Introduction

Unreasonable and unlawful dismissal of employees often hits the news headlines in Hong Kong. Imagine you were a pregnant women being dismissed during your maternity leave, or a man in hospital being dismissed during your sick leave. Even if you wished to go back to your job afterwards, it might not be easy under the current law. So what could these vulnerable employees do? The Employment (Amendment) Bill 2016 might be the answer to these questions.

What’s new?

The Current Law

Under the existing Employment Ordinance (Cap. 57), a reinstatement or reengagement order of an employee in case of unreasonable and unlawful dismissal is only possible with mutual agreement of both the employer and the employee. If no such order is made, the employee is entitled to terminal payments and compensation under s.32O and s.32P of the Ordinance. S. 43P also contains an offence of failing to comply with the award of the said specified entitlements.

Proposal of the Bill

To clarify the existing provisions and enhance protection to the employees, especially those who are prone to unreasonable and unlawful dismissal, the main proposal of the Bill aims to remove the pre-requisite of the employer’s agreement to reinstate or reengage an employee who has been unreasonably and unlawfully dismissed. A reinstatement or reengagement order is made if the Labour Tribunal is satisfied that it is reasonably practicable taking into account all circumstances.

Under the Bill, failure to comply with a reinstatement or reengagement order subjects the employer to a liability of HK$50,000 or 3 times the employee’s average monthly wages, in addition to the terminal payment and the monetary remedies provided under the current law. Failure to pay such sums amounts to an offence. Nevertheless, the Bill does not propose changes on the current law regarding unreasonably but lawful dismissal of employees, in which employer’s agreement is still required for a reinstatement or reengagement order to be made.

Implications to employers and employees

Employees are essentially given more protection against unreasonable and unlawful dismissal under this Bill. However, many expressed doubts on the Bill, in particular, on the limited sum entitled in case of failure to comply with the orders that may offer only little monetary remedy to the employees and insufficient deterrence to the employer.

To the employers, this Bill may look strict and harsh. However, it does not exactly leave the employers with no choice. Both the employer and the employee have their opportunity to present their cases in respect of the making of a reinstatement or engagement order. The court of the Labour Tribunal may request for a report containing information that relates to the circumstances of the claim to decide whether the order is reasonably practicable. The Bill also provides for an application for relief from liability to pay the additional sum under specific conditions. Alternatively, to comply with the reengagement order, the employer may also apply for a variation of order to the effect that engagement of the employee by a successor or associated company is to be treated as re-engagement.

What has taken so long?

In fact, the discussion on this topic began early in 2000. The Bill was eventually published in the Gazette by the government on 12 February 2016 and introduced to the LegCo on 2 March 2016. In early June, Lee Cheuk Yan, LegCo member from the Labour Party, gave notice of amendment to the Bill which sought to increase the maximum sum payable from HK$50,000 to HK$100,000, and from 3 times the employees’ average monthly wages to 6 times. This has led to controversies from the Labour and Welfare Bureau as well as the Labour Advisory Board. Discussions and negotiation are required regarding the amendment raised, and thus the said amendment and the debate on the Second Reading failed to take place in the LegoCo term that has just ended.

Conclusion

Despite the lengthy investigation and discussion on this employment issue, the passage of the Bill is yet to be seen, as the introduction process will have to start afresh when the new LegCo term begins. Although whether the new LegCo members will make this Bill a priority is a matter remains to be seen, it is apparent that there is a strong tendency to give more protection to the employees in Hong Kong. Employers should keep abreast of the updates on Employment Law and take more caution when handling employees’ dismissal matters.