News
News //
Hong Kong Employment Law Alert - May 2017
Submitted by // K Bowers, Partner / Solicitor Advocate; P Yeung, Senior Associate
24 May 2017

 

No gratuity for unsatisfactory service

In the recent case of Chok Kin Ming v Equal Opportunities Commission [2017] HKCU 688, the Hong Kong Equal Opportunities Commission ("EOC") successfully appealed the Labour Tribunal's decision that it had wrongfully failed to pay a former employee his end-of-contract gratuity. 

In allowing the appeal, the Court of First Instance held that, on the terms of the employment agreement, the gratuity was only payable on the "satisfactory completion" of employment. Completion required not only the employee "sitting out the appointment" until the end of his term but also, in the opinion of the employer, the employee has satisfactorily discharged his duties and obligations.

In this case, the Court found that the EOC was entitled to withhold the gratuity due to Mr. Chok Kin Ming's ("Mr. Chok") conduct during a private forum which amounted to a conflict of interests and impeded the satisfactory completion of his employment.

Decision

Mr. Chok's contractual employment terms included the EOC's Code of Conduct which required that he avoided situations involving any conflict of interests. During 2014, the EOC held a public consultation on Discrimination Law Review ("DLR") and Mr. Chok was a key member of the DLR taskforce.

During August 2014, Mr. Chok was invited to a private event organised by a church in his personal capacity to introduce the DLR consultation. At the event, Mr. Chok appealed to the audience to object to the EOC's proposal to expand the same-sex partnership protections proposed by the EOC. He also made disparaging remarks about the EOC and the way in which the EOC had handled the DLR.

The event was recorded without Mr. Chok's knowledge and was subsequently reported in the media. As a result of his conduct, the EOC refused to pay Mr. Chok the end-of-contract gratuity on the basis that he had failed to satisfactorily complete his employment.

The Court upheld the Labour Tribunal's decision and rejected Mr. Chok's argument that "satisfactory completion" only referred to the dimension of time. The Court stated that the fact that Mr. Chok's employment agreement expressly envisaged acts which may affect the grant of the gratuity, suggests that the employer may refuse payment. The Court allowed the appeal and the case was remitted to the Labour Tribunal for determination.

Practical Consideration

1. To avoid similar disputes on the interpretation of gratuity or bonus terms, such provisions should be clearly drafted to provide that the payment of the gratuity or bonus is subject to conditions and, where appropriate, the discretion of the employer.

2. An employee's conduct in relation to his/her employment is not limited to his/her working hours. An employee is subject to the implied terms of mutual trust and confidence and has a general obligation to avoid conflict between his/her personal interests and those of the employer. In practice, employers should have in place corporate policies which expressly state that the employee is subject to these obligations.


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