Frequently Asked Questions

Frequently Asked Questions about The Employment Ordinance, Cap. 57 Employment Protection

Q1 What are the valid reasons for dismissal or variation of the terms of an employment contract?

A1. Under the Employment Ordinance, the five valid reasons for dismissal or variation of the terms of an employment contract relate to -  (a) conduct of the employee; (b) capability or qualification of the employee for performing his work; (c) redundancy or other genuine operational requirements of the business; (d) statutory requirements; or (e) other substantial reasons.

Q2. (i) Under what circumstances can an employee make a claim for remedies against an employer for unreasonable variation of the terms of an employment contract? (ii) What are the remedies?

A2(i). An employee employed under a continuous contract may claim for remedies against an employer for unreasonable variation of the terms of an employment contract if -  (a) the terms of the employment contract are varied without the employee's consent and the employment contract does not contain an express term which allows such a variation; and (b) the terms of the employment contract are varied because the employer intends to extinguish or reduce the right, benefit or protection to which the employee is or will be entitled under the Employment Ordinance. The employer will be taken as having that intention and the variation of the contract terms will be taken as being unreasonable if the employer has not shown a valid reason for the variation as specified in the Employment Ordinance.     A2(ii). The Labour Tribunal, in considering the case, may order - (a) reinstatement or re-engagement (subject to the mutual consent of both the employer and employee); or (b) an award of terminal payments against the employer.

Q3. Under what circumstances does a dismissal contravene the law?

A3. Dismissal in the following circumstances contravenes the law:  (a) dismissal of a pregnant employee; (b) dismissal whilst the employee is on paid sick leave; (c) dismissal by reason of an employee giving evidence or information in any proceedings or inquiry in connection with the enforcement of labour legislation, industrial accidents or breach of work safety regulations; (d) dismissal for trade union membership and activities; or (e) dismissal of an injured employee before the parties concerned have entered into an agreement for employee's compensation or before the issue of a certificate of assessment.

Q4. (i) Under what circumstances can an employee make a claim for remedies against an employer for -  (1) unreasonable and unlawful dismissal; or  (2) unreasonable dismissal? (ii) What are the remedies?

A4(i)(1). An employee may claim for remedies against an employer for unreasonable and unlawful dismissal if -  (a) the employee is dismissed by the employer other than for a valid reason as specified in the Employment Ordinance (see A1 for the valid reasons); and (b) the dismissal is in contravention of the law (see A3 for unlawful dismissal).

A4(i)(2). An employee employed under a continuous contract for a period of not less than 24 months may claim for remedies against an employer for unreasonable dismissal if he is dismissed because the employer intends to extinguish or reduce the right, benefit or protection to which he is or will be entitled under the Employment Ordinance. The dismissal will be taken as being unreasonable if the employer has not produced any one of the valid reasons specified in the Employment Ordinance.

A4(ii). For unreasonable and unlawful dismissal, the Labour Tribunal, in considering the case, may order -  (a) reinstatement/re-engagement of the dismissed employee (subject to the mutual consent of both the employer and employee); or (b) an award of terminal payments against the employer. Where no order for reinstatement of re-engagement is made, the Labour Tribunal may also award compensation to the employee not exceeding an amount of HK$150,000, irrespective of any award of terminal payments, in appropriate cases. For unreasonable dismissal, the Labour Tribunal, in considering the case, may order -  (a) reinstatement or re-engagement of the dismissed employee (subject to the mutual consent of both the employer and employee); or (b) an award of terminal payments against the employer.

Q5. Will the Labour Tribunal force an employer to accept a reinstatement or re-engagement order?

A5. No. An order for reinstatement or re-engagement will only be made if both the employer and the employee agree to the making of such order.

Q6. What are terminal payments?

A6. Terminal payments refer to the statutory entitlements that an employee is entitled to but has not yet been paid upon dismissal.  These payments include -  (a) wages; (b) payment in lieu of notice; (c) end of year payment; (d) maternity leave pay; (e) severance payment or long service payment; (f) sickness allowance; (g) holiday pay; (h) annual leave pay; and (i) any other payments due to the employee under the Employment Ordinance and his contract of employment.   An employee may be awarded terminal payments even if he has not attained the qualifying length of service required for the entitlements. In such case, the terminal payments shall be calculated according to his actual length of service.