Termination Of Contract

In this section:

Termination By Notice

Termination Without Notice

After Termination – Your Rights and Obligations

Unreasonable and Unlawful Dismissal

Long Service and Severance Payments

Help and Contacts

Termination by Notice

Even though the employment contract you signed with your employer is valid for two years, it is possible for either you or your employer to terminate it before such period is completed. However, the party who wants to terminate the contract has to notify the other party in advance. The Standard Employment Contract establishes that such notification should be written and given to the other party one month before the contract is terminated.

Sample of letter of contract termination by the worker

During such one month, you still have to work as usual, and your employer still has to fulfill her obligations such as paying your wage and food allowance, as well as covering your medical treatment if you get sick. Top

Termination Without Notice

If you terminate the contract without giving one month notice to your employer, you have to pay her a sum of money equivalent to your one month wage. Similarly, you are entitled to extra one month wage if your employer terminates the contract without giving you one month notice.

However, there are circumstances in which you or your employer can terminate the employment without any notice and without any obligation to pay the one month wage. Those circumstances are explained in the following table:

You can terminate the contract without one month notice and without any obligation to pay any money to your employer, if…

Your employer can terminate the contract without one month notice and without any obligation to pay you extra one month wage, if…

1.    You have reasonable fear of physical danger, either by violence or disease, or 2.    You are subjected to ill-treatment by your employer, or 3.    You have worked for the employer for 5 years or more, and have been medically certified as permanently unfit for the type of work you are engaged with

1.    You wilfully disobey a lawful and reasonable order (note that your employer needs to give you warnings before she can dismiss you on this reason); or 2.    You misconduct yourself (warnings should also be given by your employer in advance, before she can dismiss you on this reason); or 3.    You are guilty of fraud or dishonesty; or 4.    You are habitually neglectful of your duties (note the word ‘habitually’, meaning this does not apply if you are being neglectful only once in a while)

It may be the case that your employer terminated your contract on the reason of false accusation that you have committed a crime and didn’t pay you the compensation that you entitiled to. In that circumstance, you still can file a complaint to the Labour Department for unreasonable dismissal. Your complaint, however, will not be examined until there is a final judgment from the court regarding the crime you are accused of. Top

After Termination – Your Rights and Obligations

Upon termination of contract, your employer has to settle all the payments due to you. This should include:

• Unpaid wages; 
• Payment for untaken annual leave; 
• Where applicable, unpaid allowances for food, sickness, holiday, and/or maternity; 
• Travelling allowance (HKD 100/day); 
• A sum of money for you to buy a plane ticket to your place of origin;  Reimbursement for your medical treatment, if any; 
• Extra one month wage (if your employer terminates the contract without giving one month notice); and
• In certain circumstances, long service or severance payment. 

It is best that all the payment is given to you via bank transfer, or by cheque. In any case, however, you should ask your employer to explain the purpose of each payment. It should be clear, for example, how much she gives you for the wages, how much for the travelling allowance, and so forth. If she asks you to sign a receipt, make sure the amount of money you receive is the same with the amount stated in the receipt.

You have the obligation to inform the Foreign Domestic Helpers Section of the Immigration Department (3rd floor of the Immigration Building in Wan Chai) of the termination of your contract. You should do so within 7 days after the date of the termination. 

Following the termination, you only have a period of maximum two weeks to legally stay in Hong Kong. The period may be shorter than that, if your visa will be expired in less than two weeks. This is a policy introduced by Hong Kong Immigration Department which is often referred as ‘new conditions of stay’ or ‘two week rule’. If you still want to work in Hong Kong, you will have to find a new employer within such period of time. When you find a new employer, you will have to apply for a new visa. Top

HKCTU is of the view that two-week rule is discriminatory against migrant domestic workers in Hong Kong, who are predominantly from other Asian countries such as Indonesia, Philippines, Bangladesh, Nepal, and Thailand. We are urging the Hong Kong government to review and abolish such discriminatory policy.

Unreasonable and Unlawful Dismissal 

A dismissal is unreasonable if it is not based on a reason that is related to: 

• The conduct of the worker; 
• The capability or qualifications of the worker for performing work; 
• The redundancy or other genuine operational requirements of the employer; 
• The fact that the worker or the employer – or both – would be violating the law, if the employment is continued; and 
• Other substantial reasons as decided by the court or the Labour Tribunal. 

A dismissal is unlawful if it is done: 

• On a pregnant worker; 
• On a worker who is on paid sick leave; 
• On an injured worker and the dismissal is conducted before the parties have come to an agreement relating to compensation, or before the issuance of a certificate of assessment; 
• On the reason that the worker has given evidence or information in any proceedings or inquiry related to the enforcement of Employment Ordinance, work accidents, or breach of work safety legislation; or 
• On the reason that the worker is a member of a trade union or has been involved in the activities of a trade union. 

If you believe that your dismissal is both unreasonable and unlawful, you may submit claim for remedies to Labour Tribunal. The claim may result in your re-employment or compensation not exceeding HKD 150,000. 

If you believe that your dismissal is unreasonable but not unlawful, you still can submit claim for remedies. However, you can do so only if you have worked for your employer for at least 24 months continuously. Your claim for remedies for an unreasonable dismissal may result in your re-employment or an award of terminal payments. Terminal payments means: (a) outstanding statutory entitlements; (b) entitlements you might reasonably be expected to be entitled to, had you been allowed to continue your employment; and (c) any other outstanding payments. 

Claim for remedies should be given to your employer in writing, within 3 months from your day of dismissal. If you wish to file a claim to the Labour Tribunal, you have to do so within nine months from the day of your dismissal.  Top

Long Service and Severance Payments 

You are entitled to long service payment, if you have worked for your employer for at least 5 years and meet at least one of the following conditions: 

• You have been dismissed, or your contract has not been renewed. You are exempted from the entitlement to long service payment if the reason of your dismissal or non renewal of contract is redundancy or your serious misconduct; 
• You have resigned from your job, as you have been certified by a registered medical practitioner that you are permanently unfit to continue working; 
• You have resigned from your job, and are aged 65 or above upon your resignation; 
• You have passed away during employment. In this case, the long service payment should be granted to your heir. 

You are entitled to severance payment if you have worked for at least 24 months for your employer, but you have been dismissed or your contract is not renewed, due to redundancy. According to the Employment Ordinance, dismissal due to redundancy is dismissal that is attributable wholly or mainly to the fact that the kind service you provide is no longer needed.

Calculating long service and severance payments

To calculate the long service or severance payment you are entitled to, use the following formula:

Long service or severance payment = (Monthly wages x 2/3) x years of service

Example:

Maryati has worked for 8 years and 2 months for Mrs. Lam. Her monthly wage is HKD 4,010. She has recently resigned as the doctor told her that, due to her health condition, she is no longer fit to perform any heavy work. How much is the long service payment Maryati is entitled to?

Answer:

Long service payment     = (4010 x 2/3) x 8 years and 2 months

                             = 2673.3 x (8 years + (2months/12months)

                             = 2673.3 x (8 years + 0.17 years)

                             = 2673.3 x 8.17 years

                             = HKD 21,840.9
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Help and Contacts
List of organisations
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