Frequently Asked Questions about
The Employment Ordinance, Cap. 57
Annual Leave

Q1. How many days of annual leave should be given in a year? Answer
Q2. Who determines the timing of annual leave? Answer
Q3. Can annual leave be granted separately to an employee? Answer
Q4. Can an employer make payment to an employee in lieu of annual leave? Answer
Q5. How is annual leave pay calculated? When should it be paid? Answer
Q6. If an employee resigns before completing one year's service, should the employer grant pro-rata annual leave pay to him? Answer

 
Content
 
Q1. How many days of annual leave should be given in a year?
A1. An employee is entitled to 7 days' annual leave with pay after serving every period of 12 months under a continuous contract.

An employee's entitlement to paid annual leave will increase progressively to a maximum of 14 days according to his length of service as follows: 

Years of Service Annual Leave Entitlement
1 7
2 7
3 8
4 9
5 10
6 11
7 12
8 13
9 or above 14

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Q2. Who determines the timing of annual leave?
A2.

The timing of the leave should be appointed by the employer after consultation with the employee or his representative. The employer should confirm by a written notice to the employee at least 14 days in advance, unless a shorter period has been mutually agreed.

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Q3. Can annual leave be granted separately to an employee?
A3. Paid annual leave should be granted for an unbroken period.  If the employee so requests, it may be granted in the following manner:
 
Leave entitlement not exceeding 10 days Up to 3 days can be granted separately; the balance should be granted consecutively
Leave entitlement exceeding 10 days At least 7 days should be granted consecutively

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Q4. Can an employer make payment to an employee in lieu of annual leave?
A4. An employer should not include in an employment contract a term to forego all or any of his employee's annual leave entitlement, including payment of wages in lieu of any annual leave days.

However, the law allows an employee to choose to accept payment in lieu of that part of his leave entitlement which exceeds 10 days.

[Example] : An employee who is entitled to 12 days' annual leave can take 10 days' leave and accept payment of the equivalent wages for the 2 days' leave.

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Q5. How is annual leave pay calculated? When should it be paid?
A5.

The daily rate of annual leave pay is a sum equivalent to the average daily wages earned by an employee in the 12-month period preceding the day of the annual leave or the first day of the annual leave (if more than 1 consecutive day of annual leave). If an employee is employed for less than 12 months, the calculation shall be based on the shorter period.

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, paternity 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.

Annual leave pay should be paid to the employee not later than the normal pay day after the period of annual leave taken.

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Q6. If an employee resigns before completing one year's service, should the employer grant pro-rata annual leave pay to him?
A6.

An employee is entitled to pro-rata annual leave pay on completion of 3 months but less than 12 months' service in a leave year if his employment contract is terminated unless the employee is dismissed by summary dismissal.

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