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Deacons
December 30, 2009 - Hong Kong

John Simpson Warham and others V. Cathay Pacific Airways Limited

Winning the case against its flight attendants, Cathay Pacific loses against a group of pilots they sacked during a 2001 industrial dispute. The airline, one of Asia's biggest, was ordered to pay damages to each of the 18 pilots whose employment had been terminated by Cathay Pacific.

The ruling came after an eight-year legal fight brought by the pilots who were among a group of 49 whose employment had been terminated by the airline during a bitter dispute over pay and rosters.

The court ruled that Cathay Pacific wrongly and unfairly dismissed the pilots and ordered the airline to pay each pilot for defamatory remarks it made about them.

Cathay argued that they terminated the 49 pilots' employment due to their conduct of having unusually high rates of calling-in-sick on duty or reserve days, their failure to discuss with management the reasons as to why such was happening and their perceived negative attitude towards Cathay and fellow employees.

The Court of First Instance held that Cathay's reasoning did not amount to a valid reason to dismiss the 49 pilots under the Employment Ordinance. In deciding the case, the judge stated that for an alleged reason for dismissal to fall under the relevant section in the Employment Ordinance, the reason must "first of all, be true". That said, if the alleged "conduct" plays only an incidental role in an employer's decision for firing the employee or if such "conduct" is trivial, the judge held that the "conduct" cannot as a matter of law qualify as a "valid reason" within s.32K of the Employment Ordinance.

During the trial, the management reasoned that if negotiations with the union were fruitful, there would be no need to dismiss any of the 49 pilots. The 49 pilots would then individually drop their debilitating campaign, cease to be abnormally sick, and restore the goodwill withdrawn under the contract compliance. The court considered that therefore the "conduct" of the 49 pilots were not the underlying or true reason for their dismissal. Because management had no real idea whether any of them were genuinely malingerers or troublemakers, there was merely the probability that they were. That was deemed a sufficient basis for management despite the strictures of the "Disciplinary and Grievance Procedures" ("DGP") Cathay has in place. That could only have been because the real target behind the mass dismissals was not the individuals concerned, but the union.

Furthermore, the judge observed that there was no hard evidence of such anti-company or anti-social conduct alleged by Cathay and that although Cathay has throughout the trial studiously denied that it dismissed the 49 pilots for "misconduct" as opposed to mere "conduct"; it is no doubt that Cathay was accusing the 49 pilots of "gross misconduct" within the terms of the DGP. For a dismissal under the DGP for gross misconduct, Cathay must first institute procedures under the DGP which would enable the officer facing possible dismissal with the chance to put forward one's side of a matter and clear one's name. Contrary to the DGP, none of the 49 pilots were given a chance to put forward their case prior to dismissal on the basis of their alleged conduct. No opportunity was given to them to explain any supposed abnormality in their sickness records or any alleged anti-social behaviour as reported.

As such, the court held that it was appropriate for the plaintiffs to each receive the maximum award under the Employment Ordinance s.32P of HK$150,000. Furthermore, despite Cathay's denial, it has as a matter of fact dismissed the 49 pilots in part for misconduct. By failing to instigate and complete disciplinary procedures, the quantum of damage is to pay each of the 49 pilots pay for a month's work. In addition, Cathay was also ordered to pay damages to these pilots for defamatory remarks it made about them.

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