Legal Update

Jan 6, 2025

2024 Year in Review – Hong Kong Employment Law

The year 2024 brought about notable changes in employment law in Hong Kong. This article provides a brief overview of the key developments that occurred over the past year and a look forward at the expected changes as we transition into 2025.

For the full version of this article, please click here.

24 January: District Court reaffirms unauthorised absence as a ground for summary dismissal. Click here to read more.
1 February: The Labour Advisory Board reaches a consensus to set the new threshold for “continuous contract” employment at 68 hours in 4 weeks. Legislative amendment is anticipated. Click here to read more.
1 March: The government launches the New Capital Investment Entrant Scheme to attract high-net-worth individuals to Hong Kong. Click here to read more.
1 March: The High Court grants an injunction against a former employee to prohibit disclosure of confidential information and documents. Click here to read more.
2 April: The District Court rules that swearing did not constitute sexual harassment. Click here to read more.
5 April: The High Court rejects an application to enforce a 12-month non-compete obligation. Click here to read more.
30 April: The government announces a new statutory minimum wage review mechanism, to take effect on 1 May 2026. Click here to read more.
14 June: The Hong Kong Stock Exchange (HKEX) publishes a consultation paper, proposing (among other things) new diversity measures for listed companies. Click here to read more.
10 July: A new visa is introduced to facilitate short-term business trips to China for non-Chinese Hong Kong and Macau permanent residents. Click here to read more.
15 July: The government launches the Re-employment Allowance Pilot Scheme to encourage elderly and middle-aged workforce participation. Click here to read more.
19 September: The District Court clarifies that customer contact details may not always qualify as protected “confidential information”. Click here to read more.
23 September: The HKEX removes trading halt during extreme weather conditions.
16 October: The Chief Executive announces employee protection enhancements and employment-related updates in the 2024 Policy Address. Click here to read more.
1 November: The government launches three measures to enhance the Top Talent Pass Scheme (TTPS) and Quality Migrant Admission Scheme. Click here to read more.
15 November: The District Court rules (among other things) that former Deliveroo rider is an independent contractor. Click here to read more.
19 December: The HKEX concludes consultation on corporate governance code enhancements and announces amendments to take effect on 1 July 2025. Click here to read more.
26 December: The first weekday after Christmas Day is added as a statutory holiday. Click here to read more.
27 December: The government announces its annual update to the list of eligible universities and institutions under the TTPS.

2025 Outlook

The anticipated changes to Hong Kong employment law in 2025 include:

the revision of the TTPS list of eligible universities and institutions, effective on 1 January 2025;
the abolishment of the Mandatory Provident Fund offsetting mechanism on 1 May 2025;
the implementation of the new diversity measures for listed companies on 1 July 2025;
anticipated amendments to the "continuous contract" definition;
upcoming government initiatives to promote talent attraction and employment diversity; and
the expected introduction of an alternative legal framework to recognise same-sex relationships by September 2025, due to a Court of Final Appeal decision.

Click here to read more.

2024 Year in Review – Hong Kong Employment Law (Full Version)

The year 2024 has brought about notable changes in employment law in Hong Kong. This article provides a summary of the key developments over the past year and an outlook on the expected changes as we transition into 2025.

January

On 24 January 2024, the District Court handed down a decision that reaffirmed unauthorised absence to be a ground for summary dismissal. In Hum Matthew Ta v. Allied Way Security Management Limited [2024] HKDC 134, the Plaintiff former employee claimed that his employment was wrongfully terminated by Defendant former employer at a meeting in October 2018, and sought from the Defendant a payment in lieu of notice period and a “Golden Parachute” payment (a contractual payment equivalent to 12 months’ salary in the event of a termination of employment for reasons other than a summary dismissal). The Defendant denied the claims and claimed that the Plaintiff’s unauthorised absence from work after the October 2018 meeting justified a summary dismissal.

In rejecting the Plaintiff’s claims, the Court stated that a notice of termination must be clear and unambiguous, and found that there was no termination of employment during the October 2018 meeting. The Court further held that the Plaintiff’s unauthorised absence for one week, coupled with his false accusation of wrongful dismissal, constituted valid grounds for a summary dismissal.

For completeness, the Court also clarified whether the Plaintiff’s contractual housing allowance formed a component of the “Golden Parachute” payment. The Court held that the use of the word “salary” in the “Golden Parachute” clause, instead of “basic monthly salary” (as used in other clauses), was intentional and meant that the payment would cover not only the basic monthly salary, but also the housing allowance.

This case serves as a reminder of the importance for parties to an employment agreement to carefully define the terms and conditions, and to consider the broader context of the agreement to avoid potential ambiguities or misunderstandings. Further, if a party intends to terminate the employment agreement, the communication, including the giving of the notice and the notification of the termination date, must be sufficiently clear and unambiguous, in order to avoid any confusion as to the termination arrangements.

February

Currently, for an employee to be treated as being employed under a “continuous contract” and therefore entitled to certain enhanced entitlements under the Employment Ordinance (for example, paid statutory holidays, maternity/paternity leave, sick leave, annual leave, severance/long service payment), they have to be employed for at least 4 weeks, with at least 18 hours worked per week.

On 1 February 2024, the Labour Advisory Board (a non-statutory body appointed by the Chief Executive to advise the Commissioner for Labour on labour matters) reached a consensus to lower the threshold for “continuous contract,” so that those who have worked at least 68 hours within a period of 4 weeks will be considered to be continuously employed. It is expected that the government will proceed with the legislative amendment in due course.

March

On 1 March 2024, the government launched the New Capital Investment Entrant Scheme (New CIES). The New CIES is aimed at attracting high-net-worth individuals to Hong Kong and strengthening the development of asset and wealth management businesses, financial services and related professional services in Hong Kong. An eligible applicant must invest at least HK$30 million in permissible investment assets, of which a minimum of HK$27 million must be invested into permissible financial assets and/or non-residential real estate, and HK$3 million must be placed into a New CIES Investment Portfolio set up and managed by the Hong Kong Investment Corporation Limited. Successful applicants may, upon at least 7 years of continuous ordinary residence in Hong Kong, apply to become permanent Hong Kong residents.

Also on 1 March 2024, the High Court granted an interim injunction against a former employee to prohibit the disclosure of confidential information and documents. In Tahoe Life Insurance Company Limited v. Cheung Wai Yi [2024] HKCFI 782, the Plaintiff former employer discovered that the Defendant former employee had retained its confidential information and/or trade secrets, after receiving an email from the Defendant (addressed to multiple parties) that contained attachments concerning the Plaintiff’s management meetings and an executive committee meeting.

The Court granted an interim injunction to restrain the Defendant from disclosing its confidential information and documents and to require the Defendant to return such materials to the Plaintiff, on the grounds that: (i.) there was a serious issue to be tried, because the Defendant was prohibited by her confidentiality obligations (both in contract and common law) from disclosing the Plaintiff’s confidential information and/or trade secrets, (ii.) the disclosure would cause irreparable damage to the Plaintiff, (iii.) there was a real risk of further disclosure by the Defendant, and (iv.) the Plaintiff would be able to financially compensate the Defendant for the damages caused by the injunction, should its claim eventually fail.

This case highlights the importance for employers to safeguard confidential information from unauthorised transfers. Employers should maintain access records (particularly for departing employees) and adopt carefully drafted confidentiality clauses to protect their confidential information and trade secrets.

April

On 2 April 2024, the District Court rejected a claim of sexual harassment filed by a policeman in Ng Hon Sum v. Lam Man Lung and Secretary for Justice for, and on behalf of, Hong Kong Police Force [2024] HKDC 415. In that case, the Plaintiff policeman claimed sexual harassment by his colleague (who had used certain swear words implying sexual relationships with the Plaintiff’s mother and wife) and, vicariously, the Hong Kong Police Force.

The Court found that, although the swear words might have implied unethical sexual relationships, they were commonly used in normal conversation or during quarrels in certain sectors of the Cantonese-speaking society. Further, the Plaintiff and the Defendant had a long-standing feud, which was not sexual in nature. Therefore, the Court held that the swearing did not constitute sexual harassment and dismissed the claim.

The Court also noted that the Hong Kong Police Force had already taken reasonably practicable steps to prevent harassment by implementing anti-harassment policies and had responded appropriately when the claim first arose.

This case serves as a reminder that sexual harassment claims can be made by any person regardless of sex. While each sexual harassment claim will be assessed on its own merits, the Court might also consider the broader cultural aspects when determining whether the act complained of is sexual in nature. Employers are also reminded of the importance of implementing proper anti-harassment policies and trainings in the workplace.

On 5 April 2024, in the case Manulife Financial Asia Limited v. Kenneth Joseph Rappold and others [2024] HKCFI 989, the High Court rejected an injunction application filed by the Plaintiff former employer aimed at preventing a former employee from joining its competitor. The Court held that the 12-month non-competition contractual obligation in question was unenforceable, as (i.) it had no geographical limitation, (ii.) the Plaintiff was unable to identify with precision the items of confidential information that it sought to protect, and (iii.) the Plaintiff was also unable to state the life cycle of each category of confidential information (i.e., it was unable to justify that 12 months was necessary to protect the confidential information).

This case is a reminder that the Court will only enforce restrictions that go no further than reasonably necessary to protect an employer’s legitimate interests. In particular, non-compete restrictions can be difficult to enforce as there may be other lesser contractual restrictions that protect an employer’s business interests (e.g., non-solicitation obligations and confidentiality clauses), which diminishes the need for the non-compete restriction.

On 30 April 2024, the government announced a new review mechanism for the statutory minimum wage (SMW), which includes: (i.) reviewing the SMW rate on an annual basis; (ii.) adopting a formula for implementing the annual review (to include inflation and economic growth); and (iii.) reviewing this new review mechanism 5 to 10 years after its implementation. The first SMW rate derived from this new mechanism will take effect on 1 May 2026.

June

Further to banning single-gender boards of listed companies in 2022 (with a transition period of until 31 December 2024 for such boards to implement the required changes), the Hong Kong Stock Exchange (HKEX) published a consultation paper on 14 June 2024 that outlines proposed improvements to corporate governance, including new measures to promote diversity (New HKEX Diversity Measures). The proposed New HKEX Diversity Measures would require listed companies to:

Appoint at least one director of a different gender on the nomination committee;
Provide an annual review of the implementation of the board diversity policy;
Develop and implement a workforce diversity policy (including for senior management);
Disclose and explain the gender ratio of senior management and the workforce (excluding senior management); and
Immediately publish an announcement setting out the details and reasons for any failure to have directors of different genders on its board, and comply with the requirement within three months.

The consultation period ended on 16 August 2024.

July

Effective from 10 July 2024, foreign nationals who are permanent residents of Hong Kong or Macau can apply for a visa similar to the “Home Return Permit” used by Chinese-Hong Kong/Macau residents, which permits travel to China for up to 90 days at a time, for a five-year period, for short-term purposes, including investment, business, and seminars. This new visa will simplify short-term business trips in China for non-Chinese Hong Kong and Macau permanent residents. However, as permanent resident status in Hong Kong and Macau generally requires seven years of residency, the visa will likely only benefit individuals already working long term in Hong Kong or Macau, or those planning to do so.

On 15 July 2024, the government launched the Re-employment Allowance Pilot Scheme, which is aimed at encouraging elderly and middle-aged individuals to join the work force and increasing labour force participation rates amongst this demographic. Eligible individuals aged 40 or above who have been out of employment for three or more consecutive months can join the Re-employment Allowance Pilot Scheme and receive a lump sum allowance capped at HK$20,000. The Scheme will run for three years from 15 July 2024.

September

On 19 September 2024, the District Court rendered a decision for Conpak Management Consultants Limited v. Luk Wai Ting [2024] HKDC 1545 and held that the Defendant former employee was not in breach of his post-termination confidentiality obligations by emailing the Plaintiff former employer’s former clients. The Court found (among other things) that there was no evidence of the contact details being non-public information and, therefore, they did not constitute confidential information (equivalent to a trade secret) that the Defendant was prohibited from using.

This case shows that, to best protect confidential information, employers must go beyond merely labeling information as confidential; they must provide clear evidence that the information qualifies as confidential (similar to a trade secret).

On 23 September 2024, the HKEX implemented a new trading protocol to enable the HKEX to continue trading during extreme weather conditions such as typhoons and heavy rainstorms.

October

On 16 October 2024, the Hong Kong Chief Executive delivered his 2024 Policy Address, in which various measures aimed at enhancing employee protection were announced, reiterated and/or emphasised. These included:

confirmation that the existing arrangement that allows employers to use the accrued benefits of employers' mandatory contributions under the Mandatory Provident Fund System to offset statutory severance payment and long service payment would be abolished in 2025 (see below for further details);
a forthcoming review of the coverage of ex-gratia severance payments under the Protection of Wages on Insolvency Fund, and consideration of an increase in the ceiling of ex-gratia payments to enhance employee protection;
reiteration that a new annual review mechanism for the Statutory Minimum Wage would be implemented (see above for further details); and
reiteration that the “continuous contract” requirement under the Employment Ordinance would be amended by relaxing the threshold from working 18 hours a week for four consecutive weeks (i.e., 72 hours in total) to an aggregate of 68 hours over four weeks, making it easier for employees to enjoy comprehensive employment rights under the Employment Ordinance.

Other key points relevant to employment in the Policy Address included: (a) a continued emphasis on talent attraction and retention and a 5-year reform of various aspects of the existing talent admission regime; (b) strengthening support for persons with disabilities and encouraging them to engage in employment; (c) promoting women’s workplace development; (d) strengthening support for working parents; (e) encouraging employment among middle aged and elderly persons through the Re-employment Allowance Pilot Scheme; and (f) implementing “Full Portability” of the Mandatory Provident Fund (where employees will be able to transfer the accrued benefits derived from their employers' mandatory contributions to a scheme of their choice, making use of the eMPF Platform launched in June 2024).

November

On 1 November 2024, the government launched three measures to enhance two talent admission schemes, i.e., the Top Talent Pass Scheme (TTPS) and Quality Migrant Admission Scheme (QMAS):

First, 13 top Mainland and overseas universities and institutions have been added to the list of eligible universities under the TTPS, making a total of 198 eligible universities and institutions.
Second, the validity period of the initial visas of Category A applicants under the TTPS (i.e., those with an annual income of at least HK$2.5 million in the year before the application) has been extended to three years. Category A applicants may also apply for an extension of stay within three months before the limit of stay expires. They will be granted an extension of stay for one year unconditionally or for up to three years if they have secured offers of employment or have established or joined in a business in Hong Kong.
Third, in relation to the QMAS, the assessment criteria and arrangements of the General Points Test (GPT) has been enhanced, and the application and selection process has been streamlined. The enhanced GPT replaces the original item-by-item scoring system with an assessment questionnaire. Applicants are required to: meet at least six of the twelve assessment criteria in the questionnaire under six major aspects, namely age, academic qualifications, language proficiency, work experience, annual income, and business ownership; and submit supporting documents. There is no longer an annual quota under the enhanced GPT.

On 15 November 2024, the District Court found in Gurung Sanjaya Man v. Deliveroo Hong Kong Limited [2024] HKDC 1932 (among other things) that a former Deliveroo rider was an independent contractor, rather than an employee. In that case, the Applicant, a gig worker who worked as a rider for Deliveroo, a delivery platform, applied for employees’ compensation against Deliveroo for an accident that occurred on the job. Upon applying the “overall impression” test, reviewing the terms of the contract between the parties and considering the practical realities of the relationship, the District Court found the rider to be an independent contractor, instead of an employee, and therefore struck out the application.

This case highlights the difficulties in classifying gig workers, as well as the importance for employers to clearly define the relationship in both contract and the day-to-day work. In particular, it is noteworthy that the ruling is in contrast with another decision made by the Labour Tribunal in May 2023 where the gig workers (who worked as couriers for a delivery platform, Zeek) were considered to be employees due to the larger degree of control by Zeek.

December

On 19 December 2024, the HKEX published its conclusions to the consultation paper on corporate governance code enhancements dated 14 June 2024. With certain modifications to the HKEX’s original proposals (and without changes to the New HKEX Diversity Measures), the amendments will take effect on 1 July 2025.

The first weekday after Christmas Day (i.e., 26 December for 2024) has become a statutory holiday in Hong Kong, increasing the total count of statutory holidays in Hong Kong to 14. The statutory holidays, which are mandatory under Hong Kong law, form part of the 17 general holidays (also known as bank holidays) in Hong Kong. This means that, currently, there are three general holidays that are not classified as statutory holidays, and the granting of which is subject to the employer’s discretion.

The number of statutory holidays in Hong Kong will continue to progressively increase to 17 days by 2030, with one new statutory holiday to be added in each of 2026, 2028 and 2030.

On 27 December 2024, the government announced its annual update to the aggregate list of eligible universities and institutions under the TTPS, which consists of 199 universities or institutions. The updated list will take effect on 1 January 2025.

2025 Outlook

We continue to anticipate various developments and changes in the employment law landscape in 2025, including the following:

The updated list of eligible universities and institutions for the TTPS will take effect on 1 January 2025.
Currently, an employer can offset any statutory severance payment and long service payment due on termination against an employee’s accrued Mandatory Provident Fund benefits derived from the employer’s mandatory and voluntary contributions. On 1 May 2025, the offsetting mechanism regarding the employer’s mandatory contributions will be abolished. To reduce the risk of large-scale dismissals before the transition date, a “grandfathering” arrangement will be implemented, where the pre-transition portion of statutory severance / long service payment for employees already in employment before the transition date can still be offset using the previous rules. The government will also launch a 25-year subsidy scheme exceeding HK$33 billion to ease the transition and financial burden on employers.
The New HKEX Diversity Measures will take effect on 1 July 2025.
It is expected that the government will introduce an amendment bill into the Legislative Council to amend the definition of “continuous contract” (see above for further details).
As announced in the 2024 Policy Address, further government measures and initiatives aimed at talent attraction, encouraging employment for persons with disabilities, middle aged and elderly persons, and promoting women’s workplace development are expected.
Pursuant to the Court of Final Appeal decision in Sham Tsz Kit v Secretary for Justice [2023] HKCFA 28, the government has been given a two-year period ending in September 2025 to establish an alternative legal framework to recognise same-sex relationships and create new legal protections for same-sex couples. Failing so, the government would be held by the Court of Final Appeal to be in breach of the constitutional right to privacy. It is therefore anticipated that the government will announce details of the implementation of the alternative legal framework prior to the deadline in 2025.