ParknShop staff complain of being made to move to new subsidiary

Employees of Li Ka-shing's supermarket chain issued letters for consent to transfer to new firm

PUBLISHED : Monday, 22 July, 2013, 12:00am
UPDATED : Wednesday, 26 October, 2016, 2:38pm

Some ParknShop employees have complained of being forced to agree to transfer to a new subsidiary, a move seen by unionists as tycoon Li Ka-shing's preparation to hive off the supermarket chain from his business empire.

The complaints came as Chief Secretary Carrie Lam Cheng Yuet-ngor sought to quell fears over Li's exit from Hong Kong and to quash speculation it was because of his discord with the Leung Chun-ying administration. Li had supported Leung's rival, Henry Tang Ying-yen, in last year's chief executive election.

The Confederation of Trade Unions yesterday said it had received about 10 complaints from ParknShop workers hired under A.S. Watson & Co.

The confederation said the workers had been asked to sign a consent letter to transfer to ParknShop (HK), a new company and subsidiary under A.S. Watson & Co.

Dated July 16, the letter asked the recipient to indicate his consent by signing and returning it by Thursday.

"This is a common trick by employers to sell off their responsibility to workers by setting up a new subsidiary and transferring current workers to it," said confederation chief executive Mung Siu-tat.

"After the new buyer takes over, what comes next will be a pay cut or a mass lay-off.

"We can't help thinking it is to pave the way for the sale of the chain … It is unfair to employees that they are given such short notice … ParknShop should have consulted the staff first."

The supermarket chain operates 345 stores and employs about 13,000 people in Hong Kong, Macau, and on the mainland. Its parent company A.S. Watson & Co is a member of Li's Hutchison Whampoa group.

Lam said yesterday that there was no need to be overly sensitive about a commercial move by an individual business.

"We are most concerned about the whole business environment and economic conditions. Hong Kong is very good on these two fronts. Many international ratings also show that Hong Kong is still very competitive," Lam said.

She also rejected speculation that Li's possible move showed discord between him and the government, saying she had met him recently and was assured of his support for the government.

"When I met him, he said if there was anything to do with poverty alleviation that needed his support, he would be happy to help," Lam said.

In a statement yesterday, A.S. Watson & Co said: "The recent internal reorganisation is a legal process of changing employment entity only. The new legal entity ParknShop (HK) is a wholly owned subsidiary of A.S. Watson & Co. There is no impact at all to employment terms and conditions of employees."

Hutchison Whampoa last week confirmed it was conducting a strategic review of ParknShop, but said there was no timetable for the review and no certainty of a transaction being announced or completed.

Last night, ParknShop said the review was part of its routine corporate activities.

"[ParknShop] is not closing down. It will continue to focus on its operation and expansion," said the company, adding that a "staff briefing regarding the reorganisation was held last week".

Li also said on Saturday that he had no plans to withdraw from Hong Kong.