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When terminating a contract of employment, the party who requested for termination is required to give the other party due notice or wages in lieu of notice. The length of notice period depends on situation, for employees employed under a continuous contract, the requirements on notice period and payment in lieu of notice are stated in the table below:
1. How to calculate notice period
The formula for calculating wages in lieu of notice is as follows -
*In case a notice has not been given, one shall adopt the average daily wages of the employee in the 12-month period preceding “the day when the contract is terminated”.
Please note that in calculating the average daily wages, an employer has to exclude (i) the periods for which an employee is not paid his/her wages or full wages, including rest day, statutory holiday, annual leave, sickness day, maternity leave, sick leave due to work injuries or leave taken with the agreement of the employer, and any normal working day on which the employee is not provided by the employer with work; together with (ii) the sum paid to the employee for such periods. Please click this link to information on “A Concise Guide to the Employment Ordinance - Appendix 2” (PDF).
The is not a legal document. The Ordinance remains the sole authority for the provisions of the law explained.