Hong Kong Employment Contract Requirements: Mandatory Terms Under Cap 57

Hong Kong Employment Contract Requirements and Legal Contents

The Employment Ordinance (Cap. 57) obliges every Hong Kong employer to provide employees with specific terms and conditions. Correctly handling the hong kong employment contract requirements prevents disputes and ensures compliance with statutory obligations.

Hong Kong Employment Contract Mandatory Terms

A written contract is not required under the Employment Ordinance. Certain key terms, however, must be communicated. Even without a written contract, the employee retains the statutory protections of Cap. 57.

Section 5 of the Ordinance mandates specific terms for any employment contract, written or oral: the wage period, the amount of wages, the end-of-year payment entitlement, leave entitlements, and the notice period required for termination. The employer must give the employee a copy of the contract or a written statement of these terms within seven days of the employee starting work. Failure to do so gives the employee grounds to complain to the Labour Department. The Labour Department publishes a model employment contract and guidance notes to help employers ensure compliance.

Employment Contract Hong Kong Law

The Employment Ordinance (Cap. 57) is the primary legislation governing employment contracts in Hong Kong. It applies to all employees under a contract of employment, with limited exceptions such as those employed outside Hong Kong or certain categories of domestic workers. The Ordinance sets minimum standards that cannot be contracted out of. Any contractual term offering less than the statutory minimum is void.

Key provisions affecting every employment contract include:

• Wage period: Wages must be paid at least once a month. Payment must be made within seven days after the end of the wage period.
• End-of-year payment: If a contract provides for an end-of-year payment, the terms must be clearly stated, including the qualifying period and the amount.
• Rest days: Every employee under a continuous contract is entitled to one rest day in every seven-day period.
• Statutory holidays: Employees are entitled to 12 statutory holidays per year.
• Annual leave: After 12 months of continuous employment, an employee is entitled to paid annual leave, starting at seven days and increasing to a maximum of 14 days.
• Sickness allowance: An employee with at least four accumulated sickness days in a continuous contract is entitled to sickness allowance at four-fifths of their daily wages.
• Maternity leave: Female employees are entitled to 14 weeks of maternity leave, with maternity leave pay at four-fifths of daily wages.
• Paternity leave: Male employees are entitled to five days of paternity leave, with paternity leave pay at four-fifths of daily wages.

Hong Kong Contract of Employment Contents

A comprehensive contract of employment in Hong Kong should contain the following contents, whether in a written document or agreed orally:

• Parties: Full names and addresses of the employer and employee.
• Job title and duties: A description of the role and responsibilities.
• Commencement date: The date employment begins.
• Wage rate and wage period: The amount of wages, the currency (Hong Kong dollars), and the payment frequency.
• End-of-year payment: Whether a bonus is payable, the amount or calculation method, and the qualifying conditions.
• Working hours: The number of hours per day or week, and any shift arrangements.
• Rest days: The designated rest day or the method for determining it.
• Statutory holidays: The entitlement to the 12 statutory holidays.
• Annual leave: The number of days of paid annual leave and the leave year.
• Sickness allowance: The entitlement and qualifying conditions.
• Maternity and paternity leave: The entitlement and notice requirements.
• Termination notice: The notice period required by either party, or payment in lieu of notice.
• Summary dismissal: The grounds for dismissing the employee without notice.
• Probation period: If applicable, the length of the probation period and the notice required during it.
• Place of work: The location where the employee will work.
• Governing law: The contract should state it is governed by the laws of Hong Kong.

The Labour Department recommends a written contract to avoid ambiguity. Even with an oral contract, the employer must provide a written statement of the key terms within seven days.

Written Contract vs Oral Contract

Hong Kong law recognises both written and oral contracts of employment. A written contract is not mandatory. It is strongly recommended.

The Employment Ordinance does not mandate a written contract, but it does require the employer to provide a written statement of the terms within seven days of employment commencement. An oral contract is legally binding but can lead to disputes over what was agreed. The Labour Department advises a written contract is the best way to avoid misunderstandings. In a dispute, the employee can still rely on the statutory protections of Cap. 57. Proving the terms of an oral contract can be difficult.

If an employer fails to provide a written statement of the terms, the employee may complain to the Labour Department, which may issue a compliance order. The employer may also face a fine.

Implied Terms Under the Employment Ordinance

Beyond the express terms agreed by the parties, the Employment Ordinance implies certain terms into every contract of employment. These implied terms cannot be excluded by agreement. They include:

• Continuous contract: An employee who works for the same employer for four weeks or more, working at least 18 hours in each week, is under a continuous contract. This status unlocks most statutory entitlements, including rest days, paid annual leave, sickness allowance, severance payment, and long service payment.
• Termination notice: The Ordinance sets minimum notice periods based on the length of continuous employment. An employee with less than one month of continuous employment is entitled to no notice. An employee with two years or more is entitled to at least one month's notice.
• Payment in lieu of notice: Either party may make a payment in lieu of notice, equal to the wages the employee would have earned during the notice period.
• Summary dismissal: An employer may dismiss an employee without notice for gross misconduct, such as theft, dishonesty, or serious insubordination.
• Wage protection: The employer must pay wages within seven days of the end of the wage period. Deductions from wages are only permitted in limited circumstances, such as for MPF contributions or with the employee's written consent.

Labour Department Guidance

The Labour Department provides detailed guidance on employment contract requirements through its website and publications. The Department publishes a "Guide to the Employment Ordinance" and a "Model Employment Contract" for employers to use as a template. This guidance covers all mandatory terms and explains the statutory entitlements that apply to every contract of employment.

Employers should review the Labour Department's guidance when drafting or updating employment contracts. The Department also offers free advisory services to employers and employees on contract terms and conditions.