Hong Kong Employment (Amendment) Bill 2016

The Employment (Amendment) Bill 2016 ("Bill") was introduced in the Legislative Council yesterday. If passed, the Bill will remove the pre-requisite that both parties agree to an order for reinstatement or re-engagement in circumstances of unlawful dismissal (i.e. terminations under section 32A(1)(c) of the Employment Ordinance).

An order for reinstatement means that the employee is treated as if he/she had not been dismissed, whilst an order for re-engagement requires the employer to re-engage the employee on terms comparable to the original terms, or in other suitable employment.

Under the current law, an order for reinstatement or re-engagement shall be made only if the court or Labour Tribunal finds that the order is appropriate and both parties agree to such an order. However, if the Bill is enacted, in situations where only the employee who has been unlawfully dismissed agrees to reinstatement or re-engagement, an order for reinstatement or re-engagement shall be made if the court or Labour Tribunal finds that such order is appropriate and that reinstatement or re-engagement is reasonably practicable. Before making a finding, both the employer and employee will be given an opportunity to present their views on whether reinstatement or re-engagement is reasonably practicable, and the court or Labour Tribunal must take into account the circumstances of the claim, including the circumstances of the employee and employer, the circumstances surrounding the dismissal, any difficulties that the employer might face in the reinstatement or re-engagement and the relationship between the employer and employee.

The Bill also grants the court or Labour Tribunal the ability to request that the Commissioner for Labour prepares a report on the circumstances of the claim to assist it to determine whether an order for reinstatement or re-engagement is appropriate, subject to the agreement of the employer and employee to both the preparation of the report and its contents.

Should an employer fail to comply with an order for reinstatement or re-engagement, it is liable to pay the employee the sums that would have been awarded if no order for reinstatement or re-engagement had been made (i.e. terminal payments plus compensation up to HK$150,000 under section 32P of the Employment Ordinance), as well as a sum of HK$50,000 or 3 times the employee's average monthly wages (whichever is less). Failure to pay these sums is an offence.

The Bill does not change the current position for unreasonable dismissals that are not unlawful (i.e. not covered by section 32A(1)(c) of the Employment Ordinance). In those cases, reinstatement or re-engagement is only possible if both the employer and employee agree.