Information Paper for
LegCo Panel on Manpower
Meeting on 24 September 1998
Change of Employment Terms by Employers


A contract of employment is an agreement made between an employer and an employee. Once an agreement is made, both parties should abide by the agreed terms of the agreement. However, these terms of the contract may be varied with the consent of both parties. In changing the terms of the agreement, any party to the contract may propose to the other party any variation of the terms of the contract. It is for the other party to decide whether or not to accept the variation.

2. For example, an employer may wish to deploy an employee to take up duties which have not been specified in his contract of employment. In another example, an employee may request a variation of hours of work to enable him to attend evening classes. In some cases, changes in employment terms may at times assist the employer or the employee in meeting their changing needs and circumstances. Variation of terms of an employment contract are permissible if such variation is accepted by both parties to the contract.

Obligations of an employer

3.Employers are obliged to comply with the Employment Ordinance (EO) as well as the terms of an employment contract, provided that those terms do not purport to extinguish or reduce any right, benefit or protection conferred upon the employee by the EO.

4.If an employer wishes to vary the employment terms of his employees and such variation will substantially affect the interest of employees, such as wage reduction, he should obtain their consent. He should not coerce his employees into agreeing any variations of employment terms or enforce such variations without the consent of the employees Before varying the terms, employers are encouraged to discuss with his employees and explain to them the reasons for such variation. If wage reduction is involved, it is all the more important for an employer to discuss problems with his employees and explore possible options. He should try to seek the understanding of the employees concerned with a view to agreeing on an acceptable wage package. It is also important that an employer should give employees a reasonable time to consider his proposal. He should comply with the provisions of the Employment Ordinance under all circumstances.

Protection for employees

5. Employees have a right to choose whether or not to accept a variation to their employment terms as proposed by their employers. An employee should consider his own position carefully, consulting his family members or friends if necessary before deciding whether he should accept the variation.

6. The Employment Ordinance protects employees against unilateral and unreasonable change of employment terms by employers. By virtue of Part VIA of the Ordinance, an employee who has been employed on a continuous contract (i.e. employed for four weeks or more, with at least 18 hours in each week) may lodge a claim with the Labour Tribunal for remedies for unreasonable variation of contract terms if his employment terms have been varied by his employer without his consent and his employment contract does not contain an express term which allows such variation.

Services of the Labour Department

7. The Labour Department ensures that employers discharge their obligations under the law and the employment contract. Employees are also accorded the rights and benefits under the contract and the Employment Ordinance. Employees can seek advice from the Labour Department concerning variation and their rights under the law. They may either contact the branch offices of the Labour Relations Service Offices or the General Enquiry Telephone Service for assistance. If there is a dispute arising from variation of contract terms, the Labour Relations Service provides conciliation service to help the employees and employers to come to an amicable settlement.

8. In their regular contacts with employers and human resources managers, officers of the Labour Relations Service will give advice to them on good management practices in carrying out variation of contract terms particularly on wage reduction and the need for staff consultation before implementation of any change to the agreed employment terms.

9. The Labour Department has recently set up the Workplace Consultation Promotion Unit to strengthen the promotion of effective communication, consultation and voluntary negotiation between employers and employees. An information paper on the work of this Unit is attached.

Labour Department
22 September 1998