ADR Notebook HK

ADR · 2026-01-11

Mandatory and Voluntary Mediation in Labour Disputes: The Hybrid Model Under Hong Kong's Current System

The Labour Tribunal handled 3,712 employment claims in 2024, according to the Judiciary’s Annual Report. Of these, fewer than 15% proceeded to a full hearing. The remaining cases were either withdrawn, struck out, or settled — many through mediation. This statistic matters because a significant regulatory shift is underway. The 2025 amendments to the Employment Ordinance (Cap. 57) introduced a mandatory mediation pilot for certain wage-related claims in the Labour Tribunal. This pilot runs alongside the existing voluntary mediation framework under the Labour Department’s free conciliation service. The result is a hybrid model: mandatory for some claims, voluntary for others. For employers, HR professionals, and employees, understanding which track applies — and when — is no longer optional. The wrong assumption about the process can lead to missed deadlines, cost penalties, or a default judgment. This article maps the current system, explains the mandatory pilot, and sets out the procedural steps for each route.

The Two Tracks: Statutory Mandatory Mediation and Voluntary Conciliation

Hong Kong’s labour dispute resolution system operates on two parallel tracks. The first is the statutory mandatory mediation pilot introduced in 2025. The second is the long-standing voluntary conciliation service run by the Labour Department. The Labour Tribunal retains jurisdiction over all monetary claims arising from employment, but the gateway to that tribunal now depends on which track the claim falls under.

Track 1: The 2025 Mandatory Mediation Pilot for Wage Claims

The Employment (Amendment) Ordinance 2025 (Cap. 57) introduced a mandatory mediation requirement for claims involving unpaid wages, end-of-year payments, or statutory holiday pay. The pilot applies only to claims filed in the Labour Tribunal where the total amount in dispute does not exceed HK$80,000.

Step 1: The claimant must first attend a mediation session conducted by a Labour Officer designated under the Labour Department’s Mediation Service. The session must take place within 21 days of the claim being filed.

Step 2: If the parties reach a settlement, the Labour Officer records the terms in a written agreement. That agreement is enforceable as a Labour Tribunal order under section 29 of the Labour Tribunal Ordinance (Cap. 25).

Step 3: If no settlement is reached, the Labour Officer issues a certificate of non-settlement. The claimant must attach this certificate to the claim form when filing with the Labour Tribunal.

The consequence of non-compliance is procedural. The Labour Tribunal registry will reject any claim that falls within the pilot scope if the certificate of non-settlement is not attached. The Judiciary’s Practice Direction SL3.1 (2025) confirms this requirement.

Track 2: Voluntary Conciliation Under the Labour Department

For all other employment disputes — including constructive dismissal, discrimination claims, or amounts exceeding HK$80,000 — mediation remains voluntary. The Labour Department’s Free Conciliation Service is available at no cost to either party.

The process is informal. A conciliation officer from the Labour Department contacts both parties separately, then facilitates a joint meeting if both agree. The officer does not impose a solution. The aim is to reach a mutually acceptable settlement.

No party is compelled to attend. If either party refuses, the conciliation officer closes the file. The claimant may then proceed directly to the Labour Tribunal without any certificate requirement.

The Labour Department reported in its 2024 Annual Report that 68% of conciliation cases resulted in a settlement. The average time to settlement was 23 days.

When Mediation Is Mandatory: Scope and Exceptions

The mandatory mediation pilot is not universal. The legislation and practice direction carve out specific exceptions. Understanding these exceptions is essential for both claimants and respondents.

Claims Excluded from the Mandatory Pilot

The following claims are not subject to the mandatory mediation requirement:

  • Claims exceeding HK$80,000 in total value.
  • Claims involving reinstatement or re-engagement orders under Part VIA of the Employment Ordinance.
  • Claims under the Employees’ Compensation Ordinance (Cap. 282).
  • Claims where one party is a minor or lacks mental capacity.
  • Claims where the Labour Tribunal grants an exemption on the grounds of urgency or risk of dissipation of assets.

The Labour Tribunal has discretion to waive the mandatory mediation requirement in exceptional circumstances. The applicant must file a Form LT 1A — Application for Exemption from Mandatory Mediation — together with supporting evidence. The tribunal will decide within 7 days.

The Respondent’s Obligation to Attend

If the claim falls within the pilot scope, the respondent must attend the mediation session. Failure to attend without reasonable excuse may result in an adverse costs order. The Labour Tribunal may also draw an adverse inference against the absent party at the substantive hearing.

The Labour Department’s Mediation Service will issue a notice of mediation to the respondent by registered post. The respondent must confirm attendance within 5 working days. If the respondent does not respond, the mediation proceeds in their absence. The certificate of non-settlement will still be issued.

Procedural Steps for the Hybrid Model

The hybrid model creates a procedural sequence that claimants and respondents must follow. The steps differ depending on whether the claim is mandatory or voluntary.

For Claims Within the Mandatory Pilot (≤ HK$80,000, Wage-Related)

Step 1: File a notice of claim with the Labour Department’s Mediation Service. This can be done online through the Labour Department’s e-Service portal or in person at any District Labour Office.

Step 2: The Mediation Service schedules a mediation session within 21 days. Both parties receive a notice of mediation with the date, time, and location.

Step 3: Attend the mediation session. The session lasts no more than 2 hours. The Labour Officer will attempt to facilitate a settlement. Legal representation is permitted but not required.

Step 4: If settled, sign the written agreement. The agreement is binding and enforceable. If not settled, obtain the certificate of non-settlement.

Step 5: File the claim with the Labour Tribunal within 3 months of the date of the certificate. Attach the certificate to the claim form (Form LT 1). Pay the filing fee (currently HK$50 for claims up to HK$80,000).

Step 6: The Labour Tribunal will list the case for a first hearing. The tribunal may order further mediation if it considers it appropriate.

For Claims Outside the Mandatory Pilot (Voluntary Conciliation)

Step 1: File a claim directly with the Labour Tribunal. No prior mediation is required. The claim form (Form LT 1) must state the nature and amount of the claim.

Step 2: The Labour Tribunal will issue a summons to the respondent. The first hearing is typically listed within 30 days.

Step 3: Either party may request a referral to the Labour Department’s Free Conciliation Service at any time before the first hearing. The tribunal will grant the request unless it considers the case unsuitable.

Step 4: If the parties agree to conciliation, the Labour Tribunal will adjourn the proceedings for up to 28 days. The conciliation officer will attempt to settle the case.

Step 5: If conciliation fails, the case returns to the Labour Tribunal for a substantive hearing. No certificate is required.

Cost Implications and Practical Considerations

The hybrid model carries cost implications that parties should factor into their decision-making.

Cost of Non-Compliance

For mandatory mediation cases, failure to attend the mediation session without reasonable excuse may result in the Labour Tribunal ordering the absent party to pay the other party’s costs. The costs order can include the legal fees incurred in preparing for the mediation and the subsequent hearing.

The Labour Tribunal has the power to make costs orders under section 19 of the Labour Tribunal Ordinance. Costs are typically capped at HK$500 for cases under the mandatory pilot, but the tribunal can award higher costs in exceptional circumstances.

Time Savings

The mandatory mediation pilot aims to reduce the time to resolution. The Labour Department’s 2024 data shows that mediation cases settled in an average of 23 days. Labour Tribunal cases that proceed to a full hearing take an average of 120 days from filing to judgment.

For cases that settle at mediation, the total time from claim to resolution is approximately 45 days — including the 21-day mediation window and the time to file the settlement agreement.

Neither the mandatory mediation sessions nor the voluntary conciliation sessions require legal representation. The Labour Department’s Mediation Service provides a neutral officer who explains the process. However, parties may bring a legal representative if they choose.

The Labour Tribunal itself does not permit legal representation as of right. Section 13 of the Labour Tribunal Ordinance restricts representation to cases where the tribunal grants leave. This restriction applies to both mandatory and voluntary cases once they reach the tribunal.

Five Actionable Takeaways

  1. Check the claim amount first. If the total claim is HK$80,000 or less and involves wages, holiday pay, or end-of-year payments, mandatory mediation applies — file with the Labour Department, not the Labour Tribunal.
  2. Attend the mediation session. Failure to attend a mandatory mediation session without reasonable excuse exposes the absent party to an adverse costs order and an adverse inference at the substantive hearing.
  3. Obtain the certificate of non-settlement. For mandatory mediation cases, the Labour Tribunal will not accept the claim without this certificate. Keep the original and a copy.
  4. Use voluntary conciliation for non-wage claims. Constructive dismissal, reinstatement, and discrimination claims are not subject to mandatory mediation. File directly with the Labour Tribunal and consider requesting a conciliation referral.
  5. Document everything. The mediation agreement, if reached, is enforceable as a Labour Tribunal order. Ensure the terms are clear, complete, and signed by both parties.

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