Fixed Term Employment Contract: Everything You Need to Know in Hong Kong
Fixed term employment contracts have become increasingly common in Hong Kong over the last decade. They offer employers flexibility in terms of staffing, while providing employees with job security for a fixed period of time. If you are a business owner or an employee in Hong Kong, it is important to understand the legal implications of fixed term employment contracts.
What is a fixed term employment contract?
A fixed term employment contract is an agreement between an employer and an employee, which states that the employment will last for a specific period of time. This type of contract can be used for seasonal work, temporary staffing needs, or to offer job security to employees for a defined period.
What are the benefits for employers?
Employers benefit from fixed term employment contracts as they provide flexibility in terms of staffing. For example, they can hire employees for specific projects or to cover maternity leave, without the risk of having to lay them off after the work has been completed.
What are the benefits for employees?
Fixed term employment contracts offer employees job security for a defined period of time. They know how long they will be employed and can plan accordingly. Additionally, they can gain valuable experience and skills while working on specific projects or assignments.
What are the legal implications in Hong Kong?
Under Hong Kong’s Employment Ordinance, fixed term employment contracts cannot be used to avoid an employer’s obligations under the law. This means that employees on fixed term contracts are entitled to the same benefits as permanent employees, such as MPF contributions, annual leave, and termination pay.
It is also important to note that if a fixed term employment contract is renewed multiple times, the employee may be considered a permanent employee and entitled to all the benefits and protections of permanent employment.
What should be included in a fixed term employment contract?
Both parties should agree on the duration of the contract, as well as the terms and conditions of employment. This includes the job duties, salary, benefits, and any performance expectations.
In order to avoid disputes that may arise, it is recommended that the contract also includes termination clauses that outline the circumstances under which either party can end the contract before the agreed upon date.
Fixed term employment contracts can be beneficial for both employers and employees in Hong Kong, as they offer flexibility and job security. However, it is important to understand the legal implications of such contracts and ensure that all terms and conditions are clearly defined in the contract. Employers should also ensure that they are fulfilling their obligations under Hong Kong’s Employment Ordinance.