26 November 2021
In our latest international employment alert we look at recent legal changes as well as changes on the horizon in the employment law field. Click below to see the legal updates in the following jurisdictions:
Hong Kong
How will two new pieces of legislation greatly benefit Hong Kong's employees?
Mandatory Provident Fund ("MPF") offsetting
Currently in Hong Kong employers can offset amounts of severance and long service payments paid to employees under the Employment Ordinance ("EO") from the accrued benefits derived from the employers' contributions made into the MPF schemes.
MPF savings are supposed to be used for an employees' retirement but the above arrangements are contrary to that objective depleting the funds when the employee retires or they are made redundant.
In her recent Policy Address Hong Kong's Chief Executive, Carrie Lam, stated that next year the Government will submit a bill to the Legislative Council which will cancel all offsetting arrangements in 2025. In summary, the bill will:
- Abolish all offsetting of severance and long service payments with effect from the law's commencement date (i.e. 2025). Prior to that date offsetting may continue;
- Provide for a governmental two-tiered subsidy scheme assisting employers' to meet expenses of paying severance and long service payments in full. The first-tier of the subsidy would last for twelve years and the second-tier would be extended to twenty-five years with the entire subsidy being estimated to be worth HK$29.3 billion; and
- Oblige employers to set up savings accounts to ensure that they have sufficient savings to pay future severance and long service expenses. This is important, after all when redundancies are happening an employer may be unable at that time to afford the cost of these payments.
More statutory holidays
Starting in 2022 and after a decade of negotiation moves will be taken to allow over a million workers more days off in Hong Kong. This is an important change.
EO
Irrespective of their length of service, all employees are entitled to twelve statutory holidays per annum pursuant to the EO's regime which provides that full-time employees with over three months of service will also be paid on the statutory holiday.
The regime is backed by criminal offences for any failure to grant the holiday and/or to pay an employee.
General Holidays Ordinance ("GHO")
The GHO provides that there are seventeen general holidays in Hong Kong (twelve of which overlap with the EO's statutory holidays).
The GHO also provides that save for banks, schools, public and government offices, these general holidays do not need to be observed, although many employers do grant their employees a leave day more than a million workers go without and have to work on those general holidays which are not also statutory holidays.
In order to improve conditions, between 2022 and 2030 and once every two years the following five general holidays will become statutory holidays: (i) Buddha’s Birthday (in 2022); (ii) the first weekday after Christmas Day (2024); (iii) Easter Monday (2026) (iv) Good Friday (2028); and (v) the day following Good Friday (2030).
By 2030, all employees will have seventeen statutory holidays and improved benefits.
Employers need to be careful to ensure that they comply with their new obligations in-particular employment documentation should be reviewed and updated.
Singapore
Update on proposed employment legislation in Singapore
Singapore has currently no anti-discrimination legislation or laws that employers have to comply with.
On 29 August 2021, Singapore's Prime Minister Lee Hsien Loong announced that Singapore will enshrine into law the current workplace anti-discrimination guidelines.
The current workplace anti-discrimination guidelines are guidelines on fair treatment of employees from the Tripartite Alliance for Fair & Progressive Employment Practices ("TAFEP Guidelines") which is a body established by the tripartite partners comprising the Ministry of Manpower, the National Trades Union Congress and the Singapore National Employers Federation. Employers are expected to abide by these TAFEP Guidelines but they are not legally binding.
The TAFEP Guidelines seek to encourage employers to implement fair employment practices based on the following 5 principles1:
a) Recruit based on merit: recruit and select employees on the basis of merit (such as skills, experience or ability to perform the job) and regardless of age, race, gender, religion, marital status and family responsibilities, or disability;
b) Respect employees: treat employees fairly and with respect and implement progressive human resource management systems;
c) Provide fair opportunities: provide employees with fair opportunity to be considered for training and development based on their strengths and needs to help them achieve their full potential;
d) Reward fairly: reward employees fairly based on their ability, performance, contribution and experience; and
e) Comply with labour laws: abide by labour laws and adopt the Tripartite Guidelines on Fair Employment Practices.
While there has yet to be any proposed legislation, it is expected that the new regime for resolving disputes regarding workplace discrimination will be similar to the regime in Singapore concerning disputes over salaries or wrongful dismissal2. Such a regime will require employers and employees to seek to resolve the disputes via mediation before the matter can be heard by a tribunal. According to Singapore's Prime Minister Lee Hsien Loong, a tribunal will be created to deal with workplace discrimination3.
In the meantime, employers should start preparing themselves for the proposed legislation and look at their workplace discrimination policies to see if what they have in place accords with the principles in the TAFEP Guidelines.
The Singapore section of the article was written by Jason Yang and Christine Ong at Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance).
Karis Yip, Senior Associate, Stephenson Harwood
karis.yip@shlegal.com
