31 March 2021
Employment and Pensions practice has introduced a new video series “Labour Law – Grab n Go” to keep our clients updated on the latest developments and trends of Employment Law in Hong Kong. In this client alert, we have included our first three episodes in one single document for our clients’ easy reference.
Budget 2021 – Employment Aspect
The Government is fully aware of the hardships brought about by COVID-19. This year’s Budget therefore focuses on stabilising the economy and relieving people’s burden, and to create benefits for people in Hong Kong. In addition to allocating funding for the retraining of the unemployed, the Government plans to expand the scope of the Continuing Education Fund to include online courses. Employers may wish to encourage their employees to regularly check out the courses made available under the Continuing Education Fund, so that their employees will have the opportunity to continue to develop professionally in such unprecedented times. Going forward, the Government acknowledges that Hong Kong must continue to strengthen our leading position in the global financial market by developing our potential in areas including financial services, innovation and technology. The Financial Secretary will allocate additional resources to promote the development of cultural and creative industries. To encourage more employment and business start-up opportunities. The Government will continue to help Hong Kong’s businesses to grasp the opportunities arising from Great Bay Area (GBA) development through various schemes. It will be interesting to see how the Government would facilitate employment in the GBA. In the meantime, Employers may want to start considering the feasibility of seconding their employees from HK to the rest of the GBA and vice versa. Issues such as implementing dual employment contracts, related employment benefits, and tax issues will need to be considered. Please click here to watch the video.
Shiu Ming v Natural Dairy (NZ) Holdings Limited – Companies not named in the employment contract may also be treated as employers
It is very common for large organisations to arrange one or some group companies to be the employing entities, such that the employees shall provide services not only to their employers but also to other group companies. It is intended that only the employing entities shall be treated as the sole employers. In Shiu Ming case, whilst the Employee mainly provided her services to the Parent Company of the group, she only signed an employment contract with a Subsidiary company. The Court of First Instance held that not only the Subsidiary (being the contracting party under the written employment contract), but also the Parent Company should be treated as the employers, and both companies shall be liable for the termination payments. When reading the contract as a whole, the Court considered that the parties’ intention was for the Employee to be employed by the Subsidiary as its manager and not as a manager of the Parent Company, and therefore, her contractual duties could not be extended to include duties to the Parent Company. As a result, when the Employee rendered her services to the Parent Company, she was actually carrying out her duties under another employment contract. The Court also considered facts including the discussions between the parties before and during employment, and concluded that the overall impression showed that the Employee was also employed by the Parent Company. Take away points:-
If your intention is for the Employing Entity to be the sole employer, it is important to make sure that:-
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The contract should be clearly drafted to show this intention;
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It should be clearly communicated to the employee at all times that the Employing Entity is his sole employer.
Please click here to watch the video.
Breton Jean v. H-K Bellawings Jet Limited – Rest Day Issues
What have you got planned this weekend? Perhaps you are going for a staycation, planning for a hike, or simply spending some quality time at home, but the common expectation is that we should be able to freely decide how to spend our weekends and not be expected to work. In the recent case of Breton Jean v. H-K Bellawings Jet Limited, the employee was a pilot with no fixed work days, and he was required to be contactable by his work phone at all times except for when he was on annual leave. The question was whether the employee, on days when he didn’t have to fly, should be regarded as being placed on standby duty given he had to be contactable on his work phone, and had to report to work within a specified timeframe after being contacted. The Employment Ordinance defines a “rest day” to mean a continuous period of 24 hours during which an employee is entitled to abstain from working for his employer. Given the employee was required to be on call on days when he didn’t have to fly, so that he wasn’t able to abstain from work if his employer called him, the court ruled that those days could not qualify as rest days under the Employment Ordinance. The takeaways of the case are therefore as follows:
1. If your company doesn’t appoint rest days on a fixed and regular basis, you should make sure each employee is clearly informed of his rest days before the beginning of each month. Remember, employees must get at least one rest day every 7 days! That is 24 hours that they can abstain from work!
2. If your company currently grants both Saturdays and Sundays off, you should make it clear to your employees (such as in their employment contracts) which day is the statutory day off, and which is the “contractual” day off, or else there may be an argument that both days off are statutory rest days on which you cannot compel the employee to work. Further, if a statutory holiday falls on a statutory rest day, the employer will have to grant an alternative holiday to the employee.
Please click here to watch the video.
For further information, please contact:
Elsie Chan, Partner, Deacons
elsie.chan@deacons.com.hk
