Foreword

This guide sets out in simple terms the main provisions of the Employment Ordinance (Cap. 57). It should be noted that the Ordinance itself remains the sole authority for the provisions of the law explained. Please refer to the Appendix for enquiries services  

Chapter 1: Application of the Employment Ordinance

The Employment Ordinance applies to all employees with the following exceptions:

1. a family member who lives in the same dwelling as the employer;

2. an employee as defined in the Contracts for Employment Outside Hong Kong Ordinance;

3. a person serving under a crew agreement under the Merchant Shipping (Seafarers) Ordinance, or on board a ship which is not registered in Hong Kong; and

4. an apprentice whose contract of apprenticeship has been registered under the Apprenticeship Ordinance, other than certain provisions of the Employment Ordinance.

All employees covered by the Employment Ordinance, irrespective of their hours of work, are entitled to basic protection under the Ordinance including payment of wages, restrictions on wages deductions and the granting of statutory holidays, etc.

Employees who are employed under a continuous contract are further entitled to such benefits as rest days, paid annual leave, sickness allowance, severance payment and long service payment, etc.

Continuous Contract of Employment

An employee who works continuously for the same employer for four weeks or more, with at least 18 hours in each week is regarded as working under a continuous contract.

In any dispute as to whether a contract of employment is a continuous contract, the onus of proving that it is not a continuous contract shall be on the employer.

Chapter 2: Contract of Employment

A contract of employment is an agreement on the employment conditions made between an employer and an employee. The agreement can be made orally or in writing and it includes both express and implied terms.

Employers and employees are free to negotiate and agree on the terms and conditions of employment provided that they do not violate the provisions of the Employment Ordinance. Any term of an employment contract which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by this Ordinance shall be void.

Information on Conditions of Service

Before employment begins, an employer must inform each employee clearly the conditions of employment under which he is to be employed. Such information should include:

1. wages (including rate of wages, overtime rate and any allowance, whether calculated by the piece, job, hour, day, week or otherwise);

2. wage period;

3. length of notice required to terminate the contract; and

4. if the employee is entitled to an end of year payment, the amount of end of year payment and the payment period.

If the contract of employment is in writing, the employer shall give one copy of the written contract to the employee for retention and reference.

If the contract of employment is not in writing, the employer shall provide the employee with such information in writing if the employee makes a written request.

Whenever there is any change in the conditions of service, whether these have merely been proposed to an employee or are actually in force, the employer shall inform him in an intelligible manner. If such change to conditions of service is in writing or upon the written request from the employee, a copy of the written amendment must be provided to the employee.

Duration of Employment Contract

In the absence of any express agreement to the contrary, every contract of employment which is a continuous contract is deemed to be a contract for one month and renewable from month to month.

Employment and Wages Records

Every employer must at all times keep a record setting out the wages and employment history of each employee covering the period of his employment during the preceding six months. The record should be kept at the employer place of business or at the place where the employee is employed. It must also be kept for another six months after the employee ceases to be employed. The record should include the following information of the employee:

1. name and identity card number;

2. date of commencement of employment;

3. job title;

4. wages in respect of each wage period;

5. wage period;

6. periods of annual leave, sick leave, maternity leave and holidays entitled and taken, together with details of payments made in respect of such periods;

7. end of year payment;

8. period of notice required for termination of contract;

9. date of termination of employment.

Offences and Penalties

An employer who fails to keep the above record is liable to prosecution and, upon conviction, to a fine of $10,000.

Officers of the Labour Department may inspect the above record, inquire any person or seize anything which may appear to be evidence of an offence under the Employment Ordinance. Any person who fails to comply with the requirements of the officers of the Labour Department is liable to prosecution and, upon conviction, to a fine of $100,000 and to imprisonment for one year.

Chapter 3: Wages

Definition

"Wages" means all remuneration, earnings, allowances, tips and service charges, however designated or calculated, payable to an employee in respect of work done or work to be done. Allowances including travelling allowances, attendance allowances, commission and overtime pay are within the definition of wages. However, it does not include:

1. the value of any accommodation, education, food, fuel, water, light or medical care provided by the employer;

2. employer contribution to any retirement scheme;

3. commission, attendance allowance or attendance bonus which is of a gratuitous nature or is payable only at the discretion of the employer;

4. non-recurrent travelling allowance or the value of any travelling concession or travelling allowance for actual expenses incurred by the employment;

5. any sum payable to the employee to defray special expenses incurred by him by the nature of his employment;

6. end of year payment, or annual bonus which is of a gratuitous nature or is payable only at the discretion of the employer;

7. gratuity payable on completion or termination of a contract of employment.

An employee entitlements to end of year payment, maternity leave pay, severance payment, long service payment, sickness allowance, holiday pay, annual leave pay and wages in lieu of notice are calculated according to the above definition of wages.

Overtime pay should also be included in calculating the above payments if :

· it is of a constant character; or

· its monthly average over the past 12 months is not less than 20% of the average monthly wages of the employee during the same period.

Deductions from Wages

An employer is prohibited from deducting wages from his employee, except under the following circumstances:

1. deductions for absence from work. The sum to be deducted should be proportionate to the period of time the employee is absent from work;

2. deductions for damage to or loss of the employer goods, equipment, or property by the employee neglect or default. In any one case, the sum to be deducted shall be equivalent to the value of the damage or loss but not exceeding $300. The total of such deductions shall not exceed one quarter of the wages payable to the employee in that wage period;

3. deductions for the recovery of any advanced or over-paid wages to the employee. The total sum to be deducted shall not exceed one quarter of the wages payable to the employee in that wage period;

4. deductions of the value of food and accommodation the employer supplies to the employee;

5. deductions, at the written request of the employee, in respect of contributions to be paid by the employee through the employer for any medical scheme, superannuation scheme, retirement scheme or thrift scheme;

6. deductions, with the employee written consent, for the recovery of any loan made by the employer to the employee;

7. deductions which are required or authorized under any enactment to be made from the wages of the employee;

8. deductions for outstanding maintenance payment owed by the employee pursuant to the Attachment of Income Order issued by the court.

Deductions under items (1) to (7) shall have priority over item (8).

Unless with the approval in writing of the Commissioner for Labour, the total of all deductions, except those for absence from work and outstanding maintenance payment, made in any one wage period shall not exceed one half of the wages payable in that period.

Offences and Penalties

An employer who makes illegal deduction from wages of an employee is liable to prosecution and, upon conviction, to a fine of $100,000 and to imprisonment for one year.

Payment of Wages

Wages shall become due on the expiry of the last day of the wage period. An employer should pay wages to an employee as soon as practicable but in any case not later than seven days after the end of the wage period. An employer is required to pay interest on the outstanding amount of wages to the employee if he fails to pay wages to the employee within seven days when it becomes due.

Offences and Penalties

An employer who fails to pay wages to an employee when it becomes due is liable to prosecution and, upon conviction, to a fine of $200,000 and to imprisonment for one year.

An employer who fails to pay interest on the outstanding amount of wages to the employee is liable to prosecution and, upon conviction, to a fine of $10,000.

Failure to Pay Wages

An employer who is no longer able to pay wages due should terminate the contract of employment in accordance with its terms. If wages are not paid within one month after they become due, an employee may deem his contract of employment to be terminated by his employer without notice and is entitled to wages in lieu of notice in addition to other statutory and contractual termination payment. An employee should inform his employer when he exercises such rights under the Ordinance.

Liability to Pay Wages of Sub-contractor Employees

The principal contractors, superior subcontractors and superior nominated sub-contractors engaged in building and construction works are liable for the first two months unpaid wages of an employee who is employed by the subordinate sub-contractor.

If an employee employed by a subcontractor is owed wages, he must serve a written notice to the principal contractor, the superior sub-contractors or the superior nominated sub-contractors within 60 days after the wages become due. The employee should state the following in the notice:

1. the name and address of the employee;

2. the name and address of his employer;

3. the address of the place of employment of the employee;

4. the particulars of the work in respect of which the wages are due; and

5. the amount of wages due and the period to which they relate.

The principal contractor, the superior sub-contractor and the superior nominated sub-contractor should pay wages to the employee within 30 days after receiving the notice. They may request every superior sub-contractor to the employee employer to share out the liability.

The wages paid by the principal contractor, the superior subcontractor and the superior nominated subcontractor shall be a debt due by the employer of the employee to them. The debt may be recovered through civil claims proceedings.

Chapter 4: Rest Days, Holidays and Leaves

An employee shall enjoy rest days, statutory holidays and paid annual leave during employment.

REST DAY

Eligibility for Rest Day

An employee employed under a continuous contract is entitled to not less than one rest day in every period of seven days.

Definition of a Rest Day

A rest day is defined as a continuous period of not less than 24 hours during which an employee is entitled to abstain from working for his employer.

Appointment of Rest Days

Rest days shall be appointed by the employer. They may be granted on a regular or irregular basis:

An employer may substitute some other rest day with the consent of the employee, in which case it must be within the same month before the original rest day or within 30 days after it.

If the statutory holiday falls on a rest day, it should be taken on the day following the rest day.

Compulsory Work on Rest days

An employer must not compel an employee to work on a rest day except in the event of a breakdown of machinery or plant or in any other unforeseen emergency. For any rest day on which the employee is required to work, the employer should substitute some other rest day within 30 days after the original rest day. The employer should notify the employee of the arrangement within 48 hours after the employee is required to work.

Offences and Penalties

An employer who fails to grant rest days to his employees or compels his employees to work on their rest days is liable to prosecution and, upon conviction, to a fine of $50,000.

Voluntary Work on Rest Days

An employee, except young persons under the age of 18 employed in industry, may work voluntarily on a rest day.

Any condition in a contract of employment which makes payment of any type of annual bonus or end of year payment conditional on an employee agreeing to work on rest days is void.

Rest Day Pay

Whether rest day is paid or not is to be agreed by employers and employees.

STATUTORY HOLIDAYS

An employee, irrespective of his length of service, is entitled to the following statutory holidays :

1. the first day of January

2. Lunar New Year Day

3. the second day of Lunar New Year

4. the third day of Lunar New Year

5. Ching Ming Festival

6. Labour Day, being the first day of May

7. Tuen Ng Festival

8. the day following the Chinese Mid-Autumn Festival

9. Chung Yeung Festival

10.   Chinese Winter Solstice Festival or Christmas Day (at the option of the employer)

11.   Hong Kong Special Administrative Region Establishment Day, being the first day of July

12.   National Day, being the first day of October

Work on Statutory Holidays

If the employer requires the employee to work on a statutory holiday, the employer should make the following arrangement:

If the employer and employee agree,any day within 30 days before or after the statutory or alternative holiday may be taken by the employee as a substituted holiday.

Holiday Pay

An employee having been employed under a continuous contract for not less than three months is entitled to the holiday pay. Holiday pay should be paid to the employee not later than the day on which he is next paid his wages after that statutory holiday.

Holiday pay is a sum equivalent to the normal wages which the employee would have earned if he had worked on a full working day. For an employee employed on piece rates or whose daily wages vary from day to day, the holiday pay should be a sum equivalent to the average daily wages earned by him on the days he had worked during every complete wage period. The wage period should be a period of not less than 28 days and not more than 31 days immediately preceding or expiring on the holiday.

An employee who in normal circumstances only works half a day on Saturdays and receive half-day pay is entitled to a full working day pay as holiday pay if a statutory holiday falls on Saturday.

Restriction on Pay in lieu of Holiday

An employer must not make any form of payment to an employee in lieu of granting him a holiday.

Offences and Penalties

An employer who fails to grant statutory holidays, alternative holidays or substituted holidays, or fails to pay holiday pay to an employee is liable to prosecution and, upon conviction, to a fine of $50,000.

PAID ANNUAL LEAVE

An employee is entitled to annual leave with pay after having been employed under a continuous contract for every 12 months. An employee entitlement to paid annual leave increases progressively from seven days to a maximum of 14 days according to his length of service:

Granting of Annual Leave

An employee shall take the paid annual leave to which he is entitled within the following period of 12 months.

The time of the leave should be appointed by the employer after consultation with the employee or his representative, confirmed by a written notice to the employee at least 14 days in advance, unless a shorter period has been mutually agreed.

Paid annual leave should be granted for an unbroken period. If the employee so requests, it may be granted in the following manner:

Any rest day or statutory holiday falling within a period of annual leave will be counted as annual leave and another rest day or holiday must be appointed.

Annual Leave Pay

Annual leave pay is a sum equivalent to the normal wages which the employee would have earned if he had worked during the period of annual leave.

For an employee employed on piece rates or whose daily wages vary from day to day, the annual leave pay should be a sum equivalent to the average daily wages earned by him on the days he had worked during every complete wage period. The wage period should be a period of not less than 28 days and not more than 31 days immediately preceding the annual leave or the day on which the employment contract terminates.

Annual leave pay should be paid to the employee not later than the normal pay day after the period of annual leave taken.

Offences and Penalties

An employer who fails to grant annual leave or pay annual leave pay to an employee is liable to prosecution and, upon conviction, to a fine of $50,000.

Restriction on Pay in lieu of Leave

An employee may choose to accept payment in lieu of the part of his leave entitlement which exceeds 10 days.

Payment of Annual Leave Pay on Termination of Employment Contract

A leave year means any period of 12 months commencing on the day on which his employment commenced and an anniversary of such day.

If an employee has been employed for a leave year and his employment contract is terminated, irrespective of the reasons of termination, he should be entitled to payment in lieu of any annual leave not yet taken.

An employee with three but less than 12 months employment in a leave year and his employment contract is terminated other than for the reason of summary dismissal due to his serious misconduct, he would be entitled to pro rata annual leave pay.

Calculation of Annual Leave Pay on Termination of Employment Contract:

* This refers to any accrued annual leave which have not yet taken in the previous leave year.

Common Leave Year

An employer may elect any period of 12 consecutive months as the common leave year for all of his employees. Should the employer wish to make this arrangement, he shall give one month notice either to each of his employees in writing or by posting a notice in a conspicuous place in the place of employment.

If an employee has not been employed for 12 months in the common leave year, the employer should calculate his leave entitlement on a pro rata basis, and any fraction of a day resulting from the calculation should be counted as a full day leave.

After consultation with his employer, the employee may opt to take the pro rata annual leave accrued preceding the commencement of the next common leave year or carry it forward and combine it with his leave accrued in the next leave year.

[Example]
common leave year: 1.1.2002 to 31.12.2002
commencement date of employment: 1.9.2002
pro rata annual leave: 122* / 365 X 7 = 2.34 days (round up to 3 days)
(*122 is the number of days between 1.9.2002 and 31.12.2002)
The employee may take the 3 days leave in 2003, or combine it with his 7 days leave accrued in 2003 and take 10 days leave in 2004.

Annual Leave Shutdown

If an employer intends to close down his business or part of his business for granting annual leave to his employees, he should inform the affected employees in writing at least one month in advance.

Where an employee is not yet entitled to paid annual leave in respect of any day during the period of shutdown but he has to stop work as a result, he should be granted paid annual leave during that whole period.

If the annual leave an employee is entitled exceeds the number of days of shutdown, he may take the remaining annual leave immediately following the shutdown.

The common leave year elected by the employer should not be affected by an annual leave shutdown as the annual leave granted shall be in respect of the leave year immediately preceding the period of the shutdown.

Chapter 5: Sickness Allowance

Accumulation of Paid Sickness Days

An employee can accumulate paid sickness days after having been employed under a continuous contract. Paid sickness days are accumulated at the rate of two paid sickness days for each completed month of the employee employment during the first 12 months of employment, and four paid sickness days for each completed month of employment thereafter. Paid sickness days can be accumulated up to a maximum of 120 days.

Eligibility for Sickness Allowance

An employee shall be entitled to sickness allowance if :

1. the sick leave taken is not less than four consecutive days (unless for any day off taken by a female employee for her pregnancy check-ups, post confinement medical treatment or miscarriage);

2. the sick leave is supported by an appropriate medical certificate (see the following section on "Two Categories of Sickness Day"); and

3. the employee has accumulated sufficient number of paid sickness days. (See para.1 above)

An employee shall not be entitled to sickness allowance under the following circumstances :

· the employee refuses treatment by a company doctor of a medical scheme recognised by the Director of Health or disregards the advice of the doctor;

· the sickness day falls on a statutory holiday on which the employee is entitled to holiday pay; or

· compensation is payable under the Employees Compensation Ordinance.

Sickness Allowance

Sickness allowance is a sum equivalent to four-fifths of the normal wages which the employee would have earned if he had worked on the sickness days.

For an employee employed on piece rates or whose daily wages vary from day to day, the sickness allowance should be a sum equivalent to the average daily wages earned by him on the days he had worked during every complete wage period. The wage period should be a period of not less than 28 days and not more than 31 days immediately preceding or expiring on the first sickness day.

Sickness allowance should be paid to the employee not later than the normal pay day.

Offences and Penalties

An employer who fails to pay sickness allowance to an employee is liable to prosecution and, upon conviction, to a fine of $50,000.

Employment Protection

An employer is prohibited from terminating the contract of employment of an employee on his paid sickness day, except in cases of summary dismissal due to the employee serious misconduct.

Offences and Penalties

An employer who contravenes the above provision is liable to prosecution and, upon conviction, to a fine of $100,000. Besides, the employer is also required to pay the following sum of money to the dismissed employee within 7 days after the day of termination:

1. wages in lieu of notice;

2. a further sum equivalent to seven days wages; and

3. any sickness allowance to which the employee is entitled.

Two Categories of Sickness Day

Paid sickness days are divided into two categories - paid sickness days can first be accumulated up to 36 days in Category 1 and then 84 days in Category 2.

Record of Sickness Days

An employer should keep the following records:

1. the date of commencement and termination of employment of each employee;

2. all paid sickness days accumulated by each employee, including the number of paid sickness days accumulated in Category 1 and 2;

3. paid sickness days taken by each employee and deducted from the total number of paid sickness days in either categories;

4. sickness allowance paid and the sickness days in respect of which the sickness allowance was paid.

The record should be signed as correct by the employee within seven days of his return to work from paid sick leave, and the employee has the right to inspect the record.

Chapter 6: Maternity Protection

Maternity Leave

A female employee employed under a continuous contract immediately before the commencement of her maternity leave and having given notice of pregnancy to the employer is entitled to the following periods of leave:

· a continuous period of 10 weeks maternity leave;

· if confinement occurs later than the expected date of confinement, a further period equal to the number of days from the day after the expected date of confinement to the actual date of confinement;

· the employee may enjoy an additional period of leave for not more than four weeks on the grounds of illness or disability due to the pregnancy or confinement.

Taking of Maternity Leave

· With the agreement of her employer, a pregnant employee may decide to commence her maternity leave from two to four weeks before the expected date of confinement;

· If the employee does not decide on the date, or fails to secure her employer agreement, the employee shall commence her maternity leave four weeks before the expected date of confinement;

· Maternity leave commences on the date of confinement if it occurs before the scheduled maternity leave. In this case, the employee should give notice of the date of confinement and her intention to take 10 weeks maternity leave to her employer within seven days of her confinement.

Payment for Maternity Leave

An employee is eligible for maternity leave pay if:

1. she has been employed under a continuous contract for not less than 40 weeks immediately before the commencement of scheduled maternity leave;

2. she has given notice of pregnancy and her intention to take maternity leave to her employer after the pregnancy has been confirmed. For example, the presentation of a medical certificate confirming her pregnancy to the employer; and

3. she has produced a medical certificate specifying the expected date of confinement if so required by her employer.

Maternity leave should be paid for a period of 10 weeks and it should be paid on the normal pay day of the employee.

Maternity leave pay shall be equivalent to four-fifths of the employee normal wages. For an employee employed on piece rates or whose daily wages vary from day to day, the maternity leave pay should be a sum equivalent to the average daily wages earned by her on the days she had worked during every complete wage period. The wage period should be a period of not less than 28 days and not more than 31 days immediately preceding or expiring on the commencement of her maternity leave.

Offences and Penalties

An employer who fails to grant maternity leave to a pregnant employee or fails to pay maternity leave pay to an eligible pregnant employee is liable to prosecution and, upon conviction, to a fine of $50,000.

Medical Examination

When the employee is absent from work to attend medical examination in relation to her pregnancy, post confinement medical treatment or miscarriage, any day on which she is absent shall be counted as a sickness day. The employee shall be entitled to the sickness allowance payable under the Ordinance (see Chapter 5).

Employment Protection

An employer is prohibited from dismissing a pregnant employee from the date on which she is confirmed pregnant by a medical certificate to the date on which she is due to return to work upon the expiry of her maternity leave if:

1. the employee has been employed under a continuous contract, and

2. she has served a notice of pregnancy to the employer.

If a pregnant employee is dismissed by her employer before she has served a notice of pregnancy, she may serve such notice immediately after being informed of her dismissal. Under such circumstances, her employer must withdraw the dismissal or the notice of dismissal.

However, the employer is not prohibited from dismissing a pregnant employee under the following circumstances :

· the employee is summarily dismissed due to her serious misconduct; or

· where it has been expressly agreed that the employment is on probation, the employee is dismissed for reasons other than pregnancy during the probation period of not more than 12 weeks.

Offences and Penalties

Except for the circumstances provided above, it is an offence for an employer to dismiss a pregnant employee. The employer is liable to prosecution and, on conviction, to a fine of $100,000. Besides, the employer is also required to pay the following sums of money to the dismissed employee within 7 days after the day of termination:

1. wages in lieu of notice;

2. a further sum equivalent to one month wages; and

3. 10 weeks maternity leave pay if, but for the dismissal, she would have been entitled to such payment.

Prohibition of Assignment of Heavy, Hazardous or Harmful Work

If a pregnant employee produces a medical certificate with an opinion as to her unfitness to handle heavy materials, work in places where gas injurious to pregnancy is generated, or do other work injurious to pregnancy, the employer may not allocate such work to the employee. If the employee is already performing such work, the employer shall within 14 days remove her from that work.

The employer may, at his own expense, arrange for the employee to attend another medical examination by a registered medical practitioner within 14 days after receiving the medical certificate of the employee.

The Employment Ordinance provides that if the earnings of the employee is affected as a result of her transfer from heavy, hazardous or harmful work, the maternity leave pay or the payment for termination of employment shall be calculated on the basis of the wages earned by the employee before the transfer.

Offences and Penalties

An employer who fails to comply with the above requirements is liable to prosecution and, on conviction, to a fine of $50,000.

Chapter 7: End of Year Payment

Application

The provisions concerning end of year payment apply to an employee employed under a continuous contract who, in accordance with a term of his contract (including agreement made orally or in writing, in express or implied term), is entitled to an end of year payment from his employer.

Definition

End of year payment means any annual payment (including double pay, 13th month payment, end of year bonus) of a contractual nature. It does not include any payment which is of a gratuitous nature or which is payable at the discretion of the employer.

Presumption

For every employment contract made after 27 June 1997, it is presumed that an annual payment or annual bonus is not of a gratuitous nature and is not payable only at the discretion of the employer unless a written term or condition in the contract expresses intention to the contrary.

Eligibility for End of Year Payment

An employee is eligible for an end of year payment if he has been employed under a continuous contract for a whole payment period. The payment period shall be the period specified in the employment contract, or a lunar year if it is not specified.

Amount of End of Year Payment

· The amount as specified in the employment contract.

· If it is not specified, a sum equivalent to a full month wages (for monthly rated employees) or in any other case, 26 days wages based on the average daily wages earned by the employee during every complete wage period, comprising not less than 28 days and not more than 31 days, immediately preceding or expiring on the day on which the end of year payment becomes due.

Proportion of End of Year Payment

An employee is eligible for a pro rata end of year payment if he has been employed under a continuous contract for not less than three months in a payment period and:

· continues to be employed after the expiry of the payment period; or

· is dismissed by the employer (except in cases of summary dismissal due to the employee serious misconduct).

Any probation period, subject to a maximum of three months, is excluded from the calculation of the qualifying service for pro rata end of year payment. However, excluding the probation period, if an employee has fulfilled the eligibility requirement of the three month employment in a payment period, then the whole employment period(including the probation period) shall be taken into account in calculating the pro rata end of year payment.

Time of Payment

· On the day specified in the employment contract.

· If a day is not specified, payment should be made on the last day of the payment period or within seven days after that day.

· If the employment contract is terminated before the payment period expires and the employee is eligible for pro rata end of year payment, payment should be made on the day the contract is terminated or within seven days after that day.

· If the end of year payment is to be calculated by reference to any profits of the employer, payment should be made on the day the profits are ascertained or within seven days after that day.

Offence and Penalties

An employer who fails to pay an end of year payment to an eligible employee is liable to prosecution and, upon conviction, to a fine of $50,000.

Chapter 8: Termination of Contract of Employment

Termination of Employment Contract by Notice or Payment in lieu of Notice

A contract of employment may be terminated by due notice or wages in lieu of notice. In the case of a continuous contract of employment, the length of notice or the amount of wages in lieu of notice required are:

Termination of Employment Contract Without Notice or Wages in lieu of Notice

An employer may summarily dismiss an employee without notice or payment in lieu of notice if the employee, in relation to his employment:

· willfully disobeys a lawful and reasonable order;

· misconducts himself;

· is guilty of fraud or dishonesty; or

· is habitually neglectful in his duties.

Taking part by an employee in a strike is not a lawful ground for an employer to terminate the employee contract of employment without notice or payment in lieu.

NOTE : Summary dismissal is a serious disciplinary action. It only applies to cases where an employee has committed very serious misconduct or fails to improve himself after the employer repeated warnings.

An employee may terminate his employment contract without notice or payment in lieu of notice if:

· he reasonably fears physical danger by violence or disease;

· he is subjected to ill-treatment by the employer; or

· he has been employed for not less than five years and is certified as being permanently unfit for the type of work he is being engaged (see Chapter 10).

Statutory Restrictions on Termination of Employment Contract

An employer shall not dismiss an employee under the following circumstances:

Offences and Penalties

An employer dismissing an employee under the above circumstances is liable to prosecution and, upon conviction, to a fine of $100,000.

Termination Payments

The items and amount of payments payable to an employee on termination of employment or expiry of the contract depend on a number of factors such as the length of service, the terms of employment contract and the reason for termination of contract. For quick reference, termination payments usually include :

· outstanding wages;

· wages in lieu of notice, if a