Baker McKenzie partner Susan Eandi introduces Rowan McKenzie to discuss  employment laws in Hong Kong and give an overview of what changed in 2017, as well as what we can expect in 2018.

Key Takeaways:

  1. Increase in minimum wage – came through in May 2017
  2. Be aware of what right to reinstatement may end up looking like
  3. Cognizant of potential changes in work hours and overtime for low wage earners
  4. Abolition of the Mandatory Provident Fund offset upon termination and any potential relief that may be provided to employers
  5. Staying ahead of potential changes to immigration policy

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A recent Court of Appeal decision in the UK (Tillman v Egon Zehnder Limited) found that a post-termination non-compete restriction was unreasonably wide (and therefore unenforceable) on the basis that there was no carve out for shareholdings in the typically broad restriction which provided that the employee could not “directly or indirectly engage or be concerned or interested in any business carried on in competition with” the employer.

The Tillman court declined to sever (or “blue pencil”) the offensive wording and enforce the remaining provisions. Instead, the court invalidated the entire agreement.

Lots of non-compete covenants are broadly drafted and include catchall phrases like “concerned or interested in” and often do not include an express carve-out for shareholdings. As such, we suggest a quick review of your non-compete covenants in the UK (and other Commonwealth jurisdictions such as Hong Kong, Singapore and Canada) to determine if they are at risk of being deemed invalid. Seeking to enforce an invalid restriction could have costly consequences. However, there are steps you can take now, to mitigate the risk of voiding a restriction, even with existing employees.

Reach out to your Baker McKenzie lawyer for more details.