THE HURDLE OF SUMMARY DISMISSAL UNDER EMPLOYEMNT ORDINANCE

September 2025

Section 9(1) of the Employment Ordinance stipulates that an employer may terminate a contract of employment without notice or payment in lieu if an employee, in relation to his employment (i) willfully disobeys a lawful and reasonable order (ii) misconducts himself, such conduct being inconsistent with the due and faithful discharge of his duties (iii) is guilty of fraud or dishonesty or (iv) is habitually neglectful in his duties. The “misconduct” of the employee is case-specific and depends on circumstances of each case. The recent case of Hu Yangyong v. Alba Asia Limited [2025] HKCFI 2484 somehow indicated the test under the statue. The court was asked to determine whether an employer's summary dismissal of an employee was justified and the court ruled that summary dismissal could only be exercised in the most serious and extreme cases of employee misconduct. 

The Plaintiff was employed as a senior executive and he was dismissed by the Defendant employer pursuant to section 9(1)(a) of the Employment Ordinance on the grounds that he had flooding claims for monthly expenses and reimbursements which he failed to provide explanation or justification for some of such claims. Under the relevant contract of employment, the employee was indeed entitled to reimbursement for out-of-pocket expenses monthly upon production of official invoices. The employee could not supply each and every invoice for various expenses. The court found that no dishonesty was on the part of the employee though some items were abnormal and the employer’s exercise of the right to summarily dismiss the employee was not justified. 

The court adjudged that summary dismissal is justified where the employee has committed a fundamental breach of the contract of employment. It should be regarded as a strong and extreme measure, justified only in exceptional cases. The onus of proof is on the employer to establish that summary dismissal is justified. In assessing whether or not the employee's conduct justifies summary dismissal, the question is whether the acts complained of are of a sufficiently serious nature as to amount to a fundamental breach of the contract. The acts of the employee must go to the root of the contract so as to indicate an unwillingness to be bound by the original terms of the contract. The standard of proof is generally a balance of probabilities, but the more serious the allegation, the stronger should be the evidence before the court concludes that the allegation is proved. 

While the court tends to adopt a heavy hurdle on the employer to exercise the right of summary dismissal, the misconduct of the employee must be serious, repetitive and serious in nature and to the extent that goes to the root and fundamental breach of the employment contract.