Hong Kong Ordinances

MANDATORY PROVIDENT FUND SCHEMES ORDINANCE - SECT 12A

Certain amounts relating to severance payments and long service payments to be paid from accrued benefits

(Past version on 01/12/2000).

(1) If-

   (a)  an employer has paid to or in respect of an employee a severance
        payment or long service payment in accordance with the
        Employment Ordinance ( Cap 57), or a part of such a payment; and

   (b)  accrued benefits are held in a registered scheme in respect of the
        employee; and

   (c)  a part of those benefits is attributable to contributions paid to the
        scheme by the employer in accordance with this Ordinance, the employer
        may make an application in writing to the approved trustee of the
        scheme for payment of an amount under subsection (2).

(2) As soon as practicable after receiving an application under subsection
(1), the approved trustee of the registered scheme concerned must, on being
satisfied as to the employer's entitlement to a payment under this subsection-

   (a)  if the severance payment or long service payment paid to the employee
        is not more than the amount of the part of the employee's accrued 
        benefits that is attributable to the employer's contributions, pay to
        the employer from those benefits an amount equal to the amount of that
        severance payment or long service payment; or

   (b)  if that severance payment or long service payment is more than the
        amount of the part of the employee's accrued benefits that is
        attributable to the employer's contributions, pay to the employer from
        those benefits an amount equal to the amount of that part. This
        subsection is subject to subsection (5).

(3) If-

   (a)  an employer has not paid the whole of a severance payment or long
        service payment to or in respect of an employee as required by the
        Employment Ordinance ( Cap 57); and

   (b)  accrued benefits are held in a registered scheme in respect of the
        employee; and

   (c)  a part of those benefits is attributable to contributions paid to the
        scheme by the employer in accordance with this Ordinance, an
        application may be made in writing by or in respect of the employee to
        the approved trustee of the scheme for payment of an amount under
        subsection (4).

(4) As soon as practicable after receiving an application under subsection
(3), the approved trustee of the registered scheme concerned must, on being
satisfied that an employer has not paid the whole of a severance payment or
long service payment required to be paid to or in respect of the employee
concerned-

   (a)  if the amount of the severance payment or long service payment that
        has not been paid is not more than the amount of the part of the
        employee's accrued benefits attributable to the employer's
        contributions, pay to or in respect of the employee from those
        benefits an amount equal to the amount of that severance payment or
        long service payment to the extent that it has not been paid; or

   (b)  if the amount of the severance payment or long service payment that
        has not been paid is more than the amount of the part of the
        employee's accrued benefits attributable to the employer's
        contributions, pay to or in respect of the employee from those
        benefits an amount equal to the amount of that part.

(5) If-

   (a)  only a part of a severance payment or long service payment has been
        paid to or in respect of an employee; and

   (b)  the amount of the employee's accrued benefits attributable to the
        employer's contributions is more than the unpaid part of the severance
        payment or long service payment but less than the total payment that
        is required to be made, the employer is entitled to be paid under
        subsection (2) the amount of those accrued benefits only to the extent
        that they exceed the unpaid part of the severance payment or long
        service payment.

(6) If-

   (a)  a change has occurred (whether by virtue of a sale or other
        disposition or by operation of law) in the ownership of a business in
        which a person is employed, or in a part of such a business, and
        either-

        (i)    the person's contract of employment (with the substitution of
               the new owner of the business for the previous owner) is
               renewed by that new owner; or

        (ii)   the person is re-engaged by that new owner under a new
               contract of employment; or

   (b)  a person is taken into the employment of a company that is an
        associated company of another company by which the person was employed
        immediately before the person was taken into that employment, this
        section applies to a severance payment or long service payment, or a
        contribution, paid by the previous owner as if it had been paid by the
        new owner or the associated company. This subsection has effect
        whether or not the previous owner may have terminated the employee's
        contract in accordance with section 6 or 7 of the Employment Ordinance
        ( Cap 57).

(6A) Where-

   (a)  subsection (6)(a) or (b) applies to a person;

        (b)	the new owner or associated company, as the case may be, ("new 
employer") has assumed the liability of the previous owner or company
("previous employer") for severance payment or long service payment in respect
of the person;

   (c)  the new employer has agreed to recognize the person's length of
        employment with the previous employer for the purposes of that
        severance payment or long service payment; and

   (d)  no accrued benefits held in a registered scheme in respect of the
        person have been paid in accordance with this section to the person or
        the previous employer, then the new employer may elect, in accordance
        with the regulations, to have the accrued benefits of the person held
        in a contribution account in that scheme transferred to an account in
        a registered scheme nominated by the new employer. (Added 29 of 2002
        s. 7)

(6B) Where a new employer has made an election under subsection

(6A), then, for the purposes of that election-

   (a)  section 7A(7) shall not apply to the new employer; and

        (b)	paragraph (b) of the definition of "contribution period" in 
section 7A(10) shall be construed as if it read as follows- "(b) in relation
to a relevant employee (not being a casual employee), means each period for
which the employer pays or should pay relevant income to the employee; and".
(Added 29 of 2002 s. 7)

(7) For the purposes of subsection (6), 2 companies are taken to be associated
companies if one is the subsidiary of the other, or both are subsidiaries of a
further company. (Added 4 of 1998 s. 2)