Have you ever terminated your employee on reasonable reasons and your employee then bring the case to the labour office or Industrial court to seek and ask for compensation?
Termination and dismissal of employee can be complicated though your dismissal is lawful and based on valid reasons and grounds. There are some employees still will make their move to industrial court to try to claim back compensation (in legal term we call it as backwages).
In this event, as an employer, you have two choices to make, first to avoid legal suit in industrial court, try to settle with the employee though you know the termination is lawful and reasonable by fulfilling unreasonable requests. Second, to engage a lawyer to fight against the employees in court.
This is the most common option will be chosen by the employers as they are thinking that to settle the case out of the court will be easy and the fastest way. This is due to they do not want to get themselves stuck in complicated legal case brought by the employees. Therefore, the employer will offer few months’ salary to solve the issue. Based on our experience, by paying few months salary are not a big deal to those employees but what make those employers terrified is that those employees who are still working with the company will learn and follow the same thing against the employers when they want to leave the company.
In May 2019, there was a company A came to us to seek for legal advice as the company CFO was terminated based on the reasons of poor performance and the CFO wish to bring the matter to industrial court. However, despite our advices that the, the Company want to avoid legal case, they have offered a compensation figure about 5 figures.
Later, around June 2019, the Company A terminated the General Manager based on the reason the general manager’s wife set up a similar business and solicit the clients to the new company. The general manager again claimed the Company A in industrial court for backwages 24 months. In a discussion between Company A and the general manager, it was found out then the terms and conditions of settlement between Company A and CFO were fully known and aware by the general manager. Knowing the attitude of Company A which terrify of legal case and to earn “extra” money, the general manager bring the case against the Company A in industrial court. Nevertheless, the Company A decided not to settle with the general manager due to avoid the current employees might do the same thing to Company A in future when they get terminated based on valid reasons. Eventually, the Company A hire us to defend the them and around early December 2019, we successfully defended the Company A and the general manager who brought the suit to the court were then directed to pay cost to the Company A. The Company A is so happy as they can finally set a good precedent to the current employees.
So employers, compromise or defend?
Call us for advices.
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Messrs. Ng Kee Way & Co. 黄志威律师事务所
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