There are few reported Hong Kong court judgments on what constitutes unlawful marital status discrimination. For many years, an interlocutory judgment left the door open for employees to argue that being married to a particular person could give rise to marital status discrimination. As a result, employers have had to tread carefully when dealing with employees who are married to one another.
In Cheuk Kit Man v FWD Life Insurance Company (Bermuda) Limited & Ors [2025] HKCFI 1369, the Court of First Instance provided much needed clarity on the requirements for establishing unlawful marital status and family status discrimination. The case also considered the enforceability of clawback provisions and the limits of implied terms in the context of an insurance agent’s agreement, which we will also cover in this legal update.
Facts
The Plaintiff joined the First Defendant (the “Company”) as a senior agency director under an Individual Agent’s Agreement dated 24 July 2015 (the “IAA”). Her husband (the “Husband”) also joined the Company as a regional director shortly afterwards.
Under the Plaintiff’s offer letter, the Plaintiff was entitled to certain payments, including (i) a one-off signing fee, (ii) a monthly special bonus, and (iii) a performance bonus (collectively, “Additional Remuneration”). The Plaintiff was also entitled to incentive payments under a sales incentive scheme (the “Incentive Payments”). Both the Additional Remuneration and the Incentive Payments were subject to clawback by the Company in certain circumstances.
On 5 May 2017, the Husband resigned to join a competitor. Three days later, the Company gave notice to the Plaintiff to terminate the IAA, even though there were no performance issues or misconduct. The termination letter did not provide a reason for the termination. However, the Plaintiff’s supervisor allegedly alluded to the reason possibly being that the Plaintiff was married to her Husband.
After the termination of the IAA, the Company sought to clawback the Additional Remuneration and Incentive Payments paid to the Plaintiff, amounting to over HK$4 million (the “Repayment”).
The Plaintiff sued the Company claiming:
- Unlawful Discrimination: That the Plaintiff’s marital or family status (as the wife of the Husband) was the sole reason, or one of the reasons, for the Company’s termination of her IAA in breach of the Sex Discrimination Ordinance (“SDO”) and/or the Family Status Discrimination Ordinance (“FSDO”); and
- Breach of Contract: That the Company breached certain implied terms of the IAA, namely a “Good Faith Term” (i.e. the power to terminate the IAA would be exercised in good faith) and a “Valid Reasons Term” (i.e. the IAA would not be terminated without valid reasons).
The Company denied the claim and counterclaimed for the Repayment.
The decision
Discrimination Claim
In determining whether the Plaintiff’s termination amounted to marital status discrimination, the Court examined what the Company would have done to someone who was in the same or not materially different circumstances, but without the same family status, as the Plaintiff (i.e. the comparator).
The Court considered that an appropriate comparator would be a hypothetical female who (i) was in a close romantic relationship with the Husband, similar to that between the Plaintiff and her Husband (e.g. a cohabitation relationship with two children), and (ii) was working as an insurance agent at the Company with similar qualifications, experience and performance abilities, and managing a team of 90-odd downline agents.
The judge was unconvinced that the hypothetical comparator would have been treated any differently to the Plaintiff. Importantly, the Court concluded that the Plaintiff was terminated not because of her marital status, but because of the particular person she was married to.
Turning to the Plaintiff’s claim under the FSDO, “family status” is defined as having responsibility for the care of an immediate family member. However, the Plaintiff did not plead what responsibility or care she had to undertake for the Husband. During cross-examination, the Plaintiff also admitted that the Husband did not need any assistance with his daily living needs. It was apparent from the evidence that the termination of the Plaintiff’s IAA had nothing to do with her responsibility for caring for the Husband. As such, the Plaintiff’s family status discrimination claim failed.
Breach of Contract Claim
Although the Plaintiff argued that the Company had acted in breach of the alleged Good Faith Term and the Valid Reasons Term, the Court rejected the claim that these terms were implied in the IAA. The terms were neither necessary nor obvious to give business efficacy to the IAA and they also contradicted the express terms of the IAA, which did not require a party exercising its right to terminate the IAA to give a reason. Hence, the Plaintiff’s breach of contract claim failed.
The Court dismissed the Plaintiff’s claim entirely and ruled in favour of the Company’s counterclaim for Repayment.
Key takeaways
While the Hong Kong court’s clarification on what constitutes marital status discrimination is good news for employers, they should still exercise care and consider the possibility of such discrimination when dealing with married couples at work. For instance, the SDO contains an exception from marital status discrimination by not providing double benefits to married people, but this exception only applies to benefits or allowances relating to housing, education, air-conditioning, passage or baggage. The exception does not apply to medical and dental benefits or allowances, among others.
The judgment is available here.
