The Employment Ordinance is one of the most liberal regimes for employers worldwide. Yet, together with a number of recent ordinances which provide for protections to individuals in specific situations, employees are not without rights.
Add to this background:
- other relationships between one company and one individual such as shareholding, directorship, a commercial agreement between the company and a company where the employee has a material interest; and/or,
- other relationships with affiliate companies of the employer in different jurisdictions, like another employment or service agreement,
and you end up with a situation which requires legal advice to be untangled without unnecessary risks.
HONG KONG LIBERAL REGIME FOR EMPLOYERS
Key points to note:
- the minimum notice period, after probation is one month if there are no provision in the employment agreement, or the agreed period which shall not be less than seven days;
- severance payment is only due in case of redundancy for employees with a minimum of two years’ continuous work with the company and the maximum indemnity is HK$15,000 per year;
- long service payment is only due for employees with a minimum of five years’ continuous work with the company and the maximum indemnity is HK$15,000 per year;
- long service payment and severance payment cannot be cumulated.
Details can be found on the government website.
GENERAL PROTECTIONS FOR EMPLOYEES
The Labour Tribunal rules are very effective to ensure the respect of the rights of the employees – as meagre as they may seem. Two provisions are specifically effective:
- no representation rule: each party, employers like employees, must appear in person in court, without representation by a lawyer. For employers it usually means a director or a person from the HR department needs to attend hearings which may take half a day out of work – without counting preparation work;
- mandatory mediation: the officers of the Labour Tribunal are well trained to lead this statutory milestone in any Labour Tribunal dispute; it takes place at the outset. The Judges continue to act during the procedure to press each party to document the weaknesses of its case, openly.
SPECIFIC PROTECTIONS FOR EMPLOYEES
The list below is not exhaustive.
- Minimum Wage Ordinance;
- Occupational Safety and Health Ordinance;
- Factories and Industrial Undertakings Ordinance;
- Employees’ Compensation Ordinance;
- Personal Data (Privacy) Ordinance;
- Sex Discrimination Ordinance;
- Disability Discrimination Ordinance;
- Family Status Discrimination Ordinance;
- Race Discrimination Ordinance.
HOW OTHER RELATIONSHIPS MAY INTERFERE
The preparation of the termination – whether on behalf of the employee or the employer – needs to be meticulous to anticipate various issues that may arise, for instance:
- termination of directorship: if the director refuses to resign, he/she may only be removed further to a lengthy procedure which requires a general meeting to be called with a special notice sent to the director to ensure she/he has the opportunity to be heard or to have a written statement read at the general meeting;
- check the provisions of the employees shares options plan (ESOP) to ascertain the rights of the employee/employer;
- review the terms and conditions of other agreements as they are independent from the employment relationship and should be treated so.
OTHER AGREEMENTS WITH AFFILIATE COMPANY OF THE EMPLOYER IN ANOTHER JURISDICTION
A typical situation will be one where the employee was initially hired and employed in a different country and thereafter agreed by addendum to suspend this initial agreement and enter into a new one with a Hong Kong company. What happens when the Hong Kong employment agreement is terminated is a question that can only be answered by reviewing the initial employment agreement and its addendum with local rules in the said foreign jurisdiction.
Another typical situation is where the employee is the beneficiary of an ESOP with a holding company in a foreign jurisdiction.
HOW WE CAN HELP
Our approach is comprehensive (looks at the big picture as well as all components of it), responsive and action-focused.
We look at the big picture and take stock of all components. For employment matters, it means we take in consideration the history and future of the relationship: duration of employment, employment prospect of the employee, financial situation of the employer, etc. And of course, we review in detail the terms of the contract, with reference to the employment ordinance and other statutory protections for employees or else.
We apply the principles of lean manufacturing to our work organization. As far as possible we arrive at the office in the morning with a workload which can be reorganized to commence work on new matters swiftly.
Yesterday’s emergencies have been dealt with yesterday. We are ready for new challenges today.
Good advice does not come in one-size. The meaning and basis for our advice will be laid at in a structured e-mail for relatively straight forward matters or memorandums of various length for complex matters.
Once the course of action has been agreed with you, we’ll assist you to prepare the draft emails, letters, contracts or addendums agreed.
From our experience, the pursuit of the exchange with the other party (ies) in the first person is more likely to produce results than lawyers’ letters. Lawyers’ letters are not the ultimate weapon, they are part of the arsenal. We’ll get litigators involved if and when the prospect of litigation is looming. Our firm is working on a regular basis with litigation departments of larger firms or firms focusing their practice on litigation.
We have created packages (fixed fees) for the following:
- Straightforward employment agreement (no restrictive covenant);
- Employment agreement including restrictive covenants for key employees;
- Employees share option plan (ESOP).
Hourly rates apply for more sophisticated cases and a budget can be provided upon demand for significant steps.