Legal update: Government proposes compulsory reinstatement and re-engagement of unreasonably dismissed employees

The Government published in the Gazette on 12 February 2016 the Employment (Amendment) Bill 2016.  The Bill seeks to amend the Employment Ordinance (Cap 57) (“EO”) to allow the Labour Tribunal (the “LT”) to order an employer to reinstate or re-engage an employee where the employee concerned is unreasonably dismissed without a valid reason and/or in contravention of a specified statutory provision.

The Amendments

Under the proposed amendments, the employer’s agreement is no longer a pre-requisite and the LT is free to make an order if the employee has been unreasonably dismissed under section 32A(1)(c) and it considered this to be appropriate and practicable. In making this decision, the LT will consider all relevant factors of the case and may also request the Labour Department to provide a report containing information in relation to the relationship between the employer and the employee.

Where an order of compulsory reinstatement or re-engagement has been made pursuant to the proposed amendment to section 32N, the employer is bound to do so.  If the employer fails to do as required, the employer shall pay to the employee a further sum set at three times the employee’s average monthly wages (subject to a maximum of HK$50,000).  This amount is in addition to any monetary remedies payable to the employee as currently provided in the EO.

This is a change from the current provisions of the current EO.   Part VIA of the EO as it currently operates provides that if an employee is dismissed unreasonably and unlawfully, the LT may only make an order of reinstatement or re-engagement if both parties consent.  In the absence of mutual consent, under the current framework, the LT may instead make an award of terminal payments and/or, in the case of certain unlawful dismissals, an award of compensation not exceeding HK$150,000.  It has no power, however, to demand or order reinstatement or re-engagement without the employer’s consent.

Potential concerns

According to the background brief prepared by the Legislative Council Secretariat in 2012, there was an average of only about two to three cases of reinstatement or re-engagement per year (by consent) in the years running up to 2012.

This suggests that employers are generally reluctant to reinstate or re-engage former employees, inciting concern among the lawmakers that the amendments will create tension in the work place.  In order to tackle this, the LT reserves the right to only award monetary compensation, where the circumstances render reinstatement or re-engagement inappropriate and impracticable.

Related amendments to the Labour Tribunal Ordinance and its subsidiary legislations

In order to facilitate the proposed amendments to the EO, consequential amendments to the Labour Tribunal Ordinance are also necessary, for example, to provide for the procedures for making an application in relation to the new sections.

The Bill will be introduced into the Legislative Council on 2 March 2016. Tanner De Witt will continue to monitor the position.  For more enquiries:

Russell Bennett

Partner | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.