Can verbal promises override written terms? Hong Kong court decides
A District Court in Hong Kong recently dealt with an employment dispute where a senior engineer argued that his employment contract was modified by an oral agreement allowing flexible working arrangements.
The worker claimed he was wrongfully dismissed after refusing to report to a new office location, while his employer accused him of breaching contractual obligations and confidentiality duties.
This case raised important questions about workplace flexibility, reporting obligations, and the validity of verbal modifications to written employment contracts that many professionals might face in their careers.
The dispute emerged from a project where the employer hired the senior mechanical engineer in July 2017 for a monthly salary of HK$60,000. The employment contract included specific terms about confidentiality, intellectual property rights, and reporting obligations.
The relationship between the company director and another manager who recommended the worker deteriorated in January 2018. This led to the director wanting to directly supervise the senior mechanical engineer's work instead of leaving it to the other manager.
When instructed to report to a new office location, the senior mechanical engineer refused, claiming "When we signed the contract, [the director] said [I could work] on flexible working hours, [another manager] and [a communications manager] both heard of it. That constitutes as an oral agreement."
The senior mechanical engineer's employment ended after he refused multiple requests to report to the new office. The termination letter stated the worker had "deliberately refused to report duty at the assigned place and have taken leave without requesting or receiving prior permission."
During court proceedings, the senior mechanical engineer maintained that an oral agreement modified his written employment contract, allowing flexible hours and different reporting arrangements.
The court rejected this argument, stating it "defies commercial sense for the [employer] to enter into the alleged Oral Agreement, pursuant to which it would have to pay the [worker's] salary whilst all the products of the [worker's] R&D would belong to another company."
A central issue was the timing of the project's development. The senior mechanical engineer argued he had completed the main work before joining the employer company, while working as a consultant for another firm.
The court accepted this position, finding "no evidence that the [worker] had produced any prototype during his employment with the [employer]." This finding significantly impacted the employer's claims about confidentiality and intellectual property rights.
The worker later submitted a report documenting his contributions during employment. Expert witnesses confirmed that "the [worker] had done some work on the smart pillow and both experts agree that the [worker] has done a lot of literature review."
The court determined that while the senior mechanical engineer breached his employment contract by not reporting to the new office and by working for his own company without permission, these breaches hadn't caused provable financial losses to the employer.
Under Hong Kong's Employment Ordinance, the court found that "The [employer] is therefore entitled to terminate the Employment Contract without notice or payment in lieu."
However, regarding compensation, the court ordered that "The [employer] do pay arrears of wages in the sum of HK$75,048.38 and annual pay leave in the sum of HK$14,483.32 to the [worker]."
