Letter For Not Renewing Contract Template for Hong Kong

A Letter For Not Renewing Contract is an essential employment document that Hong Kong employers must use when they decide not to extend a fixed-term employment contract. This formal notification ensures compliance with Hong Kong's employment laws while providing clear communication about the end of the employment relationship. Understanding how to properly draft and issue this letter protects both employers and employees while maintaining professional standards.

When do you need this document?

You need this letter when your employee's fixed-term contract is approaching its expiration date and you have decided not to offer renewal or extension. The letter should be issued well before the contract end date to provide adequate notice, even though fixed-term contracts technically end automatically. This document is particularly important when dealing with probationary periods that are concluding, seasonal employment arrangements, project-based contracts with specific end dates, or temporary positions that were always intended to be non-renewable. You also need this letter when restructuring has eliminated certain positions or when business conditions no longer require the continuation of specific roles.

Key legal considerations

Several critical legal elements must be addressed in your non-renewal letter. You must clearly state your decision not to renew the contract and confirm the exact end date of employment. The letter should reference the original contract terms and specify any notice period requirements, even for fixed-term arrangements. You need to address final payment calculations, including any outstanding salary, annual leave entitlements, and potential severance payments if applicable. The letter must also cover the return of company property, confidentiality obligations that continue post-employment, and any restrictive covenants that remain in effect. Additionally, you should include information about final administrative matters such as the completion of work handovers and exit procedures.

Legal requirements in Hong Kong

Under Hong Kong's Employment Ordinance (Cap. 57), you must ensure that non-renewal decisions comply with anti-discrimination provisions and do not constitute unlawful termination. While fixed-term contracts end automatically, you should still provide reasonable notice of non-renewal, particularly if the employee has been with your company for an extended period or if there was an expectation of renewal. The Employment Protection sections require that you cannot terminate or refuse to renew contracts for discriminatory reasons or in retaliation for legitimate employee activities. You must also consider whether severance payments are required under the Employment Ordinance if the employee has worked continuously for at least 24 months. The Personal Data (Privacy) Ordinance (Cap. 486) requires that you handle employee information appropriately during the non-renewal process. Additionally, you should ensure that any final payments comply with the Minimum Wage Ordinance (Cap. 608) and that all calculations are accurate and transparent.