Hong Kong: How Not To Arrive At The Decision To Dismiss An Employee

Last Updated: 20 September 2013
Article by Duncan A.W. Abate and Hong Tran
Most Read Contributor in Hong Kong, November 2017
Keywords: Unfair Dismissal, Employer's Conduct, Mutual Trust, Damages

The case of Grant David Vincent Williams v. Jefferies Hong Kong Ltd illustrates how an employer can breach the implied duty of mutual trust and confidence that it owes to its employee in the way it treats that employee leading up to his summary dismissal. Although in Hong Kong an employee does not have the right to bring a claim for "unfair dismissal", if the employer's conduct towards the employee during employment leading up to a dismissal is irrational, this can be a breach the employer's duty of mutual trust and confidence giving rise to substantial damages. In the Jefferies case the plaintiff employee was awarded damages in excess of HK$14 million and costs on an indemnity basis.

The Facts of the Case

The plaintiff, Grant Williams, was employed by the defendant company, Jefferies Hong Kong Ltd, as Head of Equity Trading Asia with the title of Managing Director on 26 August 2010. The plaintiff prepared a daily newsletter for the defendant company, which the defendant distributed to 900 or so subscribers as its publication. There was a protocol in place for vetting the newsletter which involved obtaining approval from an individual in London, before being distributed from New York.

A draft of the 7 December 2010 edition of the newsletter was emailed by the plaintiff to the personal assistant of the Head of Global Equities in New York in accordance with the approval protocol to await approval from London before being distributed. By error the personal assistant distributed the newsletter without having received approval from London.

The newsletter contained an incidental reference to the existence of a "Hitler video" without any comment save a warning concerning its use of many expletives.

Within 20 hours 44 minutes after the newsletter had been sent to London for review, the plaintiff was called to a meeting lasting a little more than 2 minutes where he was told that he was summarily dismissed for gross misconduct. The plaintiff was handed a letter that said he was summarily terminated "on the grounds of your unacceptable and entirely inappropriate misconduct. The detail of this has been discussed with you...". (It was common ground at trial that no such discussion of detail had taken place.)

What Went Wrong?

The defendant had behaved irrationally in arriving at the decision to summarily dismiss the plaintiff.

The defendant had blamed the plaintiff for what was human error of the personal assistant, and made "irrational and patently unfair conclusions" (as the court described it) in deciding to summarily dismiss the plaintiff.

On the evidence the basis for the plaintiff 's summary dismissal was because the newsletter contained an inappropriate reference to Hitler and a reference to an inappropriate video known as the "Hitler video". The inference drawn by the judge (because the relevant senior executives did not attend to give evidence) was that the senior executives were worried about the possibility that the CEO of JP Morgan might react to what might be perceived to be criticisms made by the defendant of him as a CEO in the financial world. The judge held that this line of thinking lacked logic, and that putting the responsibility on the plaintiff was irrational.

There was a misconception by one of the decision makers who decided to summarily dismiss the plaintiff (and possibly other decision makers as well, but they did not appear at trial to give evidence) that the plaintiff was the author or creator of the video. This was a fundamental error.

This decision maker said that the mere mention of Hitler's name in the reference to the video concerned him and raised problems. The judge found that this reaction just did not make sense. Two witnesses for the defendant had declared in their witness statements that they considered the video racist and anti-Semitic, and that it appeared that the newsletter was propagating such, or at least condoning it. The judge held that it was not sensible or realistic to censor Hitler's name out of a marketing publication, nor was it rational to suggest that the video, or the simple reference to it, denoted a "racist or anti- Semitic connotation".

Shortly after the newsletter had been distributed, the defendant sent an email to its subscribers advising that they "inadvertently distributed Grant Williams' December 7, 2010 edition...[of the newsletter] before it was properly vetted. That piece contained third-party material from a website that we do not condone". This email contained a factual error in that "That piece" did not contain third-party material. Furthermore, the "material" was not distributed, but contained a reference to the existence of a piece of material. It was also described as "Grant Williams'... edition". The judge said though Grant Williams was the editor/author, it was the defendant's publication.

It was held that there had been an unreasonable effort to "tar" the plaintiff with overall responsibility because he was the creator or author of the newsletter, and its editor.

(It should be noted that those directly responsible for deciding on the plaintiff 's dismissal did not give evidence to explain or justify their decision, and were not subjected to cross-examination.)

The termination letter was regarded by the judge as evasive and possibly drafted deliberately without detail. The letter was presented at a meeting lasting two to three minutes in which the plaintiff was given no opportunity to understand the reasons for dismissal or put forward any argument.

It was held that the way the defendant handled the matter of the plaintiff 's dismissal, the explanatory email and the excision of the plaintiff from all contact and association with the defendant was in clear breach of the implied duty of mutual trust and confidence they owed to him. That implied duty is that an employer will not without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee.

What Damages Did the Court Award to the Plaintiff?

The judge awarded damages to the plaintiff under the following two broad categories totalling in excess of HK$14 million.

  1. Contractual loss of earnings and benefits
The contractual claim was assessed on the basis that if the defendant had given proper notice of termination, the plaintiff would have been given six months' notice. Further, as a result of the defendant's wrongful dismissal, the plaintiff had lost his other contractual entitlements, including a grant of shares, retention bonus and guaranteed bonus. The damages awarded under this head are summed up below:

  1. Damages for breach of implied term of trust and confidence
The judge considered the following:

  • That the defendant sought to put the blame squarely on the plaintiff and tried to distance itself from the plaintiff by in effect denying that the newsletter was a corporate publication
  • That the cessation of the daily newsletter would have been noticed by at least 900 subscribers and the immediate dismissal of the plaintiff would have been apparent to a wider audience
  • That given the circumstances the audience may have queried whether there was something else behind the decision to dismiss the plaintiff which did not reflect well on him
  • That an aggravating factor was the perception that the reference to the "Hitler video" somehow denoted racism, anti-Semitism and sexism
  • That the plaintiff had problems obtaining alternative employment after his dismissal
  • That the plaintiff was left with a stigma.

The court considered that the plaintiff would only be able to return to normality and gain worthwhile employment if he is free from the stigma attached to his dismissal and awarded the plaintiff damages for loss until 31 July 2013 as follows.

What Cost Award Did the Plaintiff Receive?

The plaintiff sought an order for indemnity costs. The judge considered that the defendant's case at trial disclosed some extremely unpleasant features, and some important email communications were divulged very late into the proceedings. Further, in pursing the litigation, the defendant did not find a realistic "negotiator", but instead found an unidentified member of the Jefferies group to respond to the plaintiff's reasonable settlement proposals. The court found the defendant's manoeuvrings to be wasteful and unconstructive.

The court ordered the defendant to pay the plaintiff's costs on an indemnity basis which provides the plaintiff with a higher recovery rate than the scale of costs that is normally ordered.

What Are the "Take-away Points" for Employers?

In Hong Kong historically the typical remedy an employee can obtain from an employer who cannot demonstrate a valid reason for the dismissal of the employee is an order to pay "terminal payments" to the employee. Terminal payments are in effect unpaid statutory and contractual entitlements which the employer should have paid on termination of the employee's employment.

The Jefferies case illustrates how substantial damages could be awarded to an employee for breach of an implied term during employment leading up to the dismissal.

Employers must be careful not to behave irrationally when dealing with an employee. That is, an employer should ensure that it has a rational and reasonable basis for taking action against or in respect of an employee.

Originally Published - 13 September, 2013

Visit us at www.mayerbrownjsm.com

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions