C. Termination of employment and the relevant payments
Regardless of whether you are an employer or employee, you should give either formal advance notice or wages in lieu of notice to your existing employer/ employee for the termination of an employment contract.
The length of advance notice (or the amount of wages in lieu of notice) for termination
of a continuous contract of employment is determined as follows.
|
|
Length of notice |
Wages in lieu of notice |
|
With an expressed agreement |
As per the agreement, but not less than seven days |
A sum equivalent to the amount of wages for the notice period |
|
Without an expressed agreement |
Not less than one month |
A sum of not less than one month's wages |
If you are in a probation period, 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 |
Not required |
Not required |
|
|
After the first month of probation |
With an expressed agreement |
As per the agreement, but not less than seven days |
A sum equivalent to the amount of wages for the notice period |
|
Without an expressed agreement |
Not
less than |
A sum
of not less |
|
For a fixed term contract without an expressed agreement on the length of the termination notice period, these requirements are also applicable on the condition that such a contract is a continuous contract of employment.
The items and amount of payments that are payable to an employee on termination of employment or the expiry of a employment contract depend on a number of factors such as the length of service, the terms of the employment contract and the reason for the termination of the contract. For quick reference, termination payments usually include:
- outstanding wages;
- wages in lieu of notice, if any;
- payment in lieu of any untaken annual leave,
and any pro rata annual leave pay for the current leave year;
- any outstanding sum of end of year payment,
and pro rata end of year payment for the current payment period;
- where appropriate, long service payment or
severance payment;
- other payments under the employment contract, such as, gratuity or provident fund payments.
Time of Making Termination Payments
An employer must pay all termination payments, except for severance
payments, to the employee as soon as practicable and in any case
not later than seven days after the date of termination or expiry
of the contract.
For severance payments, an employer must make payment not later than two months from the receipt of a notice from an employee who is claiming a severance payment.
Offences and Penalties
Employers who fail to pay termination payments when they become
due are liable to prosecution and, upon conviction, to a fine
of $200,000 and to imprisonment for one year.
-
A) Dismissal or variation
on employment terms
- I suspect that my sales executive has
repeatedly sent client details to a rival company and I want
to dismiss him.
Can I terminate his employment contract immediately without
giving him advance notice or wages in lieu of notice?
- I am an office clerk and my boss always orders me to move heavy goods inside the warehouse. I think that this is not commensurate with my job duties because my boss did not specify it during the job interview. Can I resign without giving him prior notice or wages in lieu of notice?
- What constitutes unreasonable dismissal?
- I am going to dismiss a staff member with
one of the valid reasons for dismissal.
Am I required to give him advance notice or wages in lieu of
notice?
- What constitutes an unreasonable variation
of the terms of an employment contract?
- If I (as an employee) am facing unreasonable
dismissal or unreasonable variation of the terms of my employment
contract, then what can I do to protect my rights?
- What constitutes unreasonable and unlawful
dismissal?
- If I am unreasonably and unlawfully dismissed by my boss, then what can I do to protect my rights?
- When is an employer required to pay a
severance payment to an employee?
- When is an employer required
to pay a long service payment to an employee?
- I am going to terminate the employment contract of one of my staff members. Can I use my previous contribution to his Mandatory Provident Fund (MPF) to offset part of the severance payment/long service payment payable to him?
- My employee has tendered his resignation and his last day of employment is the 30 September. He has 10 days of untaken annual leave. If he takes all the annual leave continuously from the 21 to the 30 September as final leave, when should I make the termination payments?
B) Termination payments, severance payment and long service payment