What are the rights of an employee who is dismissed unreasonably/ unlawfully by the employer?

When a dispute arises, an employee should first approach their employer with a written notice of their claim within 3 months of the termination of employment. If they cannot settle the dispute, the employee may bring it to the Labour Tribunal within 9 months of terminating the employment.  

The Labour Tribunal may order:

1. reinstatement or re-engagement of the dismissed employee;
2. an award of terminal payments against the employer and compensation

Reinstatement or Re-engagement Order

An order for reinstatement requires the re-employment of the employee by the employer and the employer must treat the employee as if they had not been dismissed.

An order for re-engagement is re-employment of the employee by the employer, or by a successor of the employer or by an associated company, on terms comparable to their original terms of employment or in other suitable employment.

If the Labour Tribunal considers it appropriate and reasonably practicable to do so

reinstatement or re-engagement Order can be made without the employer’s consent.

Terminal Payments and Compensation

If an order for Reinstatement or Re-engagement Order is not made, the Labour Tribunal can award terminal payments or compensation to the employee.

Terminal payments include:

1) the statutory entitlements under the Employment Ordinance which the employee is entitled to but has not yet been paid upon dismissal

2) the entitlements the employee might reasonably be expected to be entitled to under the Employment Ordinance had he been allowed to continue his employment; and

3) any other payments due to the employee under his contract of employment.

A compensation of up to a maximum of $150,000 will be awarded if the employee is unreasonably or unlawfully dismissed, irrespective of the Terminal Payment. In determining whether compensation would be awarded: the Labour Tribunal will consider:

1. the circumstances of the employer and the employee;

2. the period of employment of the employee;

3. how the dismissal took place;

4. the loss sustained by the employee as a result of the dismissal;

5. the possibility of the employee obtaining new employment;

6. whether the employee should bear any fault for the dismissal; and

7. any payments, including terminal payments, that the employee is entitled to receive in respect of the dismissal.

Before bringing a claim to the Labour Tribunal, an employee is advised to contact the Labour Relations Divisions of the Labour Department for a preliminary consultation.

Key Takeaways

• An employee unreasonably or unfairly dismissed may raise a claim to the Labour Tribunal for a Reinstatement or Re-engagement Order, or terminal payments and/or compensation.
• The terminal payment compensates the unreasonably dismissed employee for entitlements he would otherwise be entitled to

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