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Print articleHong Kong: Employment (Amendment) Ordinance 2007
June, 2007 - Cynthia Chung
It was gazetted on 14 May 2007 that the Employment (Amendment) Ordinance 2007 (the "Amendment Ordinance") will become effective on 13 July 2007 (except section 16 in relation to the requirement to keep wage and employment records, which will become effective on 13 January 2008).
For details of the Amendment Ordinance, please see our HR & Pensions Newsletter Issue 2007.1 regarding the Employment (Amendment) Bill 2006 via this link: http://www.deacons.com.hk/eng/knowledge/knowledge_285.htm.
There are some changes made to the Amendment Ordinance regarding the calculation of the daily/monthly average wages earned by an employee in determining his statutory entitlements. It is now expressly set out that in calculating the daily/monthly average wages during the period of 12 months or the shorter period:
(a) any period therein for which the employee was not paid his wages or full wages by reason of (i) any maternity leave, rest day, sickness day, holiday or annual leave taken by the employee; (ii) any leave taken by the employee with the agreement of his employer; (iii) his not being provided by his employer with work on any normal working day; or (iv) his absence from work due to temporary incapacity for which compensation is payable under the Employees' Compensation Ordinance; and
(b) any wages paid to him for the period referred to in paragraph (a),
are to be disregarded.
In addition, if for any reason it is impracticable to calculate the daily/monthly average wages earned by an employee in the manner provided for in the Amendment Ordinance, the amount may be calculated by reference to the wages earned by a person who was employed at the same work by the same employer during the period of 12 months, or if there is no such person, by a person who was employed in the same trade or occupation and at the same work in the same district during the period of 12 months immediately before the specified date.
It is unclear yet how this last addition will work in practice but as the amendments will impact all employers in Hong Kong, they may have to consider reviewing their remuneration structure or payroll sooner rather than later.
For details of the Amendment Ordinance, please see our HR & Pensions Newsletter Issue 2007.1 regarding the Employment (Amendment) Bill 2006 via this link: http://www.deacons.com.hk/eng/knowledge/knowledge_285.htm.
There are some changes made to the Amendment Ordinance regarding the calculation of the daily/monthly average wages earned by an employee in determining his statutory entitlements. It is now expressly set out that in calculating the daily/monthly average wages during the period of 12 months or the shorter period:
(a) any period therein for which the employee was not paid his wages or full wages by reason of (i) any maternity leave, rest day, sickness day, holiday or annual leave taken by the employee; (ii) any leave taken by the employee with the agreement of his employer; (iii) his not being provided by his employer with work on any normal working day; or (iv) his absence from work due to temporary incapacity for which compensation is payable under the Employees' Compensation Ordinance; and
(b) any wages paid to him for the period referred to in paragraph (a),
are to be disregarded.
In addition, if for any reason it is impracticable to calculate the daily/monthly average wages earned by an employee in the manner provided for in the Amendment Ordinance, the amount may be calculated by reference to the wages earned by a person who was employed at the same work by the same employer during the period of 12 months, or if there is no such person, by a person who was employed in the same trade or occupation and at the same work in the same district during the period of 12 months immediately before the specified date.
It is unclear yet how this last addition will work in practice but as the amendments will impact all employers in Hong Kong, they may have to consider reviewing their remuneration structure or payroll sooner rather than later.
