HCLA24/2009

由此 A A HCLA24/2009 B B IN THE HIGH COURT OF THE C HONG KONG SPECIAL ADMINISTRATIVE REGION C COURT OF FIRST INSTANCE D D LABOUR TRIBUNAL APPEAL NO. 24 OF 2009 E (ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. LBTC 1003/2009) E ----------------------- F F BETWEEN G G SCOTT WILLIAMS Claimant (Respondent) H H and I I CATHAY PACIFIC AIRWAYS LIMITED Defendant J (Appellant) J ----------------------- K K Before : Hon Chu J in Court L Date of Hearing : 24 and 25 February 2010 L Date of Decision : 10 November 2010 M M -------------------------- N N JUDGMENT -------------------------- O O P 1. This is the defendant’s appeal against the decision of the P Deputy Presiding Officer made on 3 July 2009, holding that the claimant is Q Q eligible to receive bypass pay as from 1 March 2008 under the Conditions R of Service 1999. Leave to appeal was granted on 23 September 2009. R S S T T U U V V 由此 - 2 - A A The claim B B 2. The claimant is a Second Officer (SO) employed by the C defendant (“CPA”). By a letter of employment dated 13 June 2006, the C D claimant was employed as a Direct Entry Second Officer (DESO). Before D joining CPA, the claimant worked with the Royal New Zealand Air Force E E where he started pilot training in 1995. F F 3. The claimant’s employment with CPA commenced on 21 G August 2006. He completed his 12 months’ probation on 21 August 2007. G On 20 November 2007, the claimant achieved Grade A status. He then H H underwent and completed three training modules, the last of which was I completed on 22 April 2008. On 19 May 2008, he had his technical I assessment (STI) and was assessed to be satisfactory. J J 4. On 20 October 2008, the claimant was assessed by the K K Upgrade Review Board (URB) to be suitable for promotion to Junior First L Officer (JFO). As from 20 October 2008, he has been paid a bypass pay L (BPP) pursuant to clause 10.2 of the Conditions of Service 1999 (COS 99). M M 5. On 3 February 2009, the claimant commenced proceedings in N N the Labour Tribunal. The basis of his claim as stated in Form 2 was CPA’s O failure to pay bypass pay prior to 20 October 2008. In the Supplementary O Statement sent on 16 February 2009, the claim is put on the basis of P P compensation represented by the amount of BPP that the claimant would Q have received before 20 October 2008. The stated ground is that CPA had Q delayed in reviewing or assessing the claimant’s suitability for promotion. R R The period of delay is said to be from 21 February to 20 October 2008 (i.e. S six months). S T T U U V V 由此 - 3 - A A 6. The trial before the Deputy Presiding Officer was only to B B determine whether CPA is liable for the claim. The parties had agreed that C the quantum of the award, in the event CPA is held liable, is to be reserved C and determined after the determination of the issue of liability. The D D determination of quantum is now pending the outcome of this appeal. E E Conditions of Service 1999(COS 99) F F 7. The letter of employment dated 13 June 2007 under which the G claimant was employed expressly incorporated the Conditions of Service G 1999 (COS99). For the purpose of this appeal, the following provisions in H H COS 99 are relevant: I I Clause 1.2 J These conditions of service shall be read in conjunction with the J Operations Manuel Volume 1, as the same may be amended from time to time, subject to the provisions of Section 22. K K Clause 6 Career Structure L 6.1 It is the Company’s aim to recruit Pilots suitable for full career L progression to Command. All newly recruited Pilots will join the M Company at one of the following three entry levels: M a. Second Officers by Cadet Pilot Programme b. Second Officers by Direct Entry N c. First Officers by Direct Entry N 6.2 Recruitment of First Officers by Direct Entry will normally only O O take place when there are no Second Officers suitable for promotion. P 6.3 In the event that recruitment of First Officers by Direct Entry P occurs, other than in accordance with 6.2, Second Officers suitable for promotion will not normally have their promotion to Junior First Q Officer delayed by more than twelve (12) months whilst such First Q Officer recruitment by Direct Entry is taking place. R R Clause 7 Promotion S 7.1 Selection S a. Selection of Officers for promotion to higher rank will be in T accordance with seniority on the Officers’ relevant seniority list and T is subject to a Selection Panel recommendation. U U V V 由此 - 4 - A A b. Officers assessed as unsuitable for promotion to higher rank, or B as “Category D”, will be informed in writing, stating reasons, at the B time of such assessment. C 7.2 Second Officer to Junior First Officer C D a. Second Officers joining by the Cadet Pilot Programme will D serve as Second Officers for approximately thirty six (36) months. E b. Second Officers joining by Direct Entry will serve as Second E Officers for approximately eighteen (18) months. F c. Promotion to Junior First Officer will occur when the Second F Officer is allocated a conversion course, the effective date of G promotion being the course start date. The number and timing of G Junior First officer upgrade courses is dependent upon Company requirements. H H d. Second Officers who are assessed as unsuitable for promotion to Junior First Officer after two upgrade attempts may have their I service terminated. I J Clause 10 Entitlement to BPP J 10.1 In any case of retention of Captains beyond the Retirement K Age, subject to 10.2 & 10.4, the next most senior First Officer on the K Aircrew Seniority List will receive Command Bypass Pay in the form of Captain’s Salary, allowances and benefits on a one for one L basis commencing upon the date that the retained Captain reaches L the Retirement Age. The Payment of Command Bypass Pay will M cease when the retained Captain retires. M 10.2 In any case of retention of Captains beyond the Retirement N Age, the next most senior Second Officer suitable for promotion will N receive First Officer Bypass pay in the form of Junior First Officer’s Salary, allowances and benefits on a one for one basis commencing O O upon the date that the retained Captain reaches the Retirement Age. The payment of First Officer Bypass pay will cease when the P retained Captain retires. P … Q Q 10.5 In any case of recruitment of First officers by Direct Entry, other than in accordance with 6.2, the next most senior Second R R Officer suitable for promotion will receive First Officer Bypass pay in the form of Junior First Officer’s Salary on a one for one basis S commencing three (3) months after the date of joining of the First S Officer recruited by Direct Entry. The payment of First Officer Bypass Pay will cease when the Second Officer receiving bypass pay T commences Junior First Officer training. T U U V V 由此 - 5 - A A Operations Manual (Ops Manual) B B 8. Volume 1, Part 3 of the Operations Manual (Ops Manual), C C which is incorporated into the employment contract by clause 1.2, contains D provisions relating to the training and progression of SO to JFO. The D important provisions for the purpose of this appeal are under paragraph 7. E E 9. Paragraph 7.1 deals with the holding of URB and provides F F that: “Second Officers Upgrade Review Board meetings are called as G G required to assess SO’s suitability for upgrade to JFO.” H H 10. Paragraph 7.2 sets out the system for monitoring and assessing I pilots and also the grading system. Specifically, it provides that: I “Only SO’s who are grade A and are able to maintain that standard will J be eligible for upgrade to JFO. In addition a technical review will be J rostered and must be successfully completed before the SO can be K considered for upgrade.” K L 11. Paragraph 7.3 relates to progression of SO to JFO and L provides that: M M “SO progression to JDO will be as follows: N A. Approximately two years from the date of joining, or at an earlier N time, if required, each SO will be rostered for a technical assessment. … The technical assessment does not affect the SO grade O (A/B/C), but it must be completed satisfactorily before the SO can be O considered for JFO upgrade review board. P P B. Only SO’s who are assessed as Grade A and who are able to maintain that standard will be eligible for upgrade to JFO. Selection and Q upgrade will be via Second Officer Upgrade Review Board.” Q R R The decision of the Deputy Presiding Officer S 12. The focus of the trial in the Tribunal was the claimant’s S entitlement to BPP prior to 20 October 2008. In the Reasons for Decision, T T U U V V 由此 - 6 - A A the Deputy Presiding Officer identified six issues for determination. They B B are: C C (1) Whether CPA was in breach of clause 6.2 of COS99 by D failing to consider the claimant’s suitability for the D position of JFO before and during the recruitments of Direct Entry First Officer (DEFO) in 2007 and 2008. E E (2) Whether CPA was in breach of clause 7.2 of COS99 by F failing to assess the claimant for suitability as a JFO, after F he had served for approximately 18 months. G G (3) Whether CPA was in breach of clause 7.2 of COS99 by failing to upgrade him to the position of JFO, after he had H served as a DESO for approximately 18 months. H I (4) Whether CPA was in breach of the employment contract I by failing to consider the claimant’ suitability for the position of JFO at a time when CPA was retaining J J captains beyond the retirement age of 55 by offering contract extensions and/or contracts under Conditions of K K Service 2008. L (5) Whether, as a direct result of all or any of the breaches L identified in (1) to (4) above, CPA was prior to 20 M October 2008 in breach of clauses 10.2 and 10.5 of M COS99. N (6) Whether, as a direct result of all or any of the breaches N identified in (1) to (5) above, CPA was liable to pay the O claimant damages for breach of contract. O P P 13. The major findings of the Deputy Presiding Officer can be Q summarized as follows: Q R (1) Clause 6.2 of COS99 gives rise to an implied R obligation on CPA to exhaust assessments of SO S before embarking on recruitment of DEFO. S (2) Under paragraph 7.1 of the Ops Manual (Vol.1, Part 3), T the holding of JFO upgrade (or conversion) courses is T U U V V 由此 - 7 - A A not at the discretion of CPA. Instead, CPA is required B to conduct assessments and URB reviews for SO when: B (i) there are openings of First Officer positions; (ii) C CPA does not have suitable SO to fill the vacancies; C and (iii) when there are SO ready for assessments. D D (3) As CPA had in 2007 and 2008 recruited DEFO and it lacked suitable SO to fill the vacancies, CPA was E E required to hold STI and URB assessments for all SOs who were ready for assessment during that period. F F (4) To be eligible to BPP under clauses 10.2 and 10.5 of G COS99, the claimant had to show: (i) a retention of G captain beyond the retirement age or a recruitment of DEFO other than in accordance with clause 6.2 of H H COS99; (ii) he is the next most SO; and (iii) he is suitable for promotion. I I (5) The claimant would be assessed as suitable for J promotion had CPA arranged to assess him earlier than J October 2008 in that he was ready for STI as soon as K he attained Grade A standard on 20 November 2007, K and that it was probable that he would have been assessed by the URB as suitable for upgrade to JFO. L L (6) The claimant would also have been the next most M senior SO suitable for promotion if he had been M arranged for STI and URB assessment earlier than N October 2008. N (7) As CPA had to recruit DEFO, it was required to hold O STI for the claimant earlier than 19 May 2008. O Allowing time for CPA to make arrangement for the P STI and URB assessment, the claimant would have P completed STI by about January 2008 and then Q assessed by URB as suitable for upgrade to JFO by Q about February 2008. R R 14. Accordingly, on Questions (1), (5) and (6), the Deputy S S Presiding Officer held that CPA was in breach of clause 6.2 of COS99 by T failing to assess the claimant’s suitability for progression to JFO after T U U V V 由此 - 8 - A A about 1 February 2008. On this basis, he further held that the claimant was B B eligible to receive BPP as from 1 March 2008. He however left the C question of whether the claimant should be paid pursuant to clause 10.2 or C clause 10.5 of COS99 to be dealt with when determining the quantum of D D the award. E E 15. As to Questions (2) and (3), the Deputy Presiding Officer F rejected the claimant’s argument that he is entitled, under clause 7.2.b of F COS99, to automatic progression to the position of JFO after he had joined G G CPA for 18 months. The Deputy Presiding Officer felt it was not H necessary and he did not decide on whether CPA was obliged under clause H 7.2.b to have the claimant assessed for suitability for progression to JFO I I after he had served for approximately 18 months. J J 16. As for Question (4), the Deputy Presiding Officer held there K K was nothing in COS99 to the effect that CPA should have assessed the L claimant before retention of captains beyond the retirement age arises. L M Grounds of appeal M 17. The Grounds of Appeal, which had undergone several N N revisions, were drafted in meticulous details. The broad grounds that had O been argued in this appeal can be summarized as follows: O P (1) The finding of an implied obligation under clause 6.2 P of COS99 is unnecessary, not required by law and Q inconsistent with the express terms of the employment Q contract. R R (2) The finding that CPA is required under paragraph 7.1 of the Ops Manuel (Vol.1 Part 3) to hold URB S meetings for SOs when (i) there are openings of FO S positions; (ii) CPA is lacking suitable SO to fill the T vacancies; and (iii) there are SO ready for assessments T U U V V 由此 - 9 - A A is erroneous in law, having regard to clause 7.2.c of B COS99 and that a requirement to fill FO vacancy is B different from a requirement to promote SO to JFO. C C (3) The finding that the claimant was ready for STI as D soon as he attained Grade A standard, that had he been D assessed earlier, it was probable he would have been assessed as suitable and that he would have completed E E STI by about January 2008 and assessed as suitable for upgrade to JFO by about February 2008 is not F supported by evidence and is further contrary to the F evidence before the Tribunal. G G (4) The finding that the claimant would be the next most senior SO suitable for promotion had he completed the H H STI and assessed as suitable by the URB in February 2008 has no proper legal or evidential basis. I I (5) The finding that “captains” in clause 10.2 of COS99 J include freighter captains so that retention of freighter J captains beyond their retirement age after 1 January K 2008 will trigger entitlement to BPP is based on an K erroneous construction of the provision and that freighter captains should have been excluded in L L reckoning the claimant’s seniority in February 2008. M (6) The finding that the claimant became eligible to M receive BPP under either clause 10.2 or clause 10.5 of N COS99 as from 1 March 2008 is erroneous in law in N that the two provisions have different commencement date for BPP. O O (7) The decision to reserve to the hearing on quantum the P question of whether the claimant’s entitlement to BPP P arose under clause 10.2 or clause 10.5 of COS99 is Q erroneous in law in that it is an issue of liability. Q R R The Respondent’s Notice S 18. Before discussing CPA’s appeal, I shall deal firstly with the S Respondent’s Notice filed by the claimant on 2 November 2009. By the T T Respondent’s Notice, the claimant seeks to affirm the Decision on the basis U U V V 由此 - 10 - A A that the Deputy Presiding Officer should have found that clause 7.2.b of B B COS99 obliges CPA to promote a DESO to SO within 18 months of C confirmation as SO if not assessed as unsuitable for such promotion. This C is seeking effectively to overturn the Deputy Presiding Officer’s finding D D under Question (3) that the claimant was not entitled under clause 7.2.b to E automatic progression to the position of JFO after he had joined CPA for E 18 months. F F 19. CPA takes objection to the Respondent’s Notice, pointing out G G that no leave to appeal against the determination of Question (3) had been H applied for or granted. Under section 32(1) of the Labour Tribunal H Ordinance, Cap.25, any party who is dissatisfied with a determination of I I the Labour Tribunal requires leave to appeal against the determination. J J Hence, a respondent to an appeal, who wishes to cross appeal or vary some K parts of the decision of the Tribunal, has to apply for leave to appeal: see, K by way of reference, Hong Kong Civil Procedure 2011, Vol. 1 L L para.59/0/55. M M 20. Mr Scott SC accepts that there is no procedure in an appeal N from the Labour Tribunal for the filing of a respondent’s notice, arguing at N the same time that the claimant is not seeking to make a cross appeal. In O O my view, although the claimant supports the ultimate decision of the P Deputy Presiding Officer on liability, his Respondent’s Notice in fact seeks P to vary the determination on Question (3), which is one of the two bases, Q Q hence a material aspect of his claim. As such, he requires leave to argue R against the determination. As no leave has been granted, the Respondent’s R Notice filed by the claimant in this appeal is irregular and falls to be S S dismissed. T T U U V V 由此 - 11 - A A An overview B B 21. The thrust of the claimant’s claim in the Tribunal is twofold. C C First, it is argued that he is entitled to be promoted after about 18 months of D service. As noted above, this argument, which is founded on clause 7.2.b D of COS99, was rejected by the Deputy Presiding Officer. E E 22. Second, the claimant says he is entitled to be compensated by F F reason of CPA’s delay in assessing his suitability for promotion. This G aspect of the claim was upheld by the Deputy Presiding Officer. Critical to G the decision are the findings that clause 6.2 of COS99 gives rise to an H H implied obligation on the part of CPA to exhaust assessments of SO before I recruiting DEFO, that CPA was in breach of this obligation and that I consequently the claimant had been deprived of the opportunity to receive J J BPP because had he been arranged for STI and URB assessment earlier, he K would have been the next most senior SO suitable for promotion by K February 2008. It is on these several aspects that the present appeal turns. L L The implied term under clause 6.2 M M 23. On the finding of implied term, CPA’s argument in this appeal N is that there is no legal basis for implying into clause 6.2 an obligation on N its part to exhaust assessments of SO before embarking upon recruitment O O of DEFO and that the implied term as found is inconsistent with the P express term of the employment contract. P Q Q 24. A term is not to be implied merely because in all the R circumstances it would be reasonable to do so or because it would improve R the contract or make its carrying out more convenient; the touchstone is S S always necessity and not merely reasonableness. The term to be implied T must be capable of being formulated with sufficient clarity and precision. It T U U V V 由此 - 12 - A A is also trite law that a term will not be implied if it would be inconsistent B B with the express term of the contract: Chitty on Contracts (30th edition) C vol.1 para.13-009. C D 25. It is evident from his Reasons for Decision that the Deputy D Presiding Officer based the implied term on clause 6.2, but there was no E E elaboration on the basis. In the Tribunal, the claimant had argued that it F was open to CPA to circumnavigate the requirement under cause 6.2 by not F assessing SO who meets the requirements so that there would be no G G suitable SO for upgrading, thereby enabling CPA to recruit DEFO. It is H not clear from the Reasons for Decision whether this argument was H accepted by the Deputy Presiding Officer. However, Mr Scott SC who I I appears for the claimant makes a similar point in this appeal. He submits J J that the implied term is necessary to prevent CPA unilaterally K circumventing the contract and frustrating the operation of clause 6.2 by K not arranging or delaying STI or URB assessments. L L 26. In considering this issue of implied term, it is necessary to M M ascertain what are the parties’ rights and obligations under clause 6 and to N see whether there is any necessity for it. The important clauses are 6.2, N which provides that: “Recruitment of [DEFO] will normally only take O O place when there are no [SOs] suitable for promotion”; and clause 6.3, P which provides that where there is recruitment of DEFO other than in P accordance with clause 6.2, SOs suitable for promotion will not normally Q Q have their promotion to JFO delayed by more than 12 months while the R recruitment of DEFO is taking place. R S 27. Four points become clear from reading the two clauses S together. First, under the contract, CPA may recruit DEFO instead of T T promoting SO. Second, CPA will normally only recruit DEFO when there U U V V 由此 - 13 - A A are no SOs suitable for promotion. Third, CPA may recruit DEFO B B notwithstanding there are SOs suitable for promotion (i.e. other than in C accordance with clause 6.2). One possibility of this happening will be C when the situation is other than normal. In other words, CPA is entitled D D under clause 6.2 and/or clause 6.3 to recruit DEFO irrespective of whether E there are SOs suitable for promotion. Fourth, it follows that the extent of E the rights of the SOs under clauses 6.2 and 6.3 is that: (i) when there are F F SOs suitable for promotion, there will normally be no recruitment of DEFO; G and (ii) if, notwithstanding the availability of SOs suitable for promotion, G there is recruitment of DEFO, then the promotion of these SOs to JFO will H H not normally be delayed for more than 12 months while the recruitment is I taking place. I J J 28. Thus analyzed, it is difficult to see how it can be implied into K clause 6.2 an implied obligation to exhaust the assessments of SO before K CPA proceeds to recruit DEFO. The restriction sought to be placed on L L CPA’s right to recruit DEFO by the implied term is neither warranted nor M necessary in light of the parties’ contractual rights and obligations on the M matter of recruitment of DEFO. CPA cannot be put under a duty to make N N assessments for the purpose of determining whether there will be SO O suitable for promotion when it is not contractually bound to promote SO O who has been assessed as suitable to the position of JFO. The argument P P that without the implied term, CPA can circumvent the operation of clause Q 6.2 by not carrying out STI and URB assessments is likewise misplaced. Q R 29. In this connection, it is relevant to note the provisions in R clause 7.2 of COS99 dealing with promotion of SO to JFO. Clause 7.2.c, S S which provides that promotion to JFO occurs when a SO is allocated a T conversion course, also expressly provides that the number and timing of T U U V V 由此 - 14 - A A JFO upgrade courses is dependent upon CPA’s requirements. In so B B providing, clause 7.2.c confers on CPA the right to determine not only C when, but also whether there will be promotion of SO to JFO. The implied C term, in requiring CPA to exhaust assessments of SOs before recruiting D D DEFO, is therefore at odd with CPA’s contractual right to determine the E need and timing of URB assessment and, in turn, the promotion of SO to E JFO. F F 30. The Deputy Presiding Officer had rejected the claimant’s G G argument that clause 7.2.b, which provides that SO joining by direct entry H (DESO), will serve as SO for approximately 18 months, mandates CPA to H promote a DESO to JFO at approximately 18 months after joining. He I I held that the progression from SO to JFO is not automatic, noting that J J suitability for upgrade to JFO is determined by URB review and that in the K past a significant percentage of SO had been assessed as unsuitable for K upgrade by the URB. The Deputy Presiding Officer further left open the L L question whether clause 7.2.b obliges CPA to have a DESO assessed for M suitability for progression to JFO after he has served for approximately 18 M months. The Deputy Presiding Officer’s view on clause 7.2.b is thus in N N line with the express provision in clause 7.2.c that it is within CPA’s power O and discretion to determine the need and timing of promoting SO to JFO. O The finding of an implied obligation under clause 6.2 to exhaust P P assessments of SO before embarking upon the recruitment of DEFO is Q irreconcilable with the express power of CPA under clause 7.2.c. Q R 31. Mr Scott SC submits that the implied term could be supported R by reference to the implied term of co-operation and the implied term of S S non-prevention of performance: Chitty on Contracts (30th edition) vol.1 T T U U V V 由此 - 15 - A A paras.13-011 & 13-012. However, no matter for what type of implied term, B B the necessary conditions for the implication of a term must be satisfied C C 32. In finding clause 6.2 gives rise to the implied term, the Deputy D Presiding Officer does not appear to have considered clause 7.2.c and the D interplay between the two contractual provisions; and whether the implied E E term is necessary and compatible with the express contractual provisions. F In my view, the implied term found by the Deputy Presiding Officer does F not have a proper legal basis and is also inconsistent with the express term G G of the contract between the parties. H H 33. Mr Huggins SC has additionally averted to the difficulties in I the implementation of the implied term, including whether the duty to I J assess should extend to all those SOs who had attained Grade A, or only J those who had maintained the standard for three months after completing K K the training modules or those SOs who had completed STI. There is force L in this argument in that the implied term so found has not been formulated L with sufficient clarity and precision. M M Paragraph 7.1 of Ops Manual (Vol.1 Part 3) N N 34. It is convenient at this juncture to deal with the Deputy O Presiding Officer’s finding on paragraph 7.1 of the Ops Manual (Vol.1 Part O 3), which provides that URB meetings are called as required to assess SO’s P P suitability for upgrade to JFO. It was CPA’s argument that it may hold Q JFO upgrade (or conversion) courses at its discretion. This was rejected by Q the Deputy Presiding Officer, who held that CPA is required to call URB R R meetings to assess SO’ suitability for promotion when: (i) there are S openings of FO positions; (ii) CPA does not have suitable SO to fill the S vacancies; and (iii) when there are SO ready for assessments. T T U U V V 由此 - 16 - A A 35. Although paragraph 7.1 does not expressly state that URB B B meetings are called as required by CPA, in construing the paragraph, one C must have regard to the other contractual provisions, noticeably clause C 7.2.c of COS99. The two contractual provisions are inter-related. URB D D assessment is a necessary part of the process of upgrading a SO to JFO. E Given that under clause 7.2.c, promotion of SO to JFO is dependent on the E requirement of CPA, it must follow that when paragraph 7.1 provides that F F URB meetings are called as required to assess SO’s suitability for upgrade G to JFO, it is referring to the requirement of CPA. G H 36. Further, the evidence in the trial in the Tribunal shows there H are practical differences in the duties, function and responsibilities between I I a FO and a JFO; the latter is not a full-fletched FO. It is provided in clause J J 7.3 of COS99 that promotion to FO will occur when a JFO is assessed for K full line duties. Mr Huggins SC has also submitted, and I agree, that a K requirement by CPA for more FOs may not be the same as, and cannot be L L taken as equivalent to, a requirement to promote suitable SOs to become M JFO. The commercial realities would be one of the relevant factors, and M certainly an important factor, that impacts upon the promotion of SO to N N JFO. I am unable to agree with the claimant’s argument that the question O of requirement should only be viewed from the employee’s perspective. It O appears that, in rejecting CAP’s construction of paragraph 7.1 and finding P P that CPA is contractually bound to hold URB meetings once there are the Q three criteria, the Deputy Presiding Officer had not considered CPA’s Q express power under clause 7.2.c of COS99 and the practical R R considerations as demonstrated by the evidence. In these regards, his S finding in relation to paragraph 7.1 cannot be supported. S T T U U V V 由此 - 17 - A A The finding of breach B B 37. I turn next to the holding that CPA was in breach of its C C contractual obligation to assess the claimant earlier and that consequently D the claimant had been deprived of the opportunity to receive BPP. D Underlying this holding are the findings that had the claimant been E E arranged for STI and URB assessment earlier, he would have been suitable F for promotion and also the next most senior SO by February 2008. It is F CPA’s argument that there was no evidence before the Tribunal on which G G the Deputy Presiding Officer could have reached such conclusions. H H Section 32(1) of Labour Tribunal Ordinance I 38. The claimant objects to this aspect of the appeal, which it says I is a challenge to the factual findings and falls outside the permissible scope J J of appeal under section 32 of the Labour Tribunal Ordinance. Under K section 32(1), leave to appeal from a decision, determination or an award K of the Tribunal will only be granted where the decision, determination or L L award is erroneous in points of law or is outside the jurisdiction of the M Tribunal. Appeals on facts are therefore not permitted. However, it does M not mean that findings of fact can never be challenged on appeals from the N N Labour Tribunal. A finding of fact or inference from the facts which is O perverse or irrational, or where there is no evidence to support it or where O the decision is made by reference to irrelevant factors or without regard to P P relevant factors may amount to an error of law: Guido Ferrando v. Hua Q Q Dao Shipping (Unreported) HCLA 44/2007, 31 October 2008 at paras.18- R 21. As seen below, the thrust of CPA’s appeal against the findings that the R claimant would have been the next most senior SO suitable for promotion S S in February 2008 is that the Deputy Presiding Officer had proceeded on an T absence of evidence and a misunderstanding of the evidence. These errors, T U U V V 由此 - 18 - A A if made good, are errors in law and are within the scope of appeal under B B section 32(1) of the Labour Tribunal Ordinance. C C Suitability for promotion D 39. It is CPA’s case that “suitable for promotion” in the context of D E clauses 6.2, 10.2 and 10.5 of COS99 is an established status that involves E the three-stage process of: (i) achieving Grade A standard and maintaining F F it over a period of three months and completion of three training modules; G (ii) satisfactory completion of STI; and (iii) being assessed as suitable for G upgrade by the URB. This is borne out by paragraphs 7.2 and 7.3 of the H H Ops Manual (Vol.1 Part 3) and the evidence of CPA’s witness, Captain I Alan Wilson, including his witness statement. The Deputy Presiding I Officer’s conclusion on the claimant being suitable for promotion is J J premised on his views that: (i) the claimant was ready for STI as soon as he K attained Grade A standard on 20 November 2007; (ii) as and when he K completed the STI, he would be ready for URB assessment; and (iii) had L L CPA arranged STI and URB assessment for the claimant earlier, it is M probable that the claimant would have successfully completed the STI by M about January 2008 and assessed by the URB as suitable for upgrade to N N JFO by about February 2008. O O 40. I agree that the determination on the claimant’s suitability for P promotion at an earlier time must be based on evidence. The Deputy P Presiding Officer’s views on the claimant’s readiness for assessments and Q Q the probable outcome of the assessments are, however, not supported by R any primary facts. It seems his view that the claimant would probably have R been assessed as suitable had he been assessed earlier is deduced from a S S posterior fact, namely, the claimant was assessed in October 2008 to be T suitable for upgrade to JFO by the URB. I accept that as the claimant was T U U V V 由此 - 19 - A A not assessed until later in 2008, there would be no direct evidence as to his B B suitability for promotion at an earlier time. But that does not dispense with C the need for a proper evidential foundation. There ought, for instance, to C be some form of expert evidence or primary facts in relation to the D D assessment criteria and the claimant’s status of readiness for assessments at E an earlier time in light of the assessment criteria. The Deputy Presiding E Officer erred as a matter of law in proceeding to make findings as to the F F claimant’s suitability for promotion prior to October 2008 when there was G an absence of evidence and primary facts. G H 41. The Deputy Presiding Officer had also overlooked the H evidence on the requisite steps for being assessed. Paragraph 11.1 in I I Section 5 of the Ops Manual (Vol. 7 Part 1) provides that to meet the J J requirement for maintaining a Grade A status, there must be a minimum of K three training modules at Grade A spread evenly over a period of three K months and that the technical assessment will be scheduled approximately L L six months before an anticipated upgrade. Although volume 7 of the Ops M Manual is not expressly incorporated into the employment contract, the M claimant, when being cross-examined, accepted that volume 7 stated the N N steps he had to go through to achieve suitability: Transcript pp. 24F & O 25B-E. Paragraph 11.1 is also relevant to explain what is entailed by the O requirement of maintaining a Grade A standard under paragraphs 7.2 and P P 7.3.B of the Ops Manual (Vol.1 Part 3). On the evidence, when the Q claimant attained Grade A standard in November 2007, he had yet to Q maintain the standard and to complete three training modules. Before R R meeting these requirements, the claimant could not have been arranged for S STI. It follows that he could not have completed STI satisfactorily by S January 2008 or have been assessed suitable by the URB by February 2008. T T U U V V 由此 - 20 - A A Seniority of the claimant B B 42. As to the finding that the claimant would be the next most C C senior SO had he been assessed earlier, the evidence at the trial is that in D February 2008, he was no.129 on the seniority list. At the Deputy D Presiding Officer’s request, CPA had prepared a table (Table D32), setting E E out, inter alia, the number of DEFO recruitments, extensions of passenger F and freighter captains beyond retirement age and the number of SO F receiving BPP for the period from January 2007 to October 2008. The G G Deputy Presiding Officer took the view that had the defendant undergone H technical assessment in February 2008, it was probable that some of the H more senior SOs would have been assessed as unsuitable. Based on the I I previous SO URB results (i.e. from July 1998 to October 2008), he worked J out the average failure rate to be 18.1%. After deducting 10 SOs who had J been assessed as unsuitable and another 31 SOs who were receiving BPP, K K he applied the 18.1% failure rate to the remaining SOs that were more L senior than the claimant and adjusted the claimant’s seniority to no.103. L From the Table, he further worked out there were a total of 106 DEFO M M recruitments and passenger captains’ extensions and freighter captains’ N extensions. Accordingly, he concluded that the claimant would have been N the next most senior SO suitable for promotion had he completed the STI O O and was assessed as suitable by the URB in February 2008. P P 43. The findings and reasoning of the Deputy Presiding Officer on Q the seniority of the claimant are fraught with several evidential difficulties. Q First, the adoption of the 18.1% notional failure rate is arbitrary. The R R failure rate in fact fluctuated from year to year. As in the case of the S suitability of the claimant for promotion, there is no evidence on the S suitability of the other 128 SOs who were more senior than the claimant. T T U U V V 由此 - 21 - A A The Deputy Presiding Officer therefore resorted to the use of statistical B B data to gauge the outcome of the assessments of these SOs. However, C there is no evidential support for the appropriateness and reliability of the C method that he had adopted. There is nothing to show that the previous D D results of URB assessments are reliable indicator of the performance of E other SOs in future assessments. E F 44. Second, which is also a point on the methodology used, there F is no explanation for the assumption that the claimant would have been G G found to be suitable instead of being unsuitable when applying the 18.1% H notional failure rate to the group of SOs that included the claimant. Mr H Scott SC says that this is because the claimant passed the assessments the I I first time he took them. In my view, the fact that the claimant was assessed J J to be suitable some months later cannot, in the absence of further evidence, K provide a solid basis for concluding that he would surely be assessed as K suitable in February 2008. As a matter of fact, the claimant was by then L L not yet qualified for assessment. M M 45. Third, the 106 DEFO recruitments and passenger and freighter N captain retentions in February 2008 had included the extensions of 41 N freighter captains formerly employed by ASL. Out of them, 23 reached the O O age of 55 and had their contracts extended before January 2008. Under the P terms of the Annex to COS99 on Freighter Aircraft Crewing (“the Annex”), P which expired on 31 December 2007, the extensions of these freighter Q Q captains will not trigger entitlement to BPP. This is common ground. The R retentions of these 23 freighter captains therefore should not have been R taken into account when reckoning the seniority of the claimant and his S S entitlement to BPP. The claimant argues that because the freighter T captains remained on the seniority list and their extensions continued after T U U V V 由此 - 22 - A A the expiry of the Annex, the Deputy Presiding Officer was correct to have B B included them. I am unable to accept this argument. Although the C freighter captains remained on the seniority list, their extension upon C attaining the age of 55 was a past act. There could not have been a second D D extension after the expiry of the Annex. Further, the argument is directly E contrary to the terms of the Annex. It was not provided in the Annex that E the entitlement to BPP would be suspended during its occurrence and F F revived after its expiry. G G 46. Mr Huggins SC had in his submissions referred to a wider H question about the inclusion of all 41 freighter captains in ascertaining H whether the claimant would have been the next most senior SO in February I I 2008. The issue that was before the Tribunal was whether the retention of J J freighter captains beyond the age of 55 would trigger entitlement to BPP K under clause 10.2 of COS99. It was CPA’s case that when COS99 was K issued, CPA itself did not employ freighter captains. After CPA began to L L offer employments to freighter captains employed by ASL (for the use of M CPA) in about 1999 or 2000, the Annex was introduced, the effect of M which is that retention of freighter captains would not trigger BPP N N entitlement. It was accepted by the claimant that the Annex formed part of O his contract. When the Annex expired by the end of 2007, CAP introduced O a “Policy on Crewing Freighter Aircraft – 2008” that contained, inter alia, P P similar terms on BPP entitlement. The Deputy Presiding Officer found as Q a fact that this document was introduced unilaterally by CPA and did not Q form part of the claimant’s contract. He considered that the word R R “captains” in clause 10.2 of COS99, given its natural and ordinary meaning S and as understood by a reasonably well-informed man in 2006, would S include both passenger and freighter captains. T T U U V V 由此 - 23 - A A 47. CPA’s argument on appeal is that by reason of the Annex, B B which formed a part of the contract, the word “captains” in clause 10.2 of C COS99 did not include freighter captains and this remains to be the C position notwithstanding the expiry of the Annex. Therefore freighter D D captains continue to be outside the meaning of “captains” under clause 10.2 E and the Deputy Presiding Officer fell into error in construing clause 10.2 E and in including the 41 freighter captains when reckoning the seniority of F F the claimant in February 2008. G G 48. In the course of his submissions, Mr Huggins SC advanced a H further argument on the 18 freight captains (i.e. 41 – 23). It was pointed H out that they were employed by ASL before and were transferred to and I I became employed by CPA for the first time when the Annex expired. J J Hence, it is not a case of retention by CPA and falls outside the scope of K clause 10.2 of COS99. K L 49. Having regard to my other conclusions on the finding that the L claimant’s seniority, it would be not be necessary to resolve this problem M M of the definition of captains under clause 10.2 of COS99. I need only make N this observation: The arguments advanced by CPA in this appeal cannot be N decided without examining the factual circumstances surrounding the O O retention and employment or transfer of the freighter captains. I do not P consider that there is sufficient evidence or analysis of the facts in this P appeal to enable a concluded view be taken on the issue whether freighter Q Q captains are within the meaning of clause 10.2. R R 50. In summary, the findings on the claimant’s suitability for S promotion and seniority are problematic in that there is no proper evidence S before the Tribunal. Mr Scott SC refers to the case of Ashcroft v. Curtin T T [1971] 3 All ER 1208, which was an appeal against the award of damages U U V V 由此 - 24 - A A in a personal injury case. Edmund Davies LJ, with whose judgment the B B other members of the court agreed, felt that while the probability was that C some loss to the plaintiff would have resulted from the accident, it was C quite impossible to quantify it. He however did not accede to the D D defendant’s submission that this should result in a “nil” award because this E would not meet the justice of the case and also it would mean that E “arithmetic has failed to provide the answer which commonsense F F demands” (at p.1213g-i). The claimant asks this court to take the same G view and approach in this case. It is submitted that where there is a breach, G the court will do its best to assess loss even if there is limited materials for H H the purpose. I I 51. The position of the present claim is rather different from that J J in Ashcroft v. Curtin. The problems underlying the issues of the claimant’s K seniority and suitability for promotion do not relate to quantification of K damages or loss to the claimant, but go to the fundamental question of L L liability and of establishing a breach on the part of CPA. If, as in this case, M there is no or insufficient evidential basis for making the necessary M findings, the court cannot resort to hypothesis and assumptions or N N commonsense and find for the claimant on these bases. O O Eligibility to receive BPP as from 1 March 2008 P P 52. The last of the broad grounds of appeal relates to the finding Q Q that by reason of the breach, the claimant was eligible to receive BPP as R from 1 March 2008 under either clause 10.2 or clause 10.5 of COS99, and R to the ruling that the question of whether the BPP should be payable under S S clause 10.2 or clause 10.5 is to be dealt with at the determination of the T quantum. Under the two clauses, the commencement dates for BPP are T U U V V 由此 - 25 - A A different. In the case of clause 10.2, it commences on the date that the B B retained captain reaches the retirement age. In the case of clause 10.5, it C commences three months after the date of the joining of the DEFO. In C either case, it is not the same as the date the claimant should have been D D assessed as suitable for promotion. Thus viewed, the finding that the E claimant is eligible to receive BPP as from 1 March 2008 runs counter to E the contractual provisions in clauses 10.2 and 10.5. F F 53. It is further incorrect to leave the question of whether the G G claimant was entitled to be paid BPP under clauses 10.2 or 10.5 to the H determination of quantum. The Deputy Presiding Officer was obliged to H make a finding of fact that the claimant was the second most senior SO I I suitable for promotion, in the case of clause 10.2, after the retention of a J J relevant captain beyond the retirement age, and in the case of clause 10.5, K after the recruitment of a particular DEFO. It is a necessary finding of fact K relating to an issue of liability; it is not a matter of quantum. L L M Conclusion M 54. For the reasons set out above, the appeal is allowed. N N 55. Applying the normal rule of costs follow event, there is an O O order nisi that the claimant pays the respondent the costs of the appeal, P including the costs of the application for leave to appeal, but excluding the P costs of amending the grounds of appeal and to be taxed if not agreed. Q Q R 56. Counsel had indicated they would wish to be heard on the R consequential orders. I would invite the parties, having regard to the S S reasons set out in this Judgment, to try to agree on the consequential orders T and directions within 14 days from the date of this Judgment. Failing T U U V V 由此 - 26 - A A agreement, the parties shall approach the listing officer to fix a hearing to B B deal with the consequential orders and directions. C C D D E E (C Chu) F F Judge of Court of First Instance High Court G G H Mr John Scott SC instructed by Messrs Robertsons for the claimant H (respondent). I I Mr Adrian Huggins SC instructed by Messrs Mayer Brown JSM for the defendant (appellant). J J K K L L M M N N O O P P Q Q R R S S T T U U V V