Section 7

Termination of contract by payment in lieu of notice

以代通知金終止合約的情況

Part II — Contracts of Employment (僱傭合約)

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Statutory Text

(1) For the purposes of subsections (1A), (1B) and (1C), wages ( 工資 ) includes any sum paid by an employer in respect of—

(a) a day of maternity leave, a day of paternity leave, a rest day, a sickness day, a holiday or a day of annual leave taken by the employee;

(b) a day of leave taken by the employee with the agreement of his employer;

(d) a day of absence from work of the employee due to temporary incapacity for which compensation is payable under section 10 of the Employees’ Compensation Ordinance ( Cap. 282 ).

(1A) Subject to sections 15 and 33 , either party to a contract of employment may at any time terminate the contract without notice by agreeing to pay to the other party—

(a) where the length of notice required to terminate the contract under section 6 is a period expressed in days or weeks, a sum calculated by multiplying the number of days in the period for which wages would normally be payable to the employee by the daily average of the wages earned by the employee during—

(i) the period of 12 months immediately before the date on which the party terminating the contract gives notice of the termination to the other party ( date of notification ); or

(ii) if the employee has been employed by the employer concerned for a period shorter than 12 months immediately before the date of notification, the shorter period; or

(b) where the length of notice required to terminate the contract under section 6 is a period expressed in months, a sum calculated by multiplying the number of months required by the monthly average of the wages earned by the employee during—

(i) the period of 12 months immediately before the date of notification; or

(ii) if the employee has been employed by the employer concerned for a period shorter than 12 months immediately before the date of notification, the shorter period.

(1B) In calculating the daily average or monthly average of the wages earned by an employee during the period of 12 months or the shorter period—

(a) any period therein for which the employee was not paid his wages or full wages by reason of—

(i) any maternity leave, paternity leave, rest day, sickness day, holiday or annual leave taken by the employee;

(ii) any leave taken by the employee with the agreement of his employer;

(iii) his not being provided by his employer with work on any normal working day; or

(iv) his absence from work due to temporary incapacity for which compensation is payable under section 10 of the Employees’ Compensation Ordinance ( Cap. 282 ); and

(b) any wages paid to him for the period referred to in paragraph (a),

are to be disregarded.

(1C) For the avoidance of doubt, if the amount of the wages paid to an employee in respect of a day specified in subsection (1) is only a fraction of the amount earned by the employee on a normal working day, the wages and the day are to be disregarded in accordance with subsection (1B).

(1D) Despite subsection (1A), if for any reason it is impracticable to calculate the daily average or monthly average of the wages earned by an employee in the manner provided in that subsection, the amount may be calculated by reference to the wages earned by a person who was employed at the same work by the same employer during the period of 12 months immediately before the date of notification, or, if there is no such person, by a person who was employed in the same trade or occupation and at the same work in the same district during the period of 12 months immediately before the date of notification.

(2) Either party to a contract of employment, having given proper notice in accordance with section 6 , may at any time thereafter terminate the contract by agreeing to pay to the other party such proportion of the sum referred to in subsection (1) as is proportionate to the period between the termination of the contract and the time when the notice given would have expired.

(3)

(4) For the purposes of this section, and notwithstanding any other provision of this Ordinance, the term wages ( 工資 )—

(a) includes overtime pay of a constant character or the monthly average of which over a period of 12 months (or if not applicable, such shorter period of employment) immediately preceding the date on which the termination takes effect is equivalent to or exceeds 20% of his monthly average wages during the same period;

(b) except as provided in paragraph (a), shall be deemed not to include overtime pay.

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