It is generally accepted that individuals who hold substantial influence or authority within an organisation are expected to exercise that power with corresponding responsibility. In particular, those whose roles enable them to shape strategic or operational outcomes are generally understood to owe duties that require them to act with integrity and in the best interests of the business, rather than pursuing personal advantages.

When an employee is also a director, the existence of fiduciary duties is well-established. However, many organisations operate with senior executives - such as Presidents, Chief Operating Officers, or Heads of Department - who hold substantial power and influence over company affairs without ever being appointed to the board. Can employers expect those individuals to look out for the company's interests at the expense of their own?

The recent decision in Law Kee Alice v Kenye Ltd and Another explores this very question and provides valuable guidance on when senior employees may be treated as fiduciaries.

Background

The claimant, Ms Law Kee Alice, was employed by both Keyne Ltd and Mandarin Films Limited and held the position of "President". When Keyne ran into financial difficulties, she agreed to a pay cut, and a supplemental employment letter was signed in March 2022 by Keyne’s executive director and CEO, Mr Zhang Li.

When Ms Law subsequently terminated her employment because her salary had gone unpaid for more than one month (a right available to her under section 10A of the Employment Ordinance), she brought a claim at the Labour Tribunal for long service payment under the supplemental letter, totalling HK$1,703,207.24.

Her employers tried to invalidate the letter. Their case rested on Mr Zhang’s evidence that he (i) was unfamiliar with Hong Kong employment law, (ii) did not know about the statutory limits on severance and long service payments or the MPF offsetting mechanism, and (iii) would not have signed the supplemental letter had he been aware of these provisions. They also contended that Ms Law owed a duty to protect the employer’s interests and should have disclosed certain statutory limits on severance payments before the employer signed the supplemental terms, either as part of her duty of good faith and fidelity as an employee, or because her senior position made her an “ad hoc fiduciary”. Her failure to disclose these matters rendered the supplemental letter invalid.

The central question became whether a senior employee owes a fiduciary duty to volunteer information during negotiations over her own contractual entitlements.

Tribunal’s findings and High Court’s reasoning

The Labour Tribunal found in favour of Ms Law and upheld the validity of the supplemental letter. It rejected the employer’s case on credibility grounds and concluded that the employer had not established any duty requiring Ms Law to volunteer statutory information when negotiating her own terms.

On appeal, the Court acknowledged that all employees owe a duty of good faith and fidelity, but drew a clear line between that duty and fiduciary obligations. The duty of good faith requires an employee to have regard to the employer’s interests, but it does not require the employee to act solely on those interests over their own, particularly when negotiating their own contract.

Here, Ms Law was negotiating for herself, and the employer was represented by its own senior executives. In these circumstances, the Court saw no principled basis for imposing a positive obligation on Ms Law to volunteer information about the statutory framework that the employer could (and should) have considered independently.

On the employers’ alternative argument, the Court applied the analytical framework set out in University of Nottingham v Fishel [2000] ICR 1462, endorsed by the Hong Kong Court of Appeal in High Fashion New Media Corporation Ltd v Leong Ma Li [2024] HKCA 10677. It confirmed that an employment relationship is not inherently fiduciary in character. Fiduciary duties may arise where specific contractual obligations place an employee in a position where equity demands that they act solely in the employer's interests, but the Court must identify with care the particular duties undertaken before reaching that conclusion. The Court held that Ms Law was simply negotiating her own employment terms with a listed company that was well-placed to protect its own interests. The mere fact of being a "very senior employee" was "plainly not sufficient" to justify imposing fiduciary obligations.

None of the proposed grounds of appeal were found to be arguable. Leave was refused, the supplemental letter was upheld as valid and binding, and Ms Law was entitled to her long service payment calculated under its terms.

What should employers take away from this?

• Seniority and good faith do not equate to fiduciary duties. Even employees in the most senior non-director positions do not automatically owe fiduciary duties. The duty of good faith and fidelity is limited. It does not require self-sacrifice, volunteering information, or protecting the employer from its own failure to obtain advice. It simply requires the employee not to act disloyally or dishonestly. If employers want specific fiduciary-type protections, they should consider including express contractual obligations, such as duties to disclose conflicts of interest or to act in the company’s best interests in defined circumstances rather than relying on implied duties that the courts may not recognise.
• Employees have no disclosure duty when negotiating their own terms. When an employee is negotiating their own employment package, they have their own legitimate interests to protect. Employers cannot expect employees to volunteer information that might weaken their own negotiating position. In practice, this means employers should ensure that whoever is negotiating on behalf of the company are properly informed about relevant statutory entitlements and to seek legal advice where necessary.
• Written agreements will be upheld unless there are compelling grounds to set them aside. Hong Kong’s tribunals and courts will give effect to written agreements as signed. Claims that a signatory "did not read" or “did not understand” the document before signing are unlikely to succeed, particularly where the signatory is a sophisticated businessperson. Employers should consider introducing policies or mechanisms whereby non-standard employment terms are reviewed by multiple decision-makers within the company or external legal advisers before they are executed.

Conclusion

The case confirms that fiduciary obligations are exceptional in employment relationships and will not be imposed merely because an employee holds a senior role. When negotiating their own contractual terms, employees are not obliged to educate or warn their employer about relevant legal frameworks. Employers cannot shift responsibility to employees for the employer’s failure to understand statutory entitlements or contractual terms. This decision reinforces the limits of the duty of good faith and underscores the importance of employers taking responsibility for their own due diligence when approving employment terms.

羅琦 (Law Kee Alice) v 金奧國際股份有限公司 (Keyne Ltd) and 東方電影出品有限公司 (Mandarin Films Limited) [2026] HKCFI 799 – judgment available here.