HUMAN RESOURCES POLICY / GUIDELINE CHAPTER II : COMPENSATION AND BENEFITS

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1 HUMAN RESOURCES POLICY / GUIDELINE CHAPTER II : COMPENSATION AND BENEFITS Subject : Annual Leave Effective Date : 1 March 2017 Reference : HRP/II-B01/17 Supersedes Previous Policy Dated : 1 January 2016 ABSTRACT The Company believes that a balanced lifestyle where work and personal life can be both taken care of will lead to the overall well-being of individual employees. As such, annual leave is provided to enable employees to take a break regularly from their normal duties for a reasonable period of time so that they will return to the workplace relaxed and refreshed. APPLICABILITY This policy applies to all eligible employees under K. Wah International Holdings Limited and its applicable associated companies (hereinafter called the Company ). POLICY 1. GENERAL RULES a. Any annual leave application is confined to a minimum of half-day. b. For employees whose normal working week includes Saturday or Saturday morning, the annual leave taken on Saturday shall be counted as one-day or half-day leave respectively. c. Any rest days, day off or Public Holidays falling in an annual leave period will not be counted as annual leave and no deduction will be made from the annual leave balance. d. In accordance with the Hong Kong Employment Ordinance (hereinafter called HKEO ), annual leave is earned in arrears of 12 months continuous service with the Company which is to be taken in the following period of 12 months. However, the Company allows employees to apply for advance annual leave 1

2 after completion of probationary period. The advance annual leave applied cannot exceed the leave entitlement calculated on a pro-rata basis upto December 31 of the current calendar year. In the event of employment separation incurred prior to the year end date, the Company has every right to deduct the salary payment in lieu of unearned annual leave taken in a manner as described in the following clause 8b. e. Any employee who falls sick during the annual leave period will not be eligible for either a substitute leave or cancellation of annual leave on the sickness day. f. Neither substitute leave nor cancellation of annual leave will be allowed if the Typhoon Signal No. 8 or above or Black Rainstorm Warning Signal is hoisted during the leave period. g. The time of the leave should be discussed and agreed between the employee and their supervisor before application. As far as practicable, sales staff should take annual leave outside of sales launch period, and key project staff outside of prime project management period. h. All annual leave approved by the Company will be counted as service for the purpose of calculating annual leave entitlement. i. Employees cannot accept any other employment either full time or part time during the period of annual leave. 2. ELIGIBILITY In accordance with the HKEO, all employees who have completed 3 months of services are eligible for full pay annual leave. 3. ANNUAL LEAVE ENTITLEMENT a. The respective annual leave (AL) entitlement for each employee is subject to the terms and conditions as stipulated in the Employment Contract and the rules and regulations governing annual leave as announced by the Company from time to time. b. In general, AL entitlement for all staff who join the Company on or after 1 October, 2012 is : 2

3 Staff Category General Manager and above Deputy General Manager, Assistant General Manager and Senior Manager Manager, Assistant Manager, Senior Officer and Officer Assistant Officer and Below AL Entitlement For Staff Joined on / after 1 October, days 16 days 14 days 12 days c. Pro-rata annual leave calculation The Company uses calendar year as the calculation basis of annual leave entitlement. Annual leave entitlement for any employment period of less than 12 months continuous service is calculated on a pro-rata basis as follows : Pro-rata AL AL entitlement Employment days in the current calendar year Entitlement = in the current x 365 calendar year Any fraction derived from the above calculation will be rounded up to 2 decimal places in the cases of annual leave carry forward to January 1 of the following year and calculation annual leave balance for separated employees. 4. ACCUMULATION AND ANNUAL LEAVE FORFEITURE All employees are obliged to clear their annual leave entitlement on a yearly basis and accumulation of leave balance in excess of 12 months entitlement is strictly prohibited. Any leave balance exceeding the permissible limit on December 31 each year will be forfeited automatically by the Leave Application System without further notice from the Human Resources Department. 5. ANNUAL LEAVE PLANNING AND TAKEN a. Each Department Head should maintain an Annual Leave Planner for annual leave planning of self and his / her subordinates at the beginning of each calendar year so as to facilitate advance planning and minimize disruptions to the department s operations. b. Employees with annual leave entitlement of 18 days should take at least 8 days of the annual leave consecutively in each calendar year whilst employees with annual leave entitlement of 16 days or below should take at least 5 days of the annual leave consecutively in each calendar year. 3

4 6. ANNUAL LEAVE FOR DEPARTMENT HEADS AND THEIR DEPUTIES a. Department Heads and their deputies should not take leave simultaneously in order to ensure the smooth running of the departmental operations. b. Before the leave starts, Department Heads are required to set a work plan for the follow up works and assign responsible persons for those works. During the leave period, Department Heads should provide the contact person(s) and phone number(s) to the assigned staff for enquiry in case of urgent matters. To ensure smooth operational coverage, Department Head should liaise with the other Department Head(s) to offer functional coverage before the leave period. c. To minimize disruptions to the operations of the businesses, only 50% of Department Heads at a maximum of each entity is allowed to take leave simultaneously during the following popular holiday periods: Chinese New Year Easter Christmas In addition, each Department Head is allowed to apply up to two out of these three popular holiday periods in each calendar year. 7. ANNUAL LEAVE APPLICATION AND APPROVAL MECHANISM a. Under normal situation, all annual leave applications of less than 3 days shall be made at least 2 weeks in advance of the intention, unless otherwise stated. For annual leave of 3 days or above, applications shall be made at least 1 month in advance. b. Approval mechanism of Annual Leave Application The following table serves to provide a general guideline on the approval mechanism of annual leave application for the respective staff category: Staff Category Approved By Monitored By Director grade General Manager grade Manager grade and below Chairman / Executive Director Executive Director / Department Head Department Head Head of HR 4

5 8. ANNUAL LEAVE ENTITLEMENT ON EMPLOYMENT SEPARATION a. Resignation or Termination of Service with less than 3 months Continuous Service In accordance with the HKEO, should the employee resign or be terminated by the Company for whatever reasons during the first 3 months of continuous service, he / she will not be entitled to any paid annual leave. b. Resignation or Termination of Service with more than 3 months but less than 12 months Continuous Service For employees who have more than 3 months but less than 12 months continuous service, resign or terminated by the Company for whatever reasons other than summary dismissal as stipulated in Section 9 of the HKEO, he / she will be entitled to paid annual leave calculated in accordance with the HKEO. c. Summary Dismissal For employees who are summarily dismissed by the Company for misconduct, fraud, dishonesty, breach of duties, or any other reasons as stated in Section 9 of the HKEO, his / her annual leave entitlement for the respective year in which his / her employment are terminated will be calculated in accordance with the HKEO. d. Permanent Incapacity or Death in Service In case of permanent incapacity or death occurs during the course of employment with the Company, the Company will pay payment in lieu of unused annual leave calculated in accordance with the employment contract to the employee concerned or his / her legal representative, if applicable. 9. ANNUAL LEAVE BALANCE ON EMPLOYMENT SEPARATION a. Employees leaving the Company with unused annual leave balance calculated upto the last employment date will receive a payment in lieu. The formula for calculating the payment in lieu of unused annual leave balance is as follows:- Salary as defined x No. of unused annual leave under the HKEO 30 b. Employees who have taken annual leave in excess of their entitlement calculated upto the last employment date is required to repay a payment in lieu of unearned annual leave to the Company. The Company may deduct the said amount from the final payment due to the leaving employee or to obtain it 5

6 through any other means. The formula for calculating the repayment of unearned annual leave is as follows:- Salary as defined x No. of unearned annual leave under the HKEO ANNUAL LEAVE DURING THE NOTICE PERIOD a. Taking of annual leave during the notice period is generally not permitted. Following the commencement of the notice period, any approved annual leave to be taken during the notice period will be automatically cancelled. Exception to this may be at the sole discretion of the leave approver on case by case merits. b. Annual leave balance cannot be used to offset the notice period or considered as payment in lieu of notice. Exception to this may be at the sole discretion of the leave approver on case by case merits. AMENDMENT The Company may at its sole discretion amend part or all of this policy from time to time without prior notification. Notification to employees will be made as soon as it is practicable. 6