Asia-Pacific employment law bulletin 2023
In the past year, there have been some notable changes to the employment law regime in Hong Kong, including amendments to the Sex Discrimination Ordinance to prohibit discrimination against breastfeeding and to finally abolish the offsetting mechanism under the Mandatory Provident Fund Schemes Ordinance.
Breastfeeding Discrimination Law Amendment
Effective on 19 June 2021, the Sex Discrimination Ordinance (SDO) was amended to prohibit breastfeeding discrimination. The protection extends to a woman: (i) who is breastfeeding a child; (ii) who is expressing breast milk; and (iii) who feeds a child with her breast milk. Under the new SDO, employers are required to take necessary measures to make sure that breastfeeding discrimination does not occur within the company.
The prohibited breastfeeding discrimination includes both direct and indirect discrimination:
- direct discrimination: Direct discrimination occurs when an employee treats a breastfeeding woman less favourably than another person (a woman not breastfeeding or a man) in the same or similar circumstances on the ground of breastfeeding. For example, if an employee requests to use an unused room during her lunch break because she needs to express milk to her child but the employer refuses to let her use the room without justifiable reasons, this could be direct breastfeeding discrimination.
- indirect discrimination: Indirect discrimination occurs when a requirement or condition is applied to all employees, but the proportion of breastfeeding women who can comply with it is considerably less than the proportion of non-breastfeeding persons, and a breastfeeding woman suffers detriment without justification. An example could be a company having a requirement that if any employees wish to take additional breaks during their working hours, they must still ensure that the number of billable working hours per day is the same as all other employees. Such a requirement could have a disproportional detrimental impact on breastfeeding employees and may be unlawful indirect breastfeeding discrimination.
Further, under the new SDO, victimisation and instructions and pressure to discriminate will also constitute unlawful breastfeeding discrimination.
Under the SDO, employers are vicariously liable for the discriminatory acts of their employees done in the course of their employment, unless they can show that they took reasonably practicable steps to prevent the employee from doing the acts. What this means for employers in practice will depend on the circumstances, but at a minimum, employers are advised to have appropriate policies in place to prevent discrimination and to provide periodic training to employees and managers on such policies.
Another important update in Hong Kong is that the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 was finally passed in June last year, after years of consultation and debate. The bill abolishes the right for employers to use their mandatory contributions under the Mandatory Provident Fund (MPF) system to offset statutory severance and long service payment payable to employees. The abolition of the offsetting arrangement will take effect the transition date, which has not yet been appointed. After the transition date, employers can no longer use the accrued benefits derived from their mandatory MPF contributions to offset employee’s statutory severance or long service payment, but there will be grandfathering arrangements to reduce the financial impact for employers. The statutory severance or long service payment of employees who were already employed before the transition date will be split into two portions – the pre-transition portion relating to employment before the transition date and the post-transition portion relating to the employment from the transition date. Employers can continue to use the accrued benefits derived from their MPF contributions to offset any pre-transition portion of statutory severance or long service, but cannot offset against any post-transition portion. In any event, the maximum amount of statutory severance or long service payment is still capped at $390,000, so if an employee’s total statutory severance / long service payment exceeds HK$390,000 (appox. USD50,000), the amount in excess of the cap will be deducted from the post-transition portion.
Kathleen Healy Partner
Stephanie Chiu Counsel
Fan Li Associate
River He Associate