The Hong Kong Government announced that it will relax the “continuous contract” requirement (known as the “418” requirement) today. The proposed arrangement aims to align with the legislative intent and confer benefits on employees who provide a stable and considerable level of service.
Existing arrangement
Currently, regardless of whether working full-time or part-time, an employee who works for the same employer for at least 18 hours a week for four or more consecutive weeks is regarded as being employed under a “continuous contract” of employment for the purpose of the Employment Ordinance (“EO”).
Employees who are employed under a “continuous contract” are entitled to benefits under the EO such as statutory holiday pay, paid annual leave, sickness allowance, statutory maternity and paternity leave, severance payment and long service payment.
Proposed arrangement
The Labour Advisory Board reached a consensus that the 418 requirement is to be relaxed by using aggregate working hours of four weeks as a counting unit and setting the four-week hour threshold at 68 hours. This means that employees who have worked for the same employer and accumulated a total of 68 working hours or more in four consecutive weeks will be regarded as being employed under a “continuous contract” under the EO.
Implications for employers
The proposed arrangement has yet to come into effect. The Government will report to the Legislation Council and an Amendment Bill will be introduced into the Legislative Council for scrutiny upon completion of drafting.
The benefits under the EO will potentially cover more employees, especially part-time or casual employees, under the proposed arrangement. Employers should keep an eye on the developments of the law and reassess how they structure their workforce as more information emerges.
Source: Press release 01 February 2024
