Relaxation of “continuous contract” requirement under the EO

Pursuant to the Employment Ordinance, to qualify as being employed under a “continuous contract” and thus (subject to fulfilling any other applicable eligibility requirements) be entitled to certain statutory benefits, such as statutory paid sickness days and statutory holidays, an employee must (i) be employed by the same employer for at least four consecutive weeks; and (ii) work at least 18 hours in each of those weeks. This is commonly known as the 4-18 rule.

Historically, the 4-18 rule has been criticised for leaving open a loophole for employers to shun the obligation to provide statutory entitlements to employees, typically by limiting the weekly working hours in one week during each four-week period.

On 1 February 2024, the Hong Kong Government announced that the Labour Advisory Board has reached a consensus that the 4-18 rule will be relaxed. Specifically, when determining whether an employee is employed under a “continuous contract”, the aggregate working hours of four weeks will be used, and the proposed four-week working hour threshold will be reduced to 68 hours. It is expected that this new 4-68 rule will allow more employees who work shorter hours to be regarded as being engaged under a “continuous contract”.

The relevant legislative amendment work will commence soon, but at this stage, it is uncertain when the proposed amendments will take effect. To prepare for these changes, employers should start considering whether the new 4-68 rule will have any impact on any employees, in particular, those who work on a part-time, temporary or casual basis. To reduce costs, employers may need to consider changing any affected employees’ work arrangements to ensure that they will not satisfy the new 4-68 rule.