Primasia Corporate Services Limited

Thursday, 28 February 2013

China Updates- Employment-related issues

The Supreme People’s Court issued Judicial Interpretation IV on various employment-related issues, effective 1 February 2013. Key items include:

Non-compete Covenants

The amount of compensation appropriate for non-compete obligations is indicated to be 30% of the previous 12 months’ salary.
Previously, some amount has been required on the basis that the employee’s job-hunting prospects are damaged by a non-compete agreement, but there has been no national guidance available.
If, during the non-compete period, the employer terminates the non-compete agreement, the employee will be entitled to an additional 3 months of non-compete compensation.
If the employer fails to pay the non-compete compensation for 3 months, then the employee may terminate the agreement.
Breach of a non-compete agreement by an employee does not relieve the employee of the obligation to comply, even if damages are awarded.
The payment may apply even if the employer does not want to enforce the non-compete clause or the employee has no intention of breaching the clause. Hence, employers should consider whether they either need the clause in the first place or should release an employee from such a clause before the employee leaves.

Transfers of Employees: where a transfer of an employee is arranged by the employer, his or her years of service should be recognised by the new employer.

Oral Variation of Contracts - will be legally recognised if both the employer and the employee have acted in accordance with the oral variation for more than a month.

Expiry of Business Licence – does not relieve an employer from the obligation to pay severance pay.

Foreigners Without Work Permit: a foreigner without a work permit will not be able to seek redress in the Chinese courts.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Need more information?
Please contact:
John Barclay -Email
Teresa Tam - Email
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Primasia Corporate Services Limited
Tel: +852 2882 2088
Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Monday, 25 February 2013

Hong Kong Updates- Chief Executive’s Policy Address' employment-related issues

The Chief Executive’s Policy Address covered (among other things) the following employment-related issues:

The shelving of public consultation about whether anti-discrimination law is necessary to protect people of different sexual orientation.
A review to ensure that Hong Kong's approach is consistent with that of the United Nations Convention on the Rights of Persons with Disabilities.
Imminent legislation on the introduction of 3 days’ paternity leave.
Creation of a special committee in 1Q 2013 to consider the introduction of standard working hours.
A review of social security and retirement protection.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Tuesday, 29 January 2013

China Updates- Minimum wage & Trademark

The Beijing Municipal Human Resource and Social Security Bureau has increased the statutory minimum wage from 1 January 2013 to CNY8.05 and CNY1,400 respectively for hourly and monthly minimum

wages in Beijing.

Also in Beijing, and following similar comments from the Chinese Trademark Office, the Chinese judiciary has publicly acknowledged the problem of trademark squatting. In a press conference given by the Beijing People's Court, the Court reported on its study into "the cause, characteristic and judicial response to trademark squatting" and stated that the courts should aim to deter squatting in order to enhance IP protection in China. At the same time, the court delivered 6 judgments against trademark squatters.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Monday, 28 January 2013

Hong Kong Updates- Minimum Wage

The Financial Action Task Force (FATF) has positively recognised the efforts made by Hong Kong in combating money laundering and resolved unanimously to remove Hong Kong from the follow up process in its Mutual Evaluation.

The Minimum Wage Commission's recommendation to adjust the Statutory Minimum Wage rate from HK$28 per hour to HK$30 per hour has been accepted and the new rate should take effect on 1 May 2013. The HK$11,500 monthly cap (above which it is not necessary to keep a written record of hours worked) will therefore increase to HK$12,300 per month.

Employers should take steps to adjust wages to comply with this change.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Friday, 14 December 2012

China Updates- Tightening up of Labour Outsourcing

Tightening up of Labour Outsourcing (“Labour Dispatch”)

New rules in November 2012, but with retroactive effect, include the following provisions where companies use outside companies to provide labour:

(i) Limitations on the scope of positions

(ii) Increase in capital requirements for outsource (“dispatch” companies)

(iii) Protection of employees - “equal pay for equal work”

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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China Updates- New Rules on Equity Contributions

New Rules on Equity Contributions

The Ministry of Commerce in China (MOFCOM) published new provisions on equity contributions for Foreign Invested Entities (FIEs). These came into force in October 2012 following 18 months of public discussions. These provisions provide foreign investors with more flexibility in structuring

or restructuring their businesses in China.

Key Points.

(i) Contribution with equity is applicable in (inter alia) the following common situations:

incorporation of a new FIE
increase of capital to change the equity structure of an FIE.

(ii) The equity used must be free from any encumbrances.

(iii) The equity used is subject to valuation by a PRC-licensed valuer.

(iv) The aggregate value of contribution with equity and othernon-monetary contributions made by all shareholders is limited to 70% of the total registered capital of the Invested Entity.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Thursday, 13 December 2012

Hong Kong Updates- Revision of Trust Law

Revision of Trust Law

The Financial Services and Treasury Bureau has recently published the consultation conclusions on the detailed legislative proposals on the trust law reform. We will report in detail on this is a later newsletter, but we expect Hong Kong to become a more attractive jurisdiction for estate planning as a result of the reforms.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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