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The Labour Department reminded employers that wages and other statutory entitlements must be paid within seven days after the termination of employment contracts as required by the law, or they may face heavy punishment.

The reminder followed a recent court case in which a decoration company was convicted in the North Kowloon Magistracy for failing to pay wages to three employees in full within seven days after their services were terminated.

The company was also fined for failing to pay pro-rata end-of-year and annual leave pay to one of the three employees within the statutory time limit.

The amount of wages involved was $55,053 and the employer was fined $30,000 in total.

A spokesman for the Labour Department said today (Tuesday) that according to Section 25 of the Employment Ordinance, wages become due upon the termination of the employment contract and shall be paid as soon as practicable but in any case not later than seven days thereafter.

"Any employer who fails to do so wilfully and without reasonable is liable to a maximum fine of $200,000 and imprisonment of one year," he said.

In addition, the Ordinance stipulates that an employer has to pay the proportion of end-of-year payment not later than seven days after the termination of service to an employee who has not been employed for the whole payment period but has been so for not less than three months in the payment period.

On statutory time limit for annual leave pay, the Ordinance requires an employer to pay the proportion of annual leave pay to an employee who has been employed for at least three months not later than seven days after termination of service.

"In both cases, any employer who fails to observe the requirements wilfully and without reasonable excuse is liable to a maximum fine of $50,000," the spokesman said.

End/Tuesday, February 8, 2000

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