Board Matters

FACT: ARTICLE 47.2 (LANGUAGE CONSTRAINT)

Summary:

  • Article 47.2 stipulates that only German speakers can stand for election to the Board
  • The Article meets the definition of racial discrimination under Hong Kong law.
  • The vast majority of our members have stated that they want to see this constraint removed.
  • For over three years, GSIS has attempted to remove this constraint on eligibility
  • Article 47.2 has been used in the past to keep control of GSIS in the hands of a small group of individuals, many of whom have tried to block its removal; the Requisitionists propose to replace 47.2 with provisions that would likely return control of the School to this group

Article 47.2

  1. Article 47.2 of our Articles of Association (the “Articles”) states about the election of Directors that “Any Member who is fluent in written and spoken German is eligible for election”. This has meant that, in the past, only members who spoke German were able to serve on the Board of the GSIS Association.  Up to 80% of our parents would not be eligible for election. As a result of 47.2, past Boards did not in any way reflect the diversity that we see in our school’s class rooms and in our parent and alumni communities.  Even when 47.2 was supposedly enforced in the past, the actual level of German fluency of our Directors was “inconsistent” at best.

History

  1. For over three years and under successive Boards, the GSIS Association (“Association”) has been trying to amend its Articles. The primary reason for this undertaking has been a desire, widely held in the GSIS community at large, to remove this “German Fluency Constraint” from Article 47.2.
  2. In early 2017, an imminent complaint to the Equal Opportunities Commission (“EOC”) that the German Fluency Constraint was a violation of the Race Discrimination Ordinance (“RDO”) led to the appointment of a committee to spearhead the redrafting of our Articles. In addition to removing the German Fluency Constraint, this Articles Committee was also tasked with drafting amendments to ensure our Articles were brought into compliance with the requirements of the Education Bureau of Hong Kong and with the new Companies Ordinance, the law that governs companies in Hong Kong.  The original expectation was that the amendment of the Articles could be completed well before the March 2018 AGM.
  3. Since then, six general meetings of members (AGMs and EGMs) have passed and our Articles have still not been changed. At our EGM last December, while 68% of our members voted in favor of new draft Articles which had been endorsed by the ZfA (our German regulator), our Principal and the entire Board, the vote fell 7% short of the required 75%.  The efforts to amend our Articles have come at a significant cost to GSIS, both in terms of money and management time.  Worse than that, it has divided our community.

Unlawful Racial Discrimination?

  1. The German Fluency Constraint directly discriminates against non-German speakers. However, more problematic is that it also meets the definition of indirect racial discrimination in the RDO as confirmed by legal opinions obtained by the GSIS Association.  This is because the proportion of members who are from German, Austrian or Swiss national origin who are fluent in German is likely to be considerably greater than that of members who are from other national origins.
  2. The question remains whether this particular instance of racial discrimination is allowed under the RDO, since not all discrimination is illegal. The GSIS Association’s legal counsel in 2017 opined that it was illegal and therefore void and unenforceable.  An opinion from Senior Counsel Ashley Burns (“Burns SC”), obtained two days before the AGM in March 2019 by a previous Board under Mrs. Desiree Jebsen, considered that, on a fine balance (later explained by Burns SC as “not far from 50-50”), a court would find the German Fluency Constraint not in breach of the RDO.  He also agreed that the constraint falls under the RDO’s definition of racial discrimination (paragraph 44 of his Supplemental Joint Opinion).  The opinion from Burns SC put the legal validity of the German Fluency Constraint in Art. 47.2 in doubt.
  3. In March of this year, at the urging of the Education Bureau of Hong Kong (“EDB”) and in an effort to resolve the legal uncertainty around Art 47.2, the Board again obtained a legal opinion, this time from Mrs. Monica Carss-Frisk QC (“Carss-Frisk QC”). Carss-Frisk QC is based in London and is an authority in the field of discrimination.  In her opinion, she considers that Articles 47.2, 63 and 68 “involve unlawful race discrimination contrary to” the RDO.  Carss-Frisk QC concludes her opinion by stating:

I consider that Articles 47.2, 63 and 68 of the Articles of Association involve unlawful race discrimination contrary to the RDO.”

Contrary to the opinion by Burns SC, this opinion is not qualified by an “on fine balance” disclaimer.

  1. If the German Fluency Constraint breaches the RDO, then Article 47.2 is “invalid and of no effect” even if it is not deleted from our Articles, according to Burns SC in his Supplemental Joint Opinion, paragraph 6.5. This should be obvious: our Articles, as a private contract, is not above the law.
  2. In December 2018, under the chairmanship of Mrs. Jebsen, the Board decided to no longer enforce the German Fluency Constraint because it was deemed unlawful and, in any case, undesirable and not of this time. Since then, the diversity on the Board has increased markedly, better reflecting our GSIS community.
  3. Earlier this year, the Board decided again to allow any member to volunteer for election to the Board at the AGM in March. To avoid the risk of being in breach of Hong Kong law by virtue of discriminating against 80% of our members and depriving the GSIS Association of the experience, expertise and spirit of volunteerism of the non-German speaking part of our community.
  4. Throughout their Supporting Statements, the Requisitionists claim that the GSIS Association received clear legal advice that the German Fluency Constraint is legal and valid, that “there never was any serious doubt over [its] legal validity” and that the Board willfully acted against this advice by allowing non-German speakers on the Board. This is a gross and deliberate misstatement of the facts.  Burns SC opined that there was a close to 50% chance that the constraint was legal or, for that matter, illegal.  Carss-Frisk QC, an authority in the field of discrimination, states with conviction in her opinion that the German Fluency Constraint is illegal.
  5. It is the Board’s duty to act in the best interests of the GSIS Association, not to simply and blindly follow the Articles when doing so could put the GSIS Association at odds with the law.

Application to the High Court

  1. In January of this year the EOC notified us that a complaint had been lodged against GSISA on the basis that Article 47.2 continued to stand in breach of the RDO. The EOC also informed us that it was taking the complaint very seriously as a cause for possible action against GSISA.  The EOC mediated a conciliation agreement between the complainant and the GSIS Association in which the complainant agreed to not take legal action under the RDO as long as GSISA did not enforce the German fluency constraint and started legal proceedings at the District Court for declaratory relief on Articles 47.2, 63 and 68.
  2. Over the past year, some members have also accused certain directors of having been elected in breach of the Articles because they would not be fluent in German. In March and April of this year, the Board received letters sent by lawyers on behalf of a GSIS parent who threatened imminent legal action against GSISA and a number of its Board directors for not complying with the German Fluency Constraint.
  3. We thus found ourselves in a difficult position, faced with the choice to either (1) enforce what we believe to be an illegal, discriminatory and immoral rule and risk a very public and embarrassing legal action led by the EOC; or (2) not enforce the German Fluency Constraint and risk legal action by a parent who insists on enforcement, resulting in a costly and protracted Court case that could last for years and divide us further.
  4. Because only a Hong Kong Court can provide certainty about the validity of Art. 47.2, on May 6 the GSIS Association filed an application with the High Court for declaratory relief on:
  1. The validity of the German Fluency Constraint in our Articles; and
  2. The valid election and appointment of the 15 directors currently on the Board.

The substantive hearing is scheduled for June 12 and the judge has indicated that a decision is likely to be issued within a month thereafter.

Conclusion

  1. The opposition to changing our Articles has always been about the German Fluency Constraint. Of course its purpose has not been overt racism; rather, its purpose has always been to secure control of GSIS by a small group of individuals at the expense of the vast majority of our parents and members.  Discrimination is only the tool, not the objective.  However, that does not make it any less reprehensible nor any more defensible.
  2. The amendments proposed by the Requisitionists are designed to place control of the school back with that same small group of members. We do not believe that such an outcome would be in the interest of our members, our staff or, most importantly, our students.