The concept of “Employment at will” is not recognized in Hong Kong. An employment contract must be terminated in accordance with contractual terms and in accordance with statutory provisions contained in the Employment Ordinance (Cap. 57). Unless the situation warrants summary dismissal, the employer or the employee must give notice or payment in lieu of notice to terminate a continuous employment contract. As long as the notice period is not less than the statutory minimum (seven days during the probationary period after the first month of employment and one month thereafter), the employment contract can contain any length of notice period.
Upon the required notice or payment in lieu of notice being given, an employment contract is lawfully terminated irrespective of the reason or, lack of, for dismissing the employee unless:
- the reason is a prohibited reason under the Employment Ordinance (Cap. 57) or an employment-related legislation (for instance, the employee is terminated because they are a member of a trade union); or
- the termination is based on prohibited grounds (gender, race, pregnancy, marital status, family status and disability) under the Sex Discrimination Ordinance (Cap. 480), the Disability Discrimination Ordinance (Cap. 487), the Family Status Discrimination Ordinance (Cap. 527) or the Race Discrimination Ordinance (Cap. 602); or
- the employee has been employed under a continuous contract (that is, the employee worked for the same employer for at least 18 hours per week for a continuous period of four weeks or more) for more than two years.
If an employee has been employed continuously for more than two years, the employer must have a valid reason to terminate their employment. Pursuant to section 32K of the Employment Ordinance (Cap. 57), the five valid reasons for termination are:
- the employee’s conduct;
- the employee’s capabilities and qualifications in relation to the type of work they were employed to perform;
- the redundancy of the employee or other genuine operational requirements of the business of the employer;
- in case the continuation of the employment contract without variation would result in either or both of the employee and employer breaching the law; and
- any other reason of substance, which, as determined by the Hong Kong courts or the Labour Tribunal, is sufficient to cause to warrant the dismissal of the employee or the variation of the terms of the employment contract.
However, even where an employee has been employed continuously for more than two years, there is no statutory requirement to inform the employee of the reason for their dismissal at the time of termination.