Demery v Cathay Pacific Airways Ltd [2010] 4 HKLRD 99

Facts  

2.1. The plaintiff employee was a former commercial airline pilot of the defendant employer Cathay Pacific and was retired on his birthday in accordance with the employer’s Conditions of Service 1999, which provided that “the normal retirement age is 55”. The defendant did not offer any extension of employment to the plaintiff beyond his 55th birthday.  

2.2. The plaintiff brought proceedings against the defendant alleging breach of employment contract and “unreasonable and unlawful dismissal” under Part IVA of the EO.  

Breach of Employment Contract under Conditions of Service 1999

2.3. The plaintiff's claim was made on the basis that: (a) the defendant had since at least 1988 offered extensions of employment to a number of officers when they had reached the retirement age of 55; and (b) since 2007 the defendant had an internal written policy and it was also the defendant's practice to offer a one or two-year extension of employment to every officer employed upon reaching the age of 55.  

2.4. Therefore, the plaintiff claimed that he had a reasonable and legitimate expectation of being offered further employment until a higher normal retirement age subsequent to his 55th birthday.  

2.5. For that reason, the plaintiff claimed that in dismissing him, the defendant failed to give three months’ notice or payment in lieu thereof in accordance with the terms of the Conditions of Service 1999. The plaintiff further claimed that the defendant failed to hear and act upon the plaintiff's grievance in accordance with the procedures stated in the Conditions of Service 1999 and as a result, failed to pay wages pending the grievance procedures, which the plaintiff estimated to be equivalent to one month’s wage. In total, the plaintiff claimed four months’ wages totalling HK$946,646.50 for the loss and damage suffered.  

Unfair Dismissal under Part IVA of the Employment Ordinance

2.6. The plaintiff, who was an active member of two registered trade unions, claimed that under s.21B of the EO, he was entitled to protection against anti-union discrimination for his membership and participation in those trade unions.

2.7 The plaintiff claimed that the termination and dismissal of his employment by the defendant was without any valid reason and sought to claim that he was dismissed by the defendant for his active involvement with the two trade unions. The plaintiff therefore claimed that he was unreasonably and unlawfully dismissed in contravention of the EO.  

2.8. Further, the plaintiff also argued that he was unfairly dismissed on the basis that the normal retirement age was no longer 55. The plaintiff's argument was premised on the legal position in England that an employee had a right not to be unfairly dismissed. In this regard, the plaintiff submitted five English judgments in employment cases, and sought to rely on s.64(1)(b) of the English Employment Protection (Consolidation) Act 1978 by drawing the analogy from them.  

2.9. Accordingly, the plaintiff sought remedies including an order for reinstatement or re-engagement, an award of terminal payments and award of compensation.  

Decision

2.10. The plaintiff’s claims were struck out by the Master, and the plaintiff appealed. The Court of First Instance dismissed the appeal on the basis that the plaintiff had no reasonable cause of action for his claims, both in respect of the breach of contract and in respect of the EO.  

2.11. The Court held that the legal position in the United Kingdom was very different from that in Hong Kong. In the United Kingdom, the employee’s right not to be unfairly dismissed by his employer is largely entrenched in English statue law. As the law stands in the United Kingdom, it is theoretically possible for an employer to have “unlawfully dismissed” an employee if his employment was terminated upon his reaching the contractual retirement age, but it can be shown that the normal retiring age in the undertaking in which the employee was employed is higher than the contractual age. However, the English cases referred to by the plaintiff regarding claims for unfair dismissal were not applicable to this case as there was no equivalent or similar statutory provisions in Hong Kong.  

2.12. In the present case, the contractually agreed retirement age was stated to be 55, and in the absence of any variation to the agreement, the normal retirement age of the plaintiff was 55. As such, the plaintiff’s employment was held to have come to an end by effluxion of time due to his retirement. There was no question of dismissal or termination and thus the plaintiff's claims for breach of contract and under the EO fell apart.

2.13 Moreover, the court held that the defendant’s change in internal policies did not give rise to any right or entitlement exercisable unilaterally to extend the “normal” retirement age. The Court commented that the plaintiff’s claim was no more than a complaint that he was not offered any extension of his employment by the employer upon his reaching his agreed retirement age.

Practical Implications

2.14. Employees should not expect to have any contractual right or entitlement to demand extensions of employment beyond their contractually agreed retirement age. Even if there is a written and published internal policy by the employer offering extension of employment, it does not affect the contractually agreed retirement age under the employment contract. The fact that the employer might have offered or in fact extended the employment of some employees does not give any contractual right or entitlement to an employee to demand an extension in the absence of any agreement between them.  

2.15. Employers should ensure that internal policy is carefully drafted to avoid any misunderstanding by the employees that their contracts of employment with the employers can be extended beyond the contractually agreed retirement age.