Frequently Asked Questions about
The Employment Ordinance, Cap. 57
Termination of Contracts of Employment
Q1. What is the required length of notice, or the amount of payment for wages in lieu of notice, for termination of an employment contract? Answer
Q2. Can annual leave be used to offset the notice period of termination? Answer
Q3. Is there any situation whereby an employer or an employee can terminate a contract of service without notice or payment of wages in lieu of notice? Answer
 
Content
 
Q1. What is the required length of notice, or the amount of payment for wages in lieu of notice, for termination of an employment contract?
A1.

In the case of a continuous contract of employment, the length of notice or the amount of wages in lieu of notice required are:

Table 1

 

Length of notice

Wages in lieu of notice

During Probation Period

within the first month of probation

not required

not required

after the first month of probation

With agreement to the length of notice

as per agreement, but not less than 7 days

 

Table 2

without agreement to the length of notice

not less than 7 days notice

 

Table 2

No / after probation period

with agreement to the length of notice

as per agreement, but not less than 7 days

 

Table 2

without agreement to the length of notice

not less than 1 month

 

Table 2

Table 2

 

 

Notice period expressed in days or weeks

 

 

 

 

 

 

 

 

Average daily wages earned by an employee

in the 12-month period before the day when a notice of termination of contract is given*

X

Number of days in the notice period for which wages would normally be payable to the employee

=

Wages in lieu of notice

 

 

 

 

Notice period expressed in months

 

 

Average monthly wages earned by an employee

in the 12-month period before the day when a notice of termination of contract is given*

X

Number of months specified in the notice period

=

Wages in lieu of notice

 

 

 

 

 

 

 

 

* In calculating the average daily wages, an employer has to exclude (i) the periods for which an employee is not paid his wages or full wages, including rest day, statutory holiday, annual leave, sickness day, maternity leave, sick leave due to work injuries or leave taken with the agreement of the employer, and any normal working day on which the employee is not provided by the employer with work; together with (ii) the sum paid to the employee for such periods

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Q2. Can annual leave be used to offset the notice period of termination?
A2.

No.

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Q3. Is there any situation whereby an employer or an employee can terminate a contract of service without notice or payment of wages in lieu of notice?
A3. Yes.

An employer may summarily dismiss an employee without notice or payment of wages in lieu of notice if the employee, in relation to his employment, -

(a) wilfully disobeys a lawful and reasonable order;
(b) misconducts himself;
(c) is guilty of fraud or dishonesty; or
(d) is habitually neglectful in his duties.

Employers should note that summary dismissal is a serious disciplinary action. It only applies to cases where an employee has committed very serious misconduct or fails to improve after the employer's repeated warnings.

An employee may terminate his employment contract without notice or payment of wages in lieu of notice if -

(a) he reasonably fears physical danger by violence or disease;
(b) he is subjected to ill-treatment by the employer; or
(c) he has been employed for not less than 5 years and he is certified by a registered medical practitioner as being permanently unfit for the type of work he is engaged.

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