Hong Kong courts uphold summary dismissal case under the Employment Ordinance

Summary dismissal in Hong Kong

Under section 9 of the Hong Kong Employment Ordinance, an employer may only summarily dismiss an employee in the following limited circumstances:

1. Where the employee, in relation to the employment:
   1. wilfully disobeys a lawful and reasonable order;
   2. misconducts oneself, such conduct being inconsistent with the due and faithful discharge of the employee’s duties;
   3. is guilty of fraud or dishonesty; or
   4. is habitually neglectful in the employee’s duties; or
2. Other circumstances recognized under the common law.

Summary dismissal is a serious disciplinary action and the burden of proof lies with the employer to prove that the summary dismissal was justified. The standard of proof is the balance of probabilities but in view of the serious consequences of summary dismissal, the supporting evidence must be cogent.

Employers who summarily dismiss an employee for reasons other than those listed in the Employment Ordinance (set out above) would be liable for wrongful termination; and the dismissed employee will be entitled to recover damages under section 8A of the Employment Ordinance and/or under common law. Usually, the amount is limited to what the employee would have been paid had the contract been terminated lawfully - by payment in lieu of notice. However, the employee may also make further claims such as a breach of the implied term of trust and confidence which could entitle the employee to damages based on continuing financial loss. Whilst the courts also have the power to make an order of re-engagement, such order can only be made with the employer’s agreement. 

Background of the case

The facts of the Baldoo case are as follows –

• The plaintiff, a teacher at a Hong Kong school, was in South Africa. In view of the development of the pandemic, the Education Bureau issued a circular which required all school staff to return to Hong Kong by 2 February 2020. The plaintiff failed to do so.
• South Africa later went into lockdown. On 8 May 2020, the principal of the school asked the plaintiff to return to Hong Kong immediately once the departing flight to Hong Kong was available, and to report to the school immediately if there was any update about the lockdown. The plaintiff failed to follow either instruction.
• The defendant summarily dismissed the plaintiff with effect from 1 November 2020.

The plaintiff claimed that he has been wrongfully dismissed and claimed for wages in lieu of notice and arrears of wages, amongst others.

Court’s findings

In considering the plaintiff’s claim for wrongful dismissal, the court considered whether the orders were lawful and reasonable. In this case, because the employer’s orders were lawful and reasonable, the burden was shifted to the employee to establish a reasonable excuse in not obeying the order, including adducing satisfactory evidence.

The employee relied on his age and physical conditions as being reasons that he had a high risk of infection from Covid-19 to justify his refusal to return to Hong Kong. However, the court opined that:

• there was no evidence that staying in South Africa would be safer than returning to Hong Kong;
• the plaintiff failed to make any attempt to obtain medical evidence in support of his claim that he was medically unfit to travel; and
• the plaintiff failed to explain why he did not update the school about the national lockdown.

Thus, the courts found that the plaintiff had wilfully disobeyed a lawful and reasonable order. Further, as the employee was absent without leave, the employer was entitled to treat the employee’s absence as unpaid leave.

The court also upheld the contractual terms providing that if the employee’s service is terminated by the school on grounds of unsatisfactory performance or conduct, the employee would not be granted any gratuity and forfeits all rights and benefits in respect of the contract.

Key takeaways

Summary dismissal is a serious disciplinary action that should be limited to clear-cut cases, with strong supporting evidence. Crucially, careful drafting of employment contracts can play a key role in defining and limiting an employee’s entitlements in cases of summary dismissal, as this case shows.