This post was contributed by Marie Kwok, Of Counsel, Norton Rose Hong Kong

In Hong Kong, the primary piece of employment legislation is the Employment Ordinance (EO), which sets out the minimum statutory entitlements for employees. The EO is applicable to all employees in Hong Kong, subject to limited exceptions. If an employer dismisses an employee under circumstances which are inconsistent with the EO or the terms of the employment contract, the dismissal may be deemed wrongful.  In addition, if an employee is employed under a continuous contract for four weeks or more, with at least 18 hours worked in each week, then he/she is entitled to additional protections under the EO. These include protection against “unreasonable termination” (if he/she has been continuously employed for at least 24 months) or “unlawful dismissal”.  A person claiming that he/she has been wrongfully, unreasonably and/or unlawfully dismissed can file a claim at the Labour Tribunal of Hong Kong (which can, on its own motion, or on application of either party to the dispute, transfer the case to the Court of First Instance of Hong Kong). This article will cover the standard dismissals but not those involving discrimination or human rights issues.

A.     Wrongful dismissal —

Under Hong Kong law, an employment contract can be terminated by:

  1. notice (the minimum requirements are prescribed by the EO, or by contract if the minimum  statutory requirements are met), except during the first month of the probationary period, either the employer or the employee may terminate an employment contract without notice;
  2. payment in lieu of notice;
  3. mutual agreement of the parties;
  4. summary dismissal; or
  5. constructive dismissal by the employee in respect of the employer’s serious breach or on suspension.

The employee will be entitled to claim compensation equal to the amount of wages which would have accrued to the employee during which notice would have been required to be given for the termination, plus, in certain circumstances, common law damages.

B.     Unreasonable dismissal —

An employee employed under a continuous contract for a period of not less than 24 months may make a claim for remedies against an employer for unreasonable dismissal if he/she is dismissed other than for one or more of the following valid reasons as specified in the EO:

  1. the conduct of the employee;
  2. the capability or qualifications of the employee for performing his/her work;
  3. redundancy or other genuine operational requirements of the business;
  4. statutory requirements; or
  5. other substantial reasons.

In the case of an unreasonable dismissal, the Labour Tribunal may order –

  1. reinstatement or re-engagement of the dismissed employee (subject to the mutual consent of both the employer and employee); or
  2. an award of termination payments against the employer.

Termination payments include:

  1. the statutory entitlements under the EO which the employee is entitled to but has not yet been paid on dismissal such as wages, payment in lieu of notice, end of year payment, maternity leave pay, severance payment or long service payment, sickness allowance, holiday pay, annual leave pay, etc;
  2. the entitlements the employee might reasonably be expected to be entitled to under the EO had he/she been allowed to continue his/her employment; and
  3. any other payments due to the employee under his/her contract of employment.

C.     Unlawful dismissal —

It is unlawful to dismiss an employee:

  1. if that employee is pregnant and has served a notice of pregnancy to her employer;
  2. if the employee is on paid sick leave;
  3. by reason of the employee giving evidence or information in any proceedings or inquiry in connection with the enforcement of the EO, work accidents or breach of work safety legislation;
  4. by reason of the employee’s trade union membership and activities; or
  5. if that employee has been injured and is suffering incapacity within the meaning of the Employees’ Compensation Ordinance, before the employer has entered into an agreement with the employee for employee’s compensation or before the issue of a certificate of assessment in respect of the injury.

In the case of an unlawful dismissal, the Labour Tribunal may order –

  1. reinstatement or re-engagement of the dismissed employee (subject to the mutual consent of both the employer and employee); or
  2. an award of termination payments against the employer. The Labour Tribunal may order an award of compensation not exceeding HK$150,000 to the employee in appropriate cases, in addition to the termination payments payable.

It should be noted that in the case of an unlawful dismissal, an employer may be guilty of a criminal offence and be liable to a fine.