Hong Kong: Latest Developments In Employment Law

Last Updated: 18 January 2013
Article by Clyde & Co LLP

Possible increase in the minimum wage

The Minimum Wage Commission set up to review the statutory minimum wage has agreed in late September 2012 that the minimum wage should be increased from HK$ 28 per hour to HK$ 30 per hour. The Commission submitted its recommendations to the Chief Executive at the end of October 2012. The Executive Council will now decide whether to adopt the recommendation. It is expected that the proposed increase in the minimum wage will be accepted and the new statutory minimum wage will come into effect by 1 May 2013.

New rights to paternity leave for government employees may lead to paternity leave for other employees

Since 1 April 2012, new fathers who are full time government employees who have more than 40 weeks continuous service are eligible to take 5 days' paternity leave on full pay. The government is hoping that this step will encourage employers to grant similar benefits to their employees who are expectant fathers. It is likely that statutory paternity leave will be introduced in time. The government is currently adopting a wait and see approach.

Proposed introduction of compulsory reinstatement orders for unfairly dismissed employees

The Labour Department is drafting a bill to amend the Employment Ordinance to introduce compulsory reinstatement and re-engagement of an employee who has been dismissed unlawfully. Currently if an employee has been dismissed unlawfully and without a valid reason, the Labour Tribunal cannot make an award for reinstatement or re-engagement without the employer's consent. The changes, if implemented will enable the Labour Tribunal to make such an order without seeking the employer's consent.

It is also proposed that clarifying amendments would be made to the re-engagement provisions (under Part VIA of the Employment Ordinance) to state clearly that a re-engagement order made by the Labour Tribunal shall be directed at the employer alone and not his successor or an associated company. However, if the employee consents, an order for re-engagement can be taken to have been complied with by the employer if the successor or associated company of the employer re-engages the employee on the terms specified in the order. The employee's continuity of employment would be brought forward to the successor or associated company for calculating entitlements under the Employment Ordinance and in their contract of employment.

If the employer fails to comply with the compulsory order, the employee would be entitled to additional compensation of three times the monthly wages of the employee, subject to a maximum of HK$ 50,000.

It is proposed that if there is a failure to pay the additional compensation, then such a default will be a criminal offence and a maximum fine of HK$ 350,000 and three years of imprisonment on conviction of wilful non-payment of the further sum without reasonable excuse, may be imposed.

The Labour Department is aiming to submit its proposed amendments to the Legislative Council by July 2013.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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