AF2504

Introduction to
Business Law

LECTURE 10
 Section 2 of the Employment Ordinance (EO)
(Cap 57):
◦ "contract of employment" means any agreement,
whether in writing or oral, express or implied,
whereby one person agrees to employ another and
that other agrees to serve his employer as an
employee, and also a contract of apprenticeship
 A person who enters into or works
under a contract of service or
apprenticeship with an employer in any
employment, whether by way of manual
labour, clerical work, or otherwise, and
whether the contract is expressed or
implied, is oral or in writing (sec 2, EO)
 Persons aged 18 and above are
employable, provided that they hold
HKPIC or a valid HK work visa.
 The employer’s right or power to select and dismiss
the employee
 The employer’s duty or liability to pay whether fixed
or periodical wage
 Work to be performed by the employee, even partly
 Work to be performed at the employer’s premises
and at times determined by the employer
 The employer’s duty to provide tools, equipment,
etc
 Not an independent business carried on by the
employee
 The use of oral or written words while forming the
contract of employment
 Cheng Yuen v Royal Hong Kong Golf Club
[1997]HKLRD 1132 [p 640](not an
employee)

 Poon Chau Nam v Yim Siu Cheung

[2007] 1 HKLRD 951 (an employee)
◦ The main difference between the appellant and
the other workers was that his employment was
of a casual nature whereas theirs was
permanent and paid on a monthly basis.
◦ The appellant was free to work for other
employers.
◦ Also, the appellant had an MPF account where
he was registered as ‘self-employed’.
 An employment contract is subject to
the general rules of the law of contract
and if not all the terms are in writing,
the employer must provide details of
the amount of wages, when they are to
be paid, length of notice, etc in writing
(sec 44, EO)
 Without express term of duration, an
employment contract is deemed to be
for 1 month renewable from month to
month (sec 5(1), EO)
 Payment of wages
 Probation
 Statutory holidays
 Rest days
 Paid leave
 Sickness allowance/leave
 Maternity leave
 Termination rights
 Retirement benefits
 Compensation
 Safety and health
 According to the Employees’ Compensation
ordinance (ECO) (Cap 282), compensation
is payable if there is an
◦ Injury by an accident (section 5)
◦ Injury which is the result of occupational
disease (section 32)
 But no compensation if:
◦ The injury does not incapacitate the employee
◦ The injury is deliberate
◦ There was misrepresentation
◦ The employee was under the influence of drugs
or alcohol
 The injury or death need not be the fault of
the employer; it is enough if the death, injury,
or contraction of a specified occupational
disease arises out of and in the course of
employment.
 Yuen Yuk Ying v Chan Kam Wing [1997]
HKLRD 149
 Sec 6: Compensation in fatal cases
 Sec 7: Compensation in case of
permanent total incapacity
 Sec 8: Employee requiring attention
 Sec 9: Compensation in case of
permanent partial incapacity
 Sec 10: Compensation in case of
temporary incapacity
 Sec 32: Compensation in the case of
occupational disease
 A notice must be given to the
Commissioner for Labour, by the
employer:
◦ 7 days’, in case of death
◦ 14 days’, in case of injury
 A notice must be given to the
employer, by the employee, as soon
as practicable
 An application for compensation
should be made to the court within
24 months:
◦ of the accident
◦ of the death
◦ of the date of incapacity (in case of
occupational disease)
 By Notice (sec 6, EO)
◦ Notice of termination by either party at any
time of employment can be written or oral
◦ Length of notice:
 If one month renewable contract but not
specified - One month
 If one month renewable contract but specified -
As agreed but not less than 7 days
 Other contracts - As agreed
 If Continuous contract - As agreed but not less
than 7 days
 An employer or an employee may
choose to terminate the employment
without giving any notice, by making
payment of appropriate amount of
wages in lieu of the notice (sec 7, EO)
 Calculation of payment can either be
made based on “monthly average”; or
“daily average” (if expressed in “days” or
“weeks”), wages of past 12 months
 HSBC Bank Plc v Wallace [2008] 1
HKLRD 613
 Chong Cheng Lin Courtney v Cathay
Pacific Airways Ltd [2011] 1 HKLRD
10
 Employer is entitled to terminate the
employment without notice, if
employee:
◦ willfully disobeys a lawful and reasonable
order;
◦ misconducts himself, such conduct being
inconsistent with the due and faithful
discharge of his duties;
◦ is guilty of fraud or dishonesty; or
◦ is habitually neglectful in his duties or
◦ on other common law grounds
 Thomas Vincent v South China Morning
Post Pub Ltd (2005) 8 HKCFAR 605
 Wages for work performed
 Wages in lieu of notice
 Accrued but untaken leave
 Holiday pay for leave not taken
 Accrued end of year payment
 But not, unless a notice of claim is
made:
◦ Long service payment
◦ Severance payment
◦ Non-accrued leave pay and non-accrued end
of year pay
 Termination of employment not
fulfilling common law or statutory
requirement
 Dismissing any employee who is
pregnant, or on paid sick leave, or has
joined any trade union, etc.
 Remedies for wrongful termination:
◦ Sum of money recovering the payment which
would have been received if proper notice
had been given
◦ Damages (sec 9, EO)
◦ Employee’s duty to mitigate loss
 A contract of apprenticeship is an
agreement between an employer and
an apprentice to teach the apprentice
a trade or occupation
 To be a valid contract for the
purposes of employment in a
designated trade, the contract of
apprenticeship must comply with the
requirements of the Apprenticeship
Ordinance (Cap 47)
 The contract should be in writing
 If the apprentice is a minor, contract
should be signed parent/guardian
 Contract must be registered with
Director of Registration within 14
days
 Dunk v George Waller & Son Ltd
[1970] 2 QB 163
 It is unlawful to discriminate against or
harass any person in the workplace (or
otherwise) because of his/her gender,
marital status, pregnancy, disability,
family status or race
 In HK, the following Ordinances cover
such discrimination/harassment:
◦ Sex Discrimination Ordinance (cap 480)
◦ Disability Discrimination Ordinance (Cap 487)
◦ Family Status Discrimination Ordinance (Cap
527) and
◦ Racial Discrimination Ordinance (Cap 602)