Legal update: Dismissal of alleged sexual harasser held unlawful under Sex Discrimination Ordinance

Introduction

Many employers may be aware of the risk of claims under the Sex Discrimination Ordinance (“SDO”) by employees who are subject to sexual harassment during their employment. In contrast, the legal risk that may arise due to any action taken by an employer against an employee who is alleged to have committed sexual harassment may often be overlooked.

The recent District Court case of Tan, Shaun Zhi Ming v Euromoney Institutional Investor (Jersey) Ltd [2022] HKDC 622 illustrated that a breach to the SDO may occur if an employer does not properly handle the situation of the alleged harasser in a sexual harassment complaint/ allegation.

Case Background

In Tan, the employer received a sexual harassment complaint made by one of its employees (“C”) against another employee (“E”). After conducting some investigation, the employer requested E to apologise to C. E refused to apologise and he was subsequently dismissed by the employer.

In a letter from the employer’s solicitors to E (the “Employer’s Letter”), it was stated that the decision to terminate his employment was not a result of the sexual harassment allegation, but his conduct “during and following” the investigation of the allegation.

E claimed against his former employer under the SDO on the ground that his dismissal was a sex discrimination against him “because of his gender, and the gender of his accuser”.

At trial, the employer sought to not only rely on E’s conduct in relation to the investigation of the sexual harassment complaint as stated in the Employer’s Letter, but also his conduct prior to the alleged sexual harassment as reasons for his termination.   

Court’s findings

The Court found that the employer’s argument that E’s dismissal was based on or partially based on his conduct prior to the alleged sexual harassment is “blatantly untrue” as:-

1. the covert audio recording made by E at the meeting which he was dismissed showed that the basis of his termination can only be related to the sexual harassment complaint made against him;
    
2. E’s conduct prior to the alleged sexual harassment was not mentioned at the dismissal meeting and the employer did not submit any documentary evidence in support; and
    
3. the Employer’s Letter stated clearly that the termination was made in respect of E’s conduct during and following the investigation of the sexual harassment complaint.

The Court considered that the employer was not telling the truth and was trying to conceal the real reason for E’s termination. On such basis, the Court inferred that the real reason for E’s termination is the “pro-female bias” advance by him in his claim and held that the employer acted in breach of the SDO by dismissing him.

Accordingly, the Court granted the following relief to E:-

1. a declaration that the termination of E’s employment is based on sex discrimination against him and is unlawful;
    
2. an award of damages to be paid by the employer in the sum of HK$150,000 (with interests) for E’s loss of income; and
    
3. an order to the employer to make a written apology to E in the terms specified by the Court.

Conclusions and remarks

It is important to note that E succeeded in his claim not because the Court found that the sexual harassment complaint against him is untrue or that the employer was wrong to dismiss him in the circumstances.

Rather, the outcome was based on the adverse inference as to the real reason of E’s dismissal drawn by the Court against the employer whom the Court considered to be not telling the truth on the issue.

In light of Tan, employers should be mindful of whether and what reasons are given to employees at termination. Employers should also be clear and consistent internally as to the bases and reasons for taking any actions against their employees.   

Should employers have any concern about the steps they may take in respect of their employees, they should seek legal advice before doing so to minimise the risks of any such decisions being challenged in the future.

Russell Bennett and Mark Chiu

For more information on employment matters, please contact:

Russell Bennett
Partner | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.