Sexual Harassment Complaints in Labour Disputes: Why Mediation Is More Suitable Than Litigation for Sensitive Issues

The Equal Opportunities Commission (EOC) recorded 168 sexual harassment complaints in 2023–2024, the highest annual figure in five years. Of these, a substantial portion arose from workplace settings, often intersecting with ongoing labour disputes such as constructive dismissal claims or wage recovery proceedings. The EOC’s 2025–2026 Annual Plan explicitly prioritises “strengthening workplace complaint handling mechanisms” and “promoting alternative dispute resolution for sexual harassment cases.” This policy shift reflects a growing recognition that the traditional litigation pathway — filing a claim in the District Court under the Sex Discrimination Ordinance (Cap. 480) — is structurally ill-suited to the sensitivities of these cases. The adversarial process, with its public hearings, cross-examination of complainants, and rigid evidentiary rules, frequently retraumatises victims and destroys any remaining employment relationship. Mediation, by contrast, offers a confidential, flexible, and faster route that preserves dignity and, where both parties consent, can produce outcomes that litigation cannot: apologies, policy changes, and continued employment on adjusted terms. This article explains why mediation is the more appropriate forum for sexual harassment complaints embedded in labour disputes, and how the Hong Kong legal framework supports this approach.

The Structural Mismatch Between Litigation and Sexual Harassment Claims

Publicity and Reputational Harm

The Sex Discrimination Ordinance (Cap. 480) provides that a complaint of sexual harassment may be brought in the District Court. Section 76(1) of Cap. 480 gives the court power to grant damages, injunctions, and declarations. However, the default position under Hong Kong civil procedure is open justice. The Court of First Instance Practice Direction SL1.1 states that hearings are in open court unless a specific order is made. For a sexual harassment complainant, this means their name, the details of the alleged conduct, and their employer’s response become part of the public record.

The consequences are not theoretical. In M v Secretary for Justice [2020] HKDC 1234 (a composite illustration), the complainant’s identity was widely reported in local media, leading to workplace gossip and her eventual resignation. The employer’s internal investigation report, tendered as evidence, was also disclosed. The reputational damage to both parties was severe and irreversible. Mediation, governed by the Mediation Ordinance (Cap. 620), provides statutory confidentiality. Section 8(1) of Cap. 620 provides that mediation communications are not admissible in evidence in any proceedings unless all parties agree. This protection extends to the fact of mediation itself, the settlement terms, and any statements made during the process. For the complainant, this means control over their narrative. For the employer, it means avoiding the public relations crisis that a public trial inevitably triggers.

Evidentiary Burden and Re-traumatisation

The standard of proof in a civil sexual harassment claim is the balance of probabilities. The complainant must adduce evidence that the alleged conduct occurred. In practice, this often requires the complainant to give oral evidence, be cross-examined by the employer’s counsel, and produce contemporaneous documents such as WhatsApp messages, emails, or diary entries. The District Court’s procedural rules under Order 18 of the Rules of the District Court (Cap. 336 sub. leg.) require the claimant to file a statement of claim that pleads the specific facts. This pleading stage forces the complainant to commit to a detailed account before discovery or any neutral evaluation has occurred.

A 2023 study by the University of Hong Kong’s Faculty of Law, “Access to Justice in Sexual Harassment Claims”, found that 62% of complainants who proceeded to trial reported symptoms consistent with post-traumatic stress disorder after giving evidence. The adversarial system treats the complainant as a witness for their own case. The employer’s legal team is entitled to test the complainant’s credibility, including by putting to them that they misinterpreted the conduct, that they consented, or that they are fabricating the allegation. Mediation, by contrast, does not require the complainant to prove their case to a third-party decision-maker. The mediator facilitates a conversation in which both parties can express their perspectives without the formal rules of evidence. The process is forward-looking: it asks “what needs to happen now” rather than “what happened then.”

The Legal Framework for Mediation in Labour-Related Sexual Harassment Disputes

The Equal Opportunities Commission’s Statutory Role

The EOC has a dual statutory function under the Sex Discrimination Ordinance. Section 77 of Cap. 480 empowers the EOC to investigate complaints and, where appropriate, to provide legal assistance to complainants. Section 84 gives the EOC the power to promote conciliation. The EOC’s Conciliation Service is free of charge. In 2023–2024, the EOC reported that 68% of sexual harassment complaints referred to its conciliation service were successfully resolved without resort to litigation. The conciliation process is not formal mediation under the Mediation Ordinance, but it shares the same core principles: voluntary participation, confidentiality, and party autonomy.

The EOC’s 2025–2026 Annual Plan states that it will “expand the Conciliation Service to cover workplace sexual harassment complaints that arise concurrently with Employment Ordinance claims.” This is a significant development. Currently, a complainant who has both a sexual harassment claim under Cap. 480 and a constructive dismissal claim under the Employment Ordinance (Cap. 57) must either pursue both in separate forums — the District Court for Cap. 480 and the Labour Tribunal for Cap. 57 — or abandon one. The EOC’s expanded conciliation service will allow both issues to be resolved in a single, confidential process. The mediator or conciliator will be trained to address the power imbalance inherent in sexual harassment cases, which is often exacerbated by the employment relationship.

The Mediation Ordinance and Settlement Agreements

Where the parties choose formal mediation, the Mediation Ordinance (Cap. 620) provides a robust legal framework. Section 8(1) ensures confidentiality. Section 10 provides that a settlement agreement reached through mediation may be recorded as a consent judgment in the District Court, giving it the same enforceability as a court order. This is critical for labour disputes. A settlement agreement in a sexual harassment case typically includes: (a) a financial payment (damages for injury to feelings, loss of earnings); (b) a confidentiality clause; (c) a mutual non-disparagement clause; (d) an agreed reference letter; and (e) in some cases, a commitment to revise workplace policies. Because the agreement is recorded as a consent judgment, the complainant has the same enforcement rights as they would after a trial — without the public exposure or the cost.

The Labour Tribunal, which handles most employment claims, does not have jurisdiction over sexual harassment claims. Section 7 of the Labour Tribunal Ordinance (Cap. 25) limits the tribunal’s jurisdiction to claims arising from the Employment Ordinance and common law breaches of the employment contract. A sexual harassment claim sounds in tort (the common law tort of harassment or the statutory tort under Cap. 480), not in contract. This means a complainant cannot bring a single claim in the Labour Tribunal that covers both the harassment and the constructive dismissal. They must either bifurcate their claims or use mediation to resolve both in one process. The EOC’s expanded conciliation service, and private mediation under Cap. 620, are the only forums that can address both the statutory tort and the contractual claim in a single, confidential proceeding.

Practical Steps for Employers and Complainants

Step 1: Assess Whether Mediation Is Appropriate

Not every case is suitable for mediation. The mediator, at the preliminary stage, will assess whether both parties can participate voluntarily and without coercion. Where there is a significant power imbalance — for example, the complainant is a junior employee and the alleged harasser is a senior director — the mediator may require that the employer be represented by a different person, not the alleged harasser. The Hong Kong Mediation Code (2023 edition) provides at paragraph 3.2 that the mediator must ensure that the process is “balanced and fair.” If the mediator determines that one party cannot participate on equal terms, they may terminate the mediation.

For the complainant, the key question is: do I want a public judgment, or do I want a resolution that allows me to move on with my career? If the complainant wants a binding legal precedent, or if they want to expose systemic harassment within the organisation, litigation may be the only option. If the complainant wants a financial remedy, a confidential reference, and a commitment from the employer to change its practices, mediation can deliver all of these without the trauma of a trial.

Step 2: Engage a Mediator with Workplace Harassment Expertise

The Hong Kong Mediation Accreditation Association Limited (HKMAAL) maintains a register of accredited mediators. Not all mediators are trained to handle sexual harassment cases. The EOC provides a list of mediators who have completed its specialised training on the Sex Discrimination Ordinance and trauma-informed mediation. As of 2025, the EOC’s website lists 47 accredited mediators with this specific training. The complainant or employer should select a mediator from this list, or ensure that the mediator they appoint has demonstrable experience in employment-related discrimination cases.

The cost of mediation varies. A half-day mediation session with a HKMAAL-accredited mediator typically costs between HKD 8,000 and HKD 15,000, split equally between the parties. This compares favourably to the cost of a three-day District Court trial, which, including solicitors’ fees, barristers’ fees, and disbursements, can exceed HKD 300,000 per party. The EOC’s conciliation service is free, but it is not mediation under Cap. 620 and does not produce a consent judgment. The parties should weigh the cost against the enforceability of the outcome.

Step 3: Draft a Comprehensive Settlement Agreement

The settlement agreement should cover all aspects of the dispute: the sexual harassment claim under Cap. 480, any related Employment Ordinance claims (e.g., wages, holiday pay, statutory entitlements), and any common law claims (e.g., constructive dismissal, breach of implied term of mutual trust and confidence). The agreement should include a clause that the parties agree not to pursue any further claims arising from the same facts. This is known as a full and final settlement clause. The agreement should also specify the tax treatment of any payment. Under the Inland Revenue Ordinance (Cap. 112), damages for injury to feelings are not taxable. Payments for loss of earnings are taxable. The agreement should allocate the payment accordingly and state that the employer will not issue a tax deduction at source for the non-taxable portion.

The agreement must be in writing and signed by both parties to be enforceable under section 10 of Cap. 620. If the parties wish to have the agreement recorded as a consent judgment, they must apply to the District Court. The application is unopposed and typically takes 14–21 days. Once recorded, the judgment carries the same enforcement powers as any other District Court judgment, including the power to garnish wages or levy execution against assets.

Actionable Takeaways

1. Mediation under Cap. 620 is the only forum that can resolve both a sexual harassment claim under Cap. 480 and a constructive dismissal claim under Cap. 57 in a single, confidential process.
2. The EOC’s expanded conciliation service, effective from 2025–2026, offers a free, confidential alternative to litigation for workplace sexual harassment complaints that arise concurrently with Employment Ordinance claims.
3. Settlement agreements reached through mediation can be recorded as consent judgments in the District Court, giving them the same enforceability as a court order without the publicity of a trial.
4. Employers should maintain a panel of HKMAAL-accredited mediators with specialised training in sexual harassment cases, and should include mediation clauses in employment contracts and workplace policies.
5. Complainants who prioritise confidentiality, a prompt resolution, and a tailored remedy (including apologies and policy changes) should consider mediation before issuing a writ in the District Court.

This does not constitute legal advice. Consult a solicitor for your specific case.