XN000022-1995-01-10 — Page 4

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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