Generally, an employer in Hong Kong has the right to terminate employment by giving either the requisite notice or payment in lieu of notice. Under the Employment Ordinance (EO), however, every employee has the right to be a member of a trade union and to take part in trade union activities. It is unlawful for an employer to dismiss, penalise or discriminate against an employee for exercising such rights.
Campbell Richard Blakeney-Williams and Others v Cathay Pacific Airways Limited and Another (FACV No. 13 of 2011)
In this recent case, the employers, Cathay Pacific Airways Ltd and its subsidiaries (collectively referred to as Cathay), dismissed 49 pilots who were members of the Hong Kong Aircrew Officers Association (which was registered as a trade union in Hong Kong) with payments in lieu of notice. Following the termination, Cathay made three statements criticising the dismissed pilots as being unprofessional and stating that their actions had seriously affected the airline, passengers and the wider Hong Kong public.
The 49 dismissed pilots issued legal proceedings against Cathay. Whilst a settlement was reached between a number of the pilots and Cathay, some of the pilots continued to pursue their claims.
The case went all the way up to the Court of Final Appeal where it was confirmed that the dismissals of the 18 pilots constituted a violation of the employees' rights under the EO. The Court of Final Appeal upheld the earlier court's decision that the pilots were dismissed predominately because of their active participation in trade union activities, which constituted a violation of the EO. Cathay was, thus, liable to pay compensation to each of the pilots in the sum of HK$150,000.
The Court of Final Appeal also found that Cathay was in breach of the pilots' employment contracts, by failing to follow the stipulated disciplinary and grievance procedures prior to the dismissals. The pilots were, therefore, held to be wrongfully dismissed and were entitled to damages in a sum equal to one-month pay.
It was also held that Cathay was liable in defamation to the pilots, as a consequence of making the statements implicating the pilots as unprofessional. However, the Court of Final Appeal upheld the decision of the Court of Appeal to lower the award of general damages for defamation to each pilot from HK$3 million to HK$700,000 and to set aside the award for aggravated damages.
This case illustrates that employers should be wary of dismissing employees who have participated in trade union activities as such dismissals could violate the EO. Employers cannot escape liabilities for this violation even if they have paid the employees all their contractual and statutory entitlements. In addition, employers should follow any disciplinary procedures set out in the employment contracts in the appropriate circumstances. Employers should also be cautious of making any public statements relating to their former, existing or departing employees. If such statements are found to be defamatory, employers can be held liable to pay substantial damages to the employees concerned.