In the recent case of 周露娜 v. 中旅货运物流中心有限公司 [2023] HKDC 1115, the Court found that a logistics company (the "Employer") had unlawfully discriminated against a former employee who headed its logistics business unit and sales and marketing unit (the "Employee") on the ground of her pregnancy by refusing to renew her employment contract and pay her a year-end bonus.
Background
The Employee commenced employment with the Employer in April 2011 and was employed as a senior manager under successive annual contracts. Prior to that, she was employed by two other associated companies within the same group from September 2007 to March 2011.
In March 2017, the Employee informed the Employer of her pregnancy. When the Employee was hospitalised for pregnancy complication in early November 2017, the Employer issued her with a "Non-Renewal Notice" (the "Notice"), informing that her employment would not be renewed from 1 January 2018 due to the restructuring and downsizing of the Employer's business (the "Non-Renewal Decision"). The Employer also refused to pay her the year-end bonus for 2017 (the "2017 Bonus") by reason of her unsatisfactory performance (the "Non-Payment Decision").
In January 2018, the Employee filed a complaint with the Hong Kong Equal Opportunities Commission (EOC), but the parties failed to reach a settlement. In November 2019, the EOC granted legal assistance to the Employee to pursue her pregnancy discrimination claim against the Employer in the District Court.
The District Court's Decision
(i) Non-Renewal Decision
The Court rejected the Employer's contention that the Non-Renewal Decision was based solely on "restructuring" and "business downsizing". The Employer did not produce any documentation concerning the purported restructuring and this notion of "restructuring" was only first mentioned in the Notice given to the Employee. Also, given the close proximity of time between the hiring of another person to perform overlapping responsibility as the Employee and the time when the Employee informed the Employer of her pregnancy, the Court had no hesitation to infer that the Employee's pregnancy was one of the reasons (even if not the dominant reason) for not renewing her employment.
The Employer also alleged that the Employee's poor performance was part of the reason for the Non-Renewal Decision. This was rejected by the Court as it was not properly pleaded in the Employee's Notice of Response, and in any event, the Court found that those allegations were completely untrue and baseless as they were contradicted by contemporaneous documents made available to the Court.
The Court held that the Non-Renewal Decision amounted to unlawful pregnancy discrimination.
(ii) Non-Payment Decision
The Employer argued that the year-end bonus was discretionary in nature and, in light of her alleged unsatisfactory performance, the Employer had exercised its discretion not to pay the Employee the 2017 Bonus.
However, the Court came to the view that the real reason for the refusal to pay the Employee the 2017 Bonus was that she had effectively been "dismissed" by the Employer in November 2017 when her contract was not renewed.
The Court found that as the Non-Payment Decision was consequential upon the (discriminatory) Non-Renewal Decision, the refusal to pay the Employee her the 2017 Bonus constituted less favourable treatment and inferred that the Employee's pregnancy was one of the reasons for the Non-Payment Decision.
Hence, the Non-Payment Decision also amounted to unlawful pregnancy discrimination.
(iii) Award of Damages
Having found in favour of the Employee, the Court awarded the Employee (i) loss of income for a period of 12 months and the 2017 Bonus, which totalled HK$805,180 (plus interests); and (ii) damages for injury to feelings assessed provisionally at HK$130,000 on the basis that the Employer will provide her with an apology and a reference letter in appropriate form and terms. However, if the Employer refuses to issue an apology or a reference letter to the Employee, the Court may revise upward the amount of damages for injury to feelings and/or make a further award of exemplary damages against the Employer.
On the issue of costs, the Court departed from its general position in discrimination cases (namely that each party bears its own costs irrespective of the outcome) and ordered the Employer to pay the Employee her costs of this action. Presumably the Court was satisfied that there were special circumstances in this case which warranted an award of costs.
Key Takeaways
Where an employer is required to make an adverse decision (e.g., termination, non-renewal of contract or redundancy) against an employee with a protected characteristic under any of the anti-discrimination ordinances in Hong Kong (including pregnancy, sex, marital status, breastfeeding, disability, family status and race), it should ensure that it will be able to demonstrate that the sole reason for taking that action is a genuine and legitimate reason. This is because each of the anti-discrimination ordinances contains a "deeming" section, which provides that if an act is done for a number of reasons and one of which is an unlawful reason, then the act will be deemed to have been done for the unlawful reason.
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