In June 2022, the District Court (which has exclusive jurisdiction to hear discrimination claims) handed down a judgment¹ against one of Europe’s largest financial information companies, Euromoney Institutional Investor (Jersey) Ltd (“Euromoney”)², for unlawfully terminating a male employee following an allegation made against him for sexual harassment by a female employee.

The Claimant, Mr Tan Shaun Zhi Ming (“Mr Tan”), has embarked on a long legal battle against his former employer by taking his case all the way to the Court of Appeal and back to the District Court again to finally secure a declaration that Euromoney has indeed acted unlawfully in terminating his employment, securing HK$150,000³ in monetary compensation and a provisional order⁴ that a written apology be given.

Mr Tan started working for Euromoney as a reporter in January 2017. On 2 June 2017, he arrived late at a farewell lunch for a work colleague and, when he arrived, he indicated to a female colleague to make room for him to insert his chair by making contact with her waist (the “Incident”). The female colleague did not complain at the time but later that day e-mailed Mr Tan to express that she found his conduct during the Incident to be “disturbing and unacceptable”, and threatened to report the matter to HR and the police. When Mr Tan responded by saying that he had no interest in her, that she could report it if she wished and that no one would take her seriously and she might need therapy, she made a formal complaint of sexual harassment to HR.

Euromoney took the complaint seriously but before finishing its investigation and making any findings on the allegation of sexual harassment, they requested Mr Tan formally apologize to the complainant (which was something the complainant had requested). Mr Tan refused to apologize, insisting that he had done nothing wrong.

Around three weeks later, Mr Tan was given a choice to either resign immediately or be dismissed immediately (in truth he was not given any option at all, because Euromoney made it clear that he was to return his access card and leave the office premises immediately). He did not resign immediately and Euromoney terminated his employment with immediate effect by making a payment in lieu of wages in accordance with his employment contract. In communicating the termination to Mr Tan, Euromoney stated that it had taken legal advice and that it was allowed to terminate Mr Tan’s employment without giving any reason but, at the same time, it also made references to the fact that Mr Tan refused to provide an apology to the complainant as requested. Euromoney made it clear to Mr Tan that, as an employer, it had the responsibility to ensure that its workforce “is not being threatened by the threat of sexual harassment or any kind of harassment...” and that it had obtained legal advice to “close down this situation now”.

Almost immediately after his termination, Mr Tan obtained a copy of the CCTV footage from the restaurant and informed Euromoney that he would sue under the Sex Discrimination Ordinance (Cap. 480) (the “SDO”), unless certain demands were met. Euromoney’s solicitors then responded, rejecting those demands and stating that the termination of his employment was “not as a result of any claim made against you...but as a result of your conduct during and following the investigation of that claim.”

Mr Tan then commenced proceedings in the District Court against Euromoney in July 2017 for unlawful discrimination against him, on the basis that he was terminated due to his gender (i.e. male), and the gender of his accuser (i.e. female), arising out of the “pro-female bias” stance adopted by Euromoney. Mr Tan’s position was that Euromoney “would not have treated a female employee in this disgraceful manner and fired her based on such a flimsy and unsubstantiated accusation. Because I am a male and my accuser was female, [Euromoney] was so scared of being accused of not doing enough that it was willing to discard truth and due process to get rid of the issue as fast as possible.”

Euromoney applied to strike out the claim on the ground that the claim was frivolous, because Mr Tan was properly terminated in accordance with the terms of his employment contract. The court allowed the strike-out but Mr Tan appealed the decision to the Court of Appeal.

In May 2019, the Court of Appeal held that the court below was wrong to strike out Mr Tan’s claim, and that it was “at least reasonably arguable” that the lawfulness of the mode of his termination did not determine whether it was discriminatory contrary to the relevant provisions under the SDO. The case was therefore remitted back to the District Court for trial.

Finally, following trial, in June 2022, the court delivered a judgment in favour of Mr Tan, finding that Euromoney had indeed acted unlawfully in contravention of the SDO in terminating his employment.

The starting point is that, in Hong Kong, there is no legal obligation for an employer to give a reason for termination of an employee. It is well established that a contractual right to terminate employment (by either the employer or the employee) can be exercised unreasonably or capriciously so long as the right is exercised in accordance with the employment contract, and the court is not concerned with the rightness or wrongness of a dismissal. This was only recently enunciated by the Hong Kong Court in Lam Siu Wai v. Equal Opportunities Commission.

So what went so wrong for Euromoney?

The District Court and Court of Appeal judgments both refer to the fact that, prior to terminating Mr Tan, Euromoney had obtained legal advice and, throughout the legal proceedings that lasted nearly five years, Euromoney had firmly stuck to its position that it was entitled to terminate Mr Tan’s employment by making a payment in lieu of notice and without giving any reason. So confident was Euromoney in the way it conducted the termination that it sought to strike out Mr Tan’s claim and was successful until the decision was appealed.

The position is now made clear by the Court of Appeal – an employer’s contractual right to terminate an employee does not trump the SDO (or any of the other discrimination ordinances). To illustrate this principle, the court provides an “absurd” example:

“If an employer were to terminate a female employee’s employment by handing her wages in lieu of notice whilst saying to her ‘I’ve chosen you for termination of employment just because you are a woman’, it cannot possibly be argued that that termination is nevertheless lawful because of the payment of wages in lieu. It has been rendered unlawful by the discrimination.”

At trial, Euromoney also sought to rely on section 32K of the Employment Ordinance (Cap. 57) (“EO”). It asserted that it had the right to terminate Mr Tan pursuant to section 32K(a), being the conduct of Mr Tan during his employment and prior to the Incident. The Court of Appeal held that section 32K is not relevant to this case because the section is designed to protect employees who have been continuously employed for at least 24 months and who are entitled to protection under Part VIA of the EO from being unreasonably dismissed without a valid reason. Mr Tan was only employed for approximately six months when he was terminated, and his complaint was not that Euromoney intended to extinguish or reduce his rights or benefits, so the section did not apply.

The operation of sections 32A and section 32K of the EO is commonly misunderstood. Section 32A(2) provides a statutory presumption that the employee is taken to have been dismissed because the employer intends to extinguish or reduce any right, benefit or protection under Part VIA of the EO unless the employer can show a valid reason for dismissal. Section 32K then sets out five valid reasons as a defence for employers, namely: (a) the conduct of the employee; (b) lack of capability or qualifications of the employee; (c) redundancy or other genuine operational requirements; (d) contravention of law if the employment were to continue; and (e) any other reason of substance. If an employer proves that the termination was by reason of one of these five grounds, then the statutory presumption would be rebutted without any additional discretionary consideration as to whether it was reasonable to have terminated the contract or whether there should have been some initial formal procedural process.⁵ These sections of the EO are not intended to provide a statutory scheme for unfair dismissal, they only “go to protecting employees against dismissal (or variation) where the employer is trying to save money at the employee’s expense by getting rid of the employee (or changing his or her conditions) before he or she becomes entitled to some benefits.”⁶ An example would be an employer who unreasonably terminates an employee just before they reach the five-year mark in their service to avoid paying them a statutory long service payment.⁷

With the benefit of hindsight, here are some key lessons employers can learn from this case:

• Whether there is a satisfactory reason to support the termination of an employee is relevant when an allegation of discrimination arises. Although there is no legal requirement to provide any reason for termination in Hong Kong, it is good practice to provide a reason, and be truthful about that reason.
• When an employer is not truthful in providing the real reason for termination, his credibility may be undermined in due course. In this case, although Euromoney had all throughout maintained that it was entitled to terminate Mr Tan without providing any reason at all, at the beginning of the trial it had suddenly changed its stance and sought to rely on Mr Tan’s conduct prior to the Incident to justify the termination. This turned out to be poor litigation strategy because the court found that this was clearly contradicted by the contemporaneous evidence, such as Euromoney’s own statements made to Mr Tan during his termination, as well as its solicitor’s written letter to Mr Tan after he was terminated. As a result, the court found that, in not disclosing any documents showing the real reason for Mr Tan’s termination, Euromoney was “not willing to tell the truth and is trying to conceal the real reason for the termination.”
• If an employer decides to open an investigation because someone has made a complaint of sexual harassment, he should proceed with the investigation properly and finish it, before inviting the accused to make any admissions or apologize for the sake of “closing out the investigation” early in the hope that the complainant may withdraw the complaint if the apology is accepted. In this case, it may be said that Euromoney had “jumped the gun” and made the decision to terminate Mr Tan before it concluded the investigation. In fact, the judgment refers to the fact that the outcome of the investigation was that there was “no sufficient [sic] evidence proving the sexual harassment complaint”.⁸

1. Tan Shaun Zhi Ming v. Euromoney Institutional Investor (Jersey) Ltd [2022] HKDC 622.
2. Article titled “Hong Kong court orders European firm to pay HK$150,000, apologise to former employee sacked over sexual harassment claim” published by the South China Morning Post, 24 June 2022.
3. Representing Mr Tan’s loss of income from 22 July 2017 to 28 February 2018. His monthly salary was HK$21,666.66 while employed by Euromoney.
4. The court granted a provisional order for the written apology which may be varied on application by the parties within 14 days of the judgment.
5. Thomas Vincent v. SCMP Publishers Ltd [2004] 2 HKLRD 373.
6. Hong Kong Employment Law – A Practical Guide, 5th Edition, paragraph120-130.
7. See Thomas Vincent v. SCMP Publishers Ltd [2004] 2 HKLRD 373.
8. Paragraph 56 of the judgment dated 24 June 2022.