[Employer Guide] Employment Contract

When a contract of employment is made between an employer and an employee, the agreement in writing is to be considered a safeguard for oneself and if there is any future labour dispute, it is also a proof of employment.

For employers, there are a few points that must not be missed; for employees, you need to take the initiative to understand every condition of the contract, immediately ask the employer if anything is confusing, never sign the contract without reading it.

[Employers should know]

What should you know when drafting a contract of employment in writing?

Any term of an employment contract which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by this Employment Ordinance(EO) or Minimum Wage Ordinance shall be void.

Under section 44, Cap. 57 of the Employment Ordinance, before employment begins, an employer must inform each employee clearly of the conditions of employment under which he is to be employed with regard to:

• wages (including rate of wages, overtime rate and any allowance, whether calculated by piece, job, hour, day, week or otherwise);
• wage period;
• length of notice required to terminate the contract; and
• if the employee is entitled to an end of year payment, the end of year payment or proportion and the payment period.

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

But in Hong Kong,  the agreement can be made orally. Therefore, whether is made in writing or orally, employees are covered by the EO. But there are some employers who may use the grey areas and break the promises they once made. Let’s see the following case.

Case: Ken has been working in a logistics company for several months, and his daily job is delivery. When he joined the company, his employer only mentioned the salary, working time and job responsibility with him, and the rest was determined according to the rules of the industry. Ken did not ask much, and agreed. Recently, the employer found that Ken made a few mistakes in his work, for example, delivering the wrong goods or not delivering the goods on time. So the employer wanted to dismiss him. Ken disagreed with the decision because he thought that the employer should give him not less than one month’s notice period according to the EO, and the employer must give him one month’s notice or payment in lieu of notice.

Analysis: It is an oral agreement that is unable to prove how the employer described it, so  it can only be submitted to the court for adjudication. The EO clearly states that if the employment contract has made explicit provisions for the required length of notice, as per agreement, not less than 7 days; if it does not make provision for the required length of notice, the length of notice should not be less than 1 month.

As shown in the above cases, the employer and the employee have a separate dialogue. There is no third party or recording. Once the employer breaks his promise, there will be any labor disputes. If both parties can not solve them in private, they will have to solve them through the court, which is time-consuming. Therefore, it is not difficult to find a contract of employment with clear terms and conditions, as well as the responsibilities and obligations of both parties, so as to protect the rights of employees.

[Employees should know]

What should you know in reading a contract of employment?

• probation period
• working hours, meal break, rest days
• salary calculation
• place of work
• leave(annual leave, paid sick leave, maternity leave, paternity leave, etc.)
• allowance(transportation allowance, overtime allowance）
• MPF
• end of year payment
• typhoon and rainstorm warning arrangements
• termination of employment contract by notice or payment in lieu of notice

New Employee Frequently Asked Questions

Q1: I applied for the position of software engineer, but my employer asked me to transfer to HR officer after I joined. Is this a breach of contract?

A1: If your job responsibility is clearly listed and specified in the contract, the employer makes you do irrelevant work, then it is a breach of contract.

Q2: The contract states that the working hours are from 9:00 to 18:00, but the employer requires me to work overtime to 22:00 one day, and no overtime allowance. Is this a breach of the contract?

A2: If your contract states that there is no overtime allowance, then it is not a breach of the contract.

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