Law and Social Workers

SHDS4703 LAW AND SOCIAL WORK

LECUTRE 4: Employment Law
Mr. Albert Yip
Solicitor of HKSAR
[email protected]
2024.02.19
Content
1. General introduction
2. Employment vs Independent
Contractor Contract
3. Continuous Contract
4. Wage and Benefits Linked To Wages
5. Termination of Employment and the Relevant
Payments
6. Leaves and payments
7. Mandatory Provident Fund (MPF)
8. Employment Disputes
9. Discussion questions
 1. General introduction

• A contract of employment is an agreement on the

employment conditions made between an
employer and an employee.
• The agreement can be made orally or in writing,
and it includes both expressed and implied terms.
The employment terms can be implied from
the Employment Ordinance (Cap. 57 of the Laws
of Hong Kong) and other relevant employment or
labour ordinances.
• The agreement takes effect when it is signed in
writing or agreed orally and it can be well before
the 1st day to report duty.
1. General introduction
• Employers and employees are free to negotiate
and agree on the terms and conditions of
employment, provided that they do not violate the
provisions of the Employment Ordinance and other
relevant ordinances.
• Any term of an employment contract that purports
to extinguish or reduce any right, benefit or
protection conferred upon the employee by the
ordinances will be void.
1. General introduction
• Employees are entitled to examine the employment contract
before signing the contract.
• Potential employees are also allowed to take a copy of the
offered contract away to seek advice before they sign it.
• They are also entitled to keep a copy of the contract after
signing it.
• Employees can consider getting legal advice before signing a
contract. Usually the contract need not be signed immediately.
• If a dispute on the terms arises after the contract is signed, it will
create a lot of complications and the dispute may need to be
resolved through legal action eventually.
• A clear, signed, written contract will have the effect of clarifying
the issues.
• A signed written contract can act as a reference point for both
the employers and employees to discuss or arbitrate any of their
contractual duties.
 2. Employment vs Independent
Contractor Contract

• Not all service contracts are employment contracts.

• It can be an independent contractor contract.
• Examples are:
• Electrician coming to household to repair on
request
• Food ordering with delivering service like food
panda and Deliveroo
• The title of the contract is not conclusive.
• The court will examine the terms and determine its
nature rather relying what the contract title describes.
2. Employment vs Independent
Contractor Contract
No one single conclusive test to distinguish a contract of employment
from a contract for service.
Factors identifying a contract of employment rather than a
independent contractor service are as follows:
A. Control – the greater the control, the more likely it is an
employment
• Who decides on the matters of recruitment and dismissal of
workers?
• Who pays for the workers’ wages and in what ways?
• Who determines the production process, timing and method of
production?
 2. Employment vs Independent
Contractor Contract
• The relevant factors to be considered are
determined by the circumstances of each
case.
• For example, workers who bring their own
tools and materials for their work are more
likely to work under contracts for service by
independent contractors.
• In contrast, those who are fully provided with
tools and materials by their bosses are more
likely to work under contracts of employment.
2. Employment vs Independent
Contractor Contract

B. Ownership and provision of factors of production –

the provision of tools and working system usually
indicates an employment
• Who provides the tools and equipment?
• Who provides the work place and materials?
 2. Employment vs Independent
Contractor Contract
C. Economic considerations – risk and profit, among all, vested
in the service provider indicates no employment
• Do the workers carry on business on their own account or carry on
the business for their employers?
• Are the workers involved in any prospect of profit, or are they liable
for any risk of loss?
• How are the worker’s earnings calculated and profits derived?
2. Employment vs Independent
Contractor Contract
• In delineating an individual case, all
relevant factors should be carefully
weighted and an evaluation and analysis of
the factual circumstances in which the
work is performed should be carried out.
2. Employment vs Independent
Contractor Contract
• The Inland Revenue Department has a set of
criteria for determining whether a service
contract is a contract of employment. The major
criteria are highlighted as follows:
• there is no employment-type benefit (e.g.
money, annual leave, sick leave or pension)
provided for the service carried out;
• the service is not required to be carried out
personally (e.g. can hire assistants/sub-
contactors);
• the performance of the service is not subject
to the control or supervision that may be
commonly exercised by an employer in
relation to the performance of an employee’s
duties;
2. Employment vs Independent
Contractor Contract
• the remuneration is not paid or credited
periodically (e.g. weekly or monthly) as is common
with employment contracts;
• neither the service provider nor the receiver has
the right to terminate the service contract before
the expiry of the contract or before the job
finished, by giving prior termination notice/money
in lieu of notice to the other party; and
• neither party in the service contract has intended
to lead members of the public to believe that an
employment relationship exists.
• If all of these criteria have been satisfied, then a
contract of employment is unlikely to exist.
 3. Continuous Contract
DURATION OF A CONTRACT OF EMPLOYMENT?
• In the absence of any express agreement to the contrary, every
contract of employment that is "continuous" is deemed to be a
contract for one month and renewable from month to month
(section 5(1) of the Employment Ordinance).

Continuous contract – offering more benefit

• an employee who has been employed continuously by the
same employer for four weeks or more, with at least 18 hours
worked in each week, is regarded as being employed under a
continuous contract of employment.
• Hence, a part-time employee who fulfils the above
requirements is also employed under a continuous contract.
 3. Continuous Contract
• All employees who are covered by the Employment
Ordinance, irrespective of their hours of work, are
entitled to basic protection under the Ordinance
including the payment of wages, restrictions on wage
deductions and the granting of statutory holidays, etc.
• However, employees who are employed under a
continuous contract are further entitled to such
benefits as rest days, paid annual leave, sickness
allowance, severance payment and long service
payment, etc.
 3. Continuous Contract
How the period of employment be counted?

• If a trade or business is transferred from one

person to another, the period of employment
of an employee in that trade or business at the
time of the transfer shall count as a period of
employment with the transferee (the "new
boss").
• In other words, the transfer shall not break the
continuity of the period of employment for
that employee.
 4. Wage and Benefits Linked To Wages
“Wages” means all remuneration, earnings, allowances, tips and service
charges however designated or calculated, which are payable to an
employee for work done or work to be done.
Allowances, including travel allowances, attendance allowances,
commission and overtime pay are within the definition of wages.

An employee's entitlements to end of year payments, maternity leave

pay, severance payments, long service payments, sickness allowance,
holiday pay, annual leave pay and wages in lieu of notice are calculated
according to the above definition of wages.

However, wages do not include:

i. the value of any accommodation, education, food, fuel, water, light
or medical care provided by the employer;
ii. the employer's contribution to any retirement scheme;
iii. commission or attendance allowance which is of a gratuitous
nature or is payable only at the discretion of the employer;
 4. Wage and Benefits Linked To Wages
iv. non-recurrent travel allowance or the value of any
travel concession or travel allowance for actual
expenses incurred by the employment;
v. any sum payable to the employee to defray special
expenses incurred by the nature of the employment;
vi. end of year payments, or annual bonuses which are
of a gratuitous nature or are payable only at the
discretion of the employer; and
vii. gratuity payable on completion or termination of a
contract of employment.
 5. Termination of Employment and the Relevant
Payments

• To the exception of summary dismissal and constructive dismissal,

regardless of whether you are an employer or employee, you should
give either formal advance notice or wages in lieu of notice to your
existing employer/ employee for the termination of an employment
contract.
• The length of advance notice (or the amount of wages in lieu of
notice) for termination of a continuous contract of employment is
determined as follows.

Length of notice Wages in lieu of notice

With an expressed As per the agreement, A sum equivalent to the
agreement but not less than seven amount of wages for the
days notice period
Without an expressed Not less than one month A sum of not less than
agreement one month's wages
 5. Termination of Employment and the Relevant
Payments
Summary Dismissal
• An employer may summarily dismiss an employee without notice or
payment in lieu of notice if the employee, in relation to his
employment:
1. wilfully disobeys a lawful and reasonable order;
2. misconducts himself;
3. is guilty of fraud or dishonesty; or
4. is habitually neglectful in his duties.
• Taking part by an employee in a strike is not a lawful ground for an
employer to terminate the employee's contract of employment
without notice or payment in lieu.
• Summary dismissal is a serious disciplinary action.
• It only applies to cases where an employee has committed very
serious misconduct or fails to improve himself after the employer's
repeated warnings.
 5. Termination of Employment and the Relevant
Payments

Constructive Dismissal
• An employee may terminate his employment contract
without notice or payment in lieu of notice if:
1. he reasonably fears physical danger by violence
or disease;
2. he is subjected to ill-treatment by the
employer; or
3. he has been employed for not less than five
years and is certified by registered medical
practitioner or a registered Chinese medicine
practitioner as being permanently unfit for the
type of work he is being engaged.
5. Termination of Employment and the
Relevant Payments
• If you are in a probation period, the required length of notice or the
amount of wages in lieu of notice is determined as follows.

Probation Period Length of Notice Wages in lieu of

Notice
Within the first Not required Not required
month of probation
After the first With an expressed As per the A sum equivalent
month of agreement agreement, but to the amount of
probation not less than wages for the
seven days notice period
Without Not less than A sum of not less
an expressed seven days' notice than seven days'
agreement wages
5. Termination of Employment and
the Relevant Payments
For a fixed term contract without an
expressed agreement on the length of the
termination notice period, these
requirements are also applicable on the
condition that such a contract is a
continuous contract of employment.
5. Termination of Employment and the
Relevant Payments
• The items and amount of payments that are payable to an employee on
termination of employment or the expiry of a employment contract
depend on a number of factors such as the length of service, the terms of
the employment contract and the reason for the termination of the
contract.
• For quick reference, termination payments usually include:
1. outstanding wages;
2. wages in lieu of notice, if any;
3. payment in lieu of any untaken annual leave, and any pro rata annual
leave pay for the current leave year;
4. any outstanding sum of end of year payment, and pro rata end of year
payment for the current payment period;
5. where appropriate, long service payment or severance payment;
6. other payments under the employment contract, such as, gratuity or
provident fund payments.
5. Termination of Employment and the
Relevant Payments
Time of Making Termination Payments

• An employer must pay all termination payments, except

for severance payments, to the employee as soon as
practicable and in any case not later than seven days after
the date of termination or expiry of the contract.

• For severance payments, an employer must make

payment not later than two months from the receipt of a
notice from an employee who is claiming a severance
payment.
5. Termination of Employment
and the Relevant Payments
Suspension from employment in certain cases
6. Leaves and Payments
REST DAY

• An employee who is employed under a continuous

contract is entitled to not less than one rest day in
every period of seven days.

• A rest day is defined as a continuous period of not

less than 24 hours during which an employee is
entitled to cease working.

• Rest days are not equivalent to statutory holidays.

An employee employed under a continuous
contract is entitled to have rest days AND statutory
holidays.
 6. Leaves and Payments
• Rest days are appointed by the employer.
• They can be granted on a regular or irregular basis.
• If the rest days are on regular basis, it is sufficient
for the employer to inform the employee of the
arrangements.
• If they are on an irregular basis, then the employer
must inform the employee of the appointed rest
days during the month before the beginning of the
particular month.
• An employer can substitute rest days with the
consent of the employee, in which case the
substitution must be within the same month
before the original rest day or within 30 days after
it.
• If a statutory holiday falls on a rest day, then it
should be taken on the day following the rest day.
6. Leaves and Payments
STATUTORY HOLIDAYS
• Employees, irrespective of their length of service, are entitled to
the following statutory holidays :

1. The first day of January

2. Lunar New Year's Day

3. The second day of Lunar New Year

4. the third day of Lunar New Year

5. Ching Ming Festival

6. Labour Day, being the first day of May

7. The Birthday of the Buddha

6. Leaves and Payments
8. Tuen Ng Festival
9. Hong Kong Special Administrative Region Establishment Day,
being the first day of July
10. The day following the Chinese Mid-Autumn Festival
11. Chung Yeung Festival
12. National Day, being the first day of October
13. Chinese Winter Solstice Festival or Christmas Day (at the
option of the employer)

• If employees are required to work on a statutory holiday,

then their employers must give them an alternative
holiday within 60 days before or after that statutory
holiday with 48 hours' advance notice.
6. Leaves and Payments
ANNUAL LEAVE

• Employees are entitled to annual leave with pay after having been employed
under continuous contracts for every 12 months.

• Employees' entitlement to paid annual leave increases progressively from 7

days to a maximum of 14 days according to length of service.

• Annual leave pay is a sum equivalent to the normal wages that employees
would have earned if they had worked during the period of annual leave.

• For employees who are employed on piece rates or whose daily wages vary
from day to day, the annual leave pay should be a sum equivalent to the
average daily wages earned on the days that the employees worked during
every complete wage period.

• The wage period should be a period of not less than 28 days and not more
than 31 days immediately preceding the annual leave or the day on which the
employment contract terminates.
6. Leaves and Payments
SICK LEAVE
• Employees can accumulate paid sickness days after having
been employed under continuous contracts.
• Paid sickness days are accumulated at the rate of two paid
sickness days for each completed month of employment
during the first 12 months of employment, and four paid
sickness days for each completed month of employment
thereafter. Paid sickness days can be accumulated up to a
maximum of 120 days.
• It works like a piggy bank and you are entitled to claim for
paid sick leave.
• A sickness day is a day on which an employee is absent from
work by reason of being unfit due to injury or sickness.
• A paid sickness day is a sickness day on which an employee
is entitled to be paid sickness allowance.
 6. Leaves and Payments
MATERNITY LEAVE

• Female employees who are employed under continuous

contracts immediately before the commencement of their
maternity leave and having given a notice of pregnancy to their
employers are entitled to the following periods of leave:

• A continuous period of 14 weeks' maternity leave;

• if confinement occurs later than the expected date of
confinement, a further period equal to the number of days
from the day after the expected date of confinement to the
actual date of confinement;
• may enjoy an additional period of leave for not more than
four weeks on the grounds of illness or disability due to the
pregnancy or confinement.

• When an employee is absent from work to attend medical

examination in relation to her pregnancy, post confinement
medical treatment or miscarriage, any day on which she is
absent will be counted as a sickness day.
6. Leaves and Payments
PATERNITY LEAVE
• Male employees working under continuous
contracts with children born on or after January
18, 2019 are entitled to 5 days of paternity leave
for each confinement of their spouses/partners if
they give the required notification to their
employers in accordance with the Employment
Ordinance.
6. Leaves and Payments
END OF YEAR PAYMENTS
• End of year payments are any annual payments
(including double pay, 13th month payment or end
of year bonus) of a contractual nature. They do not
include any payment that is of a gratuitous nature
or that is payable at the discretion of the employer.
• Employees are eligible for end of year payments if
they have been employed under continuous
contracts for a whole payment period. The payment
period is the period that is specified in the
employment contract, or a lunar year if it is not
specified.
• Employees who resign before the payment period
expires are NOT entitled to pro rata end of year
payments unless their contracts provide otherwise.
6. Leaves and Payments
• Employees who have been employed under a
continuous contract for not less than 3 months in a
payment period and who are dismissed by the
employer (except in cases of summary dismissal due
to serious misconduct) are eligible for pro rata end
of year payments.
• The provisions of the Employment
Ordinance concerning end of year payments apply
to employees who are employed under continuous
contracts who, in accordance with a contractual
term (including agreement made orally or in writing,
in an express or an implied term), are entitled to
end of year payments from their employers.
 7. Mandatory Provident Fund (MPF)
• Employees (with the exceptions of some domestic
employees, hawkers or those covered by existing
occupational retirement schemes with exemption
certificates, etc.) between the age of 18 and 65 are
required to join MPF schemes.
• However, it does not mean that an employee or a
self-employed person who is under the age of 18 is
exempt from MPF.
• If an employer enters into a contract of
employment with an employee who is less than 18
and the employee reaches 18 on or after 18
January 2008; and the employer continues to
employ the employee after he reaches 18, the
Ordinance applies as if they had entered into
contract of employment on the day on which the
employee reaches 18 and the employment had
begun or commenced on that day.
 7. Mandatory Provident Fund (MPF)
• The same applies for self-employed person
when he becomes self-employed before he is 18
who reaches 18 on or after 18 January 2008 and
continues to be self-employed, the Ordinance
applies to him as if he had become self-
employed on the day on which he reaches 18.
• MPF is generally mandatory for employers and
self-employed persons.
• It is the statutory obligation of employers to join
the scheme to cover their employees and any
self-employed persons to join the scheme to
cover themselves.
8. Employment Disputes
• With regards to channels available for lodging
complaints relating to employment disputes, one may
refer to the Equal Opportunities Commission or the
Labour Department. In addition, legal proceedings
may be instituted by any of the relevant parties.
• With regards to complaints lodged through the Labour
Tribunal, the Labour Tribunal offers a quick and
inexpensive way of settling monetary disputes
between employers and employees. An important
point is that the Labour Tribunal of Hong Kong does
not allow legal representation. Legal aid is not
available for Labour Tribunal cases in Hong Kong
except for cases transferred to a higher court and for
the relevant proceedings in a higher court.
 9. Employment Traps
• There are many warning signs that an employment trap is in place.
• For example, a job that requires little related experience or qualifications
but pays a high salary or bonus might suggest an employment trap being in
place.
• Another sign includes manipulative interviews where employers ask
extensive questions to collect unnecessary and personal information from
the potential employees.
• Other signs include seminars and talks where victims are subject to group
pressure to pay more money for courses or sell products.
• If companies provide little information about themselves or their products
and services, this would be another warning sign of a possible employment
traps.
• If after the interviews or seminars, potential employees are asked to keep
the events confidential, this would be yet another warning sign.
• Usually, if employers invite potential employees to enrol in training courses
for a fee (especially before work begins), this would indicate another
imminent employment trap.
9. Employment Traps
The following is a list of employment traps based on information from the
Hong Kong Labour Department and various newspapers and university
career advice centres:

1. Pyramid selling schemes

Persuade and pressurise job seekers to buy their products in order to join
the company.
The job requires sharing commission (in a hierarchical way/pyramid
selling), or the participants have to pay a large sum of money to get the job,
and are required to make a profit through recruiting other members
(including relatives and friends) as their lower tiered staff rather than
directly selling the products.
Most of the reported cases of employment traps were related to the
promotions field.
Thus, there are ample examples of promotion related employment traps.
An example would be a job seeker who was persuaded to pay money to
attend a seminar organized by a company, and then in the seminar he/she
was asked to spend a significant sum on the company’s product.
Knowing little about the products, the job seeker might be pressured,
manipulated or persuaded to buy the products.
9. Employment Traps
• The job seeker would then have bought products which he/she would
not use, and which the job seeker does not know how to resell.
• The products bought from these job traps come in many shapes or
forms, and they include health products, food products, and even
services.
• Another example is where job seekers are promised a job from a hiring
company on the condition that the job seekers take some courses to
upgrade their skills.
• The course must be paid for at the expense of the job seeker.
• The courses can range from language courses, presentation courses, or
even leadership seminars.
• Usually, the courses that the job seeker paid for will not happen at all.
• Another possible event is that the job seekers never receive the job they
were promised, even after finishing the course.
• These job traps usually operate on a hierarchical or multilayered
recruitment plan.
• Job seekers who are already recruited would gain financial reward if
they persuade friends or relatives intheir network to participate.
9. Employment Traps
2. Talent scout scams
• Some job scammers claim to be representatives from the
entertainment industries (such as modeling agencies).
• The job scammers approach job seekers and claim that they
have the potential to be models, singers and movie stars.
• However, conditions are imposed and must be met before
they are able to start their careers.
• This includes having the job seekers pay fees for training
classes and visits to the beautician.
• Other fees might include referral fees and deposits.
• The money paid might not be returned, or there might be no
actual job referrals.
9. Employment Traps
3. Financial and investment scams
• Some job scammers claim to be brokers or traders of
investment companies or claim to be holding high-level
jobs in marketing firms.
• They then offer job seekers high pay for posts that require
little prior experience and qualifications.
• Upon employment, the employees will be pressurised or
manipulated to make investments with their own money or
money from their friends and families.
• Eventually, the employers fraudulently tell the employee
that their investments have failed.
9. Employment Traps
4. Theft of personal data
• Some scammers try to steal personal data for their own
profit and benefit.
• The personal data are usually stolen through long, drawn
out interview processes with multiple forms to fill in.
• The personal data that are fraudulently obtained include
Hong Kong Identification Card number, bank accounts
and credit card information.
• The scammers will then use the job seekers’ personal
information to obtain loans from banks, or steal from their
credit card accounts.
 9. Employment Traps
5. Employee versus self-employed person
• While certain industries do have the custom of employing people as
self-employed people, the category of self-employed person can be a
job trap.
• Self-employed persons do not enjoy as many rights under
the Employment Ordinance ( Cap. 57 ), the Minimum Wage
Ordinance ( Cap. 608 ), the Employment Compensation
Ordinance ( Cap. 282 ), and the Mandatory Provident Fund Schemes
Ordinance ( Cap. 485 ).
• Self-employed persons do not enjoy paid annual leave, statutory
holiday pay, sickness allowance, nor are they subject to minimum
wage regulations and employment compensation.
• Employers might potentially take advantage of eager job seekers by
offering them self-employed jobs, which might not have a signed
contract.
• Job seekers should clarify with the employers regarding the nature of
the employment, especially whether they are employed as an
employee or as a self-employed person.
9. Employment Traps
6. Paying below the minimum wage
• All employee categories are subject to the statutory minimum wage
as specified in the Minimum Wage Ordinance ( Cap. 608 ).
• This includes employees in full time and part time capacities. The
only exemptions allowed are listed under the Minimum Wage
Ordinance ( Cap. 608 ) for student interns and work experience
students.
• All employers should pay the wages on time and the payment
should not be less than the statutory minimum wage.
• Some employers might attempt to break the law by paying less
than the minimum wage, whether or not the wage amount was
specified in the contract.
• Thus, employees should ask the employers to clarify the amount of
wages that are to be paid during the negotiation of contract.
• Underpaid or unpaid employees should approach the Labour
Relations Division of the Labour Department.
10. Discussion Questions
1. Why does commission of theft usually amount to summary
dismissal?
2. What consideration will be attend to when you as an
employer choose between summary dismissal and
suspension?
3. If you sign an employment contract and before the 1st day to
report duty, you have another job offer which is more
attractive, what should you consider if you intend to take up
the new job offer?
4. A person without paid sick leave cannot take a sick leave.
Comment?