Hire in Hong Kong SAR

The probation period is to be defined in the contract. While they can be set for between one and six months, the most common practice is three months.

The services of an employee on probation can be terminated by the employer or the employee without notice during the first month and by at least seven days thereafter However, generally, at least 30 days is required to end a continuous month-to-month contract).

Termination notice period is determined in the contract. However, it must be at least seven days.

Common Practice: one month

In the absence of a contract: one month.

Employees Entitlements on Termination:

• Accrued wages and unused annual leave:

Employees are entitled to all outstanding wages and payments in respect of accrued but unused annual leave up to the time of termination. This includes only statutory leave, unless the contract specifies otherwise.

• End of year payments:

If an employee is contractually entitled to an annual bonus, they will be entitled to a proportional payment thereof in respect of the year in which they are dismissed unless the bonus is payable solely at the discretion of the company or they have not been employed for a continuous period of three months or more in the payment period. If an end of year payment is not specified in the employment contract, a sum equaling the monthly average wage of the employee will be awarded.

• Severance pay: Any employee who has been employed under a continuous contract for at least 24 months is entitled to a severance payment if dismissed by reason of redundancy or layoff.
• Long service pay: Any employee with at least five years of service (excluding an employee who retires) will be entitled to a long service payment if he or she is dismissed and the employer is not liable to pay them a severance payment. “Dismissal” has the same meaning as that under the provisions relating to severance payments described above.

The EO enables any employee to make a claim for “unreasonable dismissal” to the Labor Tribunal, so long as they have been employed under a continuous contract for a period of at least 24 months and they have been dismissed. This also applies to employees whose contracts are varied without his or her consent. Once this type of claim is made, the employer is required to produce a valid reason for the dismissal or modification. Valid reasons include:

• The conduct of the employee
• The capability or qualifications of the employee to perform the kind of work he or she was employed for by the employer
• Redundancy of the employee or other genuine operational requirements.

The entitlement to annual leave for the first year is seven days. This is accumulated at the rate of one day for each completed year, up to a maximum of 14 days:

• First year: seven days
• Second year: eight days
• Third year: nine days

This continues up to a maximum of 14 days.

Employers are entitled to determine when annual leave is to be taken and must give a 14-day notice in writing to the employee of the time that they have selected. Annual leave must, however, be granted within 12 months of the end of the leave year. In practice, most employers will allow annual leave to be taken by employees as it accrues. A leave year may either be the anniversary of the employee’s commencement of employment or a date the employer selects in order to have a common leave year for all employees. This is commonly the calendar year.

The EO also permits employees to carry forward all untaken annual leave for 12 months after the preceding leave year.

The payment received by employees by way of holiday pay is equal to the employee’s average wage over the preceding 12-month period.

Employees have a right to take a payment in lieu of any accrued and untaken statutory annual leave from the preceding leave year. They are also entitled to payment in respect of any outstanding annual leave due upon cessation of employment.

Employees are entitled to paid sick leave at the rate of four-fifths of the employee’s average wage over the preceding 12-month period. An employee who has been employed under a continuous contract for a period of at least one month immediately preceding a sickness day is entitled to paid sickness allowance in accordance with the EO.

Entitlement to sick leave may be accumulated at the rate of two paid sickness days for each completed month of employment during the first 12 months of employment. This accumulates at the rate of four paid sickness days for each month thereafter, up to a maximum of 120 paid sickness days. The entitlement to sickness pay only applies, however, to periods of absence due to sickness of no less than four consecutive days. This is separate from annual leave.

An employee must produce a medical certificate issued by a medical practitioner or registered dentist in respect to any sickness day for which he or she is claiming statutory sickness allowance for. If the employee fails to do so, the employer is not liable to make any payment for that particular day.

In light of the rather restrictive entitlement to statutory sickness allowance, it is not unusual for employers to provide a contractual sickness benefit which is more beneficial than statutory sick allowance (e.g. by providing that sick leave is compensated at full pay or by offering employees an upfront entitlement to a certain number of days instead of accruing sick leave days on a month-to-month basis).

• A female employee employed under a continuous contract of employment (e.g. she has been employed for four or more weeks and has worked at least 18 hours in each week) immediately before the expected date of her commencement of maternity leave (ML), is entitled to take maternity leave in accordance with the EO or as provided by the terms agreed with by the employer – whichever is more favorable.
• The statutory maternity leave for employees under the EO is 14 weeks. Employers, after payment of 14 weeks’ ML Pay on the normal payday, may apply for reimbursement of the 11th to 14th weeks’ ML Pay payable and paid under EO, subject to a cap of $80,000 per employee.
• To qualify for paid ML, the employee must fulfill all of the following:
  • be employed for a period of at least 40 weeks immediately before the expected date of commencement of ML.
  • give the required notice
  • comply with the requirements for the provision of medical certificates referred to above.
• Maternity leave pay is paid at the rate of four-fifths of the employee’s average wage over the preceding 12-month period. The additional four weeks’ statutory ML pay is subject to a cap of $80,000 per employee.

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

Male employees in the private sector who are employed under a continuous contract are entitled to a three-day paternity leave in connection with the birth of a 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 of service at the time of taking paternity leave, he will be entitled to a payment for each day of paternity leave. This is calculated at 80% of the employee’s average daily wages over the previous 12 months.

Trade union participation in Hong Kong depends on the industry.

There are a number of labor organizations and trade unions in Hong Kong but no closed shops. These are principally established on a trade-by-trade basis, although some of the larger corporations with substantial numbers of employees have labor unions particular to that corporation. Membership of trade unions in Hong Kong is relatively low compared to European and American counterparts.