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Employment (Amendment) Bill 1995 introduced to LegCo

Following is the speech by the Secretary for Education and Manpower, Mr Michael Leung, in moving the second reading of Employment (Amendment) Bill 1995 in the Legislative Council today (Wednesday):

Mr President,

I move the Second Reading of the Employment (Amendment) Bill 1995.

This Bill seeks to improve the amount of severance payment (SP) and long service payment (LSP) for long serving workers, and to rectify some ambiguities in the provisions of maternity leave and sickness allowance under the Employment Ordinance.

At present, an employee's entitlement to severance payment and long service payment is calculated at the rate of two-thirds of a month's wages for each year of service, subject to a maximum limit of 12 months' wages or $180,000, whichever is the less. This arrangement has the effect of limiting the reckonable service of an employee to 18 years.

To enable long serving employees to earn severance payment and long service payment beyond 18 years, we now propose to remove the ceiling of 12 months' aggregate wages. The years of reckonable service for the calculation of SP and LSP will be increased from the current limit of 18 years to 25 years plus 50 percent of any remaining service immediately upon enactment of this Bill. This limit will be increased by two years on 1 October 1995 and every subsequent year until it reaches 43 years on 1 October 2003. There will be no ceiling as from 1 October 2004, which means that all years of service will be reckoned thereafter. The absolute payment ceiling will also be increased from the current limit of $180,000 to $210,000 when the amendment takes effect. This ceiling will be increased by $20,000 on 1 October 1995 and on 1 October of every subsequent year until it reaches $390,000 on 1 October 2003. This comprehensive and forward-looking package of improvements will provide substantial improvements to severance payment and long service payment immediately for our hardworking labour force and in the long term further enhancement of the benefits as this will raise both the absolute payment ceiling and the reckonable length of service on a gradual basis and within a definite time-table.