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Casual employees

China Staff, Feb 2009 by Ellison, Minter

While employers may choose to hire casual employees to reduce labour costs, they should still be aware of the legal requirements applicable; being in breach of the requirements could be costly as Minter Ellison warns.

Q: We are a small Hong Kong company. As a result of the economic tsunami, we have to cut our operation costs, including labour costs. If we decide to employ casual employees, does it mean that we do not have to comply with many of the provisions under the Employment Ordinance? Are there any other legal requirements that we need to know?

Continuous employment

As a starting point, you should be aware that an employee is considered as working under a ‘continuous contract’ as defined under the Employment Ordinance (EO) if he/she has been continuously employed for a minimum duration of four consecutive weeks for at least 18 hours a week. If you employ a casual employee under a contract of employment, or even under a number of contracts of employment, which fulfil the minimum duration, he will still have continuous employment. An employee who works under a continuous contract is entitled to the minimum terms and conditions of employment under the EO, such as annual leave, paid statutory holidays, maternity leave and sick leave.

However, it is relatively easy to break a period of continuous employment in Hong Kong. In the case of Lui Lin Kam & Other v Nice Creation Development, CACV 205/2003, 10 July 2006, the Court of Appeal held that if an employee is employed under a series of contracts with the same employer but there is a break of seven consecutive days between the contracts, his continuity of employment will be considered as broken. Indeed, in Lui Lin Kam, the Court viewed that an employer is ‘perfectly entitled’ to make such arrangements to avoid incurring the obligations of continuous employment under the EO