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Hong Kong: 2021 Key Changes in Employment Law

Over the past two years, workplaces in Hong Kong have been deeply uprooted. First, there were widespread protests that emerged in March of 2019 and then Hong Kong experienced early impacts of the COVID-19 pandemic. As a result of these events, employers have embraced new ways of working, touching on remote working, digital transformation and enhanced duty of care. Furthermore, new legislative measures that enhance the statutory rights of employees have been introduced.

Now that we’re at the midway point of 2021, here are some of the key trends and recent developments that are reshaping workplaces across Hong Kong.

Proposal to Modernize Data Privacy Laws

The Hong Kong government is formally considering making landmark amendments to the Personal Data (Privacy) Ordinance (PDPO) which would update and modernize Hong Kong’s data privacy laws. The Panel on Constitutional Affairs published a discussion paper in 2020 which is aimed at strengthening the protection of personal data.

The key areas proposed for change include:

  • Developing a mandatory reporting mechanism for data breaches
  • Imposing new governance requirements for data retention
  • Expanding the powers of the Privacy Commissioner
  • Regulating data processes
  • Expanding the definition of ‘personal data’
  • Addressing and regulating the practice of “doxxing” (e.g., publishing private or personally identifiable information without consent, usually with malicious intent)

It is possible that further proposals to enhance other areas of the PDPO will be considered at a later phase, establishing additional provisions similar to that of the General Data Protection Regulation (GDPR), which is in effect in the European Union, or the provisions being considered or introduced into the data privacy laws of other Asia Pacific economies. Employers in Hong Kong should closely monitor the advancement of PDPO, as existing data governance policies and practices may soon need to be revised.

New Ordinance Expands Hong Kong’s Discrimination Laws

In June of 2020, the Discrimination Legislation (Miscellaneous Amendments) Ordinance 2020 was gazetted, amending each of the existing anti-discrimination ordinances to strengthen protections against unlawful harassment and discrimination. Furthermore, the ordinance outlined new protections that prohibit discrimination on the ground of breastfeeding in workplaces.

The ordinance expanded the scope of unlawful sexual, disability and racial harassment to include situations where the claimant and respondent are “workplace participants” provided that they work in or attend the same workplace. Moreover, it specifies that “workplace participants” include interns and volunteer, making them personally liable for acts of harassment they commit while performing an internship or volunteer work. A person who engages the intern or volunteer may also be vicariously liable for the act of harassment even if it was committed without their knowledge. This liability may be disputed if the person can show they took “reasonably practical” steps to prevent the intern or volunteer from committing the act.

As part of the ordinance, The Race Discrimination Ordinance (RDO) has been expanded to cover situations when “race” or “racial group” is imputed to a person, making it possible to be charged with unlawful racial discrimination if you treat someone less favorably thinking they are of a particular race or racial group when they may not be. Furthermore, the imputation provision covers situations where a person is discriminated against or harassed because of the race or racial group of that person’s “associate”, a term that includes their spouse, a family member, a household member, a caregiver or a person they have a business, sporting or recreational relationship with.

While the new harassment and discrimination provisions went into effect immediately, the breastfeeding provisions were tabled to go into effect at a later date.

The EOC Launches Anti-Sexual Harassment Unit and Hotline

In November 2020, Hong Kong Equal Opportunity Commission (EOC) established its Anti-Sexual Harassment Unit (ASHU) to strengthen efforts to mitigate sexual harassment through prevention, research, policy advocacy, policy guidance and training. ASHU provides a one-stop-shop platform for those impacted by sexual harassment. The unit will conduct a review of the legal regime in place to identify and address any gaps in addressing sexual harassment.

On 25 January 2021, the EOC announced the launch of an Anti-Sexual Harassment Hotline, manned by the ASHU. The goal of the hotline is to provide members of the public with information on provisions of the law and advice on how to lodge complaints of sexual harassment. The hotline also provides referral to counselling and therapy services for those affected by sexual harassment.

Employers must ensure they have adequate policies and procedures in place to prevent sexual harassment in the workplace. Most importantly, they must devise appropriate response and investigation mechanisms should any incidents of sexual harassment arise. 

Extension of Statutory Maternity Leave (and Changes to Paternity Leave)

Effective from 11 December 2020 onward, statutory maternity leave in Hong Kong has been expanded to 14 weeks from the previously set ten weeks. Notably, the Hong Kong government has committed to reimburse employers for the additional four weeks of paid maternity leave (capped at HK$80,000 per employee). Accompanying the new extension of statutory maternity leave, the Hong Kong Labour Department has also launched an online portal. This portal will facilitate employers in applying electronically for the reimbursement of maternity leave pay.

In line with the increased maternity leave, the period within which an expectant father may elect to take his paternity leave now begins four weeks before the expected due date and ends 14 weeks (up from the previously set 10 weeks) after the actual due date.

If they have not yet done so, it is recommended that employers review their parental leave policies and practices so they align with the newly introduced extended periods of statutory leave. Employees that manage payroll should be instructed on how to make increased payments for eligible employees and also become familiar with the process of seeking reimbursement from the Hong Kong government through the portal.

Increase of Statutory Holidays from 2022

On 7 July 2021, the Hong Kong government approved the Employment (Amendment) Bill 2021, which proposes to progressively increase the number of statutory holidays from 12 days to 17 days. The bill outlines five increments at two-year intervals, implemented from 2022 through 2030. The first addition will be Buddha’s Birthday in 2022. After that, a new holiday will be added every two years, with Boxing Day and the three days around Easter next in line. The statutory holiday regime is now aligned with Hong Kong’s existing public holiday regime.

New Protections for Breastfeeding Women

On 17 March 2021, the Legislative Council of Hong Kong (LegCo) fully passed the Sex Discrimination (Amendment) Bill 2020, further strengthening legal protections for breastfeeding women by introducing protection from harassment. The protection against breastfeeding harassment, along with new protections against breastfeeding discrimination as part of the Discrimination Legislation (Miscellaneous Amendments) Ordinance 2020, will come into effect in workplace on 19 June 2021.

Employers should practice due diligence in updating their discrimination and harassment policies ahead of the forthcoming changes, ensuring that the practices in their workplace comply with the new legislation.

Forthcoming Bill to Cancel MPF Offsetting Mechanism

In May of 2021, the Secretary for Labour and Welfare Law Chi-kwong announced that a bill to cancel the Mandatory Provident Fund (MPF) offsetting mechanism will be tabled in the coming legislative year set to end in June 2022. The bill will effectively abolish the mechanism that permits employers to offset employees’ severance payments or long-service payments with the MPF.

Law outlines that the bill will amend seven existing laws in addition to amending the Inland Revenue Ordinance. Furthermore, the bill will provide legislation on implementing a Designated Savings Accounts scheme that will mandate employers to establish designated savings accounts, ensuring that they maintain sufficient funding for meeting their potential severance and long-service expenses and alleviating financial pressures when such payments arise.

Duty of Care Remains in the Spotlight

Hong Kong, a city well known for its dedicated office culture of long working hours, was forced to transform itself during the pandemic into a work-from-home city. Amid the challenges of virtualizing operations, employers have grappled with a multitude of questions over the past year: Does our employee compensation insurance cover remote working? How do we arrange hours and workloads so working parents can also home-school? How can we address the impact of mental health challenges? How do we safely reopen?

Despite the woes of COVID-19, the laws covering mental and physical wellbeing of employees have not formally changed in Hong Kong. But, following protests and several waves of shutdowns, the emphasis on workplace safety, health and comfort certainly has. All of these disruptive events have had an impact on employees, both physically and mentally. Going forward, employers in Hong Kong must continue to prioritize the wellbeing of employees and embrace sympathetic ways of working that resonate with a workforce that has been profoundly changed.

Looking Ahead

The COVID-19 pandemic and socioeconomic changes of the past year have changed the way we work dramatically. As the world emerges from the pandemic, businesses in Hong Kong are confronting a ‘new normal’ marked by new statutory requirements and rapidly unfolding workplace trends. Staying ahead of these tides of change will help employers to protect brand reputation, retain talent and avoid costly legal liabilities.

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