Key employment law trends in 2021: China and HK

COVID-19 remains a key theme in legislation

Key employment law trends in 2021: China and HK

The end of each year brings with it a period of reflection on the past, coupled with crystal-ball gazing into what might lie ahead. 2020 was a year of unprecedented disruption, volatility and transformation that shook the world.

When identifying the key emerging themes in employment law for 2021, one key theme is the impact of COVID-19 on workplaces, which remains one of the biggest challenges for employers globally in the year ahead.

The pandemic elicited different responses and measures around the world, revolutionising the way we live and work, including remote working, digitalisation and the need for enhanced data security. A spate of support schemes were also announced by governments all over the world, to bolster economic recovery on the back of lengthy government lockdowns.

Read more: Is your boss ‘spying’ on you working from home?

In this article, we will discuss the impact of COVID-19 on the workplace in China and Hong Kong and attempt to predict what will likely happen in 2021.

China - Remote working model and points to note

COVID-19 has created an opportunity for government authorities, companies and employees to consider a different way of working and to maintain, or even possibly enhance, efficiency under the remote working model.

In China, government authorities are providing online solutions for some employment-related applications, for instance, simplifying system approval procedures for flexible working hours and encouraging the use of e-signatures in employment-related documents.

In view of the rise of labour dispute issues during the pandemic, some provincial governments including Beijing, Shanghai and Guangdong provinces have published local guidance to help companies navigate this challenging period.

The guidance addresses key issues such as salary payment during business or production suspension periods, arrangement on salary reduction, working hours adjustment, as well as holiday arrangements. Some local authorities also provided guidelines regarding dealing with redundancies arising due to COVID -19.

Read more: Is it legal to monitor staff emails and phones?

On the other hand, working from home (WFH) is becoming increasingly popular globally.  Companies in certain sectors in China have varying degrees of working from home arrangements and implementation.

Some companies have even announced that they will make this as a permanent arrangement. WFH has become a new normal in 2020 and this trend is expected to continue in 2021 and beyond.

With more and more companies adopting a remote working model, it is anticipated that companies need to establish a new set of rules regarding issues relating to WFH, which will also need to be reviewed and updated from time to time.

Management executives and HR departments of companies have to seek legal advice when needed and carefully craft the new rules.

Potentially there will be some new types of litigation or dispute which are related to the adoption of the WFH model. For instance, work-related injuries while working from home, communicating work-related issues using non-authorized platforms (such as personal WeChat accounts), breach of confidentiality, data security and privacy protection.

The likelihood of having such conflicts can be minimised by setting out internal rules or guidelines for employees’ information and making sure that the employees are well-aware of the new rules.

Read more: Landmark win clarifies HK’s sex discrimination law

Hong Kong SAR - More cost-cutting measures, restructurings and redundancies expected

Hong Kong entered the fourth wave of the pandemic in late 2020, prompting most employers to re-invoke their remote working model during this period. These arrangements are likely to be in place until the fourth wave is over when employers can reconsider their ‘return to work’ strategies.

However, this resumption will involve managing risks from operational, health and safety and employee perspectives, leading employers to strike a balance between the resumption of “business as usual” and the associated risks. Further digitalisation of the workplace and the emergence of more permanent hybrid working arrangements are inevitable over the longer term.

In 2020, the Hong Kong government established a subsidy scheme for employers, namely the Employment Support Scheme (ESS). The scheme granted a certain amount of money for each employee registered in the local provident fund scheme, known as MPF.

The second tranche ended on November 30, 2020 and it seems unlikely that a third tranche of the ESS will be rolled out. With the end of government financial support, we are inevitably going to see more cost-cutting measures, restructurings, and redundancies.

Read more: How to calculate retrenchment benefits

Conclusion

The pandemic has posed different challenges to our lives and work, impacting how we worked both in and outside the workplace. Changes to the ways in which we work are likely to be one of the lasting legacies of the pandemic, shaping employment issues in 2021 and beyond.

On a positive note, the pandemic has accelerated a global focus on employee well-being and mental health, and there is increased momentum to promote diversity and inclusion, as well as to achieve equality at the workplace.

In that spirit, 2021 may not only be the year of recovery, but a year of progress towards a more inclusive and collaborative working culture.

May Lu and Sarah Berkeley are partners at Simmons & Simmons.

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