continuous employment for sevrance payment - in HK and outside of HK

I was hoping people here could help me with some advice!

I was made redundant few weeks ago. Now I am trying to understand if I should receive the severance payment from my employer. I was initially employed by the company within the group of companies in UK in 2006, then after two years of service I was offered a position in HK with different company but still within the same group of companies. My new offer letter stated that my employment will be treated as continuous employment that started in 2006.

The question here is: am I eligible to receive the severance payment if I have been continuously employed for more than 24 months, but only 11 months in Hong Kong territory (I heard that only employment within HK would count).

Is it worth for me to seek proper legal advice on this matter if ex-employer thinks that I shouldn't get anything?


Thank you for your thoughts in advance!

The regulations about severance payment in Hong Kong are provided under the Employment Ordinance (Cap. 57) (“EO”) under the Hong Kong Laws.


Pursuant to s31B of the EO, where an employee who has been employed under a continuous contract for a period of not less than 24 months ending with the relevant date … is dismissed by his employer by reason of redundancy…, the employer shall…be liable to pay to the employee a severance payment calculated in accordance with s31G.


S31K(4) of the EO provides that “where an employee of a company is taken into the employment of another company which, at the time when he is taken into its employment, is an associated company of the first-mentioned company, his period of employment at that time shall count as a period of employment with the associated company, and the change of employer shall not break the continuity of the period of employment”, and s31K(5) of the EO provides that “2 companies shall be taken to be associated companies if … both are subsidiaries of a third company…”. As the two of your previous employers are under the same group, it is likely that they will be regarded as associated employers and hence the change of employer shall not break the continuity of the period of employment.


It should be noted that according to s3 of the EO, the onus of proof is on the employer to show that it is not a continuous contract. Therefore, based on the facts given, it is likely that you would be able to recover the severance payment in accordance with s31G(1)(a) of the EO, namely in the case of a monthly rated employee, two-thirds of the last full month’s wages, or two-thirds of $22,500, whichever is less for every year and pro rata as respects an incomplete year of employment under a continuous contract subject to a maximum payment not exceeding $390,000 under the Seventh Schedule.


Regarding your final question, it would always be wise to seek proper legal advice to ascertain your existing rights over the contract.



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