Hello everyone. We are considering renewing our helper's contract for the 3rd time (just finishing her 4th year). Our needs have changed somewhat, however. This brings me to my questions:
If we do not renew the contract with the current helper, are we to pay her a severance?
If we do renew the contract and still decide that we really don't need a helper (redundancy) at say 4 years and 9 months, do we pay her the severance or the long service payment?
Much obliged!
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if she worth it. Pls pay such upon completing the qualifying period. the matter is not the time but how to repay the efforts over past 5 years.
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if she is not worthy for this. just replace her rather than touching the borderline with false hope given.
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sometime we have to see things in fair and reasonable way as we are all human.
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if you have plan to not giving, better to inform her so that she has a choice as well.
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If helpers do badly, find measures to counteract or control such situation.
If helpers perform well with good heart, find ways to appreciate, no matter in monetary term or not.
so, what is the rationales behind?
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answered.
No. & No.
Just feel a bit mean if the asker pursue the way of .."later decide that we really don't need a helper (redundancy)" to get rid of the legal obligation for the money.
If you foresee there is redundancy, why continue the contract then "planned" to terminate it at 4 year 9 months?
If you seek only for legal obligation, go find the written laws available and not asking such through open web with possible freedom of talk on opinions.
Just feel a bit offended for someone not answering the questions but give another opinion.
After all, all are just opinions, orchardarea can take it or not.
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Under the Employment Ordinance, non-renewal of a fixed term contract is deemed to be a "dismissal". There is a presumption that dismissal is due to redundancy once the employee has 2 years of service, and severance is payable.
What this means is if you don't renew, you don't necessarily have to pay severance, but the burden of proof is on you to show that the dismissal was for reasons other than redundancy. If you can't, then severance is payable.
It's more likely that she'd bring a claim if you dismiss after 4 years and 9 months, since this is very clearly a dismissal (as opposed to a "deemed" dismissal when the contract isn't renewed). Again, the burden of proof would be on you to show that it's not a redundancy. One way to do this is to hire someone else.
Even if this isn't a redundancy, you still might have to make a "terminal payment". This is because you need to show that the dismissal (or non-renewal) is for a "valid reason" such as performance or misconduct. If you can't establish a valid reason, then you must make a terminal payment. This is calculated using the same formula as severance.
The short answer: if your helper disputes it, you'll probably have to pay something unless she has done something wrong. However, a lot of employees (not just helpers) don't realise that non-renewal of the second contract could entitled them to severance or a terminal payment and they never dispute it.
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not renewing a helpers contract does not require any severance payment if you go ahead and hire a new helper to take over the chores the outgoing helper was doing. So in effect the helper position is still available but you choose not to fill it with your existing helper but by employing someone new. so no refundancy of the position, no severance pay due.
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the issue comes about when you do not renew a helper or terminate a helper because you do not need a helper any more. In this scenario the helpers position has become redundant and you must pay severance when not renewing or terminating any helper who has worked more than two years for you. This is your situation, I think, do you will have to pay severance.
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The long service pay is for helpers employed for >5 years. For these helpers if you do not renew her contract or terminate her, then you pay long service pay/leave. This still holds true even if you hire another helper to take over her position. If however she decides not to renew with you then no long service pay is due - but most helpers will not leave on their own if long service pay is due (unless going to Canada ect) usually they will do things to get themselves fired so that they can collect the long service.
Hope this clarifies the severance versus long service leave for employer and helpers alike.
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...usually they will do things to get themselves fired....hmm, doesn't think that it can work. As it is stipulated that :
An employer should pay long service payment to his helper if the helper has been employed continuously for not less than 5 years and is dismissed (or his/her contract is not renewed) by reason OTHER THAN serious MISCONDUCT.
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Just one point re: severance / long service. The type of payment is primarily determined by the reason for dismissal. For example, if an employee has more than 5 years of service and is made redundant, you still pay severance. So a helper with 20 years of service whose contract is not renewed and who is not replaced is being made redundant and is entitled to severance, not long service pay.
Long service is only payable when the employee has more than 5 years of service and you dismiss for a reason other than redundancy.
As Lagrue said, it's not payable if the employee resigns. It's also not payable if you summarily dismiss (which is broader than misconduct and can include habitual neglect of duties or acting in a way that's incompatible with her position).
Also, there is no "long service leave". That's relevant in Australia but for some reason a lot of people in HK use the term. We just have a long service payment here.
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