Global Employer Services News July 2021

What employers should know about Hong Kong's latest employment related legislative amendments?

Two legislative amendments that have an impact on employers have been implemented and approved by the Legislative Council in July 2021.

So what legislative amendments will affect the employers in 2021 and beyond?

Employees’ Compensation (Amendment) Ordinance 2021 (“ECAO 2021”)

The Labour Department stated that this ECAO extends the coverage of the Employees’ Compensation Ordinance (Cap. 282) to a situation where an employee suffers an injury or death as a result of an accident when commuting to or from work, during the period of “extreme conditions” arising from a super typhoon or other natural disasters of a substantial scale.

The affected employee will be provided with the same employees’ compensation protection at the same level as that under Tropical Cyclone Warning Signal No. 8 (T8) or above, or when the Red or Black Rainstorm Warning Signal is in force.

The ECAO 2021 took effect on 2 July 2021 and the amendment is applicable to employees who are injured or died under the above circumstances, on or after 2 July 2021.

The Labour Department also highlighted that according to the ECAO 2021, an accident to an employee resulting in injury or death is deemed to arise out of and in the course of his employment if it occurs:

  • Whilst T8 or above or the Red or Black Rainstorm Warning Signal is hoisted;
  • Within the period (including any extended period) during which “extreme conditions” that give rise to a super typhoon or other natural disasters of a substantial scale exist as specified in an “extreme conditions” announcement; and
  • The employee is travelling as follows:
    • From his/her place of residence to his/her place of work by a direct route within a period of four hours before the time of commencement of his/her working hours for that day; or
    • From his/her place of work to his/her place of residence within a period of four hours after the time of cessation of his/her working hours for that day.

Under the above circumstances, the employee will be covered by extended protection under ECAO 2021.

Employment (Amendment) Bill 2021 (“EAB 2021”)

The EAB 2021 was passed by the Legislative Council on 7 July 2021 to increase five statutory holidays progressively by one day in every two years from the current twelve to seventeen days.

This amendment could resolve the unfairness created by the difference between the number of statutory and public holidays (Hong Kong has seventeen public holidays in a calendar year, but only twelve are statutory in accordance with the Employment Ordinance. It means that an employer can have a choice to give their staff the extra five days’ holidays or not. In general, the white collar workers are entitled to the seventeen public holidays a year, whilst the blue collar workers are only entitled to twelve statutory holidays).

The above amendment bill has laid out a clear schedule for the alignment of the number of statutory holidays with public holidays, aiming to improve the benefits of more than one million Hong Kong workers. On the other hand, the implementation of the above amendments will inevitably increase the running costs of employers (e.g. there will have a negative effect on profitability of businesses, in particular, small and medium businesses, due to increment of Employees’ Compensation insurance premium as a result of the extended coverage for their employees and the increased statutory holidays for their employees).

Joseph Hong