Hong Kong employment law updates

Employment laws are constantly changing and becoming more complex. This article highlights updates that are relevant to Hong Kong employers.

Bonus despite misconduct

In a recent Hong Kong case, an employee was entitled to a bonus, irrespective of her performance under the employment contract, which was payable in full, subject to a finding of gross misconduct by the employee, before the due date of 31 March 2017. The employer did not pay the bonus on the due date, since it was investigating allegations of the employee’s serious misconduct.

In May 2017, the employee was found guilty of gross misconduct and she resigned shortly after, giving two months’ notice.

She did not receive her bonus and therefore sued the employer for breaching the employment contract, and the Employment Ordinance of Hong Kong, in failing to pay her the bonus. The court held that the employee was still entitled to the bonus because:

1. The employment contract provided that there must be a finding of gross misconduct by the due date before the employer can refuse to pay the bonus (implying that the bonus became the employee’s entitlement on the due date in this case); and
   
2. The Employment Ordinance prohibits deduction from any other sum due to the employee including contractual bonuses.

When drafting contractual bonus terms, employers should be mindful of specifying carefully the conditions and timing of entitlement to the bonus, as well as the circumstances where such entitlement will be lost.

Harassment protection

The Laws of Hong Kong were amended on 19 June 2020 to enhance protection in the following aspects:

1. Protection from sexual, racial and disability harassment in common workplaces is extended to workplace participants who have no employment relationships (i.e., interns and volunteers), and obligations not to harass others in the workplaces are imposed on such workplace participants under the Sex Discrimination Ordinance, the Disability Discrimination Ordinance and the Race Discrimination Ordinance of Hong Kong;
   
2. Employers will be held vicariously liable for acts of harassment committed by a workplace participant unless practicable steps have been taken to prevent workplace participants from committing those acts;
3. Protection against racial discrimination and harassment are extended to associates of the individual (i.e., the spouse or domestic partner) and the definitions of race and racial groups have been widened to include the imputation of a race or racial group to a person, under the Race Discrimination Ordinance; and
4. It will be unlawful to directly or indirectly discriminate against breastfeeding women in key sectors including employment under the Sex Discrimination Ordinance. These provisions will come into force from 19 June 2021.

Employers should review and update their existing employment contracts and policies to ensure they are always in compliance with the law.