Employee termination
in Hong Kong.

SALARY PAYMENT IN Hong Kong Dollars (HKD, $)

CONTRACT LANGUAGES Chinese / English

PAYROLL TAX 5% + 1,500 HKD

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours
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Hong Kong

Valid reasons to terminate employment in Hong Kong

The Employment Ordinance (EO) recognises the following as “valid reasons” to terminate employment:

Employee conduct.
Employee’s lack of capability or qualifications.
Redundancy or other legitimate operational reasons.
If continued employment would somehow be unlawful.
Any other reason substantial enough to warrant the dismissal or variation.

Employers in Hong Kong may dismiss an employee immediately and without notice (referred to as “summary dismissal”), where the employee:

Wilfully disobeys a lawful and reasonable order.
Is guilty of misconduct.
Is guilty of fraud or dishonesty.
Is habitually neglectful in their duties.

Summary dismissal is also allowed in some cases according to common law. This means that if the employee’s conduct clearly demonstrates they do not want to be bound by the employment contract, they can be dismissed.

Unfair reasons to terminate employment in Hong Kong

There is no law that requires you to give an employee a reason for dismissal. However, if the employee has been employed continuously for two years, a Labour Tribunal may require the employer to demonstrate a valid reason for terminating the employee’s employment.

The EO protects employees in the following circumstances, and an employer cannot dismiss:

An employee who is pregnant or is on statutory maternity leave.
An employee who is on statutory sick leave.
An employee who has been injured at work and compensation is pending.

It is not legal to dismiss any employee for any of the following reasons:

The employee has complained or given (or agreed to give) evidence in relation to the enforcement of the EO; a breach of the employer’s statutory duty regarding safety at work; an accident in the workplace; or unlawful discrimination, harassment, or vilification.
The employee is a member of a trade union or engages in any trade union activity.
The employee is required to complete, or has completed, jury service.
The employee is of a particular gender, is pregnant, has a particular marital status, has family responsibilities, is of a particular race, or is disabled.

Dismissal procedure in Hong Kong

To dismiss, the EO only requires employers to give the relevant period of notice (or payment in lieu). However, best practice is that:

Employees are treated fairly in the processes leading up to a dismissal for misconduct or on grounds of unsatisfactory performance.
If one applies, the employer follows the disciplinary procedure or policy that is part of the employment terms.

There is no statutory requirement for the notice of termination to be provided in writing. However, most employers do provide notice in writing, and employment contracts may require written notice. If an employee is supposed to get a severance payment or long service payment, the employer must

Resignation procedure in Hong Kong

Resignation is generally given in writing, but unless stipulated in the employment contract, it can also be given verbally. Unless the employment contract stipulates otherwise, the minimum notice period is usually 1 month.

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FAQs

Is it difficult to terminate employment in Hong Kong?

No, as long as you have a valid reason, the process is relatively straightforward. There is no requirement to provide a reason for termination, but you may need to demonstrate validity if a Labour Tribunal is involved.

What are the risks of terminating employment in Hong Kong, and how do I mitigate them?

To avoid any risks, you should ensure that your reasons for termination are valid – as outlined above. In cases of unfair dismissal, the employee may be entitled to be reinstated, or pay the employee a further sum of three times the employee’s average monthly wage, subject to a maximum of HKD72,500 This is in addition to any other entitlements payable in respect of the dismissal.

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