Legal Update: Employment (Amendment) Bill 2022 introduces proposed amendments relating to sickness and vaccination requests01Mar2022
The Hong Kong Government had recently tightened the already severe social-distancing measures in view of the 5th wave of the COVID-19 outbreak in Hong Kong and made announcements of other policies it intended to implement in the future.
Vaccine Pass Regulation
The Government had made it clear that the underlying goal of the scheme is to boost the vaccination rate in Hong Kong with the implementation of the ‘vaccine pass’ scheme. The Prevention and Control of Disease (Vaccine Pass) Regulation (the “Vaccine Pass Regulation”) came into operation on 10 February 2022.
From 24 February 2022, unvaccinated or non-exempt persons cannot enter a total of 23 types of venues which include fitness centres, beauty parlours, supermarkets and shopping malls. If a person enters these premises without a ‘vaccine pass’, he/ she may be subject to a fixed fine of HK$5,000.
At the initial stage of the Vaccine Pass Regulation, individuals who have received at least one dose of vaccine can enter these venues provided that they use the LeaveHomeSafe app and produce their vaccination record (when and if required). The Government expressed that it will gradually adjust the scheme to require the individuals entering these venues to have received the second dose and the booster shot of the COVID vaccine.
The Regulation also contains provisions for imposing a requirement for the use of a ‘vaccine pass’ to board public transport, but such measures have not been implemented yet, and there is currently no implementation date.
Proposed Amendments to the Employment Ordinance
The Government announced earlier to amend the Employment Ordinance (the “EO”) to address employment issues that arise from or relate to measures implemented under the Prevention and Control of Disease Ordinance (the “PCDO”, also dubbed Cap 599 requirements).
The Government gazette the Employment (Amendment) Bill on 25 February 2022 (the “Bill”). In short, according to its preamble, the Bill is to amend the EO to:-
- regard a day on which an employee is subject to any restriction on movement imposed under the PCDO (the “Affected Employee”) as a sickness day;
- provide for sickness allowance to be paid to the Affected Employee in certain circumstances;
- to provide that it is not a valid reason to dismiss an employee or vary the terms of his/ her employment contract on the ground that he/ she is an Affected Employee; and
- to provide that it is a valid reason to dismiss an employee (other than those in certain categories) or vary his/ her employment contract if he/ she refuses to produce vaccination proof if required by the employer.
The main amendments are in relation to the issue of ‘unreasonable dismissal’ provision of the EO, where under the proposed amendments of the Bill:-
- the employee’s absence from work due to his/ her compliance with the PCDO does not constitute a valid reason for dismissal or variation; and
- the employee’s failure to comply with the legitimate vaccination request by his/ her employer so that he/ she may be regarded as being incapable of performing work he/ she was employed to do to be a valid reason for dismissal or variation.
To be a ‘legitimate vaccination request’, the employer needs to satisfy certain conditions, which are namely that:-
- it is a written request to all employees (if there are other employees who perform a similar type of work as the employee in question);
- a request requiring proof of compliance of the Vaccine Pass Regulation (if the workplace is subject to it), the required number of doses of vaccine as directed under the Prevent and Control of Disease (Use of Vaccines Regulation) or the proof of vaccination of at least one dose of vaccine (if no other requirements apply);
- it allows 56 days from the day of the request for the employee to show the relevant proof of vaccination;
- the employer is of a reasonable belief that there is a risk of infection to others if the employee contracts the specified disease (not limited to COVID-19) in the performance of his work; and
- the request is not made to an employee who is exempted under the Vaccine Pass Regulation or where only one dose of vaccination is required, the employee who is pregnant, breastfeeding, certified to be unsuitable to be vaccinated and certified to have recently recovered from the specified disease.
‘Unreasonable Dismissal’ under EO
The terms ‘unreasonable dismissal’ or ‘valid reason’ relate to the employment protection under section Part VIA of the EO. Generally, this protection applies to employees with over 2 years of service and primarily grants to them certain Terminal Payments which concerns cases where the employer cannot show the reason for dismissal of an employee to be one of the reasons specified in section 32K. In summary, these include:-
- the conduct of the employee;
- the capability or qualification of the employee to perform his/ her work duties;
- redundancy or other genuine operational reasons of the employer;
- the employment of the employee has become unlawful; or
- any other substantive reason as determined by the Court/ Labour Tribunal.
The section 32K protection above only applies in 3 limited circumstances specified under section 32A of the EO which essentially are:-
- where the employee has been employed under a continuous contract for a period of not less than 24 months;
- where the employee has been employed under a continuous contract and the employer unilaterally varies the terms of his/ her employment contract to extinguish or reduce any right, benefit or protection conferred or to be conferred by the EO; or
- where the employer dismissed the employee in contravention of certain provisions of the EO and other relevant legislations which renders the termination illegal (see below regarding section 32P).
If an employee is successful to establish the claim for ‘unreasonable dismissal’, the Labour Tribunal can:-
- order reinstatement or re-engagement of the employee under section 32N;
- award termination payments to the employee under section 32O; and/ or
- award monetary compensation to the employee up to HK$150,000 under section 32P.
Questionable Effect of the Proposed Amendments to EO
It can be seen from the above that ‘unreasonable dismissal’ arises in limited situations. Even if the employee can establish such a claim, it is unlikely that there are any meaningful remedies resulting from the claim for the following reasons:-
- a notional order of reinstatement or re-engagement under section 32N is an academic and ineffective remedy as it requires the employer’s consent (which is unlikely after the breakdown of an employment relationship);
- an award of termination payments to the employee under section 32O may be of little significance as:-
- such award will merely comprise of payments the employee would normally receive (and should have already received) when dismissed, including a pro-rated entitlement to the equivalent of long service pay;
- any statutory severance/ long service payment awarded can be legally set off by the employer against its mandatory provident fund contributions to the employee (which will in most cases reduce the amount to zero or a minimal sum, albeit that a bill has now been tabled at LegCo to remove the offset arrangement);
- an award of compensation under section 32P may also be unlikely as it only arises if the dismissal is also illegal, namely where the employee:-
- is on maternity leave, involved in trade union membership/ activities, on statutory sickness leave or involved in giving evidence in proceedings under the EO;
- is involved in giving evidence in proceedings under the Factories and Industrial Undertakings Ordinance; or
- has an outstanding employees’ compensation claim.
Separately, it is also interesting to note that there is no ‘deeming’ provision of sickness leave for an Affected Employee. Under the amendments proposed by the Bill, the Affected Employee is only entitled to statutory sickness pay only if he/ she:-
- can show a recognized form of certification;
- is absent from work for 4 consecutive days or more due to restrictions imposed by the PCDO; and
- is not subject to such restrictions due to his/ her own serious and wilful misconduct (e.g. breaching other social-distancing measures).
In relation to this aspect of the amendments, its actual benefit may be limited as it is likely to mainly cover employees subject to compulsory quarantine (the period of which has decreased considerably especially for those vaccinated).
Whilst the Government had made an effort to highlight the effect the proposed amendments to the EO which has been widely reported by the media, it could be seen from the above that any purported increase of protection is not in reality significant or draconian.
Based on the current wording of the Bill and on a proper analysis of the pre-existing statutory framework of the EO, the proposal is unlikely to make any real or substantive difference to an employee’s rights and entitlements, apart perhaps from those who cannot attend work due to compulsory quarantine, who are protected as being on sick leave.
The proposed changes also fail to deal with and address other related aspects of employment law, which might also mean that these changes have little real significance, including:
- separately from a failure to attend work being seen as a “valid reason” for termination under section 32K, whether the same circumstances would potentially still be capable of being grounds for summary dismissal. Such grounds include:
- misconduct inconsistent with the due and faithful performance of the employee’s duties; and/or
- a failure to follow a lawful and reasonable instruction.
This may be particularly the case where the employee is required by his contract and the nature of his role, to be present at a certain location and place of work, which he/she is now barred from entering, knowing that a failure to be vaccinated would lead to that result and perhaps failing to comply with a request/instruction that they be vaccinated, for this reason.
- misconduct inconsistent with the due and faithful performance of the employee’s duties; and/or
- In addition, whether the circumstances would have the effect of “frustrating” the employment contract. A contract is frustrated where without default of either party a contractual obligation has become incapable of being performed or because those changed circumstances the performance would entail radically different obligations from those which were originally contemplated by the contract.
A contract will not be frustrated merely because a supervening event has made performance of the contract difficult. It is necessary, however, for there to be the “non-existence of the state of things assumed by both contracting parties as the foundation of the contract”.
Where the contract specifies a physical place of work and where the contract contemplates and requires performance in a specific place, such as in a specific retail outlet located in a mall which has vaccination restrictions, the contract and its performance may well have been rendered inoperable without fault or breach by either party, rendering the contract as “frustrated” and over.
In any event, employers and employees should seek legal advice if they have doubts as to their rights and entitlements under the EO. They should also keep themselves informed of the development of the proposed amendments to the EO as the exact timetable for the reading/ passing of the Bill has not been fixed yet.
Russell Bennett & Mark Chiu
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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.