Who is applied to?
The Employment Ordinance is the most important piece of legislation governing conditions of employment in Hong Kong, this legislation provides the fundamental protection to employees including payment of wages, restrictions on wages deductions, provision of statutory holidays and extra to ALL employees in Hong Kong, no matters the hours of work done by an employee.
It applies to all employees excludes the condition of following:
- a family member who lives in the same dwellings as the employer
- an employee as defined in the Contracts for Employment Outside Hong Kong Ordinance
- a person serving under a crew agreement under the Merchant Shipping (Seafarers) Ordinance, or on board a ship which is not registered in Hong Kong; and
- an apprentice whose contract of apprenticeship has been registered under the Apprenticeship Ordinance, other than certain provisions of the Employment Ordinance.
How is an employment established?
Every employment is bounded by an agreement made between an employee and employee regarding the employment conditions. This agreement can be made verbally or in writing form. Then, the agreement is legally referred to “Contract of Employment”.
“Contract of Employment” should include both express terms (i.e. the terms that have been specifically mentioned and agreed by both parties at the time the contract is made.) and also implied terms (i.e. the terms that is so obviously to both parties included that it did not need to be mentioned.)
In the free market like Hong Kong, both parties are free to negotiate and agree on the terms and conditions of employment within the scope of Employment Ordinance and other law.
Please be reminded any terms of the employment contract cannot degrade and extinguish the rights and thus protection on the employee.
What are the conditions of “Contract of Employment”?
Conditions of Employees’ Services
An employer is required to express clearly to every employee about the conditions of this employment in prior to the begin of employment, here are the conditions must be expressed:
- wages (including rate of wages, overtime, allowance and their calculation methods.)
- wage period
- notice period for termination of contract
- extra payment (including end of year payment and/or proportion payment, and their period.)
The employer must give one of the written copy of the contract to the employee for retention (in case that the contract is made in verbal, the employer must provide the above information in writing if the employee requests a written copy.)
When the employer is going to make any changes in these conditions of service, no matter these changes are in proposal only or actually taking place, the employer is responsible to inform the employee. Written amendment must be made between both parties and a copy must be kept by the employee.
Duration of Employment Contract
Every contract of employment is implied to be a contract for one month and renewable from month to month when the contract is deemed as “continuous” and without any express agreement to the contrary.
Wage and Employment Records
It is the employer responsibility of all time to keep record regarding to the wage and employment history of every employee for the preceding 12 months. All the records must be kept at the employer’s place of business or employee’s place of employment, and be kept for a period of not less than 6 month after the cease of an employment.
The records must cover the following:
- name and identity card number of the employer
- job title
- beginning date of employment
- wages expense in each wage period
- wage period
- periods of leave (including sick leave, annual leave, holiday leave and any leave period with payment details)
- end of year payment
- notice period for termination of contract
- termination date of employment (if any)
According to Statutory Minimum Wage Ordinance, the employer has to keep the total number of hours worked in each wage period for the calculation of employee’s entitled amount of statutory minimum wage if applicable.
What is “Continuous Contract of Employment”?
In addiction to the fundamental protection enjoyed by all employees, further benefits are offered to employees who are employed under a “Continuous Contract of Employment” – including rest day, paid annual leave, sickness allowance, severance payment, long service payment, and extra.
By legal definition, an employee is regarded as being employed under a “Continuous Contract of Employment” when he has been employed continuously by the same employer for not less than four weeks (28 days) covering at least 18 hours worked in each week.
In case of dispute to the employment, the EMPLOYER is liable to proof that it is not a continuous contract.
What are the matters relate to “wages”?
Under the provision of Employment Ordinance (as well as common understanding), meaning of wages is as follows:
- all remuneration
- allowances (e.g. traveling allowances, attendance allowances)
- service charges (i.e. calculated in respect of work done or work to be done)
- overtime payment, if it is of a constant character, or its monthly average over the past 12 months is not less than 20% of the average monthly wages during the same period.
On the contrary, wages EXCLUDE the following:
- the value of any accommodation, education, food, fuel, water, light or medical care provided by the employer
- employer’s contribution to any retirement scheme
- bonus payment. end or year payment, gratuity payable which is of gratuitous nature or is payable only at the discretion of the employer
- the value of any traveling concession or traveling allowance for actual expenses incurred by the employment
- any sum payable to the employee for compensate employee’s expenses incurred by the nature of the employment
The definition of wages is important because it affect the calculation of employee’s entitlements to end of year payment, maternity leave pay, severance payment, long service payment, sickness allowance, holiday day, annual leave pay and wages.
Except from the situations listed as below, employers are strictly prohibited from deducting wages from their employees.
- Absence from work
- The sum to be deducted must be proportionate the the period of absence)
- Damage or loss of employer’s goods, equipment, or property to employee’s neglect or default
- In any situation, the deduction must not exceed HK$300 in one case, and the maximum deduction in a wage period must not exceed 1/4 of the wages payable in that period.
- Recovery of any advanced or over-paid wages to the employee
- The maximum deduction in a wage period must not exceed 1/4 of the wages payable in that period.
- The expense of food and accommodation provided by the employer to employee
- Contribution to be paid by the employee through the employer for schemes such as medical, retirement, superannuation or thrift schemes
- Recovery of loan made by the employer to employee
- Required or authorized under enactment
The total amount of deduction from (2) to (7) of the above items of wages deductions must not exceed half of the employee’s wages in a wage period.
If the employee has received Income Order issued by the court for recovery of outstanding maintenance payment owed to the employer, the deduction amount in a wage period can be unlimited.
Payment of Wages
Under all circumstances, wages become due on the end of the last day of the wage period, employers must pay wages to employees on or before the due date, or no later than 7 days after that day.
In case the employers pay wages after the due date, employers are needed to pay interest on outstanding amount of wages.
Failure to Pay Wages
When an employer is unable to pay the wages due to an employee within 1 month after the due date, the employee can deem the employment contract is terminated by the employer without notice, the employer is required to pay wages in lieu of notice plus other statutory and contractual termination payment.
To avoid any disputes, an employer should terminate the contract according to its terms when he is longer able to pay the wages due.
Special provision to building and construction works – liability to pay wages of sub-contractors’ employees
The principal contractors, superior sub-contractors and superior nominated sub-contractors engaged in building and construction works are liable for the first two months’ unpaid wages of an employee who is employed by the sub
-contractor or nominated sub-contractor.
What is Employee’s Rest Days?
Under a continuous employment contract, every employee is entitled to not less than one rest day in every period of seven days. One rest day counted as a continuous period of not less than 24 hours when which the employee can be absence from working for his employer.
There is no legal requirement that rest day is paid or not, it is a matter to be agreed by both of employer and employee.
Employers can appoint the rest days to their employees in the contract, rest day can be appointed in regular basis and/or irregular basis according to the need of industries.
- Regular rest days: an employee’s rest day arrangement is inform by his employer one time in the beginning of the employment.
- Irregular rest days: an employee’s rest day arrangement of this month is informed by employer in the beginning of every month.
- Voluntary substitution of rest days: Only with the consent of an employee, the employer can substitute some rest days with other days which must be within the same month of the original rest day or within 30 days after it.
Compulsory Working on Rest Days
If and only if the situation as follows, every employer cannot force an employee to work on a rest day:
- the event of breakdown of machinery or plant, or;
- the event of unforeseen emergency
The employ must notify the employee of this arrangement within 48 hours after the employee is needed to work on this rest day.
The employer must substitute the worked rest days with other days in the same month original rest day or within 30 days after it.
Voluntary Working on Rest Days
Except employee who is aged under 18 and working in industrial undertakings, an employee can work on rest day for wages.
However, it is prohibited that the employment contract includes the conditions to make any type of payment (annual bonus or end of year payment) requiring working on rest day.
What is Employee’s Statutory Holidays?
Every employer can enjoy total 12 days of Statutory Holidays (as follows) regardless of his length of employment period:
- 1st of January (1 day)
- Chinese (Lunar) New Year’s Day AND its following 1st and 2nd day (3 days)
- Ching Ming Festival (1 day)
- Labour Day – 1st day of May (1 day)
- Tuen Ng Festival (1 day)
- Hong Kong Special Administrative Region Establishment Day – 1st day of July (1 day)
- the day following the Chinese Mid-Autumn Festival (1 day)
- Chung Yeung Festival (1 day)
- the National Day of the People’s Republic of China – 1st day of October (1 day)
- Chinese Winter Solstice Festival OR Christmas Bay – 25th December (1 day, granted by the employer)
When a statutory holiday takes place on the same day of a rest day, the employer should appoint an alternative holiday on the next day which is neither a statutory holiday, an alternative holiday, a substituted holiday nor a rest day.
Under no circumstance, employers must arrange statutory holiday(s) (or alternative holiday or substituted holiday) to employees no matter the employees are entitle to “Holiday Pay”. The employer must arrange alternative holiday or substituted holiday holiday to employee even if employees are agreed work on these holidays. In other word, all employers are prohibited from “buying-out” of a employees’ holiday in form of payment.
Holiday Pay is entitled to employee who is employed under a continuous contract for not less than three months. The daily rate of holiday pay is calculated by either of the following:
- the average daily wages which an employee earned in the last 12-month period, or
- the period from the first day of employment to the preceding day of the first day of employment if the employment period is less than 12-month
Remark: Only employee’s working days with full wages payment are counted as working day for the calculation.
Voluntary Working on Statutory Holidays
With the consent of employee, employer can request the employee to work on statutory holidays (or an alternative day) given that not less than 48 hours’ prior notice to employee before the alternative holiday and an alternative holiday should be arranged within 30 days before and after the statutory holiday.
What is Employee’s Paid Annual Leave?
Annual leave with pay (Paid Annual Leave) is grand to employees every 12 months given that they are employed under continuous contract and after completed 12 month of service. The number of days of paid annual leave increases progressively in parallel to the completed length of service period in the minimum manner as follows:
- 1st and 2nd years: 7 days per year
- 3rd ~ 9th years and onwards: annual increase 1 day – from 8 days to 14 days per year
In other word, employees can be granted 7 days of Paid Annual Leave after 12 months of service, and enjoy 14 days of that after 9 years of service.
Appointing Paid Annual Leave
Paid Annual Leave must be consumed within 12 months after the entitlement, employer and employee should mutually agree the date to take the leave at least 14 days in advance (unless other mutual agreement) with written notice to be kept by the employer.
Continuity of annual leave is protected by law, the employer must appoint the employee the continuous leave (if requested by the employee) in the manner as follows:
- less than 10 days of annual leave: up to 3 days of separated leave
- equal or more than 10 days of annual leave: at least 7 days of continuous leave
For example, an employee holding 7 days of annual leave can request to take at least 4 days of continuous leave in the matter of law.
Rest day and statutory holiday cannot be counted as Paid Annual Leave, substitution rest day and holiday must be arranged by the employer when annual leave day falls on them.
Annual Leave Pay
Alike the Holiday Pay, the daily rate of annual leave pay is a sum equivalent to the average daily full-wages earned by an employee in the 12-month period preceding the following specified dates.
Annual leave pay should be paid to the employee not later than the normal pay day after the period of annual leave taken.
“Buy-out” Paid Annual Leave
With the mutual agreement, an employee can “sell” his entitled leave to employer for payment if and only if he has been entitled more than 10 days of leave and the part of them exceed 10 days.
Payment of Annual Leave Pay on Termination of Employment Contract
Employees are entitled to Paid Annual Leave after every 12 month of service under continuous employment contract.
When an employee has been entitled Paid Annual Leave paid annual leave year, a 12-month period commencing on the day on which his employment commenced and an anniversary of that day, and has been employed for a leave year and his employment contract is terminated, irrespective of the reasons of termination, he is entitled to payment for annual leave not yet taken.
For calculation the daily rate, the daily rate of payment, “the date of termination of contract” should be adopted as the “specified date”. An employee with 3 month but less than 12 months’ employment in a leave year and his employment contract is terminated other than for the reason of summary dismissal due to his serious misconduct, he would be entitled to pro-rata annual leave pay.
Common Leave Year for all Employees
For sake of management, an employer may elect any period of 12 consecutive months as the common leave year for all of his employees. When an employee has not been employed for 12-month in the common leave year, the employer should calculate his leave entitlement on a pro rata basis, and any fraction of a day resulting from the calculation should be counted as a full day’s leave.
Annual Leave Shutdown
For an employer intended to cease his (part of or all of) business for granting annual leave to his employees, he should issues written notice to inform the affected employees at least 1 month in advance.
If an employee who is not yet entitled to paid annual leave during the period of shutdown but he has to stop work as a result, he should be granted paid annual leave during that shutdown period; On the other hand, if an employee who has entitle the number of days of annual leave exceeding the number of days of shutdown, he may take the remaining annual leave immediately following the shutdown.
When the common leave year elected by the employer should have no effect on an annual leave shutdown as the annual leave granted shall be in respect of the leave year immediately preceding the period of the shutdown.
What is Sickness Allowance & Paid Sickness Day?
Paid Sickness Days is another kind of protection for employee but its entitlement and calculation are not the same as Sickness Allowance.
Sickness Allowance is another benefit for employee employed under a continuous contract of employment and is paid by the employer to employee, the employee can enjoy Sickness Allowance under conditions of the following:
- sick leave taken is not less than 4 consecutive days (#), AND
- sick leave taken is supported by an appropriate medical certificate, AND
- this employee has sufficiently accumulated Paid Sickness Day
Remark # : As a measure of protection for female employees with the need of pregnancy related medical treatment, any leave day taken is eligible to Paid Sickness Allowance.
On the other hand, an employee must NOT be entitled to sickness under the following:
- The day of sickness fall on rest day or statutory holiday
- Without reasonable excuse, an employee refuses to take part in medical treatment offered by employer’s medical scheme
- Compensation is payable under the Employees’ Compensation Ordinance
Calculation of Sickness Allowance
Sickness Allowance is the payment to eligible employee counted per day of sickness, the daily rate is a sum equivalent to not less than four-fifths of the average daily full-wages earned by an employee in the 12-month period preceding the sickness dates (or the first sickness day of sickness).
Sickness allowance should be paid to the employee not later than the normal pay day.
Characteristic of Paid Sickness Days
For employees employed under continuous employment contract, employers should grant paid sickness days, details are as follows:
- Granted 2 paid sickness days for each month of the employee’s employment during the first 12 month
- Granted 4 paid sickness days for each month of the employee’s employment after the first 12 month
- Paid sickness days are accumulative throughout a complete employee’s employment period
- Accumulated paid sickness days fall into 2 categories:
- Category I can be accumulated to 36 days in maximum, this can be taken with the supporting of medical certificate.
- Category II can be accumulated to 84 days in maximum, this is the on-top extension of Category I so this can be taken when ALL the number of day in Category I consumed. Extra supporting by the issuer of this medical certificate are needed.
- The employer can reject to accept a employee’s medical certificate which:
- does NOT specify the starting date and number of days on which, and the nature of the sickness or injury on account of which, the employee is unfit for work.
- are NOT issued by a registered medical practitioner, a registered Chinese medicine practitioner or a registered dentist.
- Employee should provide their record for their employer to sign within 7 days of his return to work from sick leave.
- Employer can inspect the record of employee’s sick leave
Employers Responsibility of Recording Sickness Allowance
The employee’s record being kept are as follows:
- The date of commencement and termination of employment
- All paid sickness days accumulated, taken, and deducted by each employee in each category
- Sickness allowance paid in total.
Employment Protection to Employees
An employer is strictly prohibited from terminating a contract of employment during the employee’s paid sickness day, except in cases of summary dismissal due to the employee’s serious misconduct.
How is the Maternity Protection in Hong Kong?
Maternity leave, prohibition of assignment of heavy work, and protection from dismissing are given to a female employee employed under a continuous contract of employment in the moment when the employee presents a medical certificate to confirm her pregnancy to her employer.
The duration of this leave is as follows:
- A continuous period of not less than 10 weeks
- Additional leave period which is equal to the difference between the next date of actual confinement and the expected date of confinement is granted to employee if confinement takes place later then the expected date
- Additional maximum 4-week leave period is to be given to the employee on the ground of illness or disability due to the pregnancy or confinement
Taking of Maternity Leave
- Employee can decide to begin her maternity leave EITHER 2 weeks OR 4 weeks before the expected date of confinement, she should notice and obtain agreement with the employer in advance
- If both employee or employer cannot make agreement on th beginning date of the leave, the employer can force the employee to begin her leave 4 weeks before the expected date of confinement
- If the confinement takes place before the expected date, the employee can automatically begin her 10 weeks maternity leave after notice of her confinement to the employer
The law does not force the employee to take maternity leave, the employee can take maternity leave if she expressed intention of no maternity leave.
Maternity Leave Pay
- Apart from being employed under continuous contract of employment, employee is eligible to maternity leave pay if the period of service is not less than 40 weeks before the commencement of scheduled maternity leave, AND
- Employer has received an employee’s notice of pregnancy and express of intention to take maternity leave, AND
- Employer has received medical certificate specifying the expected date of confinement.
- Pay date of maternity leave pay must be paid on the normal pay day of employee.
- Alike sickness allowance, the daily rate of maternity leave pay is a sum equivalent to not less than four-fifths of the average daily full wages earned in the last 12-month period or shorter period if she is employed less than 12-month.
Pregnancy and Confinement related Medical Examination
The employee may absence from work on the ground of taking part those related medial examination (as follows), the day on which the employee is absent shall be counted as Paid Sickness Day
- related to pregnancy,
- post-confinement treatment
- miscarriage with medical certificate
Employment Protection to Employees
The employer can ONLY dismiss a pregnant employee under the following situations:
- The pregnant employee has conducted serious misconduct, OR
- The pregnant employee is still under probation period given the clear statement of probation period in employment contract in which the period is not more than 12 weeks
Otherwise, the employer is strictly prohibited from dismissing any pregnant employee under the following situations:
- under continuous employment contract
- with pregnancy confirmation supported by a medical certificate
- present a notice of pregnancy to the employer
- the prohibition begins from the date of pregnancy confirmation to the date of return to work
Please be noted that the employer MUST withdraw the dismissal of a employee immediately if the employee presents her pregnancy confirmation supported by a medical certificate and notice of pregnancy to the employer.
Prohibition of Assignment of Heavy, Hazardous or Harmful Work
As a measure to protect pregnant employee, employer should remove the pregnant employee within 14 days from handling heavy material, working in place where pregnancy-injurious gas is filled or other work.
Employer has the right to arrange for the pregnant employee to attend another medical examination conducted by a registered medical practitioner or registered Chinese medicine practitioner named by the employer to obtain a second opinion as to the employee’s fitness to undertake the work at question. The employer must bear all the cost involved.
What is End of Year Payment?
End of Year Payment is not an compulsory payment to employee in Hong Kong, it is subject to the terms on the continuous employment contract with mutual consent.
End of Year Payment is entitled by the employee employed under continuous employment contract and is defined by any annual payment including double pay, 13th month payment, end of year bonus payment but it is presumed that it is not gratuitous nature or which is payable at the discretion of the employer unless written terms or condition are expressed in the contract for other meaning.
Calculation of End of Year Payment
For a completed year of service, the amount is expressed in either way as follows:
- A specific amount specified in the contract
- A sum equivalent to the average monthly wages earned by the employee in the last 12-month period
For an incomplete year of service, pro rata end of year payment is taken under the conditions as follows:
- the employee has been servicing for more 3 months in a payment period, AND
- continues to be employed after the expiry of the payment period, OR is dismissed by the employer (excluded the case of dismissal due to the employee’s serious misconduct).
If the employee is dismissed within probation period which is subject to a maximum duration of three months, he is excluded from entitlement of End of Year Payment.
Time of Payment
- a date/ or one date specified in the contract
- if time is unspecific, the payment should be made within the last day of the payment period to 7 days after
- if the employment contract is terminated before the end of payment period, the employee should be eligible for pro rata end of year payment.
What are Long Service Payment and Severance Payment?
Note: An employee will not be simultaneously entitled to both long service payment and severance payment.
The employee is eligible for Long Service Payment or Severance Payment according to the various employment conditions as below:
Severance Payment is granted by employer to an employee who has been employed under continuous contract of employment for not less than 24 months, when the employee is dismissed by reasons of:
- lay-off (*)
- redundancy (#)
- expiry of existing fixed term contract without renewal due to redundancy
Long Service Payment is granted by employer to an employee who has been employed under continuous contract of employment for not less than 5 years, when the employee is dismissed / resign by reasons of
- NOT redundancy
- NOT summary dismissal due to serious misconduct
- expiry of existing fixed term contract without renewal
- death of the employee
- physical or mental unfitness for engaged work
- aged 65 or above
Remark (*): An employee can deem himself that he has been laid off by the employer under the situation as follows:
- an employee is employed on terms that his remuneration depends on his kind of work provided by the employer and the employee is employed for this kind of work, AND
- No work is provided by employer and thus no wages is paid, AND
- The number of “no-work no-paid” days exceeded half of the total number of normal working days in any 4 consecutive weeks, OR exceeded one-third of the total number of normal working days in any 26 consecutive weeks.
Remark (#): An employee can be taken as dismissal by redundancy under the situation as follows:
- an employer ceases or deems to cease his business, OR
- an employer closes or deems to close the place of business when the employee is employed, OR
- an employer ceases or diminishes a kind of work while the employee is employed to carry out that kind of work.
Calculation of Severance Payment and Long Service Payment
Both of the payments can be applied to the same method of calculation as follows:
- Maximum payment amount: HK$390,000
- For monthly-paid employee: two-thirds of Last monthly wage but capped at HK$15,000 X Reckonable year of service
- For daily/piece-rated employee: Wages of any 18 days within the last 30 normal working day but capped at HK$15,000 X Reckonable year of service
- An incomplete year is counted on a pro rata basia
Payment of Severance Payment
To claim for severance payment eligible employee should serve a written notice to his employer within three months (extension may be approved by the Commissioner for Labour) after the dismissal/ lay off takes effect.
The employer should make the payment to the employee not later than two months from the receipt of such a notice.
Payment of Long Service Payment
Long service payment should be paid to an employee within seven days after the date of termination of employment contract.
Offsetting of Severance Payment / Long Service Payment
The employer can offset the employee’s entitled Severance Payment / Long Service Payment against the type of employee’s funds in the following:
- Mandatory Provident Fund Scheme benefit
- Occupational Retirement Scheme benefit
- Gratuity based on length of service
Note to Termination of Contract of Employment
Either the employer or employee can terminate their continuous contract of employment by giving the other party the “due notice” in advance to its required length or “wages in lieu of notice” instead.
If the the due notice is given to opposite party shorter than its required length, wages in lieu of notice is compulsory to be given as a form of compensation to the opposite party unless the termination happens within the first month of probation period. The length of due notice varies according to the employment condition.
Nevertheless, both employer and employee bears the SAME liability related to the required length of due notice and paying wages in lieu of notice to the opposite party.
Contract of employment can further express the terms related to the required length of due notice and wages in lieu of notice, EO offer their minimum requirement as follows:
- When the employment condition is still within probation but after the first month of probation, not less than 7 days notice is required to opposite party on termination (or referring to agreement but it must not less than 7 days)
- When the employment condition is after the probation period (or no probation period), not less than 1 month notice is required to opposite party on termination (or referring to agreement but is must not less then 7 days).
- Wages in lieu of notice is calculated by multiplying the average daily (or monthly) full wages of earned by employee with the number of days (or month) in the length of notice.
Without Due Notice or Wages in lieu of notice
In some of the extreme and serious situations in below (other than employee within probation period), an employer may summarily dismiss an employee without giving the due notice as well as paying the wages in lieu of notice, an employee also may immediately terminate the contract without the notice at the same sense.
However, the party who make decision of termination bears the responsibility to proof their actions in the question of laws. Given that the establishment of EO tends to protect employees, it is advised that employers should always communicate to employees and proceed the termination by giving required due notice or the wages in lieu of notice according to the contract or EO to avoid legal liability. Summary dismissal is a serious disciplinary action which should only be taken place when an employee has committed misconduct as below and the employer has been giving repeated warning.
Employers may summarily dismiss employees under either circumstance as follows:
- disobeys a lawful and reasonable order in a willful manner
- misconducts himself
- guilty of fraud or dishonesty
- habitually neglectful in his duties
Note to Employers: Employer is prohibited from dismissal of employee without the notice as well as the wages in lieu of notice because an employee takes part in strike. Taking part in strike does not fulfill the legal ground stated above.
Employee may immediately terminate employment contract under either circumstances:
- reasonably fear physical danger by violence or disease
- in danger by ill-treatment by employer
- being given medical certificate in supporting to employee’s unfit for works engaged AND being employed for not less than 5 years
Paid for Termination Payments
In general, the employer should calculate and pay all the payment to employee on termination of employment, the items involved are usually as follows:
- outstanding wages
- wages in lieu of notice (if any)
- payment of any untaken annual leave (pro rata payment for current leave year, if any)
- end of year payment (pro rata payment for current payment year, if any)
- long service payment or severance payment (if any)
- other payment written in employment contract e.g. gratuity, provident fund, etc.
All the outstanding payment stated above (except long service payment and severance payment) shall be pay on the date of termination and within 7 days after.
How is Statutory Employment Protection to Employee?
Restriction on Dismissal
Unless serious misconduct done by employee, employers are prohibited from dismiss an employee in the situation as follows:
- Maternity Protection protects female employees who has been confirmed pregnant and give their notice of pregnancy to employer.
- Paid Sick Leave Protection protects employees who are taking paid sick leave.
- Protection on giving evidence or information to the authorities protects employees giving of evidence or information in any proceedings or inquiry in relation to the enforcement of the EO, work accidents or work safety legislation.
- Protection on joining Trade Union Activities protects employees taking part in activities or membership of trade union
- Injury at Work Protection protects injured employees who have not yet entered into an agreement with the employee for employee’s compensation or before the issue of a certificate of assessment.
Remedies for Employment Protection
To be awarded by the Labour Tribunal, this remedies include an order of the following:
- Order of Reinstatement: An order to the employer to teat the employee in all aspect of wages, benefits and work without variation as if the employee has not been dismissed. It can be established only if both party agree on.
- Order of Re-engagement: An order to the employer, and his successor or his associate to re-engage the employee on terms comparable to his original terms of contract (terms about wages, benefits and work). It can be established only if both party agree on.
- Award of Terminal Payments: if neither reinstatement nor re-engagement are made, the Labour Tribunal may order the employer to pay to employee a fair and appropriate amount as the award for the dismissal.
- Award of Compensation: if the Labour Tribunal order the dismissal of an employee is unreasonable and unlawful, and no Order of Reinstatement or Re-engagement are agreed, the employer may be ordered to pay to employee an compensation up to a maximum of HK$150,000.
An employee who is employed under continuous contract of employment may claim for remedies against an employer under the circumstances as follows:
- Unreasonable Dismissal: Be awarded an order for reinstatement or re-engagement, up to an award of terminal payments
- Unreasonable Variation of the Terms of the Employment Contract: the same as “Unreasonable Dismissal”
- Unreasonable and Unlawful Dismissal: Be awarded an order for reinstatement or re-engagement, up to an award of terminal payments OR an award of compensation
Offenses and Penalties
An employer (or employee) who fails to comply with the EO requirement is liable to prosecution by the Labour Department and, up conviction, to penalty. Here is a summary of common condition of non-compliance of EO and their maximum penalty:
- Any person failed to comply with the requirements of the officers of Labour Department: liable to a fine of $100,000 and to imprisonment for one year.
- Employers failed to keep wages and employment record: liable to a fine of $10,000.
- Employers made illegal deduction from wages of an employee: liable to a fine of $100,00 and to imprisonment for one year
- Employers without reasonable excuse failed to pay wages to an employee when it became due: liable to a fine of $350,000 and to imprisonment for 3 years
- Employers without reasonable excuse failed to pay interest on the outstanding amount of wages to employee: liable to a fine of $10,000.
- Employers without reasonable excuse failed to grant rest days to his employee: liable to a fine of $50,000.
- Employers compelled his employees to work on their granted rest days: liable to a fine of $50,000.
- Employers without reasonable excuse failed to grant statutory holidays, alternative holidays or substituted holiday, or pay holiday pay to an employee: liable to a fine of $50,000.
- Employers without reasonable excuse failed to grant annual leave to an employee: liable to a fine of $50,000.
- Employers without reasonable excuse failed to pay sickness allowance to an employee: liable to a fine of $50,000.
- Employers contravened employment protection related to sickness allowance to an employee: liable to a fine of $100,000 and pay the sum of money to the dismissed employee within 7 days after the day of termination:
- wages in lieu of notice
- a further sum equivalent to 7 days’ wages as compensation
- any sickness allowance to which the employee is entitled.
- Employers failed to grant maternity leave to a pregnant employee or pay maternity leave pay: liable to a fine of $50,000.
- Employers contravened employment protection related to maternity leave to an female employee: liable to a fine of $100,000 and pay the sums of money to the dismissed female employee within 7 days after the day of termination:
- wages in lieu of notice
- a further sum equivalent to 1 month wages a compensation
- 10 weeks’ maternity leave pay if, but for the dismissal, she would have been entitled to such payment.
- Employers without reasonable excuse failed to comply with the requirements about prohibition of assignment of heavy, hazardous or harmful work to a pregnant employee: liable to a fine of $50,000.
- Employers without reasonable excuse failed to pay an end of year payment to an eligible employee: liable to a fine of $50,000.
- Employers dismissed an employee who has fallen into the statutory restrictions on termination of employment contract: liable to a fine of $100,000.
- Employers without reasonable excuse failed to pay termination payments when they became due to eligible employee: liable to a fine of $350,000 and to imprisonment for 3 years.
- Employers without reasonable excuse failed to pay severance payment to and employee: liable to a fine of $50,000.
- Employers without reasonable excuse failed to pay long service payment to an employee: liable to a fine of $350,000 and to imprisonment for 3 years.
- Employers without reasonable excuse failed to pay long service payment to the beneficiaries of a deceased employee: liable to a fine of $50,000.