Hong Kong

8 Chapter Labor

    • a. Labor Laws

       The Employment Ordinance (EO) is the main employment legislation in Hong Kong. It guarantees certain minimum benefits, including:

      ·         Paid annual leave.

      ·         Paid sick leave.

      ·         Paid maternity and paternity leave.

      ·         Minimum notice of termination and a right to make a payment in lieu of notice.

       

      Subject to limited exceptions, the EO applies to all employees working in Hong Kong, regardless of their nationality. Observing the terms of the EO is generally considered to be mandatory, although it is not specifically expressed to be an overriding statute.

       

      i.              Laws applicable to foreign nationals

       

      Employees who are employed by foreign employers and seconded to Hong Kong are often employed under contracts expressed to be governed by foreign laws. However, there are currently conflicting High Court decisions on whether a choice of law clause in an employment contract can validly exclude the application of the EO

       

      Other mandatory laws that are likely to apply to an employment relationship, regardless of the contractual choice of law provisions are as follows:

       

      Minimum Wage Ordinance (MWO). This ordinance provides for a minimum wage for most workers in Hong Kong.

       

      Personal Data (Privacy) Ordinance (PDPO). This ordinance regulates an employer's collection, use and disclosure of an employee's personal data (including personal data contained in e-mails and phone calls).

       

      Mandatory Provident Fund Schemes Ordinance (MPFSO). Subject to very limited exceptions, this ordinance requires employers to enrol employees in Hong Kong in a Mandatory Provident Fund (MPF) Scheme (that is, a retirement scheme), to which the employer and employee must make certain contributions. Foreign nationals are exempt if they hold an employment visa and:

      are posted in Hong Kong to work for a period not exceeding 13 months; or belong to a retirement scheme outside of Hong Kong.

       

      Occupational Retirement Schemes Ordinance (ORSO). This ordinance establishes a registration system and provides for the regulation of certain retirement schemes.

       

      Occupational Safety and Health Ordinance (OSHO). This ordinance imposes a duty on all employers, as far as is reasonably practical, to ensure the safety and health in the workplace of its employees. The OSHO covers most industrial and non-industrial workplaces in Hong Kong

      .

      Employees' Compensation Ordinance (ECO). If an employee suffers an injury arising out of and in the course of employment in Hong Kong (or overseas, if the travel is authorised by the employer), the employer is usually liable to compensate the employee under the ECO. Eligible family members of an employee killed in an accident at work can also be entitled to compensation. All employers must maintain valid employees' compensation insurance policies to cover their liabilities under the ordinance and at common law.

       

      Companies (Winding Up and Miscellaneous Provisions) Ordinance (CWUMPO). On winding up of a Hong Kong company (including a Hong Kong subsidiary of a foreign company), employees' claims for wages and other entitlements are given priority over other unsecured creditor claims.

       

      Sex Discrimination Ordinance (SDO), Disability Discrimination Ordinance (DDO), Family Status Discrimination Ordinance (FSDO) and Race Discrimination Ordinance (RDO). All legislate against various forms of discrimination.

       

      Basic Law and Hong Kong Bill of Rights Ordinance. These safeguard certain rights of individuals, although they have limited application in the context of employment law.

       

      Labour Tribunal Ordinance (LTO). This ordinance empowers the Labour Tribunal to hear and resolve disputes relating to employment contracts as well as alleged breaches of the EO. It potentially covers disputes involving foreign nationals or Hong Kong residents working abroad (see below, Laws applicable to nationals working abroad).

       

      Prevention of Bribery Ordinance (POBO). The POBO applies to employees, particularly to those who receive or solicit bribes from third parties (for example, an employee who receives bribes from a supplier of goods in return for placing orders with that supplier). In some cases, employees may also be subject to anti-corruption legislation in other jurisdictions.

       

       

      Applicable to Foreign Nationals

      Applicable to Hong Kong Nationals

       

       

       

      ii.            Laws applicable to Hong Kong nationals

       

      Hong Kong employment law only applies to nationals working abroad if the employee's employment contract is expressly governed by Hong Kong law or has a substantial connection with Hong Kong. Factors that may be relevant in determining whether there is a substantial connection include, for example:

      ·         Whether the employee's placement outside Hong Kong is temporary or permanent.

      ·         Residency of the employee and the employee's family.

      ·         Currency of pay and place of payment.

      ·         Location of the management.

      ·         Location where the contract was concluded.

       

       

      The Contracts for Employment Outside Hong Kong Ordinance (CEOHKO) applies to Hong Kong nationals who are recruited by an employer that is neither based in Hong Kong nor undertakes any business in Hong Kong to perform primarily manual work or whose wages do not exceed HK$20,000 per month.

    • b. Labor Standards

       i.              Categories of worker

       

      In Hong Kong, the key distinction in employment law is between "continuous" and "non-continuous" employment. To qualify as continuous employment, the employee must have worked 18 or more hours per week for the same employer for at least four consecutive weeks. It does not matter if the employment relationship was governed by separate, successive employment contracts, only that the employee works the requisite number of hours in each of the weeks.

       

      ii.            Entitlement to statutory employment rights

       

      All employees (whether they are continuously employed or not), are entitled to a basic level of protection. Basic statutory rights include:

      ·         Protection from discrimination.

      ·         Entitlement to statutory holidays.

      ·         Payment of salary.

       

      Continuous employees are entitled to a greater level of statutory employment rights. For example, continuous employees are entitled to:

      ·         Rest days.

      ·         Paid annual leave.

      ·         Paid maternity or paternity leave.

      ·         Sickness allowance.

      ·         Severance or long service pay (where other necessary conditions are satisfied).

       

      iii.           Time periods

       

      Hong Kong employees need to have worked for the same employer during each of the previous four weeks for at least 18 hours in each of those weeks, to qualify for additional employment rights under the Employment Ordinance. There are no maximum engagement periods.

       

      iv.           Minimum wage

       

      The Minimum Wage Ordinance (MWO) came into effect on May 1,2011. As of May 1,2015, the statutory minimum wage (SMW) rate is set at HK$32.50 per hour

       

      The SMW applies to most employees (regardless of age, whether they are full-time, part-time or casual employees). The SMW does not apply to:

      ·         live-in domestic workers

      ·         student interns or work experience students.

       

      The MWO also includes special arrangements for disabled employees, including that they can opt to be paid less than the SMW in accordance with an assessment of their productivity.

       

       

      v.            Restrictions on working time

       

      There are generally no restrictions on working hours, except in relation to young persons (that is, those below 18 years old). For those employees, the maximum working period is usually eight hours per day or 48 hours per week.

      The Hong Kong Government has established a Standard Working Hours Committee to advise the government on working hours, including whether a statutory standard working hours regime should be implemented. The Committee's recommendations are expected in early 2016.

       

      vi.           Rest breaks

       

      Employees continuously employed for at least 18 hours in each of four consecutive weeks are entitled to at least one rest day per week. This is in addition to annual leave and statutory holidays.

       

      vii.          Shift workers

       

      There are no special restrictions applicable to the working hours or rest breaks for shift workers.

       

      viii.        Holiday entitlement

       

      (a)  Minimum holiday entitlement

       

      The Employment Ordinance (EO) prescribes certain minimum holiday entitlements.

      In addition to rest days, statutory holidays, sick leave and other statutory leave entitlements, employees who have been employed under a continuous contract for one year are entitled to paid annual leave. The amount of leave depends on the length of service, starting at seven days after one year of employment up to a maximum of 14 days after nine years' service.

       

      (b)  Public holidays

       

      The EO specifies 12 statutory holidays that must be granted to all employees. If the employee has been employed continuously for three months and works at least 18 hours a week, he/she will be entitled to paid leave on a statutory holiday. The statutory holidays include Christmas, Easter, Lunar New Year and HKSAR Day (when Hong Kong celebrates the handover to Chinese sovereignty). There are five additional general holidays specified in the General Holidays Ordinance, which are only guaranteed to certain employees (such as civil servants). However, many employers also treat these as paid holidays.

    • c. Illness and injury of employees

       i.              Rights employees have to time off in the case of illness or injury

       

      (a)  Entitlement to time off

       

      The Employment Ordinance provides that employees that are employed continuously accumulate sick leave in the form of a sickness allowance at the rate of two paid sick days per month during the first year of employment and four paid sick days each month thereafter. The maximum sickness allowance that can be accumulated is 120 days.

      It is unlawful to dismiss an employee who is absent from work on statutory sick leave. However, this prohibition does not apply if the employee is validly dismissed summarily.

       

      (b)  Entitlement to paid time off

       

      Employees are entitled to 80% of their average daily wages (as calculated over the previous 12 months), provided they are off sick for four consecutive days and have accrued enough sick days to cover the period in question. Special rules apply to women who are pregnant or who have recently given birth. An employee who is on paid sick leave cannot be lawfully dismissed except in very limited circumstances.

       

      ii.            Recovery of sick pay from the state

       

      Employers are not able to recover sickness allowance from the state. If an employee is injured at work, he/she is entitled to compensation under the ECO and possibly also at common law. The Employees' Compensation Ordinance (ECO) requires employers to take out an insurance policy to cover the employer's liability for work injuries, whether under the ECO or at common law. Failure to do so is an offense.

       

      It is unlawful for an employer to dismiss an employee who has made a claim for compensation under the ECO until the claim has been determined (unless the Commissioner for Labour consents to the dismissal).

    • d. Statutory rights of parents and carers

       The statutory rights of employees who are:

       

      i.              Maternity rights

       

      A female employee who is employed under a continuous contract and who has given notice of her intention to take maternity leave is entitled to ten weeks' maternity leave, and an additional period of not more than four weeks on the grounds of illness or disability resulting from the pregnancy (Employment Ordinance). If the employee has more than 40 weeks' service at the time of taking maternity leave, she will be entitled to ten weeks' paid maternity leave, calculated at 80% of the employee's average monthly wages over the previous 12 months. Maternity leave can begin between two and four weeks before the expected date of birth of the child.

       

      An employee who is pregnant and who has given notice of her pregnancy to her employer cannot generally be lawfully dismissed from the date on which she is confirmed pregnant by a medical certificate until the expiry of her maternity leave. This prohibition does not apply if the employee is dismissed summarily or is dismissed during the first 12 weeks of her probationary period . Wrongful termination results in liability for compensation and amounts to an offence. If a pregnant employee is dismissed by her employer before she notifies the employer of her pregnancy, the employer must withdraw the dismissal if she gives such notice immediately thereafter. It is unlawful to discriminate against an employee because of pregnancy.

       

      ii.            Paternity rights

      Male government employees employed under a continuous employment contract are eligible to take five days' paternity leave on full pay on the birth of each child.

      Male employees in the private sector who are employed under a continuous contract are entitled to three days' paternity leave in connection with the birth of their child. Leave can be taken at any time (on single or consecutive days) during the period commencing four weeks before the expected date of birth and ending ten weeks after the actual date of birth.

      If the employee has more than 40 weeks' service at the time of taking paternity leave, he will be entitled to paid paternity leave, calculated at 80% of the employee's average monthly wages over the previous 12 months.

       

      iii.           Carers' rights

      There is no specific statutory entitlement to leave for the purpose of caring for a dependant, spouse or a close family member. However, it is unlawful for an employer to discriminate against an individual on the ground of their disability or the disability of an associate (that is, the spouse or a relative of that person), or on the ground of an individual's family status (for example, if they have responsibility for the care of an immediate family member). In practice, many employers allow employees to take paid or unpaid leave to handle family emergencies.

        

    • e. Termination of Employment