Scrapping Hong Kong’s MPF offset mechanism must balance needs of employers and workers, top restaurateur says

Operator of more than 30 restaurants says many catering companies will suffer and government needs to differentiate between industries in abolishing system

PUBLISHED : Wednesday, 18 January, 2017, 8:37pm
UPDATED : Wednesday, 18 January, 2017, 11:22pm

The process of removing the Mandatory Provident Fund’s controversial offsetting mechanism must balance the interests of employers and workers, a leading restaurateur has said.

Simon Wong Kit-lung, who operates more than 30 restaurants with 1,500 employees, urged authorities to tailor the process to the needs of each industry – rather than the size of businesses.

The offsetting mechanism allows employers to settle severance and long-service payments using the savings employees have amassed in the city’s compulsory pension scheme.

While large catering chains have the financial clout to absorb the impact of scrapping the mechanism, Wong said the industry also included many small labour-intensive firms with a high employee turnover rate that would struggle to manage the change.

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“A rent collection agency can run with a few employees. But we hire as many as 100 people in a single restaurant,” said Wong, whose empire includes Chinese restaurant company LH Group and Japanese chain Kabushikigaisha, which owns barbecue outlet Gyu-kaku and hotpot diner Mou Mou Club.

Wong said he had been forced to lay off about 100 people last year after a restaurant was forced to shut down due to an expired lease, which had left him having to fork out HK$2 million to settle long-service and severance payments.

He recalled occasions where resigning employees had asked whether they could be “sacked” instead of laid off so as to trigger the offset clause in order to receive a bigger handout.

“I wouldn’t like to use the word ‘offset’ – the money always belongs to the employees,” he said.

Wong said he felt the government was heading in the right direction on the issue, but remained cautious on whether he would support the current proposal to scrap the mechanism, saying he would have to study the small print first.

“The ageing population is also a problem Hong Kong needs to face,” he said. “If neither side is willing to compromise, nothing gets achieved.”