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Employment Issues Arising from Social Events

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Employment Issues Arising from Social Events

octobre 4, 2019 by OLN Marketing

Since June 2019, there have been an ongoing series of demonstrations and protests in Hong Kong (the “Protests”) against the enactment of the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill (the “Extradition Bill”).  The Extradition Bill, if enacted, would allow local authorities to detain and extradite criminal fugitives who are wanted in territories with which Hong Kong does not currently have extradition agreements, including Taiwan and mainland China.

The Protests have dragged Hongkongers with different political views into tensions, which occur in families and workplace and between friends.

Over the months, there were reported and repeated news on respective employer’s decisions to terminate employees, allegedly based on the supportive messages or acts of those employees in the Protests.

These included pilots and flight attendants hired by a Hong Kong airline; producers and artists of TV broadcasting company; in-house lawyer of an investment bank and so on.  There was also a complaint against a trainee solicitor which almost affected his admission as a solicitor of Hong Kong.

Are employers entitled to terminate employment due to employees’ political views on social media or involvement in social activities like the Protests?

The right to freedom of speech or expression is enshrined in Article 27 of the Basic Law and Article 16 of the Bill of Rights. However, these rights are not absolute.  Any statement of speech damaging to national sovereignty, national security and territorial integrity is a violation of the constitutional and legal bases for the Basic Law.

Under common law, an employment contract can be terminated by reason of frustration, such as imprisonment of an employee, which renders the performance of the contract impossible.

Separately, under the Employment Ordinance, either the employer or the employee can unilaterally terminate an employment contract without providing a reason of such.

It is therefore not unlawful for an employer to terminate an employment contract of its employee if the employee was involved in an illegal act and got sanctioned, or in the other cases, to simply serve notice of termination or make payment in lieu of such notice without providing a reason for the termination. 

In reality, employers facing employees of different political views or getting involved in vigorous social activities, whether or not these affect the proper performance of their work duties, can simply give notice of termination or make a payment in lieu of notice to terminate their employment contracts.  

Guidance to employers

Considering the potential ongoing series of Protests, it is high time for employers to revisit their in-house policies to ensure that they have clear guidelines on employees’ personal conduct which may affect the proper performance of work duties, inter alias, including the use of social media (whether personal or corporate account), internal and external communications, and employees’ involvement in social activities.

Employers should be aware that on setting out their policies and guidelines, respect on the personal life, privacy and rights of freedom of speech of employees should be observed.  There should also be policies to ensure that no discrimination acts due to the differences in political views between staff members, like bullying and verbal assaults, would occur in the workplace or if does occur, can be properly dealt with.

If it has come to a situation where an employer needs to consider termination of employment due to the employee having been involved in any illegal act or his/her involvement in any social events has deterred the proper performance of his/her work duties, the employer has to consider the proper grounds of termination or whether one should be given at all.

It is notable that Hongkongers are becoming more sensitive to the political position of corporate entities regarding the Protests.  Employers should consider the reputation risks in taking any action against employees being involved in the Protests or alike, among all other considerations.

Guidance to employees

Recent instances of companies taking disciplinary actions against employees also serve as a reminder that the use of social media comes with responsibilities. Offensive statements, personal attacks or distasteful comments should generally be avoided as a matter of respect for others.

While balancing basic human rights and respect of personal life, employees should also recognize that enjoyment of technology in this age also brings intrusion upon personal privacy to some degree.

Employees may argue that acts done in private should not be regulated by their employers, it should be recognized that certain personal conduct of employees would bring about damage to the employer’s reputation and lead to operational disrupt.

We could recall that the Civil Aviation Administration of China requested Hong Kong airlines to provide lists of crew members involved in the Protests and would ban flights having those crew members from landing in the PRC or passing through the PRC airspace.  This left the employers with no choice but to terminate the employees in concern since the employees could no longer perform their duties properly.

If you are, as an employee, facing discrimination in the workplace or even termination due to your involvement in any social or political activity or expression of political views, you are advised to seek independent legal advice.

If you, whether an employer or employee, have any question regarding the topic discussed or on other employment issues, please contact one of the members of our Employment Practice Group.

Filed Under: Droit du Travail et de l’immigration Appliqué aux Entreprises

Protecting family assets when mental health deteriorates: The Enduring Power of Attorney compared with Court-appointed Committeeship

octobre 4, 2019 by OLN Marketing

As life expectancy rises, we see an increasing number of family patriarchs/matriarchs living longer, sometimes with decreased mental capacity. To protect family assets, younger family members may then wish to take over the management of family assets, but how do we ensure that this is done properly without being challenged in court in the future? 

The Enduring Power of Attorney (“EPOA”) regime under the Enduring Powers of Attorney Ordinance, Cap. 501 provides a great tool that allows a person to arrange, BEFORE mental capacity occurs, for someone else to step into his shoes to deal with property and financial decisions (but not decisions relating to medical or personal care) in the unfortunate event that he becomes mentally incapable. 

As explained below:

  • This tool can be effective even if there has already been an onset of mental incapacity.
  • The regime is far more convenient and cost-effective than using Part 2 of the Mental Health Ordinance, Cap. 136 to apply to the court to have a committee appointed to manage and administer the property and affairs of a mentally-incapable person AFTER the person’s condition renders him completely unable to make a voluntary and informed decision.  Under Part 2, the test for mental incapacity is stricter (harder to prove that someone is mentally incapable) whilst the costs and time involved in making the application and running the committee on a year-to-year basis are much higher.

 The formal requirements of creating a valid EPOA are:

  • in the form prescribed in the Enduring Powers of Attorney (Prescribed Form) Regulation, Cap. 501A
  • the attorney (i.e. the person given the power to handle the donor’s property and financial affairs) must be at least 18 years old; the attorney cannot be a trust corporation
  • the donor signs in front of the EPOA in front of a registered medical practitioner, a Hong Kong practising solicitor and 2 witnesses
  • the doctor must certify that the donor is mentally capable
  • the solicitor must certify that the donor appears to be mentally capable at the same time or within 28 days after the doctor signs
  • the donor must acknowledge that he signed the document voluntarily
  • the donor must specify what powers are to be given to the attorney (unlike the General Power of Attorney, the donor cannot give a general authority over all of his property and financial affairs)
  • if there are 2 attorneys, the donor must specify whether their powers are joint (the consent of both attorneys is required) or joint and several (either attorney can decide)
  • registration of the EPOA with the High Court Registrar (the Register is open for public inspection)

The substantive requirement: Mental capacity at the time of executing the EPOA. In HK, unlike in other common law jurisdictions, the law on the EPOA is still at a developmental stage. So far, our High Court in To Lee Wah Samuel v Yum Huin Ming [2019] HKCFI 1441 has interpreted incapacity as consisting of 2 elements:

  • an inability to understand the effect of the EPOA or an inability to make a decision to grant the EPOA by reason of:
  1. mental disorder, defined as mental illness, a state of arrested or incomplete development of mind which amounts to a significant impairment of intelligence and social functioning which is associated with abnormally aggressive or seriously irresponsible conduct, psychopathic disorder, or any other disorder or disability of mind which does not amount to mental handicap; OR
  2. mental handicap, defined as sub-average general intellectual functioning with deficiencies in adaptive behaviour; AND
  • an inability to communicate to any other person an intention or wish to grant the EPOA after someone has made a reasonable effort to understand him

The person who challenges the validity of an EPOA bears the burden of proof – see To Lee Wah Samuel, supra. 

Please note that both requirements (mental issue and inability to communicate) must be present for mental incapacity to be established.  However, a person does not necessarily lack the capacity to grant an EPOA even if he suffers from a mental handicap or disorder.  As long as he fully understands the nature and effect of the EPOA and voluntarily grants the EPOA to an attorney of his choice, the EPOA will be valid. In To Lee Wah Samuel, supra, the court cited the following passage from the UK case of Re K (Court of Protection) [1988] 1 Ch 31 at 315 with approval:

In practice it is likely that many enduring powers will be executed when symptoms of mental incapacity have begun to manifest themselves.  These symptoms may result in the donor being mentally incapable in the statutory sense that she is unable on a regular basis to manage her property and affairs.  But, as in the case of Mrs. F., she may execute the power with full understanding and with the intention of taking advantage of the Act to have her affairs managed by an attorney of her choice rather than having them put in the hands of the Court of Protection.  I can think of no reason of policy why this intention should be frustrated. 

In contrast, in order to persuade the Court that a committee should be appointed to manage and administer the property and affairs of a person under the Mental Health Ordinance, one must show an inability to actually manage his affairs (a higher threshold).  Further, there are far more steps and costs involved in a Court-appointed committeeship.  The explanation of this regime is beyond the scope of this article. It should be noted that once committeeship has been appointed, the EPOA would automatically be revoked (C v B re A: Mental Health [2018] 2 HKLDRD 1105):  

Practically-speaking, a valid EPOA can come into existence as long as the doctor and the solicitor conduct assessments that are procedurally and substantively correct and tailored to the donor’s circumstances (the widely popular MMSE test is not conclusive and other clinical tests should be considered depending on the circumstances), and both the doctor and the solicitor maintain sufficiently-detailed contemporaneous notes that would hold up during any potential cross examination. 

Finally, there are 3 additional issues that you should consider with your solicitor:

  • the validity period of the EPOA (some financial institutions have a policy of asking for general power of attorney to be “refreshed” on an annual basis) and there is a presumption of validity of the EPOA of only 12 months when faced against bona fide purchasers for value (section 14)
  • whether in the particular circumstances of the donor’s case, a number of assessments conducted over a period of time will increase the chances of having the validity of the EPOA upheld by a court if challenged
  • whether the Will of the donor needs to be “refreshed” and whether there is a need to create other legal documents dealing with the donor’s wishes after he loses capacity but before the end of his life such that all documents relating to the donor’s financial affairs are consistent with each other

If you wish to have a confidential discussion about the EPOA, court-appointed committeeship or other aspects of estate planning, or if you wish to challenge an EPOA that has already come into existence, please feel free to contact our partner, Ms Eunice Chiu at eunice.chiu@oln-law.com, +852 2186 1885.  Ms Chiu is an experienced disputes and private client solicitor, qualified to practise in Hong Kong and British Columbia, Canada. 

Filed Under: Résolution des Litiges

OLN Ranked in Chambers 2019 (Global and Asia-Pacific)

octobre 3, 2019 by OLN Marketing

We are glad to announce OLN departments and lawyers have been ranked in Chambers Global and Asia Pacific 2019.

Chambers Global

Departments:

  • Corporate / M&A: Independent Hong Kong Firms – Band 2
  • Dispute Resolution (International Firms) – Recognised Practitioner

Lawyers:

  • Gordon Oldham, Corporate / M&A – Senior Statespeople
  • Tracy Yip, Corporate / M&A – Band 2
  • Richard Healy, Dispute Resolution – Band 4
  • Vera Sung, Intellectual Property – Recognised Practitioner

Chambers Asia Pacific

Departments:

  • Corporate / M&A: Independent Hong Kong Firms – Band 2
  • Dispute Resolution: Litigation (International Firms) – Recognised Practitioner
  • Employment: Hong Kong Law (International Firms) – Band 3
  • Family / Matrimonial (International Firms) – Band 3

Lawyers:

  • Gordon Oldham, Corporate / M&A – Senior Statespeople
  • Tracy Yip, Corporate / M&A – Band 2
  • Richard Healy, Dispute Resolution: Litigation – Band 4
  • Stephen Peaker, Family / Matrimonial – Band 3
  • Vera Sung, Intellectual Property – Recognised Practitioner

About Chambers Rankings

Chambers rankings offer reliable recommendations on the best law firms and lawyers around the globe and in Asia-Pacific. Chambers has been the leading source of legal market intelligence for over 30 years now. Especially in the Asia-Pacific-wide rankings it covers the most internationally important areas of law, such as Arbitration, Capital Markets, and Corporate / M&A.

Filed Under: News

International Bar Association Annual Conference 2019 in Seoul

septembre 30, 2019 by OLN Marketing

The International Bar Association (IBA) Annual Conference is the premier conference for legal professionals worldwide to meet, share knowledge, network, build contacts and develop business. It also serves to advance the development of law and its role in business and society and to learn from the experience of others. This year, the conference had been held at the COEX Convention & Exhibition Center in Seoul on the 22-27 September 2019.

Anna Chan, Head of the Tax Advisory, Partner, has been invited to be the panelist speaker on the topic “Shadow Banking and its tax implication”. The session was well attended with over 50 officers and delegates all of whom are themselves tax experts of their home jurisdictions. Issues such as availability of tax incentives, risk of transparent entities, withholding tax on interest, interplay of DTA have been covered. Amongst the speakers, we have leading tax experts from the Netherlands, US, Canada, Germany and Luxembourg. The presentation has received lots of positive feedback.

Filed Under: Conseil Fiscal, News

Legal Challenges of using Robotic Process Automation (RPA)

septembre 30, 2019 by OLN Marketing

With the advance of technology, a lot of audit firms have been using Robotic Process Automation (RPA) in auditing. However, notwithstanding the advantages brought along by RPA, audit firms would at the same time be exposed to certain legal risks.

Anna Chan, Head of Tax Advisory, Partner, has recently given a talk at the Accounting & Finance Show HK 2019 on legal challenges relating to Robotic Process Automation (RPA) in accounting. The seminar focused on different means to mitigate legal risks in using RPA and demonstrated how audit firms can protect themselves through careful drafting of agreements in the aspects of intellectual properties issue, the liabilities allocation, data privacy and confidentiality.

The seminar was a great success with over 50 delegates from the Accounting and Finance industry attended.

Filed Under: Conseil Fiscal, News

Legal Update: Hong Kong-Guangdong Framework Agreement on Legal Exchange and Mutual Learning

septembre 26, 2019 by OLN Marketing

On September 7 2019, the Department of Justice entered into a framework agreement with the High People’s Court of Guangdong Province to facilitate the exchange and mutual learning by legal professionals in Hong Kong and Guangdong (the “Agreement”).

The Agreement

Hong Kong has been playing a vital role in the development of the Greater Bay Area. This Agreement takes it one step further by providing a platform for the Hong Kong legal sector to engage in meaningful exchange with its Guangdong counterpart, and to leverage opportunities in the Greater Bay Area.

Under the Agreement,  

  • Courts in Guangdong and legal bodies in Hong Kong will launch projects on legal aspects for mutual exchanges and collaboration for the enhancement of the legal development and safeguard in the Greater Bay Area; and
  • Mutual learning opportunities such as seminars will be held for judicial members and legal practitioners in both jurisdictions to forge a better understanding of each other’s legal system.

Implications

  • A communication mechanism between Guangdong and Hong Kong for the exchange of legal information encourages mutual undertaking on our respective legal system, which will be essential for the implementation of any future cross-boundary co-operation projects that must be underpinned by legislation and firmly rooted in the overarching principle of “One Country, Two Systems” enshrined in the Basic Law.
  • Given the growing economic and trading activities between Hong Kong and mainland China, mutual understanding of each other’s legal principles will help advocates in the Greater Bay Area better grasp the legal issues, expediting the process of dispute resolution.

Conclusion

The Agreement, when viewed in conjunction with the Legislative Council paper “Opportunities for Hong Kong’s Legal and Dispute Resolution Services in the Greater Bay Area” issued in March 2019, can be acknowledged as an attempt to speed up the legal cooperation in the Greater Bay Area that is commensurate with the development of an open economy.   

If you have any questions on the above or on any corporate and commercial law issues, please contact one of the members of the Corporate and Commercial Law team.

Filed Under: Droit des Sociétés et Droit Commercial

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