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If the employee is laid off, is the employee entitled to severance payment? How to calculate the amount?

Labour Department

What is lay-off?

If an employee is employed on such terms and conditions that his remuneration depends on his being provided by the employer with work of the kind he is employed to do, he shall be taken to be laid off if -

  1. the total number of days on which no work is provided or no wages is paid, exceeds half of the total number of normal working days in any four consecutive weeks; or
  2. the total number of days on which no work is provided or no wages is paid, exceeds one-third of the total number of normal working days in any 26 consecutive weeks.

The days of lock-out, rest days, annual leave and statutory holidays should not be counted as normal working days during the above periods.

If the employee has been employed under a continuous contract for not less than 24 months, and is laid off by the employer, he/she is eligible for severance payment. 

Please click here for the formula for calculating severance payment.

Employees who are in situation of being laid off, or insufficient work is given, are advised to seek help from the Labour Relations Division as soon as possible.

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: 10 Sep 2019
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