COVID-19 legal update: Unpaid leave and work-from-home considerations

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by Catherine Leung, Legal Director, Lewis Silkin

Can employers force employees to take annual leave during this period when stores/offices/etc are closed?

Annual leave falls into two categories: statutory annual leave, which is governed by the rules under the Employment Ordinance (“EO”); and contractual annual leave, which is any annual leave granted by an employer on top of the statutory annual leave.

Where an employer does not distinguish between statutory annual leave and the more generous contractual annual leave in the employment contract; there is a Hong Kong case which held that the employer is at risk of a court finding that all annual leave provided to the employee shall be treated in accordance with the rules relating to statutory annual leave under the EO.

The times at which statutory annual leave is granted shall be determined by the employer after consultation with the employee. An employer can direct an employee to take statutory annual leave by giving at least 14 days’ notice in writing of the time the employer has determined for the grant of a period of annual leave, unless a shorter period has been mutually agreed.

Therefore, if an employer can obtain employees’ consent to take statutory annual leave on short notice, then this should be fine and there would be no breach of the EO.  If employees are unwilling to consent to this arrangement, an employer could not force employees to take statutory annual leave during this period without breaching the EO.

If the employment contract does not distinguish between statutory and contractual annual leave, arguably the same rules would apply to contractual annual leave. It is therefore best practice to differentiate the two types of annual leave in the employment contracts.

There are a number of employment law issues for HR arising out of the work-from-home directive still being undertaken by many companies in Hong Kong. Could you comment on some of the pitfalls HR should be looking out for in relation to this?

While there are advantages of allowing flexible working arrangements such as reduced costs (of both premises and office overheads), reduced travelling time, improved motivation as employees feel trusted, and possibly increased productivity on the basis that working in a more relaxed environment enables employees to work more productively (although some people have expressed that they find the home working arrangement challenging given children are also off school due to the coronavirus situation, and there may not be sufficient working space at home), there are areas that HR should consider when considering employees who work from home.

Although there is no mandatory requirement to put in place a homeworking policy, I highly recommend having a written policy in place which should cover the following key areas:-

• Work location
• Working day and working hours (as per the employment contract)
• The factors / performance indicators that will be used to assess an employee’s performance
• IT security and the use of company equipment
• Data protection and privacy
• Confidentiality of company and client information
• Health and safety duties. Although there is no particular legislation in Hong Kong covering homeworking, the Occupational Safety and Health Ordinance requires every employer to, so far as reasonably practicable, ensure the health and safety of all employees at work. To minimise the risk of potential liability for workplace injuries, all homeworkers should be asked to agree to establish a safe and ergonomic home workplace and to follow good health and safety practices.

Employers should check with its existing insurance providers to ensure that their existing work injury insurance covers any injuries arising out of or in the course of the employee’s employment when the employee works from home. In Hong Kong, all work related injuries must be covered by an employees’ compensation insurance.

Employers should also set very clear expectations on the work that is required of them during the work from home period. On the one hand, employers may consider exercising some degree of monitoring to ensure employees are continuing to carry out work as they would do in their normal workplace.

However, micro managing may not be the best solution. Employers may also consider fostering a culture of self-accountability, and that employees should know that they are relied upon to be responsive and responsible in ensuring that they carry out their work duties and responsibilities as they would do in their normal workplace.

Employers should also make clear that homeworking does not create a permanent variation to the employee’s terms of employment, and they should consider reserving the right to direct the employee to come into work as and when required.