HKEJ Column | September 18th, 2007 |

2007-07-18 publish on《SCMP》

The mainland’s Labour Contract Law was passed by the National People’s Congress on June 28 and will come into effect on January 1.

The new law  has, among other provisions, raised the protection afforded to employees by requiring compulsory written labour contracts, limiting the use of fixed-term contracts to avoid severance payments, fixing the maximum term of a probation period and reducing the maximum length of the post-termination non-competition period.

By contrast, the Employment Ordinance of Hong Kong which was first enacted in 1968 (when our economy was mainly manufacturing based) is an antiquated piece of legislation which needs a major overhaul.

Changes are required from purely operational and compliance perspectives since from past experience employers and employees  alike have found it difficult to understand and adhere to some of the provisions in the ordinance.

For example,  an employer can only discharge his statutory obligations for granting statutory annual leave to employees in the next year following the leave year in which the statutory leave accrues. This will make record keeping and compliance extremely complicated if an employer out of his own goodwill, grants annual leave in excess of the statutory minimum.

The ordinance provides that employees taking  fewer than four  consecutive sick days will not be entitled to the statutory sickness allowance.

This complicates compliance for employers who decide to pay out for every  day of an employee’s sickness.

An overly-complicated system also applies to how rest days are granted and counted.

There  are demands from some sectors  for minimum wages and paternity rights.

These issues must be studied carefully and consensus  within the community must be reached before any amendment to the law is made. But they should not be used as excuses to hinder the rationalisation and simplification of the ordinance to make it more user-friendly.

Kenneth Leung, vice-chairman, The Professional Commons