The Sex Discrimination Ordinance (Cap. 460) (SDO) makes it unlawful to discriminate against a person by virtue of his / her sex, marital status, pregnancy or breastfeeding, in prescribed areas of activities, such as employment, education, provision of goods, services and/or facilities and participation at clubs.
In Tan, Shaun Zhi Ming v Euromoney Institutional Investor (Jersey) Ltd, DCEO 4/2017, Mr. Tan (T), a male employee, successfully claimed against his ex-employer, Euromoney, for unlawful termination, in breach of the SDO. Despite the lack of direct evidence, the court readily inferred that the termination was due to pro-female bias against T, based on circumstantial evidence. The court ordered Euromoney to pay damages to T as compensation for his loss of income in the sum of HK$150,000 and to apologise to T.
Facts
T worked for Euromoney as a reporter. T was accused of sexually harassing a female colleague during lunch in a restaurant (Lunch Event). Upon receiving a sexual harassment complaint (Complaint) from the female colleague (Complainant), Euromoney conducted an investigation and interviewed several witnesses and T. In the meetings with T, Euromoney asked T to apologise to the Complainant, but he refused on the grounds that he had not done anything wrong. T also asked for details of witnesses’ evidence against him, but Euromoney did not respond.
Euromoney then terminated T’s employment with immediate effect by paying him wages in lieu of notice. The termination was said to be because of T’s conduct during and following the investigation of the Complaint. Euromoney requested T to either resign or face termination, but did not allow T time to consider this. T decided not to resign and was terminated.
T initiated proceedings against Euromoney for breach of s.5(1)(a) and s.11(2)(c) of the SDO, claiming that Euromoney terminated him as a result of its pro-female bias. T argued that had he been a female colleague in a similar situation, Euromoney would not have fired the female colleague in an unlawful manner, in circumstances where the Complaint was flimsy and unsubstantiated.
Euromoney’s position was that as its termination of T was lawful, it was not obliged to provide any reason to justify the termination. At the trial, apart from relying on the argument that T was terminated because of his conduct during and following the investigation of the Complaint, Euromoney changed its stance to rely on T’s conduct prior to the Lunch Event as a reason for dismissal. Euromoney argued that such termination was based on s.32K(a) of the Employment Ordinance (i.e. termination due to the employee’s conduct, which falls within one of the prescribed valid reasons) and its employment contract with T, which allowed Euromoney to dismiss T by payment in lieu of notice.
Prior to the present proceedings, Euromoney successfully applied to the District Court to strike out T’s claim. T appealed and the Court of Appeal allowed his appeal and handed down written reasons for the judgment. The District Court referred to the Court of Appeal’s written reasons for its judgment in the present proceedings.
Sexual Discrimination under SDO
Under sections 5(1)(a) and 11(2)(c) of the SDO, no person, including a company, may discriminate against a person on the ground of his / her sex, by treating him/her less favourably than it treats or would treat a person of the other sex or to discriminate against him / her by dismissing that person or subjecting that person to any other detriment.
In determining whether there was sexual discrimination under s. 5(1)(a) of the SDO, the court adopted the four-step approach in Leung Kwok Hung (Long Hair) v Commissioner of Correctional Services, as follows:-
- There must be a difference in treatment between one person, the complainant, and another person, real or hypothetical, from a different sex group (i.e. the compared person).
- The relevant circumstances between the complainant and the compared person are the same or at least not materially different.
- It must then be shown that the treatment given to the complainant is less favourable than that given to the compared person.
- The difference in treatment is on the basis of sex.
The burden to prove discrimination, on the balance of probabilities, is on the claimant. Where there is no direct evidence on discrimination, the claimant may have to rely upon inferences based upon the primary facts.
Court’s decision
The court held that s.32K(a) of the Employment Ordinance was not relevant as it only applies to certain categories of employees, which did not include T[1]. Euromoney could not defend the lawfulness of its termination decision by referring to its right to terminate the employment by payment in lieu of notice under the employment contract.
In assessing whether there was sex discrimination against T, the court looks at all the factual evidence to decide whether there is a satisfactory reason in support of the termination. If no explanation is forthcoming, or if it is inadequate or unsatisfactory, it would be legitimate for the court to infer that there was discrimination against T by reason of a pro-female bias.
Having reviewed the evidence, the court held that there was no satisfactory reason for terminating T. As the Complaint was unsubstantiated, this could not be a valid reason for termination. Euromoney was also unable to prove that the conduct of T during and following the investigation of the Complaint or his prior conduct were the reason for termination. The lack of documentation and emails recording the discussion concerning the termination amongst Euromoney’s management was inherently improbable and suggested that Euromoney had chosen not to disclose its real reason to the court.
Based on this, the court inferred that the real reason for the termination was the pro-female bias of Euromoney, as advanced by T. By requiring T to tender an apology to the Complainant, even though the Complaint was unsubstantiated, and dismissing T when he refused to apologise, Euromoney had treated T less favourably than it would have treated a female employee in breach of the SDO.
Takeaways
For businesses dealing with HR matters in their daily operations, the handling of sexual harassment complaints requires special care. These complaints involve, on the one hand, the victim seeking redress for their grievances and, on the other hand, the accused, who should be treated fairly during the investigation process.
There is often mounting pressure for businesses (especially staff within the organisation) to side with victims who make the complaint. Yet, professionals are reminded to stay neutral and undertake an independent investigation before making any adverse decisions (including disciplinary action) in order to ensure fairness in the workplace. Enquiries should be made through HR professionals, who must have clear reasons in support of any decisions made.
HR professionals are also reminded of the following:-
- There must be valid reasons for termination. An unsubstantiated sexual harassment complaint should not be relied upon as a valid reason. In the absence of a justified or satisfactory explanation, the court may draw inferences based upon the primary facts against the employer that the termination was unlawful, driven by pro-female bias and in breach of the SDO.
- All employee termination decisions should be supported by documentation. There is a need to preserve evidence, which may include all correspondence, communications, investigation reports and interview notes.
- Businesses may consider inviting independent third parties to conduct the internal investigation and conduct interviews with the person accused, to send a message that the business is neutral and aiming for a fair investigation outcome
For further information, please contact:
Paul Kwan, Partner, Deacons
paul.kwan@deacons.com
[1] Although not made clear by the Judge in the judgment, it seems that the court was referring to section 32Q of the Employment Ordinance which provides that Part IVA (including section 32K(a) – a valid reason for dismissal by virtue of the conduct of the employee) would not apply to acts of discrimination within the meaning of the SDO.
