In a recent case involving the Equal Opportunities Commission (the EOC), the Hong Kong Court of First Instance (the CFI) considered whether an employee’s activities at a private event outside of working hours could justify disciplinary action and could be taken into account by the employer when making decisions regarding remuneration.

Background

The case involved an individual (CM) who was employed by the EOC as a Chief Equal Opportunities Officer, on a three year fixed term contract. The terms of the contract provided for the payment of a gratuity sum following “satisfactory completion of the agreement in the opinion of the EOC“.

Towards the end of his employment term, CM was involved in conducting a 3-month public consultation as part of the EOC’s review of Hong Kong’s discrimination law framework, following which the EOC would make recommendations to the government on potential reforms.

During the consultation period, CM attended and gave a talk at a church forum titled “Briefing on DLR Consultation”, after having been asked to introduce and explain the consultation exercise being undertaken by EOC in connection with its review of Hong Kong’s discrimination laws. A recording of the talk was later leaked to the media, who criticised CM for compromising the integrity of the EOC and the credibility of the consultation. In particular, the reports focussed on comments urging participants to respond to questions in the consultation in a certain way and encouraging them to oppose the EOC’s proposal to extend certain protections to same-sex relationships.

After an internal investigation, the EOC formed the view that CM’s participation in that meeting was in breach of its employee code of conduct (Code of Conduct), which required employees (among other things): (i) not to be involved in any activity outside the EOC which would directly conflict with the work of the EOC; and (ii) to disclose any situations where conflicts of interests had arisen.

A dispute arose when, upon expiry of CM’s fixed term, the EOC did not to renew the contract and declined to pay the contract-end gratuity, on the basis that the contract had not been “satisfactorily completed”. Proceedings were brought against the EOC seeking payment of the contract-end gratuity, on the basis that: (i) CM’s contract was satisfactorily completed upon its expiry; and (ii) the comments in question were made in CM’s personal capacity, during his own time and for no remuneration, at a private religious forum attended by a restricted number of participants and, by implication, should have no bearing on his employment or his entitlement to the contract-end gratuity.

The decision

The CFI held that CM was not entitled to the gratuity. In doing so, the CFI disagreed with the Labour Tribunal’s earlier conclusions that: (i) the entitlement arose automatically upon expiry of the contract; or (ii) only misconduct justifying summary dismissal would justify a finding that the contract had not been “satisfactorily completed”.

Instead, the CFI confirmed that, in forming a view as to whether or not CM had satisfactorily completed the contract, the EOC was entitled to have regard not only to length of service, but also his work performance. Furthermore, the EOC was entitled to take into account CM’s actions at the church forum in concluding that the contract had not been satisfactorily completed.

In holding that it was open to the EOC to have regard to CM’s conduct at the forum when deciding whether or not to pay the gratuity, the CFI was satisfied that there as a sufficient connection between CM’s conduct and his employment, taking into account the nature of the forum, the number of attendees, CM’s introduction to the audience as an “insider” in relation to the consultation exercise, and the nature of the comments made.

Key takeaways

This decision serves as a useful reminder that an employee’s actions outside of work can have implications on their employment (including in relation to disciplinary and/or remuneration decisions) where (as in this case) there is a sufficient connection between those acts and the individual’s employment duties/relationship.

In addition, the judgment reflects:

  1. a common sense approach to interpreting phrases such as “satisfactory” performance / completion, accepting as the court did that this inevitably involves a qualitative assessment of the employee’s performance; and
  2. a continued commitment to intervening in an employer’s exercise of a discretion only where the court is satisfied that the decision was irrational or perverse, i.e. that no reasonable employer would have made that decision.