Hong Kong: Is it time to refresh your disciplinary procedure?

When was the last time you looked at your organisation's disciplinary procedures? Is it time for a refresh?

Earlier this year, a decision of the Court of First Instance of Hong Kong ("CFI") caused many HR professionals to reassess their organisation's disciplinary procedures after the CFI held that an employer's disciplinary policy was broad enough to apply to situations involving under-performance.

This decision serves as a reminder of the importance of reviewing regularly internal policies and procedures to ensure that they continue to reflect accurately the needs of the business.

The decision

This case involved an employee who had been dismissed after failing to achieve the expected performance outcomes following a performance improvement plan. The employee brought a claim in the Labour Tribunal arguing (among other things) that his former employer should have commenced an investigation and held a disciplinary hearing before his dismissal, in accordance with its stated disciplinary procedure.

On appeal, the CFI agreed that the disciplinary procedure did apply taking into account the language used (in particular, the statement that a formal disciplinary process should be commenced in relation to an "[e]mployee's conduct or unsatisfactory performance") and that the Labour Tribunal should have considered the impact of the disciplinary procedure on the employee's claim.

Do you need a disciplinary procedure at all?

There is no statutory requirement in Hong Kong for an employer to adopt a formal disciplinary procedure. That said, doing so can be useful for:

1. reminding employees that there are consequences for poor behaviour, and providing transparency to employees as to what will happen if they do not comply with acceptable standards of workplace behaviour; and
2. promoting consistency in disciplinary matters where practices might otherwise vary across different offices, workgroups or locations.

It is important, however, to ensure that the procedure is sufficiently flexible so as to allow employers to respond as appropriate to the particular facts of each case and to depart from the procedure in appropriate cases.

Impact for employers

This decision highlights the need to take care when drafting internal policies and procedures (such as disciplinary procedures) and, in light of the CFI's broad interpretation in this case, give careful consideration to when the policy should or should not apply. Policies and procedures should also be reviewed regularly to ensure that they continue to meet the needs of the business.

Written by Gareth Thomas and Gillian McKenzie