It is unlawful for any employer to dismiss any of its employees on the basis of his or her gender. However, it is often difficult, if not impossible, for an employee to produce direct evidence of such discrimination against his or her employer. In addition, the Court is often reluctant to draw an inference of sex discrimination from bare allegations of the employee that the employer has acted unreasonably or unfairly towards him or her. In Tan, Shaun Zhi Ming v Euromoney Institutional Investor (Jersey) Ltd [2018] HKDC 185, an employer was alleged to have unlawfully dismissed an employee on the ground of his gender. Various legal issues concerning how to ascertain an unlawful dismissal was considered at the District Court, which provide certain important insights to both employers and employees.

The background

In the case, the claimant employee (the “Employee”) was alleged to have sexually harassed a female colleague during lunch at a restaurant. The respondent company (the “Company”) conducted investigation into the allegation and interviewed witnesses of the alleged victim. Thereafter, the Employee and 2 senior personnel of the Company entered into a conversation concerning the investigation, during which the Employee was informed of the Company’s decision to terminate his employment by payment in lieu of notice. The conversation was secretly recorded by the Employee (the “Recorded Conversation”).

Based on the Recorded Conversation, the Employee commenced legal proceedings in the District Court against the Company alleging that he was unlawfully dismissed on the basis of an unsubstantiated sexual harassment allegation, without proper investigation or due process and his dismissal was “the result of sex discrimination against him because of his gender and the gender of his accuser” in breach of the Sex Discrimination Ordinance (Cap. 480) (“SDO”). Before the case proceeded to trial, the Company applied to the Court to dismiss the proceedings on the ground that the Employee’s claim was frivolous, i.e. the claim is incapable of reasoned argument, without foundation or where it cannot possibly succeed.

Unlawful discrimination

The Employee relied on sections 5(1)(a) and 11(2)(c) of the SDO to argue that he was dismissed by the Company on the ground of his gender and that the Company would not have dismissed a woman in the same or not materially different circumstances. Citing the Court of Final Appeal’s decision in Secretary for Justice v Chan Wah (2000) 3 HKCFAR 459, the District Court considered that the “but for test” should be applied in determining whether a particular situation involves sex discrimination, i.e. whether the male Employee would have received the same treatment as the female but for his sex. However, the difficulty in the present case was that the Employee had no direct evidence showing that he was dismissed on the ground of his sex or that the Company would not have dismissed a female employee in similar circumstances. With the Recorded Conversation, the Court found that the Employee was actually in a hope to asking the Court to “infer” sex discrimination from the totality of his evidence.

The crux of the Employee’s case was that the Company chose to dismiss him instead of properly investigating the sexual harassment allegation and affording him an opportunity to confront his accuser, the witnesses and to call his witness(es). Nevertheless, even if the Employee was treated unreasonably or even unfairly in the investigation process, the Court held that it did not necessarily mean that the Company had committed any act of discrimination under the SDO. It is incorrect to expect the Court to make a finding of discrimination by means of inference based on the Recorded Conservation.

Termination in lieu of notice

Since the personnel of the Company expressly mentioned in the Recorded Conversation that the Company could terminate the employment contract (the “Agreement”) by either giving payment in lieu of one month’s notice or one month’s notice, and the salary computation accompanying the letter of termination to the Employee evinced that the sum paid to him represented the payment in lieu of one month’s notice (equivalent to 1 month’s salary of the Employee), the Court therefore held that the Company invoked the payment in lieu of notice clause to terminate the Employee’s employment.

In short, the Court found that there was nothing to show that but for the Employee’s gender the Company would not have dismissed him. It was also apparent from the Recorded Conversation that although the sexual harassment allegation against the Employee and the Company’s investigation were mentioned, the employment was in fact terminated in accordance with the payment in lieu of notice clause of the Agreement.

Accordingly, the Court struck out the Employee’s claim on the ground that the Employee’s claim was frivolous.

Conclusion

As discussed above, sufficiency of evidence is very important for lodging a complaint of unlawful dismissal on the basis of sex discrimination under the SDO. An inference of sex discrimination could not be simply drawn from the fact that a claimant is male (or his accuser is female) or that the alleged discriminator had acted unreasonably or unfairly during the investigation. In order to avoid unnecessary disputes, employers and employees must both understand the relevant clauses in the employment contracts which would allow either of them to terminate the same by giving payment in lieu of notice. Where there is doubt about whether a termination is unlawful or whether there is any entitlement to terminate an employment contract, legal advice should be sought.

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This article is written by ONC Lawyers and was first published on ONC’s website.

This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.