Haveaux Xavier Marie-Ghislain v Hong Kong Express Airways Limited [2023] HKCFI 2073

 

My research informs me that in Hong Kong, the termination of employment has long been governed by principles that emphasize the employer's right to end the employment relationship by providing notice or payment in lieu thereof, without the obligation to provide a reason. This legal framework, deeply rooted in statutes like Hong Kong's Employment Ordinance (Cap. 57), sharply contrasts with jurisdictions such as Barbados and the United Kingdom, where robust statutory protections against unfair dismissal are codified in laws like the Employment Rights Act 1996 and the Employment Rights Act 2012-09, respectively.

Historically, Hong Kong's approach to employment termination has emphasized flexibility for employers, enabling efficient workforce management. In contrast to the UK and Barbados, where stringent criteria govern fair dismissal, Hong Kong law imposes minimal constraints on an employer's termination decisions, requiring adherence only to contractual and statutory obligations concerning notice periods or compensation.

Some employment law professionals argue that this legal framework in Hong Kong allows for flexibility in the notice period for termination, ensuring compliance with statutory obligations. Further, they opin that it facilitates a balanced approach where employers and employees can negotiate terms that fit their specific circumstances, provided they meet the minimum statutory requirements. However, this flexibility places a significant responsibility on employees to understand their rights and negotiate effectively. In situations of unequal power or knowledge, employees may face challenges in asserting their interests.

On 29 December 2023, a significant judicial reaffirmation of these principles unfolded in the case of Haveaux Xavier Marie-Ghislain v Hong Kong Express Airways Limited [2023] HKCFI 2073. In this landmark decision, the High Court of Hong Kong clarified the extent of an employer's rights in terminating employment. The case involved a veteran pilot, employed since 2005, whose employment was terminated with payment in lieu of notice. The court underscored that under Hong Kong law, termination without cause does not automatically constitute wrongful dismissal. The plaintiff contested the termination, alleging breaches of implied duties of trust and confidence, highlighting discrepancies in the airline's Quality, Safety, and Security (QSS) data.

Case Summary

The Claim

1. Nature of Claim: The Plaintiff claims that the Defendant breached an implied duty of trust and confidence or wrongfully dismissed him under an erroneous reference to "Chapter 9 of the Labour Law," which likely intended to cite section 9 of the Employment Ordinance (EO) concerning summary termination without notice or payment in lieu of notice.

2. Incidents Leading to Claim:

First Incident (31 August 2018): The Plaintiff (a pilot) was flying a scheduled flight from Hong Kong to Ishigaki, Japan. During the flight, he noticed that the airplane was flying lower than it should have been according to the planned flight path. This planned path is sometimes referred to as being "one dot" on the plane's guidance system.

Realizing the plane was too low, the pilot took action to correct the flight path and bring the airplane back to the right altitude. This corrective action was taken just before the plane's Ground Proximity Warning System (a safety feature that alerts pilots when the plane is too close to the ground) would have been triggered.

After the flight, on 3 September 2018, the pilot reported this incident to his employer, as part of routine safety procedures.

Second Incident (14 October 2018): During a flight on October 14, 2018, the Plaintiff (a pilot) and a trainee were flying together. According to standard aviation procedures, only one pilot should be in control of the aircraft at any given time. This is known as the "one pilot flies" principle. This principle ensures clear and unambiguous control of the airplane to avoid confusion and potential safety issues.

However, during this flight, both the Plaintiff and the trainee were trying to control the aircraft at the same time. This is a violation of the "one pilot flies" principle and the designated safety procedures.

3. Investigation and Findings: The Defendant's Quality and Safety Systems (QSS) conducted an investigation and released reports in November 2018, finding that the Plaintiff deliberately failed to comply with safety procedures. The Plaintiff challenged these findings, claiming the investigation breached internal regulations and contained material factual and technical errors.

Combined Justification for Termination

1. First Incident: The Plaintiff had already been involved in an earlier incident on August 31, 2018, where he had to take corrective action because the airplane was flying too low.

2. Second Incident: Now, in this second incident, he and the trainee both controlled the aircraft simultaneously, breaking an important safety rule.

Why This Justified Termination

Given these two incidents:

• The first showed a potential safety issue with the flight path being too low.

• The second involved a clear violation of a critical safety procedure by not adhering to the "one pilot flies" rule.

The Defendant (the employer) decided that these incidents, especially occurring close together in time, were serious enough to justify terminating the Plaintiff's employment. They believed these actions indicated a pattern of behavior that posed risks to flight safety.

4. Allegations of Fabrication: The Plaintiff alleged that data provided by the Defendant in the form of "Annexures 1, 2 and 3 Screenshots" were fabricated and did not accurately reflect the flight circumstances. He presented his own data, "Annex EGPWS ROIG," captured from the Defendant’s Flight Operations Quality Assurance (FOQA) website, to support this claim.

5. Core Claim: The Plaintiff asserted that the Defendant abused its powers and terminated his employment in bad faith, breaching the duty of trust and confidence. He claimed this caused substantial loss and damage, including loss of future earnings.

The Defense

1. Right to Terminate: The Defendant maintained that it had the right to terminate the Plaintiff's employment at any time with three months' notice or payment in lieu of notice. The Plaintiff was terminated with payment in lieu of notice, in compliance with the employment agreement and statutory rights.

2. Justification for Termination:

 First Incident: The Defendant argued that the Plaintiff's decision to fly below the glideslope and remain there was a deliberate failure outside permissible tolerance levels.

 Second Incident: The Plaintiff and the trainee were both flying the aircraft, violating the "one pilot flies" principle and designated procedures. This, combined with the Plaintiff's involvement in the first incident, justified the termination.

3. Validity of QSS Findings: The Defendant denied any flaws or factual errors in the QSS reports, asserting the investigation was conducted accurately and in compliance with regulations.

4. Data Integrity:

 The Defendant refuted the Plaintiff's claim of data tampering, explaining that the time stamps in the data did not refer to actual local time at the airport.

 The Defendant stated that some of the Plaintiff's data pertains to a different flight (31 May 2017) rather than the incident flight (31 August 2018).

5. Core Claim Response: The Defendant reiterated that the termination was lawful and within the terms of the employment contract, with any claim limited to potential miscalculation of the payment in lieu of notice, which is not alleged by the Plaintiff.

Court’s Decision

Central to the court's decision was its interpretation of the implied duty of trust and confidence between employer and employee. Contrary to arguments raised, the court reiterated that this duty primarily concerned the ongoing employment relationship, not the manner of its termination. Citing precedents and distinguishing cases such as Tadjudin Sunny v Bank of America, National Association, the court emphasized that implied terms cannot restrict an employer's statutory right to terminate.

The judgment further clarified that while employees enjoy rights to challenge dismissals based on contractual breaches or discriminatory grounds, such claims did not extend to challenging the business judgment or discretionary decisions of employers in the termination process. This approach maintained Hong Kong's stance as a jurisdiction where employment termination remains largely a matter of contractual agreement and statutory compliance, affording employers considerable latitude in managing their workforce.

Importantly, the case highlighted distinctions between Hong Kong and Barbados as well as UK legal landscapes, emphasizing Hong Kong's more employer-friendly framework in employment termination matters. Unlike in the UK and Barbados, where unfair dismissal protections are robust and statutory, Hong Kong's legal framework is structured to grant employers broad discretion in employment decisions, including terminations.

Takeaways and Lessons

The following takeaways and lessons are to be learned from this important decision: 

1. Clarification of Termination Rights: The case reaffirmed that under Hong Kong law, employers have the right to terminate employment by notice or payment in lieu without needing to provide a specific reason. This underscores the importance of understanding contractual and statutory obligations in employment termination.

2. Implied Duties of Trust and Confidence: The court clarified that while there are implied duties of trust and confidence between employer and employee, these primarily pertain to the ongoing employment relationship, not the decision to terminate. Future cases should consider these duties within the context of the employment's continuation rather than its termination.

3. Legal Precedents and Interpretations: The judgment emphasized the precedent that statutory rights of termination cannot be unduly restricted by implied terms, aligning with established legal principles in Hong Kong.

4. Employee Rights in Termination: Employees retain rights to challenge dismissals based on contractual breaches or discriminatory grounds. However, challenges cannot extend to disputing the business judgment or discretionary decisions of employers in termination processes.

5. Jurisdictional Differences: The case highlighted significant differences between Hong Kong and jurisdictions like the UK and Barbados, where unfair dismissal protections are more comprehensive. Understanding these differences is crucial for legal practitioners and stakeholders involved in employment disputes.

In conclusion, while Hong Kong law reflects global employment principles in many respects, its unique legal framework affirms an employer's right to terminate employment by notice or payment in lieu, unaffected by implied terms of trust and confidence regarding the termination decision itself. This recent judicial clarification serves as a significant reminder of the legal landscape's nuances and underscores the importance of understanding local jurisdictional differences in employment law for both employers and employees alike.

The case of Haveaux Xavier Marie-Ghislain v Hong Kong Express Airways Limited [2023] HKCFI 2073 has provided significant insights into the legal landscape of employment termination in Hong Kong. This landmark decision by the High Court clarifies several fundamental aspects of employer rights and employee protections, shaping the future direction of employment law in the region.

The decision in Haveaux Xavier Marie-Ghislain v Hong Kong Express Airways Limited [2023] HKCFI 2073 reinforces Hong Kong's legal framework, which grants employers broad discretion in managing their workforce within contractual and statutory boundaries. This landmark case serves as a reminder of the nuances within employment law and the importance of comprehending local jurisdictional variances for both employers and employees alike.