On 11 February 2026, LexisNexis hosted an insightful webinar titled "Employment Law in Focus: The New '468 Rule' and Emerging Termination Risks." The session was led by Michael Szeto, Partner at ONC Lawyers, who provided expert analysis on the recent legislative shift in Hong Kong’s employment landscape and explored critical case studies regarding workplace conduct and contract stability.
The Transition to the "468 Rule"
The most significant legislative update discussed was the replacement of the long-standing "418 Rule" with the new "468 Rule," effective from 18 January 2026. Under the old regime, an employee was only considered to have a "continuous contract" if they worked at least 18 hours per week for four consecutive weeks.
Michael noted:
"The New 468 Rule closes the loophole by using a 4-week aggregate (68 hours) instead of a strictly weekly basis."
This change ensures that workers with fluctuating hours still receive the full suite of statutory benefits, such as paid annual leave and sickness allowance.
Can Dishonesty Justify Summary Dismissal?
Addressing termination risks, Michael explored whether an act of dishonesty—such as submitting incorrect expense invoices—automatically justifies immediate dismissal. Referencing the recent case HU YANGYONG v ALBA ASIA LIMITED [2025] HKCU 3084; [2025] HKCFI 2484, he emphasised that summary dismissal is an "extreme measure".
Michael explained the court's nuanced view:
"An act of dishonesty will not automatically justify summary dismissal since there are degrees of dishonesty; summary dismissal will only be justified if the dishonest act is so serious that it constitutes a repudiation of the employment contract."
Employer Liability and Workplace Defamation
Another critical topic was vicarious liability—specifically whether an employer is responsible for defamatory statements made by one employee against another. In the case of BRETON JEAN v HK BELLAWINGS JET LIMITED (香港麗翔公務航空有限公司) AND OTHERS [2024] HKCU 4545; [2024] HKDC 1695; [2025] 1 HKLRD 36, the court applied the "close connection" test to determine liability.
Michael clarified that the "close connection test" is used to determine if an unauthorised act is within the scope of employment. He noted:
"Employers may unlikely be held vicariously liable for an employee’s personal views on and feelings towards another employee that are defamatory, especially when they are not part of or incidental to the performance of the function of the employee."
However, he warned that employers remain strictly liable for discrimination or harassment under various ordinances unless they can prove they took "reasonably practicable" steps to prevent such conduct.
Fixed-Term Contracts and Sick Leave
Finally, the webinar touched on the "effluxion of time" in fixed-term contracts. A common misconception is that an employee on sick leave cannot have their contract expire. Michael clarified:
"Ongoing sick leave does not transform the employment contract or subsequent into indefinite terms, or create additional protections beyond statutory sick pay entitlements."
Watch the Full Webinar
To gain a deeper understanding of these cases and the practical strategies for navigating the 18 January 2026 changes, we encourage you to register and watch the full on-demand recording online. The recording includes detailed case analyses and the final Q&A session with Michael Szeto. Click here to watch the recording.
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