This month, we consider the obligations of employers in China, Hong Kong and South Korea in the situation where a business function is being outsourced.
HONG KONG SOUTH KOREA
IS OUTSOURCING CONSIDERED A TRANSFER OF BUSINESS/ UNDERTAKING?
CAN THE EMPLOYMENT OF AFFECTED EMPLOYEES BE TERMINATED IF THEY ARE NOT AUTOMATICALLY TRANSFERRED?
ARE THE AFFECTED EMPLOYEES ENTITLED TO A REDUNDANCY PAYMENT OR EQUIVALENT PAYMENT IF THEY ARE TERMINATED?
No. Yes, if there is a genuine redundancy scenario where (a) Yes. There is a statutory entitlement to a severance there is a major change in the objective circumstances payment based on the employee's length of service. relied upon at the time of the conclusion of the employment contract which renders performance impossible and (b) the employer is unable to reach agreement with the affected employees as to how the employment contract should be amended.
Yes, if there are no surviving roles for the employees,
Yes. There is a statutory entitlement to a severance
there will be a genuine redundancy situation entitling the payment based on the employee's length of service,
employer to terminate the employment.
subject to a minimum qualifying period of 24 months'
No. Yes, if it can be shown that the affected employees are Yes. There is a statutory entitlement to a severance
terminated based on an urgent business need, such as payment based on the employee's length of service,
financial distress with continued financial hardship going subject to a minimum qualifying period of one year of
forward unless the layoff is implemented.
In addition to the urgent business need requirement, an employer must make "every effort" to avoid employee dismissals for business reasons and must establish rational and fair employee selection criteria in relation to any proposed dismissals.
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