In 2019 and 2020, the Hong Kong courts, including the Court of Final Appeal, handed down numerous influential and representative judgments, which have important implications and offer clear guidance to human resources operations. As a corporate management staff, human resources head or manager, you have to know the relevant representative case laws very well, update relevant employment contracts and staff handbooks based on those judgment guidelines, and provide pragmatic recommendations for protecting the employer's rights. In this online workshop, the speaker will explain to you the HR legislation by reviewing and analyzing multiple landmark court cases. He will also talk about the latest legislative amendments in 2020 and the development and updates for 2021.
1. Case 1: When an employee resigns, is an agreement of waiving the employee's rights under the employment contract in exchange for additional compensation and not to make any complaints or commence any legal proceedings valid and legally binding?
A 2020 Court of Final Appeal case on the captioned matter ruled that the employer won, and held that the relevant agreement was legally binding. What are the legal considerations involved, and what guidelines does the case provide to human resources personnel in terms of assisting employers in executing relevant agreements for "peaceful" terminations of employment? How should the relevant agreement clauses be written effectively? This workshop will provide related legally binding provisions for reference.
2. Case 2: Is it legal to refuse giving out or to reduce year-end guaranteed bonus according to the terms of a contract, or to request for refund of the bonus already disbursed?
In 2020, the Court of Appeal cited cases and ruled that for year-end guaranteed bonuses (or year-end remunerations/ contractual bonuses such as the 13th or 14th month salary), employers cannot refuse payment by the reason that the bonus payment date fell within the notice period after the employee had already resigned or been dismissed by the employer's notice of dismissal. The Court of Appeal also held in other cases that any malus clause (i.e. a clause to reduce part or all of the unpaid bonus/ commission) and clawback clause (i.e. a clause requiring employee to refund paid bonus/ commission) are only applicable to "discretionary" bonuses or commissions. Based on past landmark cases, how does the court decide what truly is "discretionary" (the term "discretionary" does not determine whether a certain bonus is truly discretionary and does not help to avoid legal liability)? How should human resources formulate a "discretionary bonus" policy that complies with the law? This workshop will offer practical advice on the drafting of related provisions.
3. Case 3: How to prohibit employees from joining competitors collectively by effective and legal means? A Springboard Injunction will do
In 2019, the High Court laid down important legal principles regarding the grant of Springboard Injunctions. The case came from a lawsuit where a former employer sought to prohibit its manager alongside 8 subordinates who resigned collectively to join its competitor. The relevant principles and restriction clauses have important implications as to how human resources could effectively protect the rights and interests of employers, as well as to how springboard prohibition clauses should be written. One interesting fact about the case is that the new employer was also accused of soliciting its competitor's employees to join its own company with the aim to obtain confidential information of its competitor (i.e. the former employer), which would lead to unfair competition. From the perspective of a company who is hiring a group of employees from its competitor, the case also reveals important insights as to how human resources should clarify relevant provisions in the contract to help employers avoid such risks.
4. Case 4: The potential legal risks of hastily dismissing an employee who is alleged to have sexually harassed another female colleague
When dealing with allegations of male employees having sexually harassed female employees, such as physical contact, corporates oftentimes try to dismiss the accused male employee, or issue warnings, or persuade the accused male employee to resign, hoping to stop the relevant female employee from making further complaints to law enforcement bodies. In a 2019 court case, the relevant employer lost and was charged with direct discrimination pursuant to the Discrimination Ordinance. The judgment held that "If no explanation is forthcoming, or if it is inadequate or unsatisfactory, then it would be legitimate for the court to infer that there was discrimination against the Claimant by reason of a pro-female bias". What are the implications of the case to human resources? How should companies avoid the relevant risks and deal with cases of sexual harassment in a reasonable and legal manner? What are the explanations that the court will accept as adequate and satisfactory?
5. Case 5: Explanation of daily average wage and legally compliant calculation of contractual annual leave
A 2020 High Court case, which concerned an appeal from an employee regarding the calculation of the daily average wage, gave further explanations of daily average wage. In the same case, the court provided a leading decision on how employers should calculate "contractual annual leave" – the calculation of compensation for additional annual leave other than statutory annual leave. This has important implications on how human resources should revise their respective employees' handbook and/or annual leave policy.
6. Case 6: Dispute on 7-13 calculation on average daily wage that the contractual commissions and team bonuses have been judged to be excluded from the statutory payment of holiday pay/ annual leave pay/ sick leave pay – judgement has significant impact on labor cost saving for employers
In 2019, in a High Court and District Court litigation, the court ruled that employers may deduct commissions and team bonuses payable under the relevant contract from statutory holiday pay, annual leave pay and sick leave pay. The court was of the view that otherwise, employees would be entitled to double benefits contrary to the legislative intent. This decision provides important legal guidelines as to how employers should include employer's protection clauses in employment contracts or incentive plans, as well as how employers could save labor cost significantly and avoid legal risks due to ambiguous provisions.
7. Case 7: Legal disputes on whether an incentive and penalty mechanism within a commission policy would constitute an illegal deduction of wages
In a 2019 High Court case, an employer had introduced an incentive and penalty mechanism into its commission policy. The court ruled that the relevant penalty mechanism contravened the Employment Ordinance for deducting wages unlawfully. The judgment carried important human resources guidance on how to legally formulate an incentive and penalty policy within a commission policy in order to satisfy operational and business needs.
8. Case 8: Legal disputes over employees' allegations of employers causing excessive workplace stress leading to serious medical conditions and what human resources could do in relation to such complaints
In the present economic environment, companies may have to rearrange their manpower deployment, and employees' workload and stress could inevitably increase. In a 2019 case, the employee claimed against the employer for compensation of work injury caused by work-related stress. Such injury was termed as an "internal accident" – "post-traumatic stress syndrome". The judgment touched upon different legal principles, and showcased how human resources should provide new ways to avoid different legal risks in relation to the captioned matter.
9. Case 9: When the law says differential treatment of an employee due to such employee's miscarriage constitutes "disability discrimination", how should employers deal with employees who suffered from miscarriage and avoid committing discrimination by way of victimization under the Discrimination Ordinance?
Miscarriage is indeed an unfortunate event that no one would wish to happen. In a 2020 case, the court held that miscarriage and any discomfort caused by a miscarriage surgery fall within the definition of disability. In the relevant cases, employers were held to have violated the principle of "victimization" as they were unable to give inadequate evidence to show that there was indeed a reasonable basis for dismissal of the relevant employee after her miscarriage, thereby unable to avoid charges of direct discrimination. These cases serve as an important reminder to human resources as to the ways of dealing with relevant employees in order to avoid related legal risks.
10. Case 10: When an employer is not only civilly liable but also criminally liable for an employee's death in a workplace accident, how would human resources assist employers in avoiding such legal risks?
In October 2020, the Court of Final Appeal ruled in a case where an employee unfortunately died in a workplace accident, that the employer was also criminally liable under the relevant laws, in addition to its civil liability under the law of negligence in common law. Based on the judgment, how should human resources assist employers in avoiding related legal risks and unnecessary liabilities?
11. Case 11: When facing with an employee's claim for damages in relation to work-related injuries, the key to a successful defence is effective search for and preservation of evidence
In a 2020 case where an employee claimed against the employer for damages in relation to the personal injuries suffered in the course of employment, the human resources department's detailed investigation and collection of evidence after the accident was the key to successfully defending against the employee's claim. The case provides important guidelines as to how human resources should search for evidence when faced with unsubstantiated or substantiated personal injury cases.
12. Case 12: Department head's failure to lighten workload after notice of the employee's work-related injury entitled the employee to huge compensation
In a 2019 decision, it was held that the head of a department failed to exercise reasonable care towards the employee who suffered from work-related injuries. As such, the employee won the lawsuit and was awarded a huge compensation of HK$20 million. The case shows important implications as to how managers and management personnel should coordinate with the human resources department in avoiding massive legal liabilities.
13. Case 13: The legal principles and basis for summary dismissal of problematic employees by "lawful and effective warning", "fair handling", and "immediate action"
Heads of human resources departments are often required to provide management and department heads with strategic and legally compliant ways to deal with problematic employees, ensuring that the company could defend against any legal actions. In a 2020 High Court case on summary dismissal, the court set out different legal principles, providing human resources with practical and law complying guidelines. The guidelines include: 1. If there are true reasons for summarily dismissing an employee, and the employer knows that it is entitled to do so yet chooses not to exercise such right, the employer is deemed to have given up and will lose such right (Boston Deep Fishing Principle; 2. The misconducts of employees must be addressed and handled equally; 3. Employees' acts of misconduct must be shared with the company; 4. In principle, it is not mandatory for employers to issue warning(s) to the relevant employee, but the employer will have to prove that the dismissal was legal and reasonable, and a warning will be an important piece of evidence proving so .
14. Case 14: Important legal principles for legally compliant "summary dismissal" of senior staff
In a 2019 High Court case, an employer who summarily dismissed a human resources and executive manager for minor faults in administration was held to have lost the lawsuit. In the judgment, the High Court very clearly delineated 5 important legal principles for "summary dismissal", serving as a guideline on the legal principles employers should pay heed to when dismissing any senior staff.
15. Case 15: Being fair and just in handling dismissal of employee helps avoid huge claims for unreasonable dismissal
In a 2019 case where an employee claimed against its employer for unreasonable dismissal and damages in the sum of HK$2.8 million, the High Court held that the employee failed to prove his claim. In the case, the employer dismissed the employee by payment in lieu of notice despite the employee's misconduct, yet the employee claimed damages from the employer after termination of employment. In determining the case, the court was of the view that the human resources department acted reasonably and complied with common law principles during the dismissal process. As such, the employer won the lawsuit. The decision has important legal implications as to how human resources should handle dismissal of employees.
16. Case 16: Legal interpretation of summary dismissal based on the employee being "habitually neglectful in his duties" and its implications to human resources
Human resources oftentimes use the ground of the employee being "habitually neglectful in his duties" under section 9 of the Employment Ordinance as legal basis for summary dismissal of employees. In a 2019 decision, the High Court ruled on a case where a chief executive officer was summarily dismissed for being habitually neglectful in his duties as a senior staff. The court gave a comprehensive interpretation of habitual negligence of duty, which provided clear guidelines as to the lawful use of such basis for summary dismissal.
17. Review of other landmark court cases
• 2020 case: Case review on employer's criminal liability for violating section 17I of the Immigration Ordinance
• 2020 case: Wrongful and unlawful dismissal of an employee who suffered from work-related injuries, contrary to section 48 of the Employees' Compensation Ordinance (fault on the part of the human resources department)
• 2020 case: High Court decision on relevant restriction clauses
• 2020 case: Whether content on WhatsApp constitutes evidence of termination of employment
18. Latest legislative amendments in 2020
The Discrimination Legislation (Miscellaneous Amendment) Ordinance 2020 and the Discrimination Ordinance Amendment Ordinance came into effect on 19 June 2020. How should human resources implement the relevant amendments and review anti-discrimination policies accordingly?
19. 2021 outlook
• The impact of the proposed amendment (Personal Date (Privacy) Ordinance) on human resources
• Minimum wage: government's update
• Progress of the abolishment of the MPF offsetting mechanism: government's update
• Progress of the increase in statutory holidays: government's update