Introduction

Hong Kong continues to battle the fifth wave of COVID-19 pandemic. The Government first announced on 8 February 2022 that it would be amending the Employment Ordinance (Cap. 57) (“EO”) to address employment-related issues brought by the COVID-19 pandemic and the implementation of anti-epidemic measures. On 25 February 2022, the Employment (Amendment) Bill 2022 (“Bill”) was published in the Gazette. The Bill was introduced to the Legislative Council (“LegCo”) for the first reading on 16 March 2022. Currently, the House Committee is considering the Bill.^[1]

We gave a webinar on “COVID-19 Fifth Wave from an Employment Law Perspective: Vaccine Pass Mandatory Lockdowns, Compulsory Quarantine, Testing and More” on 11 March 2022, where we discussed the proposed amendments to the EO. It was well-received by over 400 registrants and had a lot of questions from the participants. On 13 April 2022, we will be co-hosting a webinar with LexisNexis on “COVID-19 Special: Latest Changes to the Employment Ordinance that the Employers Need to Know”, please join us.

Vaccine Pass

On 10 February 2022, the Prevention and Control of Disease (Vaccine Pass) Regulation (Cap. 599L) (“Vaccine Pass Regulation”) came into operation. The Government implemented the Vaccine Pass on 24 February 2022 and made it clear that the underlying goal is to boost vaccination rate.

Starting from 24 February 2022, Vaccine Pass is applicable to all catering business premises and 23 other types of premises including shopping malls, department stores, hotels, supermarkets, markets, club-houses, beauty parlours, barber shops, hair salons and more.^[2] If a person (except for exempted groups) enters these premises without a Vaccine Pass, he/she may be subject to a fixed fine of HK$5,000.

At the initial stage of the Vaccine Pass Regulation, individuals who have received at least one dose of vaccine can enter these premises provided that they use the LeaveHomeSafe app and produce their vaccination record (if and when required). The Government will gradually adjust the Vaccine Pass requirement to have received a second dose and a booster shot of vaccine.

On 20 March 2022, the Government announced adjustments to the vaccination requirements of Vaccine Pass, with a view to further encouraging members of the public to get vaccinated as soon as possible, including the third dose, and advancing the implementation of stage three Vaccine Pass from end June to end May.

The Bill

The Bill seeks to give effect to the following three proposals:

1.        to make it explicit that the absence from work of employees for compliance with a requirement with restriction on movement imposed under the Prevention and Control of Disease Ordinance (“Cap. 599”) (except restriction imposed on people travelling to Hong Kong) will be deemed as sickness day(s) under the EO and to provide for sickness allowance to eligible employees absent from work under these circumstances, subject to the fulfilment of the relevant criteria under EO;

2.        to make it explicit that dismissal of an employee by reason of the employee being subject to restriction on movement imposed under Cap. 599 (except restriction imposed on people travelling to Hong Kong) is considered as unreasonable dismissal; and

3.        to make it explicit with a sunset provision that dismissal of employees due to refusal to receive vaccination without sufficient medical reasons after request being made by employers is not considered as unreasonable dismissal.

What is Unreasonable Dismissal?

If an employee has been employed under a continuous contract for a period of not less than 24 months and he is dismissed other than a valid reason under the EO, the employee may make a claim against the employer for unreasonable dismissal. Valid reasons include:

1.        the conduct of the employee;

2.        the capability or qualifications of the employee for performing his or her work;

3.        the redundancy of the employee or other genuine operational requirements of the employer’s business;

4.        the employment itself being in contravention of the law; or

5.        any other substantial reasons deemed by the court or the Labour Tribunal to be sufficient to warrant the dismissal.

The employer has the burden to prove that there is a statutory valid reason for the dismissal. Unless a valid reason is shown for that dismissal, an employee shall be taken to have been so dismissed because the employer intends to extinguish or reduce any right, benefit or protection conferred or to be conferred upon the employee by the EO.

What is Unreasonable Variation of the
terms of the employment contract?

Similarly, if an employee has been employed under a continuous contract for a period of not less than 24 months and the employer, without his consent and, in the absence of an express term in his employment contract which so permits, varies the terms of his employment contract, the employee may make a claim against the employer for unreasonable variation of the terms of the employment contract.

The employer has the burden to prove that there is a statutory valid reason for the variation of the terms of the employment contract. Unless a valid reason is shown for that variation, the variation of the terms of the employment contract by the employer shall be taken to have been varied by the reason that the employer intends to extinguish or reduce any right, benefit or protection conferred or to be conferred upon the employee by the EO.

Remedies for Unreasonable Dismissal or
Unreasonable Variation of the terms of the employment contract

If the Labour Tribunal finds the employer had unreasonably dismissed the employer or there was unreasonable variation of the terms of the employment contract, the Tribunal may:

1.        award terminal payments to the employee under the EO; or

2.        order reinstatement or re-engagement of the employee (if employer and employee agree).

If the dismissal is both unreasonable and unlawful,^[3] the Tribunal may award monetary compensation to the employee (up to HK$150,000) as it considers just and appropriate.

Proposed amendments under the Bill

Proposed amendments regarding Unreasonable Dismissal

The main changes regarding unreasonable dismissal are:

1.        dismissal of employees due to refusal to receive vaccination without sufficient medical reasons after request being made by employers is not considered as unreasonable dismissal (“Valid Reason Amendment”); and

2.        absent from work due to employee’s compliance with the Cap. 599 does not constitute a valid reason for dismissal or variation (“Not Valid Reason Amendment”).

The Valid Reason Amendment

Under the EO, one of the five valid reasons for dismissal or variation of the terms of the employment contract is “the capability or qualifications of the employee for performing his or her work”. Under the proposed amendment, an employee fails to comply with the employer’s “legitimate vaccination request” is regarded as being incapable of performing work of the kind which the employee was employed to do.

What is a “legitimate vaccination request”?
What are the conditions?

Legitimate vaccination request:

1.        The request must be in writing and made to all employees (who performs the same or similar type of work).

2.        The request is one that requests the employee to produce, within 56 days from the date of the making of the request, to the employer:

a.        If the place of work is in any premises or a public transport carrier, which is subject to a Vaccine Pass requirement – a record, document or information showing that the employee has complied with the Vaccine Pass requirement.

b.        If the Government imposes a requirement or makes a recommendation (other than the Vaccine Pass requirement) that persons who perform a particular type of work are to be (or should be) vaccinated with a certain number of dose of a vaccine under the Prevent and Control of Disease (Use of Vaccines) Regulation (Cap. 599K) – a record, document or information showing that the employee has complied with this requirement or recommendation. This also does not apply to an employee who is exempted from the Vaccine Pass requirement.

c.         If no (a) Vaccine Pass requirement or (b) other Government’s requirement or recommendation – record, document or information showing that the employee has at least one dose of vaccine.

3.        When making the request, the employer reasonably believes, having regard to the nature of the employee’s work and the related operational requirements, that if the employee contracts the specified disease, the persons with whom the employee may come into face-to-face contact when the employee performs the employee’s work will be exposed to the risk of infection.

4.        The request is not made:

a.        to any employee who is exempted under the Vaccine Pass requirement; or

b.        where only one dose of vaccination is required (see 2(c) above), the employee who is (i) pregnant, (ii) breastfeeding, (iii) certified to be unsuitable to be vaccinated and (iv) certified to have recently recovered from the specified disease.

Not Valid Reason Amendment

An employee’s absence from work due to compliance of “Cap. 599 requirement” will not be a valid reason for dismissal or the terms of the contract employment varied.

A “Cap. 599 requirement” is defined under the Bill as a requirement under the Prevention and Control of Disease Regulation (Cap. 599A) (“Cap. 599A”) or Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Cap. 599J) (“Cap. 599J”):

1.          where the employee is placed under quarantine or isolation or is within a place that is placed under isolation (ss. 29(1) and (2) of Cap. 599A) (e.g. persons being in close contact);

2.          to comply with a requirement under a compulsory testing notice or a compulsory testing order (ss. 13(1) and 16(1) of Cap. 599J); or

3.          not to leave any restricted premises that is the subject of a restriction testing declaration (s. 19C(1) of Cap. 599J).

The Cap. 599 requirement does not cover compulsory quarantine on return to Hong Kong from overseas required under Compulsory Quarantine of Persons Arriving at Hong Kong from Foreign Places Regulation (Cap. 599E) and, therefore, not protected by the Not Valid Reason Amendment.

Sickness Day Amendment

The definition of “sickness day” in the EO will be amended to include a day on which an employee is absent from work by reason of the employee’s compliance with a Cap. 599 requirement.

The evidence required to be produced by the employee for the day to qualify for “sickness allowance” is:

1.        a document (in hard copy or electronic form) issued by a public officer or any person on behalf of the Government that shows the “prescribed information” relating to the employee, or

2.        electronic data, access to which can be obtained, by telecommunications, in a manner specified by a public officer that shows the “prescribed information” relating to the employee.

“Prescribed information” means:

1.        the name of the employee who is subject to the Cap. 599 requirement (or information that could identify the identity of the employee);

2.        the type of the restriction imposed by that requirement; and

3.        the commencement date and the expiry date of the period for the restriction imposed by that requirement.

What are the effects of the Proposed Amendments?

Valid Reason Amendment

1.        It will not be unreasonable to dismiss an unvaccinated employee. Employers may regard that employees must have received at least one dose of vaccine (or the then required minimum dose under the Vaccine Pass requirement) in order to perform work of the kind that the employee concerned was employed by the employer to do.

2.        The Valid Reason Amendment empowers employers to boost vaccination rate of their employees.

Not Valid Reason Amendment

3.        An employee who is absent from work due to compliance of a Cap. 599 requirement will not be a valid reason for dismissal or variation of terms of the employment contract.

4.        An employee, who has to comply with a requirement under a compulsory testing notice or a compulsory testing order (likely to be less than 4 days), will be protected by the Not Valid Reason Amendment.

Sickness Day Amendment

5.        An employee who is placed under quarantine or isolation (likely be four or more consecutive sickness day) will be protected by the Not Valid Reason Amendment as well as from dismissal under s. 33(4B) of the EO, which makes the termination of an employee entitled to statutory sickness allowance (other than by way of summary dismissal) unlawful.

6.        If the employee is absent from work for 4 or more consecutive days as a result in complying with a Cap. 599 requirement, the employee will be entitled sickness allowance (provided the other requirements under the EO are satisfied).

Takeaway

The Bill seeks to minimise disputes between employers and employees result from COVID-19 and the effort of fighting the epidemic. The proposed amendments to the EO are, of course, subject to amendments being proposed and passed during the Bill’s passage through the LegCo.

With regards to its commencement date, it appears that most of the proposed provisions in the Bill, if passed by LegCo, would come into operation on the day on which the enacted Ordinance is published in the Gazette. In other words, and subject to any amendments to the contrary being passed by LegCo, the proposed amendments relating to “unreasonable dismissal” would not have retrospective effect to cover employees dismissed before the date of gazettal of the enacted Ordinance. We discussed the topics of “Can employers dismiss unvaccinated employees who cannot go to work as a result of the vaccine pass arrangement?“ and “Vaccine Pass, proposed amendments to the Employment Ordinance, and before the new law is passed: Can employers dismiss unvaccinated employees?“ the January and February 2022 editions of our employment newsletter. These issues remain relevant in the meantime before the proposed amendments are passed into law.

It remains to be seen whether LegCo would try to fast-track the three-reading process (including any scrutiny of the Bill by the Bills Committee) with a view to bringing these amendments into operation as a matter of urgency, say, within the 56-day period required for a “legitimate vaccination request” proposed under the new law, where a failure to comply by an employee will allow the employer to regard the employee concerned as being incapable of performing work of the kind that the employee was employed to do, and it would be an unreasonable dismissal for the employer to dismiss the employee.

We will of course discuss the any further amendments to the proposed employment legislation. In the meantime, employers and employees should seek legal advice if they have any doubts as to their rights and obligations under the EO and the proposed amendments.

The writer will be giving a CPD accredited webinar entitled “COVID-19 Special: Latest Changes to the Employment Ordinance that the Employers Need to Know” on Wednesday, 13 April 2022 at 1 p.m. to 2 p.m. to discuss various legal and practical issues regarding the proposed amendments under the Bill. Please join us.