Summary dismissal in Hong Kong: lawful grounds and procedural requirements

Hong Kong Summary Dismissal Grounds and Legal Requirements

Summary dismissal terminates an employment contract without notice or payment in lieu. No warning. No pay in substitution. The employer simply ends the relationship on the spot. Under Hong Kong law, that power exists only where the employee has committed a serious breach of the contract. The statutory framework is set out in the Employment Ordinance (Cap. 57).

Hong Kong Summary Dismissal Grounds

The Employment Ordinance (Cap. 57) permits summary dismissal where the employee has:

• Wilfully disobeyed a lawful and reasonable order from the employer
• Engaged in misconduct inconsistent with the proper discharge of the employee’s duties
• Committed fraud or dishonesty in connection with the employment
• Been habitually neglectful of the employee’s duties
• Committed any other serious breach of the employment contract

These grounds are exhaustive. An employer cannot add new reasons or rely on conduct falling outside these categories.

Act promptly. If the employer knows of the misconduct but continues the employment without taking action, the right to summarily dismiss may be lost. Delay reads as condonation.

Hong Kong Employment Ordinance Summary Dismissal

Sections 9 and 9A of the Employment Ordinance (Cap. 57) govern summary dismissal. Section 9 lists the employer’s grounds. Section 9A gives the employee a reciprocal right: the employee may terminate summarily without notice if the employer commits a serious breach, such as failing to pay wages or exposing the employee to physical danger.

For the employer, summary dismissal under section 9 extinguishes the obligation to give notice or payment in lieu. It does not extinguish accrued statutory entitlements. The employee remains entitled to:

• Wages earned up to the date of dismissal
• Annual leave pay for untaken statutory annual leave
• Sickness allowance if the employee was sick before the dismissal
• Any end-of-year payment that has already accrued
• MPF contributions up to the date of dismissal

Pay these amounts within seven days after the dismissal. The seven-day clock starts on the termination date.

Hong Kong Instant Dismissal Rules

Instant dismissal, another term for summary dismissal, requires a genuine belief, based on reasonable grounds, that the employee has committed one of the statutory offences. Conduct a proper investigation before dismissing. A dismissal based on a hunch or unsubstantiated allegation may be found wrongful.

The conduct must be serious enough to justify instant dismissal. Minor infractions, such as a single instance of lateness, do not meet the threshold. Habitual neglect requires a pattern of behaviour, not a one-off mistake.

If the employer dismisses summarily without a valid ground, the dismissal is wrongful. The employee may claim damages equivalent to the notice period that should have been given, plus any other losses caused by the dismissal.

Hong Kong Termination Without Notice

Termination without notice is the defining feature of summary dismissal. Termination by notice requires the contractual or statutory notice period, or payment in lieu. For employees under a continuous contract, the 4-18 rule, the statutory minimum notice period is seven days. The contract may provide for longer.

Where an employer terminates without notice but without a valid summary dismissal ground, the employee is entitled to:

• Payment in lieu of notice at the full contractual rate
• Any accrued but untaken annual leave pay
• Any accrued end-of-year payment
• Severance payment or long service payment, if the employee qualifies

Check whether the employee is covered by employees’ compensation insurance under Cap. 282. A dismissal does not affect the employer’s obligation to maintain that insurance for the period of employment.

Wrongful Summary Dismissal and Unreasonable Dismissal

An employee summarily dismissed without a valid ground may bring a claim for wrongful dismissal. Apply to the Labour Department for conciliation. If conciliation fails, the claim goes to the Labour Tribunal. The tribunal may order reinstatement or re-engagement, or award compensation.

Separately, an employee employed under a continuous contract for at least 24 months may claim unreasonable dismissal if the employer dismissed for a reason that is not one of the five statutory grounds. The Labour Tribunal may award up to HK$150,000 in compensation.

The risk of an unreasonable dismissal claim rises when the employer has not followed a fair procedure. Even with a valid ground, a failure to investigate or give the employee a chance to respond may render the dismissal unreasonable. A valid ground and a fair process are separate requirements.

Summary Dismissal and Accrued Entitlements

Summary dismissal does not wipe out accrued statutory entitlements. The employer must pay:

• Wages up to the last day of employment
• Annual leave pay for untaken leave
• Sickness allowance, if the employee was on sick leave before the dismissal
• Any end-of-year payment that has accrued
• Severance payment or long service payment, if the employee qualifies

Make the required MPF contributions for the period of employment, up to the date of dismissal. The relevant income for MPF purposes includes wages earned but not yet paid.

Practical Steps for Employers

Before summarily dismissing an employee:

1. Identify which statutory ground under section 9 of the Employment Ordinance (Cap. 57) applies
2. Gather evidence of the misconduct
3. Give the employee an opportunity to explain
4. Consider whether a lesser sanction, such as a warning, is more appropriate
5. Document the decision and the reasons

If you proceed, communicate the dismissal in writing. State the ground and the effective date. Then calculate and pay all accrued entitlements within seven days.

Seek legal advice before acting if there is any doubt whether a ground exists. A wrongful summary dismissal can result in a claim for notice pay, compensation, and legal costs.