組成的委員會擬定, 他們對所有飛機師的相應工作表現進行了深入評估 該委員會曾認定, 這 49 名相關飛機師參與了法院認為屬於嚴重失當, 須由紀律處分程序處理的行為 法院總結, 由於國泰航空因飛機師的失當行為而解僱他們, 而該公司並沒有首先採取紀律處分程序, 因而構成非法行為 國泰航空行為的後果飛機師以遭錯誤解僱為由要求獲得多項補償, 並成功勝訴 1. 不公平解僱 : 法院判給每名飛機師 15 萬港元的法定補償金, 理由是 : 國泰航空因為懷疑飛機師集體從事工會活動 ( 而非其個人表現 ) 而終止 ( 部分 ) 飛機師的僱用 法院指出, 國泰航空曾在法院公開承認, 若能與飛機師工會協商達成和解, 相關個別飛機師便不會遭到解僱 2. 不當解僱 : 法院向每名飛機師發放一個月的工資, 以代替國泰若依照合約要求執行紀律處分程序, 每名飛機師本可獲得的報酬 3. 誹謗 : 法院裁定, 國泰航空高層管理人員指責飛機師不專業 僱傭記錄混亂 無視公司利益的言論完全沒有根據, 因而構成誹謗 法院判給每名飛機師 300 萬港元的誹謗損害賠償金 另外, 法院還判給每名飛機師 30 萬港元的嚴重損害賠償金 結論這宗訟案充分表明, 僱主必須謹慎行事, 不因貪圖便利或自身喜好而忽視僱員的合約權利 僱主尤其應當注意, 如果紀律處分程序構成僱員合約條款的組成部分, 在出現紀律或表現原因而終止僱員的僱用時, 必須多加重視 僱主還應當留意, 在提出終止員工僱用的理由時, 此類理由必須真實 香港僱主提出解僱僱員的理由往往不真實, 這種現象已司空見慣, 而正如國泰航空案件所表明, 提出不實理由可能影響聲譽, 令前任僱員獲判巨額損害賠償 鄧立文香港及中國僱傭事務部主席普衡律師事務所 40 a p r i l

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