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.
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|
Length
of notice
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Wages
in lieu of notice
|
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With
an expressed agreement
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As
per the agreement, but not less than seven days
|
A sum
equivalent to the amount of wages for the notice period
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|
Without
an expressed agreement
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Not
less than one month
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A sum
of not less than one month's wages
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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.
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Probation
Period
|
Length
of Notice
|
Wages
in lieu of Notice
|
|
Within
the first
month of probation
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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
seven days' notice
|
A sum
of not less
than seven days' wages
|
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?
B) Severance payment and long service payment
- 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?
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