Jurisdiction - Hong Kong
Reports and Analysis
Asia Pacific – Fixed Term Contracts Of Employment.

4 March, 2015

 

Legal News & Analysis – Asia Pacific

 

The rules governing the use of fixed term contracts vary from country to country across Asia. We compare the rules in Singapore, Hong Kong, Indonesia, the People’s Republic of China, the Philippines and Thailand.

 

  Things To Consider When Using Fixed Term Contracts Are There Any Restrictions On The Types Of Work That Can Be Performed? Are There Any Restrictions On The Length/Number Of Fixed Term Contracts?
Singapore Singapore law recognizes the use of fixed term employment contracts. No. No.
Hong Kong Hong Kong law recognizes the use of fixed term employment contracts. 

 If the fixed term contract lasts for fewer than four weeks and fewer than 18 hours a week, the employment will be considered ‘non continuous’ and the employee will not be covered by all of the provisions of the Employment Ordinance. In particular, the following protections will not apply to noncontinuous workers:

 

 1 rest days;

 

 2 paid annual leave;

 

 3 sickness allowance;

 

4 severance payments;

 

5 long service payments.

No. No.
Indonesia Indonesian law recognizes the use of fixed term contracts in limited circumstances (see restrictions). 

If a fixed term contract is not made in Bahasa (or dual language) it will be deemed to be a permanent contract.

 

Fixed term contracts must be registered with the relevant manpower office within 7 days of the date they were signed.

 

 If a fixed term contract is terminated prior to the expiry of its term, the party terminating the contract must pay to the other party a sum equal to the salary that the employee would have been entitled to if the contract had run to term.

Yes. 

 Fixed term employment contracts are restricted to the following categories of work:

 

 1 work to be carried out and completed at one time or work that is temporary by nature;

 

2 work that is estimated to be completed within three years;

 

3 seasonal work;

 

4 work that is related to a new product, a new activity or an additional product that is still in the experimental stage or try out phase.

Yes. 

The maximum period of a fixed term contract is two years. After the two year period, the contract may be extended for a further period of one year.

 

Thereafter, the fixed term contract may be renewed once for a maximum period of two years, but only if there has been an interval period of 30 days during which the employee is not employed by the company.

 

Any fixed term employment arrangement outside of these parameters will be deemed to be a permanent employment.

People’s Republic  of China (PRC) PRC law recognizes the use of fixed term employment contracts. 

If a fixed term contract is not signed within one month of the employee commencing employment, the parties will be deemed to have entered into a permanent contract.

 

Fixed term contracts are usually 1-3 years in duration.

Yes. 

 Fixed term contracts may not be used in the following circumstances unless the employee requests for one (this may be difficult to prove in the event of a dispute):

 

 1 the employee has worked for the company for at least ten consecutive years;

 

 2 the employee is within ten years of retirement;

 

3 the employee has already been employed on two fixed term contracts

Yes. 

Only two fixed term contracts are permitted under PRC law after which the employee will be deemed to be a permanent employee.

Philippines Philippines law recognizes the use of fixed term employment contracts. No. No.
Thailand Thai law recognizes the use of fixed term employment contracts. If a probationary period is included in a fixed term contract, it will be deemed to be a permanent contract. 

If a fixed term contract gives either party the right to terminate the contract before the expiry of its term without any party being in default, it will be deemed to be a permanent contract.

 

 If a fixed term contract gives either party the right to extend/renew the term of the contract at the end of its term, it will be deemed to be a permanent contract.

Yes. 

 Fixed term employment contracts are restricted to the following categories of work:

 

1 specific project work which is not the normal work of the Company;

 

2 seasonal work. The work must be completed within two years.

Yes. 

An employee working on a fixed term contract for more than two years will be deemed to be a permanent employee.

 

herbert smith Freehills

 

For further information, please contact:

 

Fatim Jumabhoy, Herbert Smith Freehills

fatim.jumabhoy@hsf.com

 

Jasmine Chen, Herbert Smith Freehills

jasmine.chen@hsf.com

 

Narendra Adiyasa, Herbert Smith Freehills

narendra.adiyasa@hbtlaw.com

 

Helen Beech, Herbert Smith Freehills

helen.beech@hsf.com

 

Janaki Tampi, Herbert Smith Freehills

janaki.tampi@hsf.com

 

Gillian McKenzie, Herbert Smith Freehills

gillian.mckenzie@hsf.com

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