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The Buy-Out Restriction Complication

The restriction on pay in lieu of holidays (“buy-out restriction”),[1] compared to other laws governing foreign domestic workers (“FDHs”) in Hong Kong, is seldom discussed. Perhaps since it applies to all employees in Hong Kong. However, the restriction in the FDWs context, is more problematic due to the imbalance of power.

Photo from HKFP

The rule exists to protect the FDWs, they have extremely demanding work, and they might not be on friendly terms with their employers. Whether intentionally or accidentally, FDWs faces genuine risk of being overworked.

On the other hand, given the number of holidays an FDW has (12 statutory holidays on top of a rest day every 7 days and annual leave)[2] in a year, some FDWs would rather work instead of taking their days off. The extra money could go a long way for their family back home. Some FDWs are even delighted to help the employer they have come to trust and respect.

Are we really dignifying and protecting these FDWs with this rule? Or are we restricting their freedom of contract and removing their power to make their own choices?

We must consider the power dynamic between an employer and an FDW before we answer these questions. When the contracting parties’ powers differ significantly, the freedom of contract is undermined as the weaker party’s exercise of that freedom is less meaningful.[3] FDWs have much less power than their employer. Having to live with their employer means that their movement can be restricted by their employers;[4] resigning and getting another job is much harder for an FDW than it is for an employer to hire another worker. Their knowledge of the law and access to any complaint avenues are also likely to be more limited. All of these often render their so-called choice disingenuous. Nevertheless, given the already highly restrictive conditions imposed upon them,[5] the buy-out restriction could be taking away even more power from the already very little that an FDW has.

Moreover, such a rule is very difficult, if not impossible, to enforce for FDWs. Their workplace is private residences, enforcement agencies cannot carry out routine checks; their access to help is narrow, as mentioned before; and some FDWs might not even be aware of the buy-out restriction. They also lack incentives to report such violations as it might expose themselves to prosecution risks; and they just might rather have their holiday bought out.

Photo from HelperChoice

As rules governing FDWs in Hong Kong go, the buy-out restriction is far from the worst, but the problem with this rule, as with many others, is that they either add to the oppression of the largest group of ethnic minorities in Hong Kong[6] or that they only work in theory and not in practice. Amending these laws is by no means an easy task, but if we wish for a fairer and more equal city, and one that continues to attract the FDWs we are in rising need of, we must not remain stagnant.

[1] Employment Ordinance (Cap. 57), section 40A.

[2] Labour Department, Practical Guide for Employment of Foreign Domestic Helpers, (2018) 12-16.

[3] Christopher Carr, “Inequality of Bargaining Power,” (1975) 38 The Modern Law Review 4. 463-466.

[4] Labour Department (note 2 above), p5.

[5] Vallejos Evangeline Banao v Commissioner of Registration [2013] HKEC 429.

[6] Available at (visited 11 November 2018): Indonesian and Filipino make up 58% of the ethnic minorities in Hong Kong, most of them are foreign domestic workers.

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