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Contract


Article exclusively contributed by
the Labour Relations Promotion Unit
of the Labour Department

You are fired!


Tony was a sales executive in an electronics company. His employer summarily dismissed him last week. The employer had repeatedly warned Tony of his lateness, but he turned a deaf ear to the warnings.

Tony's office hours were from 9:00am to 6:00pm, Monday to Friday. He admitted that he usually turned up at 9:30am. But he argued that he needed to entertain his clients and attend various social gatherings for business purposes after office hours. Therefore, he felt he should be entitled to start work later. He always met sales targets and had been able to complete the work as assigned. Tony insisted that the company had suffered no loss from his lateness and therefore, they should give him wages in lieu of notice and pro-rata annual leave pay.

Was Tony entitled to claim wages in lieu of notice and pro-rata annual leave pay?

An employer may summarily dismiss an employee without notice or payment in lieu of notice if the employee, in relation to his employment:

- willfully disobeys a lawful and reasonable order;
- is guilty of misconduct;
- is guilty of fraud or dishonesty; or
- is habitually neglectful in his duties.

Tony admitted that he was frequently late for work, although his employer expressly prohibited that. Tony's argument that he could cope with his work and should have the autonomy to decide his own working hours was not a valid one. It was clear that lateness was a kind of misconduct, whether or not the employer's business suffered a loss as a result of the employee's lateness.

It seems that Tony's employer is justified in summarily dismissing Tony and under the circumstances the law does not require him to pay Tony any wages in lieu of notice or pro-rata annual leave pay.

Having said that, the employer should note that summary dismissal is a serious disciplinary action. It only applies to cases where an employee has committed very serious misconduct or fails to improve himself or herself after the employer's repeated warnings. Moreover, when contemplating a summary dismissal of an employee, the employer should consider whether other employees having committed the same misconduct have received the same treatment.

The above case only serves as an illustration of the provisions of the Employment Ordinance on termination. The Employment Ordinance, however, remains the sole authority for the provisions explained above and in case of dispute, the final decision rests with the court.

Q & A on termination of contract
Q1 What is the required length of notice, or the amount of payment of wages in lieu of notice, for termination of an employment contract?
A1 The length of notice or the amount of wages in lieu of notice for termination of a continuous contract of employment is determined as follows :< P>
Continuous contract Length of notice Wages in lieu of notice
with an express agreement as per agreement, but not less than 7 days a sum equivalent to the amount of wages for the notice period
without an express agreement not less than one month a sum not less than one month's wages

If a probation period is provided, the required length of notice or the amount of wages in lieu of notice is determined as follows -

Probation period Length of notice Wages in lieu of notice
within the first month of probation not required not required
after the first month of probation with an express agreement on the length of notice as per agreement, but not less than seven days a sum equivalent to the amount of wages for the notice period
with no provision in the agreement for length of notice not less than seven days' notice a sum not less than seven days' wages

Q2 Can annual leave be used to offset the notice period of termination?
A2 No.

Q3 Under what circumstances does a dismissal contravene the law?
A3 Dismissal contravenes the law under the following circumstances:

(a) dismissal of a pregnant employee;
(b) dismissal whilst the employee is on paid sick leave;
(c) dismissal for the reason of an employee giving evidence or information in any proceedings or inquiry in connection with the enforcement of labor legislation, industrial accidents or breach of work safety regulations;
(d) dismissal for trade union membership and activities; or
(e) dismissal of an injured employee before the parties concerned have entered into an agreement for the employee's compensation or before the issue of a certificate of assessment.

   
 
Source : Labour Relations Promotion Unit of the Labour Department


Taken from Career Times 01 November 2002

(Last review date: 23 August 2013)


Disclaimer: The opinions expressed in this article are those of the contributor.

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