News
News //
Submitted by // K Bowers, Partner / Solicitor Advocate; P Yeung, Senior Associate
09 February 2017

 

The 2017 Policy Address: HK employers should pay attention

Chief Executive Leung Chun-ying delivered his final policy address on 18 January 2017 ("Address"). The Address set out proposals which could have broad implications for Hong Kong employers.

In this Employment Law Alert, we focus on three key proposals from the Address, which warrant the particular attention of Hong Kong employers.

1. Abolishing the offset mechanism under the Mandatory Provident Fund system ("MPF system")

Under the current regime, an employer can offset the severance payments and long-service payments due to an employee against the employer's contributions towards that employee's MPF scheme benefits. The Chief Executive has announced a proposal to "progressively abolish" this offset mechanism.

If this proposal materialises, employers, especially small to mid-sized businesses with tighter profit margins, may be impacted significantly .

To alleviate the financial burden that this proposal will likely impose on the business sector, the Government has declared that the abolition would involve the following elements:-

(a) the abolition will have no retrospective effect, in that any MPF contributions made by employers before the implementation date will be exempted;

(b) employers may be subsidised for a portion of the costs in the first 10 years following the implementation date; and

(c) the amount of severance payments and long-service payments that employers are required to pay may be reduced from two-thirds to half of the employee's monthly wages.

Some commentators hold the view that it will take years for the impact of abolishing the offset mechanism arrangement to be felt if the Government bears part of the costs by subsiding employers in the 10 years after the abolition. Others have commented that employers might try to circumvent the arrangement by starting to hire staff on short-term contracts to avoid severance or long-service payments. It seems likely, however, that the abolition of the offset mechanism will now proceed.

2. Increasing the statutory minimum wage

The Chief Executive has adopted the recommendation of the Minimum Wage Commission to raise the Statutory Minimum Wage from HK$32.50 per hour to HK$34.50 per hour, which represents an increase of 6.2%. Subject to the approval of the Legislative Council, this increase will take effect from 1 May 2017.

To correspond with the increase, employers will be exempted from the requirement under the Employment Ordinance to record the total number of hours worked by an employee in a wage period if wages payable are not less than HK$14,100 per month (the exemption amount is currently set at HK$13,300 per month).

3. Loosening employment visa requirements for Belt and Road countries

The Chief Executive has stated that the Hong Kong Government will consider relaxing visa requirements for nationals of the Belt and Road countries, consistent with the Central Government's Belt and Road Initiative. As the proposal for easing visa requirements extends to applications for employment visas, employers may benefit from a larger workforce candidacy and greater ease in arranging Hong Kong employment visas for prospective employees from applicable countries.


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; and financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

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News //
Submitted by // K Bowers, Partner / Solicitor Advocate
08 February 2017


YOU SNOOZE, YOU (MIGHT NOT) LOSE 

Introduction

This case answers the question of whether an individual owner in a building ("Building") is entitled to exclusively occupy common areas by virtue of having done so for 18 years without any action being taken by the IO. Various equitable defences (estoppel, acquiescence, waiver and laches) were raised, and were rejected by the Lands Tribunal.

Background

The Applicant in this case was the Incorporated Owner of the Building ("IO"), and the Respondents were the owners of a shop on the ground floor of the Building ("Respondents"). On either side of the shop were staircases ("Staircases"). There was no dispute that the Staircases had, since around 1996, been occupied exclusively by the Respondents for storage purposes.

The IO argued that the conversion of the Staircases from a "common area" to a "personal area" contravened the Building's DMC and the Building Management Ordinance (Cap. 334) and the IO sought possession / recovery of the Staircases accordingly.

The Respondents argued that in or about 1996 after the IO had discovered that the Staircases were in a heavily damaged state, a representative of the IO, Mr. Chan, represented to the Respondents that the IO would not be repairing the Staircases, and that the Respondents could repair them as they deemed fit. The Respondents further argued that in any event, the IO had taken no action in relation to the cordoning off of the Staircase for around 18 years.

Factual evidence

Seeing as it was common ground that the Staircases were common parts of the Building, the Tribunal had first to decide whether there was any express representation by Mr. Chan. This was ultimately decided upon the credibility of the witnesses. In this regard, the 2nd Respondent gave contrary testimony in his written statements and in his oral evidence before the Tribunal, and in his second witness statement he completely failed to mention anyone by the name of Mr. Chan. Consequently, on the balance of probabilities, the Tribunal did not believe that there was ever any express representation by Mr. Chan.

The Tribunal also had to decide whether there was inaction by the IO. From the available evidence, the Tribunal accepted that the Staircases were in a state of disrepair and had been abandoned for some time, and that even though the IO knew that they had been occupied by the Respondents for 18 years, it did nothing to remedy the situation. Although the Tribunal believed that representatives of the IO had since 1996 occasionally asked the Respondents to vacate the Staircases, the Tribunal believed the IO had not taken the matter seriously, and concluded that there had been inaction by the IO.

The Tribunal then considered whether the various equitable defences raised by the Respondents applied.

Acquiescence

In order to rely upon the defence of acquiescence, the breach in question must be "within the power of the IO to acquiesce".

The IO argued that acquiescence could not be relied upon in this case because the Respondents' conversion of the Staircases involved illegality. The Respondents' use of the Staircases breached the Building (Standards of Sanitary Fitments, Plumbing, Draining Works and Latrines) Regulations (Cap. 123I), and accordingly, was illegal. The IO had no power to consent to something illegal, and so, the IO argued, it was impossible for the IO to approve or acquiesce to the breach.

The Tribunal agreed, and held that what cannot be consented to expressly, cannot be acquiesced to impliedly.

Waiver

Seeing as representatives of the IO occasionally asked the Respondents to vacate the Staircases, it could not be said that the IO had waived its right to bring an action.

Delay in bringing in action, in itself, was not held to be indicative of an intention to waive the IO's rights in relation to the M/F and Staircases.

Laches (Delay in bringing action)

In order to rely upon the defence of Laches, the Respondents must show that (i) the IO unreasonably delayed in bringing its action against the Respondents, and (ii) any order for specific performance by the Tribunal would cause hardship on the Respondents.

Although the Tribunal accepted the Respondents' evidence that during the course of 18 years, the Respondents continued to spend money to improve the Staircases, the Tribunal held that these were necessary costs incurred for the continued occupation and enjoyment of the "extra space" gained from the conversion of the common areas, and that consequently, this could not be regarded as "prejudice" to the Respondents. The Tribunal held that in fact, the IO's delay in bringing the action had benefited the Respondents, because the Respondents had gained the use and enjoyment of "extra space" at no additional cost.

Estoppel

To rely upon the defence of estoppel, one party (in this case the IO), by words or conduct, must convey a clear and unequivocal promise to the other (in this case, the Respondents) that it will not enforce or exercise some its rights.

As explained above, because the Tribunal rejected the Respondents' evidence that any express representation had been made to them on behalf of the IO, the Tribunal’s finding was that there was no clear and unequivocal promise.

Although there was inaction by of the IO, the Tribunal held that because representatives of the IO did occasionally ask the Respondents to vacate the Staircases, such an express representation could not be said to be "clear or unequivocal".

Take-away

The IO in this case succeeded despite its inaction for 18 years (mainly because the IO was able to show that it did occasionally ask the Respondents to vacate the Staircases). However, it is quite possible that with a different set of facts, the IO may not have been so fortunate with its claim. IOs and building managers should be wary of these potential equitable defences which can be raised after prolonged inaction in response to any breach by an individual owner.

 

About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

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Press //
Submitted by // H Rogers, COO
23 January 2017


It is now 5 years since Chris Howse, Chris Williams and Kevin Bowers set up HWB.

The partners would like to take this opportunity to thank our clients and friends of the firm for their support over the last 5 years.

HWB is now one of Hong Kong's largest independent law firms. It continues to be an efficient, well-managed firm of international calibre lawyers delivering quality legal services at a reasonable cost to our clients.

You may be interested to know that the firm currently has:

  • 23 Partners
  • 100+ Fee-earners in total
  • approximately 50% contentious and 50% non-contentious practice areas
  • a diverse range of practice areas including: corporate/commercial and corporate finance; corporate restructuring and insolvency; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance
  • minimal conflicts of interest as the firm is Hong Kong based and independent


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; intellectual property; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

 
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Publications //
Submitted by // K Bowers, Partner/Solicitor Advocate; M Withington, Partner
18 January 2017

 

ILO The Apology Bill and its potential effects on insurance contracts

Click here to see the International Law Office Article

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