The decision of the Court of First Instance in鄺惠玲 v 麗景酒店有限公司經營麗景酒店 HCME 1/2011 held that the notice period for termination of employment for the employer and its employee can be non-reciprocal provided that the requirements of the Employment Ordinance are fulfilled.

Introduction

Most contracts of employment contain reciprocal notice period for termination of employment i.e. the length of notice required for the termination of the employment by the employer and its employee are the same.  However, some employment contracts may stipulate different notice periods for the employer and its employee.  Are such provisions valid?  A recent decision of the Court of First Instance (“CFI”) in 鄺惠玲 v 麗景酒店有限公司經營麗景酒店 HCME1/2011 has clarified this issue.

Facts of the case

鄺惠玲 (“the Employee”) was employed as a room attendant by 麗景酒店有限公司經營麗景酒店 (“the Employer”).  The Employee was subject to a probation period of 6 months pursuant to the employment contract.  The Employer terminated the employment during the 5^th month of the probation period by payment of 7 days’ wages in lieu of notice to the Employee.  However, the Employee took the view that she was entitled to payment of 1 month’s salary in lieu of notice.  Therefore, she claimed against the Employer for the balance of the payment in lieu of notice in the Minor Employment Claims Adjudication Board (“MECAB”) (the amount involved was within the jurisdiction of the MECAB) (i.e. not exceeding HKD8,000.00 for each Claimant). 

The Employment Contract

The employment contract contains the following provisions:-

            “Termination of Employment.  The Employee’s employment may be terminated by the Employer for any of the following reasons:

1.       ……………..

2.       without cause, upon giving the notice referred to in the Employment Ordinance of Hong Kong;

            Notice. Should the Employee choose to resign their position, Employee must provide Employer with a minimum notice period of one (1) month, unless otherwise agreed by both parties.”

Minor Employment Claims Adjudication Board

The MECAB held that amongst other reasons, if the Employee must give 1 month notice for terminating the employment pursuant to the terms of the employment contract, the non-reciprocal notice period which the Employer was subject to (7 days pursuant to the Employment Ordinance) was invalid.

Court of First Instance

The Employer appealed to the CFI against the decision of the MECAB. The CFI overturned the decision of the MECAB and held that as long as the requirements of the Employment Ordinance are complied with, the law does not prohibit the parties from adopting non-reciprocal notice period for termination of employment.  The relevant requirements which must be satisfied includes the minimum period of notice under the Employment Ordinance that may be agreed by the parties of a continuous contract i.e. at least 7 days’ notice for termination of employment after the first month of the probation period and thereafter.

Comments

In view of the decision of the CFI in 鄺惠玲 v 麗景酒店有限公司經營麗景酒店, there are calls from trade unions to amend the Employment Ordinance to prohibit non-reciprocal notice period for termination of employment because some employees may not have the bargaining power to negotiate for reciprocal notice period provisions.  However, unless and until any such amendments are made, the notice period for the termination of employment for the employer and its employees can be non-reciprocal provided that the relevant requirements of the Employment Ordinance regarding the minimum notice period as mentioned above are fulfilled.