As discussed in our most recent Safety Snapshot, managing an employee's return to work after an extended absence can be a difficult process. Without careful management, employers may breach discrimination protections afforded to employees. In a recent decision1, the Court helpfully set out guidance on how to avoid unlawful discrimination when selecting an employee for redundancy through the proper application of the comparator test. The case also provides a useful reminder on the importance of a clear reason for dismissal (unrelated to the protected attribute) and the need to preserve documentation which evidences the steps taken in reaching the decision to terminate employment.
Mr Lee was a sales supervisor with Novartis Pharmaceuticals (HK Ltd) (Novartis HK) until his employment was terminated by reason of redundancy in December 2016. Mr Lee had been suffering from poor health and had been on sick leave since mid-December 2015, save for one day in January 2016 when he was at work. Mr Lee claimed that, on this day, he was informed he had scored unsatisfactorily in his 2015 Performance Review and was asked to resign, or his employment would be terminated. Mr Lee did not resign and remained on sick leave until his employment was terminated in December 2016.
Mr Lee claimed the request for him to resign in January 2016 and the termination of his employment in December 2016 amounted to disability discrimination under the Disability Discrimination Ordinance (DDO) and he sought compensation for injury to feelings, loss of earnings, a letter of apology, and other relief.
Using a comparator to determine if direct discrimination has occurred
The Court of Final Appeal has previously set out the four-step approach used in Hong Kong2 to analyse discrimination claims. This approach was followed by the District Court in its judgment, namely:
- there must be different treatment of the person with the protected attribute, here a disability, (the Complainant) and a comparator without that attribute. The comparator is a real or hypothetical person, without the protected attribute;
- the circumstances of the Complainant and the comparator must be the same, or at least not materially different;
- the treatment of the Complainant must be less favourable than that of the comparator; and
- the difference in treatment must be due to the presence or absence of the protected attribute (e.g. a disability).
Parties can sometimes find it challenging to identify an appropriate comparator when assessing whether an action is discriminatory. In support of his claim, Mr Lee asserted that he was the only employee whose role was made redundant following an integration exercise Novartis HK had undertaken in 2016. Mr Lee's claim was misconceived. The appropriate comparator would not be all other Novartis HK employees or a group of Novartis HK employees, but an employee in Mr Lee's role or an equivalent role, with Mr Lee's performance record and experience, but with no disability.
The importance of contemporaneous records
The Court also emphasised the importance of contemporaneous written documents, and documents that came into existence before any issues arose, in determining whether discrimination occurred. In Mr Lee's case, the Court relied heavily on a written summary of issues by Mr Lee's supervisor to the human resources manager dated 10 December 2015, prior to Mr Lee's extended sick leave. The summary set out Mr Lee's unsatisfactory performance and the need for a follow-up meeting. Further, evidence demonstrated that, at this time, Novartis HK was unaware of the severity of Mr Lee's illness nor any likelihood of extended sick leave, as they only received his sick leave application and accompanying medical certificate setting out details of his condition on 14 January 2016.
The decision is a helpful reminder of the following:
- In defending any claim, it will be critical for employers to demonstrate the reason for dismissal and that this reason is unrelated to the protected attribute. Failing to do so may allow an inference of unlawful discrimination.
- The reason for termination of employment should be clearly articulated internally and supported by objective facts, such as a record of underperformance, a finding of misconduct or the operational reasons causing a role to be redundant.
- As contemporaneous documents will be most compelling in defending any complaint, employers must prepare and preserve records relating to matters such as an employee's performance or conduct, or any proposed business or operational changes which may impact roles.
- Where possible, employers should clearly and directly communicate the reason for dismissal to an employee. In many instances, a misunderstanding may lead to a dispute.