Hong Kong Employment Law Outlook for 2020

The employment law outlook for 2020 indicates that there would likely be some significant changes to the employment-related legislation in Hong Kong on various areas, including anti-discrimination, employment benefits, pension and data privacy. As of now, there are no fixed dates for any such changes to come into effect in 2020. We set out below the potential changes to the law in the employment landscape.

The Proposal to Amend the Existing Anti-Discrimination Legislation

The Discrimination Legislation (Miscellaneous Amendments) Bill 2018 was gazetted in November 2018. It seeks to amend Hong Kong’s existing anti-discrimination legislation to implement the prioritised recommendations given by the Equal Opportunities Commission in its Discrimination Law Review. Some of the key employment-related amendments include:

1. Prohibition against discrimination on the basis of breastfeeding under the Sex Discrimination Ordinance (the “SDO”);
2. Prohibition against racial discrimination and racial harassment by imputation under the Race Discrimination Ordinance (the “RDO”);
3. Prohibition against disability and racial harassment by customers against services providers under the Disability Discrimination Ordinance (the “DDO”) and the RDO respectively;
4. Expansion of the scope of protection from sexual, disability and racial harassment at a common workplace under the SDO, DDO and RDO respectively.

The bill is currently still under discussion at the Legislative Council, but it is expected to come into effect in 2020.

The Proposal to Increase Statutory Maternity Leave From 10 Weeks to 14 Weeks

In the 2018 Policy Address, the Chief Executive proposed that statutory maternity leave under the Employment Ordinance (the “EO”) be extended from the current 10 weeks to 14 weeks. According to the Government’s proposal, the payment for the additional 4 weeks of statutory maternity leave would be maintained at 80 percent of the employee’s average daily wages. The employers would be fully subsidised by the Government for the additional 4 weeks of statutory maternity leave pay, subject to a cap of HK$36,822 per employee (equivalent to 80 percent of the wages of an employee with a monthly wage of HK$50,000).

The relevant bill to amend the EO would likely be introduced and passed in 2020.

The Proposal to Abolish the Mandatory Provident Fund (“MPF”) Offset Mechanism

Currently, an employer is entitled under the EO to offset an employee’s statutory severance or long service payment from the accrued benefits derived from the employer’s contributions to the employee’s MPF scheme. In the 2018 Policy Address, the Chief Executive proposed to abolish the MPF offset mechanism. Under the latest Government’s proposal, the Government will subsidise the employers to meet their statutory severance or long service payment obligations, and the employers will be required to set up designated savings accounts to prepare for the enhanced financial burdens to make the said payments.

The Government is still engaging in discussions with various stakeholders regarding the details of the amendments. It has announced its intention to get the relevant bill passed by 2022 and for the law to fully come into effect by 2024.

The Proposal to Tighten the Regulatory Regime of Occupational Retirement Schemes

Occupational retirement schemes are retirement schemes set up voluntarily by employers to provide retirement benefits for their employees before the launch of the MPF System in 2000. They are governed by the Occupation Retirement Schemes Ordinance (the “ORSO”).

The Occupational Retirement Schemes (Amendment) Bill 2019 was gazetted in April 2019. It serves to ensure that only employment-based schemes could fall into the ambit of the ORSO (ie carving out any de facto investment or tax saving vehicles), and any schemes which fail to meet this employment-based criterion will not be eligible for registration or exemption under the ORSO (and accordingly they will lose the corresponding tax and regulatory advantages).

The bill is currently still under discussion at the Legislative Council, and there is no definite timeline on when it will be passed and come into effect.

Review of the Personal Data Privacy Ordinance (the “PDPO”)

In light of recent high profile data privacy breaches, the Privacy Commissioner for Personal Data (“PCPD”) announced that he will conduct a review of the PDPO to address the inadequacies of the PDPO that were exposed in the recent data breaches. The following amendments to the PDPO may potentially be recommended by the PCPD:

1. Imposition of mandatory data breach notification requirements regarding data breaches;
2. Imposition of enhanced statutory sanctions for data breaches to be more in line with the data protection laws of the European Union;
3. Imposition of statutory sanctions on data processors for data breaches (instead of only targeting data users);
4. Imposition of restrictions on transfer of personal data out of Hong Kong.

Employers are recommended to keep abreast of the above developments which may potentially take place in 2020 or the next few years. In particular, employers should be prepared to revise their existing policies to ensure compliance with the relevant legislative changes when they come into effect.

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Legal Director, Lewis Silkin Hong Kong

Associate, Lewis Silkin Hong Kong