What happens to an employee’s annual leave if the employer intends to close down their business?

If an employer intends to shut down their business or part of it for granting annual leave to their employees, they should make a written inform to the affected employees at least one month in advance.

If an employee is not entitled to any paid annual leave for any day during the shutdown period but they must stop working due to the shutdown, they should be given paid annual leave during that entire period.

If an employee is entitled to annual leave that exceeds the number of days of the shutdown, they may immediately take the remaining annual leave after the shutdown.

The annual leave shutdown should not affect the common leave year that is to be elected by the employer. The annual leave should be granted in respect of the leave year that immediately precedes the shutdown period.

Bibliography:

1. Labour Department, ‘Chapter 4: Rest Days, Holidays and Leave’: https://www.labour.gov.hk/eng/public/wcp/ConciseGuide/04.pdf

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