COVID-19 and Employment Issues (3rd Series)

The COVID-19 Pandemic has caused severe impact on the economy and businesses. Many businesses in Hong Kong are forced to adopt cost-cutting measures including redundancies, unpaid leave, reduced working hours and pay cuts citing reduced business activities to keep their businesses afloat.

 

What is dismissal by reason of redundancy?

An employee is taken to be dismissed by reason of redundancy if the dismissal is due to the fact that :

( 1 )     the employer closes or intends to close his business;

( 2 )     the employer has ceased, or intends to cease, the business in the place where the employee was employed; or

( 3 )     the requirement of the business for employees to carry out work of a particular kind, or for the employee to carry out work of a particular kind in the place where the employee was employed, ceases or diminishes or is expected to cease or diminish.

             

What is the meaning of lay-off?

If an employee is employed on such terms and conditions that his remuneration depends on his being provided by the employer with work of the kind he is employed to do, he shall be taken to be laid off if the total number of days on which no work is provided or no wages is paid exceeds:

( 1 )     half of the total number of normal working days in any 4 consecutive weeks; or

( 2 )     one-third of the total number of normal working days in any 26 consecutive weeks.

The days of lock-out, rest days, annual leave and statutory holidays should not be counted as normal working days during the above periods.

 

Below is a list of common termination payments payable to the employee when there is redundancy or laid off:

• statutory or contractual severance payments or long service payment
• wages up to and including the date of termination of employment;
• payment in lieu of notice (if applicable);
• payment in lieu of accrued but untaken annual leave;
• allowances and/or reimbursement of personal expenses contracted and incurred by the employee (such as for food, travel, housing, cost of living);
• bonuses and/or commissions;
• deferred compensation including stock or stock options; and
• payment to the Mandatory Provident Fund scheme or other occupational retirement scheme (eg. ORSO)

 

 

For legal advice or services on employment disputes, please contact CHOW & CHEUNG, Hong Kong Solicitors & Notary Public

Tel: +852 2856 3799   Email:cac@ccsn.hk

www.ccsn.hk

 

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