Serverance & Long Service Payment

Please note that the information below is provided by the Hong Kong Labour Department.

As both Employer and Helper
1.  Under what circumstances should an employer pay severance payment to a helper?
2.  Under what circumstances should an employer pay long service payment to a helper?
3.  Would a helper be entitled to severance payment and long service payment simultaneously?
4.  How are severance payment and long service payment calculated?

1.Under what circumstances should an employer pay severance payment to a helper?

An employer should pay severance payment to the helper if he/she:

1. is dismissed or the fixed term contract is not being renewed* by reason of redundancy; and
2. has not less than 24 months of service with the same employer immediately prior to the termination.

2.Under what circumstances should an employer pay long service payment to a helper?

An employer should pay long service payment to the helper if he/she has worked continuously for not less than five years, and:

1. is dismissed or the fixed term contract is not being renewed* by reason of redundancy; and
2. is certified by a registered medical practitioner as permanently unfit for the present job and he/she resigns.
3. is aged 65 or above and he/she resigns; or
4. dies in service.

3.Would a helper be entitled to severance payment and long service payment simultaneously?

No. A helper will not be simultaneously entitled to both long service payment and severance payment. A helper dismissed by reason of redundancy is entitled to severance payment but not long service payment.

4.How are severance payment and long service payment calculated?

The following formula applies to the calculation of both severance payment and long service payment:
[(Monthly wages 2/3 ) reckonable years of services ]
Service of incomplete year should be calculated on a pro rata basis.
(For details of calculation, please refer to the booklet “A Concise Guide to the Employment Ordinance”.)

* If not less than seven days before the date of dismissal / expiry of the fixed term contract in case of severance payment, and seven days before the expiry of the fixed term contract in case of long service payment, the employer has offered in writing to renew the contract of employment but the employee has unreasonably refused the offer, the employee in not eligible for the entitlements.