Protect yourself against disputes by following the rules

EMPLOYERS MAY GENERALLY believe that local labour law makes Hong Kong an easy jurisdiction in which to operate, but according to Pattie Walsh, head of Minter Ellison's Greater China employment practice, this is a myth.

'In many respects, the nitty-gritty is far from easy,' she said, adding that this could easily lead to tricky issues, especially in matters involving the termination of employment contracts.

To avoid such difficulties, Ms Walsh recommended that employers review their standard company practices for drafting or amending contracts. If necessary, they should go back to basic principles and ensure correct and consistent application.

An employment contract can be in any form, but it should include three key elements: the express terms, which could be oral or written; the terms implied by legislation; and the terms implied under common law, which derived from case law or precedent.

'However, the thing that gets forgotten in staff-related issues is that the contract is not the document or the offer letter,' Ms Walsh said. 'The best way to think of it is as the employment relationship. It is based on the same principles as if you are buying a car or a property. There has to be an offer, acceptance, consideration and intention to be legally bound.'

Ms Walsh said the relationship was also evolving. Responsible employers therefore made a point of keeping written contracts in good order and fully up to date. This entailed notifying staff of impending changes, seeking agreement and making a clear distinction between sub-contractors and employees in any documentation.

Even so, problems can occur when terminations take place.