Hong Kong – Employment Ordinance Update & Abolishment of MPF Offsetting

In this article, Emily Smith explores the Employment Ordinance update and the abolishment of MPF Offsetting in Hong Kong.

Employment Ordinance Update

On 15 June 2022, the Hong Kong Legislative Council passed a bill amending the Employment Ordinance (EO). The EO aims to encourage employees to receive the COVID-19 vaccination and strengthen employees’ rights and benefits when they are absent due to compliance with COVID-19 anti-epidemic measures

Under the updated EO, if an employee fails to comply with a ‘legitimate vaccination request’ from their employer, this will be considered as a valid reason for dismissal. The request must meet certain requirements (including that at the time of making the request, the employer must reasonably believe that if the employee was to contract COVID-19, others would be exposed to the risk of infection). However, if an employee fails to attend work due to compliance with a Cap 599 requirement, this will not be considered as a valid reason for dismissal. Rather, the definition of ‘sickness day’ has been amended to include a day on which an employee is absent from work because they are complying with a Cap 599 requirement. This includes an employee’s compliance with an isolation order, a quarantine order or a requirement under restriction-testing declaration which imposes a restriction on movement. Employees that meet the relevant criteria under the EO will be entitled to sickness allowance.

The above changes took effect on 17 June 2022. It would be prudent to review any internal guidelines relating to COVID-19 (including vaccinations) and sickness absence/pay and make any necessary updates, to reflect these changes.

Abolishment of MPF Offsetting

While it is not expected to come into force until 2025, legislation was passed on 9 June 2022 that will abolish the current mandatory provident fund (MPF) offsetting mechanisms for severance payments and long service payments.

Currently, employers can use the accrued benefits of their mandatory contributions to offset the cost of severance payments and long service payments. The new bill will prohibit employers from doing this. The Government hopes to implement the measure and an ‘eMPF Platform’, and has committed approximately HK$33.2 billion over 25 years for the subsidies to help employers cover the payments. The new bill sets out detail on how voluntary contributions can still be used, by reference to certain employment dates.

The Government intends to publish simplified guidelines to assist employers in understanding the relevant legislative changes and related measures. For now, employers should watch this space.

Please get in touch if you have any questions or need any support in these areas – we would be happy to help.


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