Employees can sometimes be quite vocal in their views about how their employer could do things better. However, the recent case of Golden Field Glass Works v Yeung Chun Keung should give employees a reason for pause before commenting negatively about their employers’ operations.
The decision
This case involved a claim in libel brought against a former employee. The claim arose out of an email sent by the employee to a customer in which he made negative comments about his employer’s factories and what he claimed was a high level of waste due to poor management and planning. The individual left his position with the company shortly thereafter.
The employer subsequently sued its former employee and succeeded. The court found that the email was defamatory and awarded the employer HK$100,000 in damages. In reaching this decision, the court was satisfied that the email amounted to an attack on the company’s efficiency in management and planning and implied that wasted costs would be passed on to customers, and that this message would have the effect of damaging the company’s reputation in the eyes of right-thinking members of society.
The employee’s defence
In this case, the employee sought to rely on two defences. Firstly, he raised the defence of justification, arguing that the message was true in substance and fact. However, the court preferred the evidence of the employer, and found that the employee had failed to establish that the email was true or the comments were fair.
Secondly, the employee sought to rely on the defence of qualified privilege, which exists to protect statements which are made where an individual has a “duty to speak”, because it is in the public interest to do so. This duty has been said to apply where “the great mass of right-minded men in the position of the defendant [would] have considered it their duty under the circumstances to make the communication”.
In this case, the employee claimed to have sent the email to the client after having heard that the client was hiring and he hoped to impress the client with his insight as to how efficiency and cost-effectiveness could be raised. In that context, the court had no difficulty in finding that the defence of qualified privilege did not apply.
In reaching that view, the court observed that while it was reasonable for an individual to describe one’s own experience when seeking employment, they were under no duty, whatsoever, be it legal, social or moral to “comment negatively on his current employer’s lack of efficiency and cost-effectiveness, especially when there was not any factual basis for such comments”.
Key takeaway for employers
This case demonstrates that (while not commonly exercised) there are options open to employers whose employees make unfavourable statements about them or their operations, even after the individual concerned ceases employment and can no longer be subject to internal disciplinary sanctions.
It also highlights the possibility that employees may face financial consequences for any unsubstantiated comments made about their employer or its business, where those comments tend to damage their employer’s reputation and thereby lower the company “in the eyes of right-thinking members of society”.
However, before deciding whether or not to sue, employers will need to balance carefully the damage caused by the statement(s) against the cost of bringing proceedings and assess the possibility and merits of any defence the employee may assert - in particular, whether the comment was based in fact and/or whether there was a public interest in the statement.
Further, as Hong Kong courts have traditionally awarded low levels of damages for defamation (and would seem to have done so here), in deciding whether or not to sue, employers should understand that the wasted costs of a defamation action are likely to greatly outweigh the likely damages award.
This article appeared in the Classified Post print edition as The perils of bad-mouthing your former employer.
