Severance payment- again!

Hi, have reread the threads and been on the Labour Dept website but is still not clear to me whether we have to pay it to our helper of 3 years or not. We are relocating and so no longer need her. It is clear on the website how much to pay for Long service but not severance. Help please!

Hi there,

I was really hoping you'd get some answers to your post so that I could learn from them ... I am about to dismiss my DH of 3 years as well.


I have researched this a bit and it's a really unclear area. No one seems able to say one way or the other.


First I read the "Employment Ordinance" which states that the employee is entitled to Severance Pay if she has been working more than 24 consecutive months and is being made redundant.


I am planning to release my helper because I'm not happy with her work performance and attitude, you because you're relocating, so according to this it seems we don't have to pay.


But then I went to my nearest Labour Department branch in person to double check. I may have got this completely wrong, but they seem very much "pro-employee" and the staff member initially said to me "you must give Severance Pay". Then I pointed out what it says in the Employment Ordinance and he started to change his tune ... !! I left the Labour Department Office feeling really unclear.


I'm inclined to think that Severance Pay is NOT due unless you're really making your DH redundant - consider this : a good DH who finishes 2 contracts and is not renewed gets no Severance Pay, so why should a DH who is terminated for poor work performance halfway through the second contract get it?


Also, if the helpers can get Severance Pay by playing up and getting themselves dismissed after 3 years, why would so many hold on and on (like they do) for the Long Service Bonus (paid after 5 years of service)? It doesn't make sense. So that's why I'm thinking that logically it must be that the DH is really not entitled to Severance Pay unless she's being made redundant. I think the guy at the Labour Department was being a bit over-enthusiastic & biassed in his protection of helpers' rights, because in this case I don't think she actually has the right to this payment.


Despite this, some unethical helpers will try to force their employers to give them money they are not entitled to. A helper may tell you that she is entitled to it when she is not. Don't believe your helper automatically!! do your own checking. Some nasty helpers will take it a stage further, even if they're not entitled to the money they will threaten to take the employer to the Labour Tribunal to scare him/her into paying up. Lastly, if the employer still holds out, the DH may actually pursue the case to the Labour Tribunal.


All of this won't affect you because you're leaving Hong Kong, but it's pretty scary stuff for me.


In your case, I would suggest that if you are basically happy with your DH you give a cash bonus. If unhappy, just what you legally must. And then you're relocating, so there won't be any problems.


For myself, I will give a month's salary in lieu of notice + airfare & travel allowance and no Severance Pay. If she files a complaint with the Labour Tribunal then I guess I'll pay up, because although I'm quite sure I'm in the right, I'm not 100% confident because of that guy at the Labour Department. And anyway, I'll be "helper-less" and won't have time to get mixed up in legal proceedings.


Anyway, I'm sorry I can't help much, and if anyone out there knows the answer to this question please do let us know!!

Hi Snow Rose I think we do here is the reply from the Labour Dept.

Eligibility for severance payment


According to the Employment Ordinance, an employee is eligible to severance payment if he / she is employed not less than 24 months under a continuous contract and:


· the employee is dismissed by reason of redundancy;


· employment contract of a fixed term expires without being renewed by reason of redundancy; or


· the employee is laid off.





The calculation of severance payment


The severance payment is calculated with the formula:





For monthly-paid employee


(last month wages x 2/3)* X reckonable years of service (service of an incomplete year should be calculated on a pro rata basis)





For daily-rated/ piece-rated employee



any 18 days’ wages* chosen

by the employee out of his last 30 normal working days X reckonable years of service

On first read I was about to agree but reading again it says after 24 months employment on a continuous contract etc etc. As a DH can only do 2 years on any contract surely she would never qualify for severance pay? I think as she has only done 1 year of a 2 year contract you do not have to pay!