Tabs being kept on 22 struggling restaurants

PUBLISHED : Monday, 22 January, 2007, 12:00am
UPDATED : Monday, 22 January, 2007, 12:00am

The Labour Department is closely monitoring 22 restaurants identified as being at high risk of closure in the next few months, while the catering industry warns there may be more eateries shutting down after the Lunar New Year.

Despite a stronger economy, catering industry legislator Tommy Cheung Yu-yan predicted some restaurants would fold in the second quarter of the year.

'Many of the restaurants' lease contracts normally last for three years and were signed over the Sars period,' he said.

'Many are due [for renewal] in the coming few months, and some of them should expect a huge increase in rent.'

Mr Cheung said the double blow of higher rents plus an economic slackening after the Lunar New Year holiday would put many restaurants out of business.

Labour minister Matthew Cheung Kin-chung said yesterday the department had been closely monitoring 22 restaurants in financial difficulties.

'On restaurants where we received more than three complaints from their staff, we consider them as high risk and put them on the list of close surveillance ... we will try our best to prevent these employers from abusing the insolvency fund and fulfil their duties to pay the workers in case the restaurants close down,' he said.

Among 118 eateries chosen for inspection since the department adopted a pre-emptive approach in 2005 - after a spate of restaurants closing, resulting in a surge of unpaid wage cases - 96 closed. Of these, 56 settled the money they owed without resorting to the government's insolvency fund.

Meanwhile, labour statistics show accidents in the catering industry rose from 4,191 in the first six months of 2005 to 4,375 over the same period last year.



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