Where to bring a claim in a dispute between employer and employee in Hong Kong – the Labour Tribunal or the Court?

Why does it matter?

The Hong Kong Labour Tribunal offers a comparatively quick, informal and inexpensive way of settling monetary disputes between employees and employers as compared to the Courts of Hong Kong. This makes it an attractive venue, particularly to employees with limited resources. While the Tribunal Officers may help the claimant to draft the claim form, parties to claims brought before the Labour Tribunal are not allowed to be represented by lawyers and will not receive any legal advice from the Labour Tribunal. Employers may, in some circumstances, like to engage lawyers to conduct its case in a Court.

The District Court's Judgment

The District Court struck out the Plaintiffs’ claim on the basis that the claim was within the exclusive jurisdiction of the Labour Tribunal and it was an abuse of process for the Plaintiffs to initiate the claim in the District Court. In giving its judgment, the District Court commented that, while a claim founded on tort would be beyond the jurisdiction of the Labour Tribunal, the test is to look at the substance, as opposed to the label, of the claim disregarding any “window-dressing” applied to the claim. 

The District Court illustrated this by distinguishing (i) cases involving breaches of fiduciary duties arising out of employment contracts, which are within the exclusive jurisdiction of the Labour Tribunal, from (ii) cases founded on both contract and tort, such as one where a breach of confidentiality arises from an incident where an employee exploits his position to gain by using confidential information against the interest of his employer, which are beyond the Labour Tribunal’s jurisdiction. 

It was held that the substance of the claim was no more than a claim for recovery of alleged overpayments of wages and reimbursements in breach of expressed terms in the Defendants’ employment contracts and the policy on reimbursement of expenses stated in the employee handbook. Therefore, it fell within the exclusive jurisdiction of the Labour Tribunal. The District Court further held that there was no practical reason for the Plaintiffs to bring the proceedings in the District Court, considering the claim could simply be determined on facts. Issues such as whether the alleged overpayments of wages and reimbursements were due to breaches of fiduciary duties, bad faith, gross misconduct or honest mistakes would neither affect the finding nor the quantum. 

Takeaway

The Labour Tribunal does not have exclusive jurisdiction of all employment-related claims. It is important to assess the substance of a dispute between an employee and an employer before determining where to commence proceedings. If the claim is in substance based on a breach of fiduciary duty arising out of an employment contract, the correct venue is the Labour Tribunal. Initiating proceedings at a wrong venue is an abuse of process and could result in the claim being struck out, wasting the parties’ money and time.