Notes for preparing an employment contract

General Points to Note

◼ Employers and employees are free to negotiate and agree on the terms
and conditions of employment provided that these terms are complied
with the provisions of the Employment Ordinance (EO) and the
Minimum Wage Ordinance (MWO).

◼ Under the EO, if an employer enters into a written employment

contract with an employee, he shall provide a copy of the employment
contract to his employee. An employer should also consult his
employee and obtain his consent before making any subsequent
change to the terms of the employment contract.

◼ Any term of an employment contract which purports to extinguish or

reduce any right, benefit or protection conferred upon the employee by
the EO or the MWO shall be void.

◼ For details of the provisions of the EO, please refer to the Labour
Department’s “A Concise Guide to the Employment Ordinance”. For
details of the MWO, please refer to the leaflet or reference guidelines
on MWO published by the Labour Department.

◼ When drawing up employment contracts, you are advised to refer to

the Labour Department’s booklet “Using Written Employment
Contract” and the “Sample Employment Contract” in the booklet.
They are also available on the Department’s Homepage.

◼ This note sets out in simple terms the main provisions of the
Employment Ordinance (Cap. 57) and the Minimum Wage Ordinance
(Cap. 608). It should be noted that the Ordinance itself remains the sole
authority for the provisions of the law explained.
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 Notes to the “Sample Employment Contract”

5. Working Hours

◼ If the statutory minimum wage (SMW) applies to an employee and

the wages payable to the employee in respect of the wage period are
less than the amount specified in the Third Schedule of the MWO, the
employer must keep a record setting out the total number of hours
(including any part of an hour) that are worked by the employee in
that wage period.
[section 49A of the EO]

6. Meal Break

◼ When an employee’s meal break also falls under the circumstances

of hours worked as specified in MWO, such meal break is hours
worked for computing minimum wage.

7. Rest Days

◼ An employee employed under a continuous contract1 is entitled to

not less than 1 rest day in every period of 7 days.
[section 17 of the EO]

8. Wages

◼ Wages shall become due on the expiry of the last day of the wage
period and shall be paid as soon as practicable but in any case not
later than 7 days thereafter.
[section 23 of the EO]

1
Under section 3 & First Schedule of the EO, a continuous contract of employment means
an employment contract under which an employee works continuously for the same
employer for 4 weeks or more, with at least 18 hours in each week.
2
◼ According to the MWO, wages payable to an employee in respect of
any wage period should not be less than the amount of the total
number of hours worked during the wage period multiply by the
SMW rate.

9. Overtime Compensation

◼ Employers and employees may work out the agreed contents of the
terms on overtime compensation having regards to the operational
needs of different sectors and occupations.

◼ Any overtime hour which falls within the definition of “hours worked”
as stated in MWO, or is regarded as hours worked by the employee
under his employment contract or with the agreement of the employer,
should be included in computing the minimum wage for a wage
period.

10. Holidays

◼ All employees, irrespective of their length of service and hours of

work, should be granted statutory holidays. An employee is entitled
to paid statutory holidays after he has been employed under a
continuous contract for a period of 3 months.
[section 39 & 40 of the EO]

11. Paid Annual Leave

◼ An employee working under continuous contract for not less than 12
months is entitled to paid annual leave. The number of days ranges
from 7 to 14 days depending on the employee’s length of service.

◼ Paid annual leave to which an employee is entitled under the EO shall

be granted by his employer and be taken by the employee within the
period of 12 months immediately after the expiry of the relevant leave
year.

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 ◼ Annual leave entitlement is in addition to the rest days, statutory
holidays, maternity leave and paternity leave under the EO.
[section 41AA of the EO]

◼ An employee is entitled to pro rata annual leave pay upon termination

of the employment contract if he has been employed under a
continuous contract for a period of not less than 3 months in the leave
year, other than for reason of summary dismissal due to the
employee’s serious misconduct.
[section 41D of the EO]

◼ An employer may choose to grant annual leave to his employees

according to the rules of their companies provided that such leave will
not be less than the requirement stipulated in section 41AA of the EO.
Employers should specify the leave entitlement in the contract for
each employee.

12. Maternity Leave Pay

◼ A female employee employed under a continuous contract

immediately before the commencement of her maternity leave and
having given notice of pregnancy and her intention to take maternity
leave to the employer is entitled to a continuous period of 142 weeks’
maternity leave.
[section 12 of the EO]

◼ A female employee is entitled to maternity leave pay if –

(a) she has been employed under a continuous contract for not less
than 40 weeks immediately before the commencement of
scheduled maternity leave;

2
Eligible employees whose confinement occurs before 11 December 2020 are entitled to
a continuous period of 10 weeks’ maternity leave.
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 (b) she has given notice of pregnancy and her intention to take
maternity leave to her employer; and
(c) she has produced a medical certificate specifying the expected
date of confinement if so required by her employer.
[section 14 of the EO]

13. Paternity Leave Pay

◼ A male employee is entitled to 5 days’ paternity leave for each

confinement of his spouse/partner if –
(a) he is the father of a new-born child or a father-to-be;
(b) he has been employed under a continuous contract; and
(c) he has given the required notification to the employer.
[section 15E of the EO]

◼ A male employee is entitled to paternity leave pay if he has been

employed under a continuous contract for not less than 40 weeks
immediately before the day of paternity leave and has provided the
required document to the employer.
[section 15H of the EO]

14. Sickness Allowance

◼ An employee can accumulate paid sickness days at the rate of 2 paid

sickness days for each completed month under a continuous contract
during the first 12 months of employment, and 4 paid sickness days
thereafter. Paid sickness days can be accumulated up to a maximum of
120 days.

◼ An employee is entitled to sickness allowance if –

(a) the sick leave taken is not less than 4 consecutive days (unless
for any day off taken by a female employee for her pregnancy
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 check-ups, post confinement medical treatment or miscarriage,
any such day on which she is absent shall be counted as a
sickness day and, subject to the following conditions, be paid
sickness allowance);
(b) the employee has accumulated sufficient number of paid sickness
days; and
(c) the sick leave is supported by:
(i) an appropriate medical certificate (regarding an employee’s
medical examination in relation to her pregnancy, may also
be supported by a certificate of attendance 3 apart from a
medical certificate); or
(ii) regarding the absence from work of an employee by reason
of his/her compliance with a specific anti-epidemic
requirement with a movement restriction imposed under the
Prevention and Control of Disease Ordinance (Cap. 599),
the employee is required to produce a proof of such
requirement4.
[section 33 and Schedule 12 of the EO]

3
Certificate of attendance is not applicable to an employee’s medical examination in
relation to her pregnancy conducted before 11 December 2020.
4
Applicable to sickness days taken by employees who are absent from work by reason of
their compliance with a movement restriction on or after 17 June 2022. The specific anti-
epidemic requirements with a movement restriction are those prescribed in Part 1,
Schedule 12 of the Employment Ordinance. The proofs of the relevant requirements
include hard copy or electronic form of document, or an electronic data issued by the
Government. The relevant proof should show the name of the employee, or information
that could identify the identity of employee, the type of movement restriction imposed
and the commencement and expiry dates of such restriction.
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15. Termination of Employment Contract

◼ For a continuous contract with no probation period or after probation

period, the agreed length of notice for termination should not be less
than 7 days. If an employment contract does not make provision for
the required length or notice for its termination, the length of notice
should not be less than 1 month.
[section 6(2)(a), (b) & (c) of the EO]

◼ If a probation period is provided, the contract of employment can be

terminated without notice within the first month of probation. After
the first month of probation, if the contract makes provision for the
required length of notice, it should be as per the agreement, but not
less than 7 days. If the contract does not make provision for the
required length of notice, it should be not less than 7 days.
[section 6(3)(a), (b) & 6(3A) (a), (b) of the EO]

16. End of Year Payment

◼ There is no requirement under the EO on provision of end of year

payment, including bonus and double pay. However, if an employee
employed under a continuous contract who, in accordance with a term
of his contract, is entitled to an end of year payment from his
employer.

◼ If the end of year payment is of a gratuitous nature or is payable at

the discretion of the employer, it must be clearly specified in the
employment contract.
[section 11AA & 11B of the EO]

◼ If the employment contract has provided for end of year payment, an

employee is entitled to have pro rata end of year payment if he has
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 been employed under a continuous contract for a period of not less
than 3 months in the payment period. Except for cases where the
employee is summarily dismissed due to serious misconduct or has
resigned in the payment period.

◼ Any probation period, subject to a maximum of 3 months, is excluded

from the calculation of the qualifying service for pro rata end of year
payment.
[section 11F of the EO]

17. Mandatory Provident Fund Schemes

◼ For details of the Mandatory Provident Fund Schemes, please refer to

the Mandatory Provident Fund Schemes Ordinance or the homepage
(www.mpfa.org.hk) of the Mandatory Provident Fund Schemes
Authority. You may also call the Authority’s hotline at 2918 0102.

18. Work Arrangements when tropical cyclone/rainstorm

warning or “extreme conditions” is in force

◼ An employer should work out prior work arrangements and

contingency measures when tropical cyclone/rainstorm warning or
“extreme conditions” is in force, and state clearly the arrangements
to his employees. He is advised to make reference to the “Code of
Practice in Times of Adverse Weather and ‘Extreme Conditions’”
published by the Labour Department.

◼ An employer should keep the number of staff on duty at workplaces

under adverse weather or “extreme conditions” to the minimum as far
as possible. If at all possible, the employer should provide transport
service for employees who are required to travel to and from
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 workplaces when Tropical Cyclone Warning Signal No. 8 or higher,
the Black Rainstorm Warning Signal or “extreme conditions” is in
force. If such service is not available, the employer should grant an
extra travelling allowance to the employees who are required to work.

Enquiries

Enquiry Hotline:
2717 1771 (the hotline is handled by “1823”)

Labour Department website:

www.labour.gov.hk

Enquiry in person to Offices of the Labour Relations Division:

www.labour.gov.hk/eng/tele/lr1.htm