2019-10-18
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Hong Kong Today
今日香港


Early compromise on MPF offsetting mechanism favours uniting society
積金對沖早妥協 利社會團結


After the government put forward the proposal to scrap the mechanism


of offsetting long service and severance payments with MPF, it is meeting with labour


groups starting from today to reach a consensus between employees and employers before its


term ends. Whether workers can enjoy the benefits earlier depends on the mutual understanding


and accommodation accommodation (n) 容納 .


Scrapping the mechanism is what Chief Executive-elect Carrie Lam Cheng Yuet-ngor


described to pro-establishment legislators as one of the "three mountains" she was facing during


the later part of her tenure tenure (n) 任期 as chief secretary. The other two "mountains" are MTR fares and


the Link Reit that manages several public housing malls and car parks. The MTRC recently


announced freezing fares for the first time in eight years while offering a three per cent discount.


The Link Reit congratulated Lam on the day she was elected and made a statement that it hopes


to continue working closely with the government and other stakeholders.


Business sector worried about expenses, government willing to subsidize


Of the "mountains", the MTRC and Link Reit are individual organizations while the MPF


involves employees and employers who are not rigid but with shared interests and sometimes


tinted with politics. Reaching a consensus to solve the problem is a lot more complicated.


When an employee retires or is made redundant made redundant 被解僱的 , the employer can use the MPF contribution


to offset offset (v) 抵銷 the long service and severance payments. In the past 15 years, over $30 billion of MPF


contributions have been used in the mechanism. Last year alone, it was over $3 billion. In some


extreme cases, the employees lost 90 per cent of their long service and severance payments. The


mechanism has led to many complaints from employees when they retire.


Labour groups keep fighting to have the mechanism scrapped, but the business sector strongly resists because it will greatly raise costs especially exerting pressure on small and medium enterprises.




After prolonged brewing, the compromise of scrapping the offsetting mechanism was brought


up in the Policy Address delivered by Chief Executive Leung Chun-ying early this year with three key


elements. It will "have no retrospective effect. In other words, employers’ MPF contributions before


the implementation date of the proposal will be ‘grandfathered’." The payments for an employment


period from the implementation date will be "adjusted downwards from the existing entitlement entitlement (n) 權利 of


two-thirds of one month's wages to half a month's wages as compensation for each year of service".


Finally, the government will share part of the expenses on payments to employers in the 10 years after the implementation date of the abolition abolition (n) 廢除 to help them gradually adjust to it. It is expected to involve about $6 billion public money.




The nature of the proposal is that all parties make some compromise. The government will


also provide some subsidy. However, the labour side is dissatisfied with long service and severance


payments becoming smaller while the business sector hopes that the government will subsidize extra


expenses, only willing to slightly increase MPF contributions. The government is concerned that such


subsidy will become an abyss abyss (n) 深淵 and be abused by unscrupulous unscrupulous (adj) 無良的 employers like the Protection of Wages


on Insolvency Fund.


Reducing opposition benefits employees and employers


Now the government is meeting with labour and business groups creating a new round of


struggle between employees and employers. If there is no compromise, it is not known how long the


anticipated scrapping of the offsetting mechanism will be dragged on. In the end, it will still be the


many employees suffering loss. In recent years, there has been no trust and compromise between the


two sides. After the minimum wage minimum wage 最低工資 issue, there has been no major measure to promote labour welfare. Matters as simple as gradually increasing statutory holidays to match up with public holidays remain stagnant, let alone complex issues such as scrapping the MPF offsetting mechanism and standard working hours. If there can be compromise, employees will enjoy better protection. Remaining flexible and keeping down opposition to boost social harmony will also benefit businesses.

 

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