Basics Reiterated – No Strings Attached For Exercising Termination Rights

It is widely known that parties to an employment contract are entitled to terminate the contract without cause either by giving requisite notice or payment in lieu of notice to the other party. When handing out the termination package, responsible employers tend to state the reason(s) for the termination. The recently handed down case, Lam v Equal Opportunities Commission [2021] HKEC 4664, reiterated the well-established principle that no reason is needed to terminate an employment contract without cause. The case was first decided by the Labour Tribunal and subsequently appealed to the Court of First Instance. The Claimant was Lam, the employee, while the Defendant was the Equal Opportunities Commission (the “EOC”), the employer. The Labour Tribunal sided for Lam and the EOC appealed against such decision. It is interesting to note that even the EOC and the Labour Tribunal could err in respect of the basics, and thought that there was an implied duty of mutual trust