The Legislative Council passed two employment related legislative amendments in two consecutive days

The employment (amendment) bill 2022 passed on 15 June 2022

The Legislative Council passed the Employment (Amendment) Bill 2022 on 15 June 2022 and the bill was gazetted on 17 June 2022 with amendment becoming effective on the same date.

Under the amendments, eligible employees who are absent from work for compliance with a requirement with restriction on movement imposed under the Prevention and Control of Disease Ordinance (Cap 599A) or Protection and Control of Disease (Compulsory Testing for Certain Persons) (Cap 599J) will be protected by the following:

The day(s) which an employee is absent from work due to compliance with the above Cap 599 requirements is included under the definition of “sickness day” in the Employment Ordinance (“EO”) and also provide for sickness allowance payable to eligible employees under the above circumstances, subject to the fulfilment of the relevant criteria under the EO.
Dismissal of an employee due to the reason of the employee being subject to such restriction on movement will consider as an unreasonable dismissal.

When the law takes effect, eligible employees are entitled to paid sick leave if they have contracted COVID, been ordered to undergo quarantine or are subject to health restrictions.

However, the amendment also gives employers the right to dismiss employees who:

Refuse to comply with the legitimate vaccination requirement of the "vaccine pass" scheme under Cap 599L; or
Fail to produce proof of having vaccinated of any COVID-19 vaccine offer by the government at employers’ request and after the expiry of a specified period constitutes a valid reason for dismissal under the EO.

The amendment has no retrospective effect. That means certain employees who could not work due to contracting COVID during the fifth wave of COVID-19 infections earlier or had to undergo a 14-day quarantine ordered by the government, could not retrospectively claim back from their employers for their annual leave or no-pay leave taken due to infected or quarantined earlier.

The amendment of the maximum amount of ex-gratia payment that can claim by an employee under the provisions of protection of wages on insolvency ordinance passed on 16 June 2022

The Legislative Council passed the amendment of the provisions of Protection of Wages on Insolvency Ordinance (“PWIO”) to increase the maximum amount of ex-gratia payment (including unpaid wages, pay for outstanding annual leave and statutory leave, wages in lieu of notice, and severance payments) that an employee can claim from the Protection of Wages on Insolvency Fund (“PWIF”). The Government gazetted the amendment of the PWIO on 17 June 2022 and such amendment became effective on the same date. Details of the amendment of PWIO provided in Table 1:

Table 1

Notes

The maximum amount of ex-gratia payment that an employee can claim from the PWIF is HK$396,000.
The benefits accrued from the employer’s contributions to the Mandatory Provident Fund for the employee have not yet been reduced.
The Employment Ordinance caps severance payments at HK$390,000, so the maximum an employee may claim from the PWIF is HK$245,000.
Pay for untaken annual leave that is payable to an employee upon termination of their employment contract under the Employment Ordinance includes:
(a) pay for any annual leave entitlement in the employee’s last full leave year and not yet taken; and
(b) pay (pro-rata) for annual leave entitlement in the last leave year in which the employee has at least three but less than twelve months’ service upon termination of their employment contract.
Pay for statutory holidays that an employee is entitled to within four months of their last day of employment but has not taken.

Speak to our payroll professionals

Feel free to get in touch to find out how we can help you by providing a tailored solution for payroll & HR outsourcing.

Joseph Hong
josephhong@bdo.com.hk