Questions on HK labor

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  1. #1

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    Questions on HK labor

    Just curious about a few things in HK labor policy. I read through all the legislation, and I am not sure I quite understand it. Please help advise the following:

    1. What is the compensation for firing someone?

    2. What if they are laid-off instead?

    3. Im confused by the legislation online detailing the requirements for "laid off" or "redundancy". What is it considered when company has run out of money and cant afford to keep everyone, but the job position and the company will continue to exist in HK (position absorbed by someone else).

    4.Same questions for Chinese nationals employed in China.


  2. #2

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    From what I have seen, companies, excluding public limited companies, that are losing money and need to down-size drastically simply shut down and re-incorporate (read: reincarnate) under a different name after cutting staff, in order to avoid having to provide a redundancy package to the laid-off employees (or gratuity for senior employees).
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    I am not looking to cheat anyone mate. I just want to understand what I need to do minimum in order to adhere to law, and then I can decide how to proceed.
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    google hk labour ordinance

    usually law for redundancy says 2/3 of a monthly salary for every year worked capped at 1 year if i am not mistaken


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    Quote Originally Posted by cookie09:
    google hk labour ordinance

    usually law for redundancy says 2/3 of a monthly salary for every year worked capped at 1 year if i am not mistaken
    hi...i mentioned that i read the legislation at HK labor site, but not sure if i understand it correctly.

    Also, your info would suggest that if someone worked for me for 10 years then i would need to pay (monthly salary x2/3) x 10 years? And then I only pay the smaller amount between that calculation or a full year salary?

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    also...is the bonus mandatory in hk?
    i know the norm it seems here is for a 13 month salary...but what if we did not want to offer any bonuses for the time being?
    also, do you use this bonus in calculating severance pay and such?


  7. #7

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    LSP calculation should be (monthly wages X 2/3)* X reckonable years of services..
    * Note: The sum should not exceed 2/3 of $22,500.

    If you pay LSP/SP to the employee , and you have MPF scheme, you can withdraw/offset the same amount from the MPF contributions you had paid for "employer contribution portion" in the employee account.

    Labour Department - Frequently Asked Questions


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    You can also get free advice directly from the Labour Department.

    You may also make use of our telephone hotline 2717 1771 (handled by the 1823 Call Centre) which provides round-the-clock service for general enquiries on topics of labour legislation and services of the Labour Department.

  10. #10

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    Quote Originally Posted by BenderBends:
    I am not looking to cheat anyone mate. I just want to understand what I need to do minimum in order to adhere to law, and then I can decide how to proceed.
    Posted via Mobile Device
    That is not what I was alluding to in my post. I was responding to what I thought was an inquiry into the way things are done rather than the way they are supposed to be done with regards to redundancies. Apologies.