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In Hu v Alba Asia Limited [2025] HKCFI 2484, the High Court ruled on a dispute over the summary dismissal of a senior executive, involving allegations of misconduct and dishonesty in expense claims and an employer's counterclaim for breach of contract and fiduciary duties.
Decision
The plaintiff, a senior executive employed under a three-year fixed-term contract, was entitled to family expense reimbursements with official invoices. The employer alleged fraud, claiming the plaintiff submitted mismatched invoices and those covering friends' expenses, justifying summary dismissal. The plaintiff maintained that his expenses were genuine and relied on assurances made by a senior finance officer that submitting invoices for expenses incurred by individuals other than family were acceptable.
The Court held that summary dismissal is a severe measure, justified only in cases of fundamental breach or gross misconduct. The burden of proof lies with the employer, and allegations of dishonesty require strong evidence. The Court found that the employer had not met this threshold: the plaintiff did not act dishonestly or with fraudulent intent, and his conduct, while irregular, did not amount to repudiation of the employment contract. The employer's summary dismissal of the plaintiff was therefore wrongful.
The plaintiff was awarded damages in the amount of HK$5.4 million comprising lost wages and year-end payments for the remainder of his fixed-term contract, as well as lost medical insurance, annual leave pay and reimbursements. The employer's counterclaim for breach of contract and fiduciary duties was dismissed, as the plaintiff had incurred expenses that were genuine (i.e. not fabricated) and the employer suffered no loss.
Key Takeaways
This decision underscores that summary dismissal is a 'nuclear option', reserved only for the most serious misconduct. Employers should act cautiously, especially where allegations involve internal practices or employee representations, and must ensure strong evidence of gross misconduct and adherence to fair procedures before proceeding.
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