Can employers lawfully ‘opt out’ of their statutory obligations? A call for reform of fixed-term employment in Hong Kong

Abstract

ABSTRACTThis article critically reviews one of the most common practices adopted by Hong Kong employers today — the use of fixed-term employment contracts — from a comparative and theoretical–practical perspective. This article begins with an examination of the landmark decision in Lui Lin Kam v Nice Creation Development Ltd, where the employer successfully avoided severance pay, by resorting to artificial work arrangements, and then analyses its adverse social implications. While Hong Kong court has generally been entrusted with the role of a ‘guardian of labour rights’, the Court of Appeal in the Lui case found it difficult to stretch its limits of adjudication to intervene the employer’s policy to stagger the work schedule of workers under successive fixed-term contracts of 18 months’ duration, due to the apparent defects of the current Employment Ordinance. This article calls for reform of the fixed-term employment, the regulation of which has remained frozen for many years, particularly in the light of the two long-standing ‘imbalances’ implicit in Hong Kong labour market: the imbalance of power in labour relations, as well as the imbalance between ‘flexibility’ and ‘security’ of employment. With reference to the existing labour policy on fixed-term contracts in other European and Asian countries, the author of this article proposes two main lines of reform, concerning primarily the maximum duration of fixed-term contracts and the imposition of a positive duty upon employers to provide objective reasons for concluding such contracts, in order to afford better protection to fixed-term workers in Hong Kong.