李青 (Li Qing) v 廣州基金國際股權投資基金管理有限公司 (Sfund International Investment Fund Management Ltd) [2025] 2 HKC 17, [2024] HKCFI 2629 (Timothy Lam)

Timothy Lam represented the defendant (appellant) in 李青 (Li Qing) v 廣州基金國際股權投資基金管理有限公司 (Sfund International Investment Fund Management Ltd) [2025] 2 HKC 17, [2024] HKCFI 2629.

The defendant was a Hong Kong company, which was wholly owned indirectly by 廣州產業投資基金管理有限公司 (through 廣州匯垠天粵股權投資基金有限公司 and another company). The claimant was a Mainland citizen. The claimant was a former employee of the defendant, initially via an employment agreement as the defendant’s Chairman, and later as its General Manager. The claimant was also a director of the defendant. The Employment Agreement prevailing at the time when the present disputes between the parties arose contained the following terms: (a) Clause 3.1 was in effect an exclusive employment clause; (b) Clause10 governed termination of the employment: ‘10.1 終止本 合同可以根據下列方式被終止: (a) 雙方協商同意;…(d) 如在試用期之後: (i) 由乙方向甲方提前3個月發出書面通知或支付3個月的代通知金方式; 或 (ii) 由甲方向乙方提前3個月發出書面通知或支付3個月的代通知金方式。…10.3 終止後的要求… (b) 本合同終止後，乙方必須在任何甲方涉及的可能或實際的訴訟或其他程序中協助甲方，乙方所有合理費用由甲方承擔，本條款將在本合同終止後持 續生效。’; (c) Clause 13.3 governed variation: ‘只有經雙方或雙方適當授權的代表書面簽署檔，本合同方可作出修改、變更、補充或修訂’. In March 2022, the claimant tendered a Resignation Letter dated 3 March 2022 to seek approval of the resignation of all appointments with the defendant. By signed notice, the claimant also with effect from 2 March 2022 resigned as a director of the defendant. An Acceptance Notice was subsequently issued by ‘中共廣州產業投資基金管理有限公司委員會’. On 9 March 2022, the defendant issued a letter to the Immigration Department stating to the effect that the claimant had terminated employment relationship with the defendant, and the defendant would no longer act as sponsor for the claimant’s work visa with effect from 3 March 2022. The defendant requested the Immigration Department to update the claimant’s visa status. On 9 March 2022, the defendant’s board of directors resolved inter alia to accept with effect on 2 March 2022, the claimant’s resignation as defendant’s director, General Manager and 投資管理委員會代理投委會主任. The claimant started new employment with a third party on 23 March 2022. The claimant was only paid under the Employment Agreement up to 3 March 2022. In June 2023, the claimant made a claim in the Labour Tribunal against the defendant, contending that he had continued to carry out his duties even beyond the 3-month notice period, until the new General Manager reported duty to 15 September 2022. The defendant denied liability and argued that the claimant unilaterally and wrongfully terminated the Employment Agreement on 3 March 2022 when he issued the Resignation Letter, in breach of Clause10.1(d)(i) of the Employment Agreement and s 7 of the Employment Ordinance (Cap 57). The defendant counterclaimed for damages of 3 months’ payment in lieu. The Presiding Officer awarded the claimant salaries and allowances in the total sum of $1,541,953.05 and dismissed the defendant’s application for review. The defendant obtained leave to appeal on the following grounds: (1) The Presiding Officer erred in law in finding that the Employment Relationship was terminated on 31 August 2022.; (2) The Presiding Officer erred in law by failing to discharge its statutory duty to investigate; and (3) A tribunal correctly directing itself on the law and on the facts and considering only the relevant factors would come to the conclusion that: (a) the Employment Relationship was terminated with effect on 3 March 2022 by the mutual agreement of the parties formed on 7 March 2022 pursuant to Clause 10.1(a) of the Employment Agreement when the defendant’s parent company issued the Notice; and (b) alternatively, the Employment Relationship was terminated on 3 June 2022 following the expiry of the 3-month notice period. The claimant did not seek to resist the appeal or uphold the Presiding Officer’s Decision.

Held, allowing the appeal, remitting the case to the Labour Tribunal for retrial before another Presiding Officer, and ordering that the claimant should bear the costs of and occasioned by the appeal (including the application for leave):

(1) Ground 1 had been made out. In deciding when and how the employment relationship between the claimant and the defendant had been terminated, the deciding consideration was Clause10 of the Employment Agreement, and whether the employment relationship had been terminated according to any of the agreed mechanisms. The Presiding Officer adopted a wrong test, namely ‘申索人在 2022年3月3日遞交辭職信之後有沒有為被告公司工作’. Furthermore, the Presiding Officer had apparently placed a burden upon the defendant to disprove any continuous discharge of duties by the claimant. The adoption of the test and approach had led the Presiding Officer into reaching a conclusion without proper regard to the contractual mechanisms of termination. The Presiding Officer then only sought to re-visit those mechanisms after a conclusion had been reached, and then put forward the notion of variation by conduct, but in the process overlooked the effects and operation of Clause 13.3. Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, [2019] AC 119, [2018] 4 All ER 21, 洪輝 (Hung Fai) 對 明利文具製品廠有限 公司 [2024] HKCFI 541, [2024] HKCU 667 considered (para 27).

(2) Ground 2 had been made out. The Labour Tribunal’s duty to investigate matters considered relevant to the claim was a statutory duty that arose irrespective of whether any matters ‘has been raised by a party’. The important duty flowed from the informal nature of the hearing, the prohibition of legal representation, and the inquisitorial nature of the proceedings. In considering the termination of employment relationship between the parties, the Presiding Officer concentrated upon Clause 10.1(d). She put forward the notion of variation by conduct. She further put forward the alternative notion of withdrawal of the Resignation Letter by the claimant. The Presiding Officer had not investigated the scenario of termination by mutual agreement. Whilst the way the defendant ran its case should be noted, that did not relieve the Presiding Officer from investigating the question of termination by mutual agreement, which was clearly relevant to parties’ cases. Chan Suk Bing Angie v Harbour Phoenix Ltd [1992] 2 HKC 459; and Leung Wan Kee Shipyard Ltd v Lik Shau Foo [1995] 3 HKC 229 applied (paras 28-31).

(3) Ground 3 was not made out. Whether the parties’ employment relationship had been terminated by mutual agreement pursuant to Clause 10.1(a) was facts-sensitive. On the materials before the Court, it was not satisfied that a finding of termination by mutual agreement on 3 March 2022 could be substituted at the present stage. The Court could not say that that conclusion was the true and only reasonable one. Nor was it fair to the claimant for the Court at this stage to do so. In the circumstances, the case should be remitted to the Labour Tribunal for retrial before another Presiding Officer. 馮皓嵐 (Fung Ho Nam) v 威達製品有限公司 (Witty Industrial Co Ltd)及另一人 [2011] HKCU 1985 (HCLA 6/2011, HCLA 7/2011, Deputy Judge Au-Yeung, 14 October 2011, unreported) applied. Chok Kin Ming v Equal Opportunities Commission [2018] 3 HKC 20, [2017] 2 HKLRD 521 considered (paras 32, 34).

(4) The defendant was successful in the appeal in the end. There was nothing on the facts which warranted depriving the defendant of its costs. There was litigation conduct on the part of the claimant which could be taken into account in tilting the balance against the claimant. 余大強 (Yu Tai Keung Tim) & Anor v 兆豐企業顧問有限公司 (Billion Town Corporate Consultants Ltd) [2022] 6 HKC 239, [2022] HKCFI 2360; Lai Wo Heung v Cheung Kong Fur Fty Co Ltd [2004] 1 HKLRD 959, [2004] HKCU 84; Pak Wang Kwan v Associated Tourist Coach Ltd [2001] HKCU 1284 (HCLA 7/2001, Deputy High Court Judge Poon, 30 November 2001, unreported); and Pang Hong v Pro-Centric Group Ltd [2006] HKCU 1594 (HCLA 85/2005, Deputy High Court Judge Poon, 20 September 2006, unreported) considered (paras 42, 43).

[The above is excerpted from the headnote to the report in HKC.]