Hong Kong court rejects employer's last-minute challenge to wage claim, orders indemnity costs

A Hong Kong court has dismissed an employer's last-minute attempt to block an employee's wage claim on jurisdictional grounds, ruling that the application was filed too late and ordering the company to pay costs on an indemnity basis.

In a decision delivered on May 26, 2026, Deputy District Judge Adrian Lai rejected the employer's bid to strike out the employee's counterclaim for outstanding wages, finding that the District Court retained jurisdiction over the matter despite procedural changes during the litigation.

The employer, a food-and-beverage services company, had initiated legal proceedings against a former employee, alleging breaches of various common law duties following the end of their employment in May 2022. 

In response, the employee filed a counterclaim seeking approximately HK$58,000 in unpaid wages covering the period from June 2020 to May 2022, together with interest. Alternatively, the employee sought HK$20,000 relating to a dishonoured cheque.

Just one week before the scheduled trial, the employer applied to have the wage claim dismissed, arguing that the District Court lacked jurisdiction because the claim had not been properly transferred from Hong Kong's Labour Tribunal, which generally has exclusive authority to hear wage disputes under the Labour Tribunal Ordinance.

However, the court found that the wage claim had originally been filed before the Labour Tribunal, which declined jurisdiction and transferred the matter to the District Court under a new case number. A registrar later allowed the employee to discontinue the separate District Court action after the same claim was incorporated into the ongoing proceedings as a counterclaim.

Judge Lai held that the transferred wage claim and the counterclaim were effectively the same claim and that the court's jurisdiction remained intact. He concluded that discontinuing the separate file was simply a case-management measure designed to prevent parallel proceedings, rather than an abandonment of the claim or the court's authority to hear it.

In reaching the decision, the judge relied on established legal principles distinguishing a claim from a cause of action. He also rejected the employer's reliance on the High Court decision in Acumen Hong Kong Limited v Kwan Pak Kei Lawton, finding that the earlier case involved different circumstances and was therefore not applicable.

Having upheld the court's jurisdiction, Judge Lai dismissed the employer's application without addressing the employee's additional arguments on delay and estoppel, stating that they were unnecessary in light of his findings.

The court was particularly critical of the timing of the employer's jurisdiction challenge. The judge noted that the application was filed only days before trial, that no satisfactory explanation had been offered for failing to raise the issue earlier, and that the employer had not objected to the court's jurisdiction during earlier proceedings, including the pre-trial review.

The failed application also consumed half a day of court time that had been allocated for the trial.

Given these circumstances, Judge Lai ordered the employer to pay the employee's legal costs on an indemnity basis, a higher-than-standard level of costs, finding that the late jurisdiction challenge unnecessarily increased litigation expenses and delayed the proceedings.