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Termination by statutory bodies of employees who have been declared bankrupt by the court


Date of Meeting: 18 October 2000

Asked by : Hon YEUNG Yiu-chung

Replied by : SEM

Question :

Will the Government inform this Council whether:

  1. it knows the statutory bodies which have specified, in their employment contracts, that the employer may terminate immediately the service of an employee who has been declared bankrupt by the Court; of the posts and ranks of the employees involved, and of the criteria adopted for determining the selected posts and ranks; and

  2. it has, through issuing guidelines to these statutory bodies or by other means, regulated the terms of the employment contracts laid down by these bodies?


Madam President,

a. We are aware that one statutory body has included in its employment contracts a term which provides that the employer may terminate the employment of an employee who has committed an act of bankruptcy. This term applies to staff of all ranks who have entered into employment contracts with this statutory body since 1990. The statutory body is now reviewing whether such a term is necessary.
b. Unless otherwise provided in the relevant ordinances, statutory bodies in general enjoy administrative autonomy in matters such as employment of staff and the making of contracts. However, the terms of employment contracts negotiated between employers and employees must comply with the minimum standards of employment-related benefits and conditions as stipulated in the Employment Ordinance (EO). Under Section 70 of the EO, any term of a contract which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by the EO shall be void. As employers, all organizations, including non-governmental statutory bodies, must comply with the requirements of the EO.

To facilitate a better understanding of the EO by both employers and employees and to promote good human resources management practices, the Labour Department (LD) organizes various kinds of activities such as seminars, courses, exhibitions and lectures and issues publications on the EO as well as on labour relations and employment-related measures. LD has also published the "Guide to Good People Management Practices" and the "Sample Employment Contract" with a view to reminding employers of the issues which should be taken into consideration in drawing up employment contracts.
Last revision date: 18 October 2000
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