Hong Kong Fact-File Part 6:
Individual Business Employment Issues

6.4 Hong Kong Employee Dismissal Rules

The termination and dismissal of employees

In order to terminate an employment contract or dismiss an employee the following rules apply: during the first month of employment no notice to dismiss has to be given. After that, a one month notice period is required if nothing is specified in the contract of employment. The minimum notice period that may be negotiated and included in the contract is seven days.

Where an employee has been continuously employed for more than 24 months and is made redundant or laid off (except in case of severe misconduct), severance pay will usually be due, calculated as follows:

· For monthly paid employed workers: 2/3 of monthly wages (up to a limit of monthly wages of HKD22,500) multiplied by years of service.

· For daily paid workers: 18 days wages multiplied by years of service.

Severance pay can be reclaimed by the employer from his contribution to the employees mandatory pension fund by applying to the pension fund provider for withdrawal of the relevant amount.

It is illegal to discriminate against an employee on the grounds of their sex, marital status, pregnancy, disability, status as carer for a family member, or race; this includes dismissing them on the above grounds.

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