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Employment (Amendment) Bill 1995 to be submitted to LegCo next week
Following the endorsement by the Governor-in-Council today (Tuesday), the Government will introduce into the Legislative Council next week, the Employment (Amendment) Bill 1995 which contains a comprehensive package of improvements for calculating severance pay (SP) and long service payment (LSP).
The improvements contained in the Bill seek to raise both the absolute payment ceiling and the length of reckonable service for the calculation of SP and LSP on a gradual basis.
The improvements are based on the advice of the Labour Advisory Board which held two special meetings after the withdrawal of the Employment (Amendment) Bill 1994 last December to reconsider the issue of SP and LSP. The Bill provides for improvement of employee welfare by:
(a)
(b)
Removing the ceiling of 12 months' wages for the calculation of SP and LSP:
Increasing the years of service for the calculation of SP and LSP from the current limit of 18 years to 25 years plus 50 per cent of any remaining service immediately upon enactment of the legislation.
This limit will be increased by two years on October 1, 1995 and every subsequent year until it reaches 43 years in October 2003. There will be no ceiling as from October 1, 2004.
Details of the agreed increases in years of service are as follows:-
Effective date
Enactment to September 30, 1995
October 1, 1995
October 1, 1996
October 1, 1997
October 1, 1998
October 1, 1999
October 1, 2000
October 1, 2001
October 1, 2002
October 1, 2003
Years of
reckonable service
25
27
29
31
33
35
37
39
October 1, 2004 and thereafter
1
41
43
No ceiling