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30 January 2019
Since 2014 the Labour Tribunal has had the power to order parties to provide security for awards or orders.(1) The grounds for making such an order are relatively broad and give the tribunal considerable discretion, including making an order for security for a party's costs.
There has been little case law on how this discretion should be exercised. In a 2015 case, an employee was ordered to pay security for payment of an award essentially because they had abused the process.(2) Clearly, the making of such an order against an employee can have a drastic effect on their ability to pursue their claim. A recent decision of the Court of First Instance, Hon Sau Har v Lo Woon Bor Henry T/A Henry Lo & Co Solicitors,(3) sheds some further light on this area of law.
The claimant was a secretary employed by the defendant (a law firm). She worked for the defendant for less than two years and was dismissed by the defendant with one month's payment in lieu of notice.
The claimant claimed for annual bonus, pro-rata payment for unused annual leave and termination payments. The defendant argued that:
In the call-over hearing before the tribunal, the presiding officer explained to the claimant that both the Labour Department and the tribunal officer had informed her that all of her claims lacked merit. The claimant insisted on pursuing her claims, so the defendant applied for an order for payment of security for costs.
The presiding officer made an order for payment of security for costs against the claimant on the basis that "the Claimant could not demonstrate that she has a high degree of probability of success at trial". The claimant did not make the security payment and the presiding officer ordered her claims against the defendant to be dismissed. The claimant appealed against the orders to the Court of First Instance.
In the Court of First Instance, Deputy High Court Judge Marlene Ng considered whether the order or determination by the tribunal was erroneous in point of law or outside the jurisdiction of the tribunal.
The claimant argued that she had a low income and therefore it would be unfair to impose a security payment order against her. The court considered whether there were any balancing factors which meant that a security payment order should not be imposed on the claimant. Such balancing factors included considering whether the claimant had a strong and valid claim.
The court took the view that the presiding officer had not erred in point of law and agreed that the claimant's claims lacked merit. In summary, the court's reasoning is as follows:
The court also considered the claimant's income level and financial situation, which posed a risk that she may not be able to compensate the defendant's costs in the event that she was not successful in her claims. Meanwhile, the defendant may also have to incur additional costs in seeking to execute any costs order, which would be unfair to the defendant. Therefore, an order for security for costs was "just and expedient" in this case.
In considering whether an order for security for payment of an award or order should be made, the tribunal would consider the following:
When deciding on the amount of the security payment, the tribunal will take into consideration the defendant representative's income and the amount of time expected to be spent on the case by such defendant representative.
The presiding officers have indicated a willingness to invoke this power in cases where they consider that employees are pursuing weak or meritless claims. It should not be forgotten that the tribunal can also make such orders against employers.
For further information on this topic please contact Patricia Yeung at Howse Williams Bowers by telephone (+852 2803 3688) or email (email@example.com). The Howse Williams Bowers website can be accessed at www.hwbhk.com.
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