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When terminating employment contract, is the employee entitled to pro rata end of year payment? How to calculate the amount?

Labour Department

End of year payment means any annual payment (including double pay, 13th month payment, end of year bonus) of a contractual nature. It does not include any payment which is of a gratuitous nature or which is payable at the discretion of the employer. The provisions concerning end of year payment apply to an employee employed under a continuous contract who, in accordance with a term of his/her contract (including agreement made orally or in writing, in express or implied term), is entitled to an end of year payment from his employer.

If an employee has been employed under a continuous contract for not less than three months in a payment period (Note) and is dismissed by the employer (except in cases of summary dismissal due to the employee's serious misconduct), he/she is eligible for a pro rata end of year payment. Any probation period, subject to a maximum of three months, is excluded from the calculation of the qualifying service for pro rata end of year payment. However, excluding the probation period, if an employee has fulfilled the eligibility requirement of the three months’ employment in a payment period, then the whole employment period(including the probation period) shall be taken into account in calculating the pro rata end of year payment.

Note: The payment period shall be the period specified in the employment contract, or a lunar year if it is not specified.

The is not a legal document. The Ordinance remains the sole authority for the provisions of the law explained.

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Last update: 15 Oct 2019
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