HONG KONG
LEGAL REPORT
Enclosure No. 2
THE EMPLOYMENT (AMENDMENT)(NO. 3) ORDINANCE 1974
(No. 67 of 1974)
This Ordinance amends the Employment Ordinance to provide for severance payments for employees who, in specified circumstances, are dismissed by reason of redundancy or are laid off.
2. Section 5 adds a new Part VA, consisting of sections 31A to 31Q, to the principal Ordinance.
Section 31B provides that, subject to other provisions in the new Part VA, an employee who, having been employed for a minimum of 24 months, is either dismissed by reason of redundancy or is laid off is entitled to a severance payment. Domestic servants are given the same rights as other employees by treating the maintenance of a household as if it were the carrying on of a business.
Section 31C contains exclusions from the right to a severance payment. The excluded cases are where
(a) the employee's contract is terminated for cause under section 9 of the principal Ordinance;
(b)
(c)
-
the employer offers to renew the employee's contract or to re-engage him under a new contract on terms identical or similar to his existing con- tract and the employee unreasonably refuses that offer; or
the employee ceases work
before the expiration
of notice given to him under section 6 of the prin- cipal Ordinance without the employer's consent or a payment in lieu of notice.
Section 31D determines what is meant by "dismissal" by an employer for the purposes of liability to make a severance payment and section 31E prescribes what is meant by "lay-off".
Section 31F provides that certain specified classes of employees are not entitled to severance payments.
Calculation of the amount of a severance payment is provided for by section 31G. It is a proportion of the employee's wages multiplied by the length of his service. A maximum payment is prescribed and employment more than 5 years prior to the day appointed by the Governor under section