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Potential Violation of Employment Ordinance

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  1. #1

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    Question Potential Violation of Employment Ordinance

    Hi all,

    I am writing in regards to a potential violation of my current employment contract. Kindly find attached my employment agreement (I have changed the font of the relevant clause connected to the potential violation of the Employment Ordinance to red for easy reference.)


    Some background information: I have been employed by "The Employer" and have worked for them for 1 year and 8 months. I would like to leave for another opportunity at a different company from a different industry altogether. The new position commences on November 1, 2018. This would mean that I would still have around 3 months remaining before my employment contract naturally terminates. I have already submitted my resignation letter on 22 August, 2018, and thus my last day with The Employer would be on 22 October, 2018.


    The problem is, after having talked to my HR department, if i am to leave, they insist that I have to (as per my contract):
    1: Give two months' notice (I am fine with this )
    2: Compensate The Employer 3 MONTHS (or the remaining term of employment) of aggregate salary
    3: Potentially compensate The Employer more than just my average salary for the past 12 months, including but not limited to: Discretionary bonus from last year, paid sick leaves and annual leaves).


    This is directly contravenes with Chapter 9 of the Employment Ordinance (I have attached the PDF for ease of reference). It is stated in the Ordinance that an employee is to pay only the average monthly wage in the 12 month period preceding the day when notice of termination is given, and that the employee has to only pay the number of months specified in the notice period (which is 2 months in my employment agreement) irrespective if this is a fixed contract.


    The fact that the company has a) asked me to pay an aggregate amount that is MORE than my 2 months notice payment and b) could potentially ask me for a greater compensation due to me having used my all my sick leaves this year, makes me question the integrity of the employment agreement.


    I would like your advice on whether my employment agreement (specifically termination clause) is compliant with the HK Government's Employee Ordinance. If what is stated above happens to be true and The Employer really is in violation of the Employee Ordinance, what steps might I take in order to take action against The Employer? Ideally, I would like to skip paying them anything if this turns out to be in my favor.


    What do you all think should be done at this stage? Who should I consult (ideally like to avoid any consultation fees with lawyers or at least keep them to a minimum)

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  2. #2

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    What do you all think should be done at this stage? Who should I consult (ideally like to avoid any consultation fees with lawyers or at least keep them to a minimum)
    Without trying to really understand what the matter is and reading your contract (seems complex ...), I think it might be better to get the Labour department involved as a mediator. Drop them a line as they're usually the first port of call ..

    https://www.labour.gov.hk/eng/tele/lr1.htm

    https://www.labour.gov.hk/eng/public...ServiceLRD.pdf

  3. #3

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    Also worth mentioning this scheme. Not sure how useful it is and if it just serves as a sales pitch by the lawyers - "use us we will sue your opponent and make you billions ... but sign a retainer for $20K first". In the past, when I've been referred to lawyers, I've always had a very productive session with them - advice on course of action, potential costs, risks etc, so it might be really worth it, but approach cautiously as lawyers do tend to suck the hope out of you at times.

    ChooseHKLawyer

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  4. #4

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    1) Notice Period is mentioned in the contract
    2) Compensating the employer for the remaining period is also mentioned in the contract
    3) Holidays, Sick leaves etc shud be excluded. If the bonus was discretionary it shud be excluded. Look here for definition of wages https://www.labour.gov.hk/eng/public...seGuide/03.pdf


  5. #5

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    Quote Originally Posted by shafiq:
    1) Notice Period is mentioned in the contract
    2) Compensating the employer for the remaining period is also mentioned in the contract
    3) Holidays, Sick leaves etc shud be excluded. If the bonus was discretionary it shud be excluded. Look here for definition of wages https://www.labour.gov.hk/eng/public...seGuide/03.pdf
    Im aware that compensating the employer for the remainder of the contract period is included in the contract, but am conflicted about the integrity of such a statement since the Employee Ordinance states that the amount of compensation must only reflect the notice period.

  6. #6

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    Quote Originally Posted by shri:
    Also worth mentioning this scheme. Not sure how useful it is and if it just serves as a sales pitch by the lawyers - "use us we will sue your opponent and make you billions ... but sign a retainer for $20K first". In the past, when I've been referred to lawyers, I've always had a very productive session with them - advice on course of action, potential costs, risks etc, so it might be really worth it, but approach cautiously as lawyers do tend to suck the hope out of you at times.

    ChooseHKLawyer
    Ive sent a few emails to some of the solicitors from that list and am hoping the initial free 45 min consultation covers most of my concerns..I’ve just never dealt with solicitors before..but yes I should probably also get the labour department’s view of this case as well. Thanks!

  7. #7

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    Labour department first - you'd be surprised how much they can help.

    Don't rush into a meeting with a law firm...

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  8. #8

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    Call 1823.

    24 hour hotline.

    If your contract has a cash penalty for you quitting, yes it is valid. This can be in addition to your notice period.

    One issue you also have to consider is that your employer can sue you in the labour tribunal and it cost them a couple hundred HKD. Yet it will also occupy about 10 days of going to court to deal with everything. And from what it does like, you owe money according to your contract. Not sure how your new employer will think about taking a bunch of days off work to deal with this either.

    So finish the contract up or try to get fired.

    Discretionary bonuses are not included in the monthly wages that they calculate. But do you have something that states the bonuses are discretionary.

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  9. #9

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    Quote Originally Posted by MandM!:
    Call 1823.

    24 hour hotline.

    If your contract has a cash penalty for you quitting, yes it is valid. This can be in addition to your notice period.

    One issue you also have to consider is that your employer can sue you in the labour tribunal and it cost them a couple hundred HKD. Yet it will also occupy about 10 days of going to court to deal with everything. And from what it does like, you owe money according to your contract. Not sure how your new employer will think about taking a bunch of days off work to deal with this either.

    So finish the contract up or try to get fired.

    Discretionary bonuses are not included in the monthly wages that they calculate. But do you have something that states the bonuses are discretionary.
    The contract doesn't exclusively state a cash penalty for quitting early, it just says I have to pay in aggregate the remainder of the employment term, but my concern is, don't the HK Employment Ordinance regulations prevent these types of terms? They are rather strict to be honest...giving 2 months' notice on top of compensating the Employer is seriously just in bad taste considering how much effort I've given to the Company since my employment.

    If i do try to get fired, (they state my I could be laid off if i don't show up to work for 3 days without any notice).. would I still be obliged to pay them the remainder of the contract? Finishing the contract is out of the question since a) my job is absolutely horrible b) my new job (which is significantly better in every way) starts in November. I really want a good relationship with all of my employers (including ex-employers) but if they really do try and push this compensation thing on me I will really be disappointed and infuriated considering how I've been with them since they were established and how many hours off the clock I've dedicated to them.

    If you had limited savings, what would you do? Would you pay off the remainder of the contract if your new job was significantly better? It would be a sort of an investment in the future i suppose, but I really would like to avoid losing the majority of my savings (am in a bad financial position atm)

  10. #10

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    Quote Originally Posted by shafiq:
    1) Notice Period is mentioned in the contract
    2) Compensating the employer for the remaining period is also mentioned in the contract
    3) Holidays, Sick leaves etc shud be excluded. If the bonus was discretionary it shud be excluded. Look here for definition of wages https://www.labour.gov.hk/eng/public...seGuide/03.pdf
    If your contract didnt have any implied notice period or break clause, you can derive it from the EO. In your case, the contract is a fixed term contract and break clause is mentioned in the contract. Notice period and penalty for breaking fixed term contract are two speperate issues. EO doesnt have any mention about the penalty for not fulfulling a contract.
    Alzthehero likes this.

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