49ers Court of First Instance Case - 5th October 2009
John Simpson Warham and Others v Cathay Pacific Airways & Veta Limited
South China Morning Post Headline, July 2001: "Cathay Pacific sacks 49 pilots"
Thus began the drama of The 49ers, escalating what has become one of the most protracted labour disputes in commercial aviation.
Although 3 pilots had been fired the previous week, and one more would be sacked several days later, the events of 9th July 2001 would firmly establish the group as "The 49ers". Management’s aim was reflected in their 9th July 2001 press conference, entitled "Move to resolve pilots’ pay dispute", when Mr. Tony Tyler - then Director Corporate Development, now the Chief Executive Officer - stated alleged defamatory statements.
There are repeated references in Mr. Tyler's speech linking the union's legal industrial action with Cathay Pacific's management's decision to fire the union members.
The Hong Kong Employment Ordinance that Mr. Tyler refers to also states:
Q That it is an offence if an employer “terminates the contract of employment of, penalizes, or otherwise discriminates against, an employee by reason of his exercising any such right” to take part in union activities.
There are several actions all consolidated into the prime case (HCMP 4400/2001). These are:
Initially, legal actions were commenced in various jurisdictions depending on the plaintiffs' overseas base and the Cathay Pacific Airways' wholly-owned subsidiary in that base e.g. Veta Limited, USA Basings Limited etc. However after time, some of the plaintiffs withdrew from the actions and the remainder - 18 in total - have opted for Hong Kong to hear their complaints - hence, the consolidated actions. One plaintiff, Captain George Crofts, previously had legal successes in the U.K.
There was a trial hearing on preliminary issues. In his judgment, dated 2nd March 2009, the Honourable Justice AT Reyes ruled (in part):
The right to terminate without cause under cl.35.3 is not
unfettered. Clause 35.3 cannot be used to by-pass the procedures in Appendix
1, where the underlying reason behind a dismissal is alleged misconduct.
Where the underlying reason for an intended dismissal is alleged misconduct, the Defendants would not be able to terminate by giving 3 months’ notice or payment in lieu. They would first have to invoke the Appendix 1 procedures.
The court case involves 3 causes of action:
Q That CPA acted in breach of the Employment Ordinance S21B(2)(b) by firing The 49ers because of their taking part in legitimate and protected trade union activities.
Q That CPA acted in breach of contract by not following the Appendix 1 Disciplinary and Grievance Procedure.
Q That CPA defamed The 49ers..
The High Court, Court of First Instance, ruled on 11th November 2009 that Cathay Pacific wrongly and unfairly dismissed 18 pilots in 2001 following industrial action. Mr Justice Reyes ordered the airline to pay HK$150,000 plus one month's salary to each of them. In addition, the airline was also told to pay HK$3.3 million to each pilot for defamatory remarks it made against them.
This judgment was appealed by Cathay Pacific and the breach of contract ruling was overturned by the Court of Appeal. Nonetheless, the rulings on defamation and breach of the Employment Ordinance were re-affirmed.