XN000022-1997-03-04 — Page 4

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If no order for reinstatement or re-engagement is made, or the employer has not complied with an order for reinstatement or re-engagement, the employee shall be entitled to an award of terminal payments. These refer to those sums payable under the Employment Ordinance upon termination of the employment contract by an employer, (including LSP, SP, wages in lieu of notice, annual leave pay, end of year payment, holiday pay and other payments) which the employee would have been entitled to receive if he had been allowed to continue his original employment. The terminal payments would be calculated on the basis of the actual length of service of the employee.

In addition to terminal payments, an award of compensation may also be made payable to the employee by the employer in respect of an unlawful dismissal to compensate the employee for the damage or hardship caused. The maximum amount of the compensation is $150,000.

As regards procedures for filing claims, an employee should make a claim by giving a written notice to the employer within three months of the dismissal or the effective date of the variation of the term(s) of the contract of employment. This deadline may be extended for a period up to six months by the Commissioner for Labour if there are good grounds for late submission. Alternatively, he may lodge a claim with the Labour Tribunal within nine months of the dismissal.

"This serves to ensure that a claim under this proposal will not arise from a dismissal which took place an unduly long time ago in the past," Mr Cheung said.

To clarify the legislative intent under the existing provisions of LSP in respect of the entitlement of employees on fixed-term contracts to LSP, the Government also proposes to amend the Employment Ordinance to make it clear that if an employee on a fixed term contract declines an offer of renewal or re-engagement by the employer which is on no less favourable terms than his existing contract, he shall not be entitled to LSP.

"This should remove the present ambiguity on the entitlement of fixed-term employees' entitlements to LSP," Mr Cheung said.

Turning to the Labour Relations (Amendment) Bill, Mr Cheung said that the Commissioner for Labour would be given greater flexibility in making submissions on trade disputes to the Governor-in-Council upon receipt of a report by a conciliation officer without having to appoint a special conciliation officer.

"The proposal would have the benefit of imposing greater pressure on the disputing parties to come to a settlement through ordinary conciliation, lest the Governor-in-Council may order any appropriate action, including arbitration and setting up a board of inquiry.