When is failure to renew pregnant employee’s employment contract unlawful?

The recently reported news of a community service centre’s (Centre) refusal to renew the employment contract of a pregnant employee (Employee) sparked concerns over possible employment and discrimination issues.

Factual background

The Employee was employed under a fixed term contract of one year. Towards the end of her one-year contract, she notified the Centre that she was pregnant and produced medical proof. The Centre explained that any employee was entitled to maternity leave as long as she was employed for at least 10 months and able to provide the necessary documentation as proof.

However, 5 days before the end of the Employee's contract term, the Centre orally informed her that her contract would not be renewed because her position had become redundant due to the Centre's new strategic direction to provide professionally accredited services. The Employee complained that she was made redundant only because the Centre did not want to pay for her maternity leave.

Breach of the Employment Ordinance?

Generally speaking, apart from the case of summary dismissal, it is unlawful under the Employment Ordinance to terminate the employment of a pregnant employee from the date on which she is confirmed pregnant by a medical certificate to the date on which she is due to return to work on the expiry of her maternity leave or the date of cessation of pregnancy if:

  1. the employee has been employed under a continuous contract; and
  2. she has served a notice of pregnancy to the employer.

In this case, non-renewal of a fixed term contract is unlikely to be treated as a termination of the Employee’s employment by the Centre which therefore may not amount to a breach of the Employment Ordinance.

Issues of discrimination?

Under the Sex Discrimination Ordinance, it is unlawful to discriminate against a woman, if on the ground of her pregnancy, she is treated less favourably.

The question is what was the reason for not renewing the Employee’s employment? Was it purely due to the change in the business direction of the Centre which led to the redundancy of the Employee’s role, or was the decision made (partly or otherwise) by reason of the Employee’s pregnancy?

If the Centre is able to prove on a balance of probability that the decision not to renew the Employee’s contract is purely due to redundancy and has nothing to do with her pregnancy, then the Centre is not in breach of the Sex Discrimination Ordinance. Accordingly, the answer will ultimately depend on the factual evidence submitted by both parties.