TNAG-0452-FCO40-517-Legislation-for-employment-of-workers-in-Hong-Kong-1974 — Page 5

C.S. 166

CONFIDENTIAL

機密

For discussion

on 7th January 1975

XCC(75)2

Copy No of 70

MEMORANDUM FOR EXECUTIVE COUNCIL

- 6 JAN 1775

28

OLA Savan (GGD)

EMPLOYMENT (AMENDMENT) BILL 1975

HKK 519.

Annexed for the consideration of Honourable Members

11. coppi

is the Employment (Amendment) Bill 1975.

2

A contract of employment may be terminated under the Employment Ordinance by the giving of notice of termination as re- quired by section 6 of the Ordinance or by an agreement to pay a sum equal to wages in lieu of notice (section 7).

3

It was thought that, where a contract of employment is wrongfully terminated (that is to say, otherwise than in accordance with the provisions just referred to), a liquidated sum equal to wages in lieu of notice was payable to the other party. The Full Court held recently that this is not the case and that the remedy is the ordinary common law action for unliquidated damages for breach of contract.

4

This bill will restore the position to what was thought to be and provides a right of action for liquidated damages for wages in lieu of notice.

5

It is possible that a result of the amendment could be an increase in the number of claims by employers against former employees who have left their employment otherwise than in accordance with the Employment Ordinance. Many employers have been under the impression that section 7 of the Employment Ordinance already entitles them to liquidated damages, but it is not known to what extent employers are at present deterred or interested for one reason or another from pursuing claims but it is not thought to be significant. In so far as workers are concerned the amendment will only reinstate the position to what they believe it to be. At common law, of course, it is diffi- cult for an employer to prove damage.

6

Because many employers and employees already believe that damages payable under the present section 7 are liquidated, little publicity is required. This can be restricted to a brief factual re- lease on the bill itself.

CONFIDENTIAL

機密