The Employment Ordinance, Cap. 57

Content

An employee employed under a continuous contract for not less than 24 months is eligible for severance payment if:

*If not less than 7 days before the date of dismissal/ expiry of the fixed term contract in case of severance payment, and not less than 7 days before the expiry of the fixed term contract in case of long service payment, the employer has offered in writing to renew the contract of employment or re-engage him under a new contract but the employee has unreasonably refused the offer, the employee is not eligible for the entitlements.

An employee is taken to be dismissed by reason of redundancy if the dismissal is due to the fact that :

If an employee is employed on such terms and conditions that his remuneration depends on his being provided by the employer with work of the kind he is employed to do, he shall be taken to be laid off if the total number of days on which no work is provided or no wages is paid exceeds:

The days of lock-out, rest days, annual leave and statutory holidays should not be counted as normal working days during the above periods.

If an employer dismisses an employee due to redundancy, he should pay severance payment as soon as practicable.  The Employment Ordinance also requires an employer to make severance payment to his employee not later than 2 months from the receipt of a written notice for claiming such payment from the employee.

An employee employed under a continuous contract for not less than 5 years is eligible for long service payment if:

*If not less than 7 days before the date of dismissal/ expiry of the fixed term contract in case of severance payment, and not less than 7 days before the expiry of the fixed term contract in case of long service payment, the employer has offered in writing to renew the contract of employment or re-engage him under a new contract but the employee has unreasonably refused the offer, the employee is not eligible for the entitlements.

Long service payment should be paid to an employee within 7 days after the date of termination of employment contract, except as otherwise specified in the case of payment to the beneficiaries of a deceased employee.

An employee who is dismissed by reason of redundancy is eligible for severance payment but not long service payment.

The following formula applies to the calculation of both severance payment and long service payment:

Service of an incomplete year should be calculated on a pro rata basis.
Click here for information on the reckonable years of service (PDF).

If an employee becomes entitled to severance payment or long service payment and:

the severance payment / long service payment is to be offset against the aforementioned amount of gratuities and benefits to the extent that they relate to the employee's years of service for which the severance payment / long service payment is payable.

Note : When offsetting the above sum of money, an employer should observe the time limit and requirements on making severance payment or long service payment set out in the Employment Ordinance.