In February 2016, the Hong Kong government took its most significant step yet towards implementing a proposal to strengthen the Labour Tribunal’s powers to require an employer to re-hire an employee who has been unlawfully dismissed.
The proposal was first raised for discussion in 2000. It is now set out in the Employment (Amendment) Bill, which was introduced for first reading in the Legislative Council’s session on March 3, 2016.
If the Employment (Amendment) Bill passes, it will amend the Employment Ordinance and provide the Labour Tribunal with greater power to order an employer to re-hire a former employee in an appropriate case.
At present, the Labour Tribunal can only make an order for reinstatement or re-engagement if both parties agree, which happens rarely. More typically, the tribunal will make a monetary award in these circumstances.
Where an employee is dismissed without a valid reason, and in breach of the law – for example, when the employee is pregnant, is on statutory sick leave or maternity leave, or has been injured at work – that award may comprise terminal payments. These payments may include statutory and contractual amounts due, but unpaid, on termination, plus any additional compensation that the Labour Tribunal considers appropriate, up to HK$150,000.
If the Employment (Amendment) Bill is passed, the Labour Tribunal will be able to compel the employer to reinstate the employee. This must be to his or her former position on the same terms and conditions prior to the dismissal, or by placing the employee in a different, but similarly suitable, role within the same company or a related company.
In such cases, employment will be treated as being continuous and unbroken. The result is that the entire period of service – including the period between the date of dismissal and re-hire – will count for the purposes of calculating an employee’s entitlement to benefits, such as annual leave, sick leave and severance payments.
In addition, the Labour Tribunal may order the employer to pay the employee a certain amount for loss of pay and statutory entitlements between the date of dismissal and the date of re-hire, if it considers this just and appropriate in the circumstances.
In determining whether to exercise these powers, the Labour Tribunal will need to consider all of the circumstances of the case. It may decline a request to the reinstatement of an employee if it is not reasonably practicable for the employer to re-hire the individual in question.
This might be the case where, for example, the employer has since sold off a part of the business in which the individual was employed – such that there is no role for the employee to return to – or where relations between the parties have deteriorated beyond repair, so that a continued employer-employee relationship would not be reasonably possible.
An employer who does not comply with a reinstatement or re-engagement order by the date specified by the Labour Tribunal will be liable to pay an amount of up to HK$50,000 (or three times the employee’s average monthly wages) to the employee, in addition to the monetary awards mentioned above.
However, if it becomes no longer reasonably practicable for an employer to comply with a reinstatement or re-engagement order made by the Labour Tribunal, the employer may apply to the tribunal for relief from the obligation of this additional sum. This could be for several reasons, including those attributable to the employee or because of a change in circumstances outside the employer’s control.
The current proposal has been drafted following a number of rounds of discussion with both the Labour Advisory Board and the Legislative Council’s Panel on Manpower.
It seeks to strike a balance between the needs of employers to manage their workforce and the need to provide protection to vulnerable employees, where the loss of employment may result in significant financial burden on the employee and his or her family.
This article appeared in the Classified Post print edition as New bill to press employers to take back ex-staff.