We’re finally beginning to see some light at the end of the tunnel – or is it already 100% post-COVID-19 for you stepping into 2023? Nevertheless, this pandemic poses unprecedented issues to employers and employees in various sectors in Hong Kong.

In this article, we address the most asked queries relating to everything from alternative working arrangements, potential discrimination, sick leave and annual leave and unpaid leave and termination of employment, in which these new practices became a norm, and this could actually be the one last gain from the pain. We also bring awareness to cross-border payments and virtual banking, another challenge in the post-COVID era, which is an area the Fintech industry continues to tackle through new technologies.

Alternative working arrangements

During the outbreak of COVID-19, flexible working-from-home (“WFH”) arrangements have been widely implemented in Hong Kong and around the globe. Employees are allowed to perform their work from home. Although the right to work from home is not statutorily guaranteed in Hong Kong, in some cases, the employment contract may expressly provide for a right to work from home. Where the contract is silent to such rights, any changes on working arrangements requires mutual agreement between employers and employees.

Issues surrounding WFH arrangements

• Employers should take necessary care in facilitating employees to work remotely. For example, they could consider providing their employees with sufficient resources and equipment for the performance of their duties which may include laptop/desktop, printer, and mobile phone. It is also possible that employers are required under the relevant contractual terms to reimburse employees any costs or expenses they incur while working remotely.
• Before adopting a WFH arrangement, employers are advised to update their policies in respect of security confidentiality and date protection and familiarize such policies with employees to ensure adequate protection of business and compliance with the law during remote working.
• Employers have a statutory duty under the Employment Ordinance (Cap.57) (“EO”) to pay employees the normal wages as specified in the employment contract. Any reduced or non-payment of salary may be regarded as a breach of contract.
• Remote working does not alter the working time. Employers are obliged to remunerate employees for overtime working. It may be necessary to keep track and record of the employees’ working hours with relevant software.

Sick leave

EO imposes a statutory duty on Hong Kong employers to pay sickness allowance at the rate of four-fifths of the employee’s daily average wage when the employee takes sickness days. It is unlawful for the employer to terminate the employment when an employee is on paid sick leave, unless it is a case of summary dismissal (e.g. employee wilfully disobeying a lawful or reasonable order, gross misconduct, fraud, or dishonesty or being habitually neglectful in one’s duties).

EO has further expanded the definition of “sickness day” to include absence from work due to medical surveillance, quarantine required or isolation ordered by a health officer of the Hong Kong government. It appears that employees under compulsory quarantine, though not infected with the coronavirus, are entitled to the benefits of the paid sick leave under EO.

Paid/ Unpaid Annual Leave

As the COVID-19 outbreak has hampered the operation of business, less manpower is needed. Some employers might ask its employees to take annual leave. EO provides that an employee could enjoy paid annual leave, from 7 days to a maximum of 14 days, after having been employed under a continuous contract for 12 months. Under EO, an employer can ask an employee to take statutory annual leave by giving at least 14 days’ notice in writing.

On the other hand, the EO is silent on the arrangement of unpaid leave. In Hong Kong, employers are not statutorily entitled to force their employees to take unpaid leave. In the absence of express contractual terms, the employer cannot unilaterally oblige their employees to take unpaid leave, otherwise it could amount to a breach of contract.

Termination of employment

Employers can terminate employees as they please so long as it is not for discriminatory or unlawful reasons. EO makes it unlawful to terminate the employment of an employee who has suffered a work-related injury which gives rise to compensation under the Employees’ Compensation Ordinance; or suffered temporary incapacity for a period not exceeding three days which entitles him/her to claim employee’s compensation.

Where an employee has been employed for at least 24 months, employers are obliged under EO to make a statutory severance payment equivalent to two-thirds of the last full month’s salary, multiplied by years of service. The employer could be exposed to criminal prosecution for his failure to make termination payments due.

Beyond alternative working arrangements and contracts, the pandemic has also exposed the inefficiencies of existing cross-border payment systems, which are often slow and expensive, with hidden fees and opaque exchange rates. Many small and medium-sized enterprises (SMEs) heavily rely on international transactions to conduct their everyday business with clients, customers, suppliers and partners. However, during the pandemic, these SMEs and startups suffered with delays and increased costs due to unpredictable markets and disruption of traditional supply chains.

This has highlighted the need for greater transparency and interoperability in cross-border payments. To address these challenges, the Fintech industry is offering revolutionary cross-border payment systems that are faster, cheaper and more secure.

Why should SMEs and startups start using TranSwap’s multi-currency global account?

As small business owners and startups, every little fee adds up and can massively impact the business. For a different option, consider TranSwap. TranSwap’s multi-currency global bank account allows you to protect your profit and expand strategically.

• A hassle-free alternative to securing local bank accounts in each country of operation.
• Pay to over 100+ countries.
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• Smoothly manage cash flow and bolster your competitive advantage in the local markets by paying and receiving money in the local currency.
• Instantly make international payments with no hidden costs and no need to maintain a minimum account balance.
• Use real-time exchange rates with no unwelcome surprises.
• Enjoy quick, secure and fast international transfers by accessing our global network of bank partners.
• Everything can be handled online. There is no need to visit a physical branch and no paperwork or phone calls.

As we continue to navigate the post-COVID-19 aftermath, it is clear that these new phenomena such as WFH and virtual banking will play a critical role in the future of work and our global economy. By embracing new technologies and having a better understanding of alternative working arrangements, we can build a more resilient and efficient workforce that benefits all stakeholders.

Disclaimer: This summary is for information purposes only. Its contents do not constitute legal advice and should not be regarded as a substitute for detailed advice in individual cases. Transmission of this information is not intended to create, and receipt does not constitute, a lawyer-client relationship between JC Legal and the user or browser. JC Legal is not responsible for any third-party content which can be accessed through the hyperlink provided in this summary.