News & Insights

Hong Kong passes two important employment-related bills within one week

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Authored by: Cynthia Chung and Stephanie Yip

The Hong Kong Legislative Council has unprecedentedly passed two important employment-related bills in the past week, namely:

    1. the Employment & Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 (the “First Bill”), which beginning from 2025 (date to be specified) will abolish the current use of the accrued benefits of employers’ mandatory contributions under the Mandatory Provident Fund (“MPF”) system to offset statutory severance payment and long service payment (“SP/LSP”) (commonly known as the “MPF Offsetting Arrangement”); and

    2. the Employment (Amendment) Bill 2022 (the “Second Bill”), which provides that:
    1. if an employee is subject to any movement restriction under the Prevention and Control of Disease Ordinance (Cap. 599) (namely compulsory quarantine and testing orders) and is therefore unable to attend to work, the employee is not only protected from termination or having their employment terms varied, they would also be entitled to claim statutory sickness allowance provided they meet the requisite requirements (which include showing the employer evidence (in the form specified in the law) that the employee is subject to such a movement restriction – please see our earlier guidance note for more details on the requisite requirements for claiming statutory sickness allowance); and

    2. if an employee fails to comply with an employer’s “legitimate vaccination request” (please see our earlier guidance note on what a “legitimate vaccination request” is (for example, an employer would be making a “legitimate vaccination request” if it requires its employee’s vaccination proof to comply with the Vaccine Pass Regulation), the employee may be regarded as being incapable of performing the work which the employee was employed to do, therefore constituting a valid reason for the employer to dismiss the employee or vary the employee’s employment terms (especially if it would cause the employer unjustifiable hardship in providing reasonable accommodation to such an employee).

The Second Bill will come into effect the day it is gazetted, which is expected to be tomorrow, 17 June 2022.

In relation to the First Bill, the Hong Kong Government has put aside HK$33.2 billion as financial subsidy in order to help employers over a 25-year transition period with the increased costs. The Government is also expected to introduce in the next legislative session a Designated Savings Accounts Scheme for employers to cope with future SP/LSP liabilities. Lastly, the Government has said that it would issue easy-to-understand information to employers to enable their understanding of the relevant changes and relevant ancillary measures.

Apart from referring to our earlier article in relation to the Second Bill for more details in relation thereto, you may also click here for our previous article in relation to the First Bill.

Key Contacts

Cynthia Chung

Partner | Corporate Commercial | Employment and Pensions

Email or call +852 2825 9297

Elsie Chan

Partner | Employment and Pensions

Email or call +852 2825 9604

Helen Liao

Partner | Employment and Pensions

Email or call +852 2825 9779

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