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Mandatory Provident Fund (MPF)

Thousands take to streets in Hong Kong on Labour Day as workers call for end to MPF offsetting mechanism

Other issues raised include long work hours, paid maternity leave and foreign labour

PUBLISHED : Tuesday, 01 May, 2018, 1:50pm
UPDATED : Wednesday, 02 May, 2018, 9:58pm

Thousands of Hong Kong workers marched for Labour Day on Tuesday, to put fresh pressure on employers to accept a government proposal to stop them dipping into employees’ pensions and establish standard working hours.

The Federation of Trade Unions (FTU) organised a march involving more than 200 of its subsidiary unions, including the Hong Kong Construction Industry Employees General Union, the Eating Establishment Employees General Union and the Hong Kong Railway Workers General Union.

Marchers wore panda-themed caps – a reference to dark rings around workers’ eyes from a lack of sleep – to express their frustration at long hours.

Speaking before the march, FTU chairman Wong Kwok urged the government to scrap what is known as the offsetting mechanism for the city’s government-mandated pension scheme, the Mandatory Provident Fund (MPF), as soon as possible. The controversial arrangement allows employers to dip into workers’ pensions to cover long-service or severance payments.

The Mandatory Provident Fund Schemes Authority said a record HK$3.85 billion (US$494 million) was offset by employers in 2016. Among those affected, the amount offset was on average equivalent to 94 per cent of their employers’ contributions. That meant little was left in workers’ nest eggs when they left their jobs.

“For each year of delay [on removing the offset mechanism], close to HK$4 billion of funds accumulated by employees will be offset,” Wong said.

Why is the Hong Kong government’s MPF offsetting plan so controversial?

Plans to put an end to the arrangement continue to face setbacks, with Hong Kong’s key business chambers recently throwing out a revised government offer that pledged at least HK$17.2 billion in subsidies to companies to pay for originally offset payments, which employers are now entitled to claim.

Other issues raised by worker groups at the march included demands for the introduction of 14 weeks’ paid maternity leave for employees.

Workers also opposed the government’s plan to bring in more foreign labour and called for a review of its outsourcing system.

Hundreds of marchers left Southorn Playground in Wan Chai at 10.40am, arriving at their destination at government headquarters in Admiralty at 11.20am. 

Marchers were joined by FTU lawmakers Alice Mak Mei-kuen and Kwok Wai-keung.

“We want to protect local workers. The government should have a comprehensive training policy for the local workforce before they consider importing any labour,” Mak said.

While the FTU said about 5,000 people had taken part in its march, police estimated the number at 1,900.

On Tuesday afternoon, pro-democracy group the Hong Kong Confederation of Trade Unions led 2,500 workers, including 1,000 foreign domestic helpers, on a march from Victoria Park to the so-called Civic Square next to the Legislative Council building. Police estimated that 2,100 attended.

HKCTU chairwoman Carol Ng Man-yee urged Chief Executive Carrie Lam Cheng Yuet-ngor to establish standard working hours.

Hong Kong business leaders band together to oppose scrapping MPF offsetting mechanism 

“Society sees many deaths and industrial accidents caused by long working hours, but until now the chief executive has not shouldered any responsibility,” Ng said.

She also said the HKCTU wants the minimum wage to rise to at least HK$44 (US$5.60), from HK$34.50.

A representative of the Asian Migrants Coordinating Body, who wished to be identified as Sring, said domestic workers needed better accommodation and pay. 

“We want to make the government ban some ‘accommodation’ such as the toilet, sofa or the kitchen – they are not decent accommodation for domestic workers,” Sring said.

She also called for the wages of foreign domestic workers to be raised to HK$5,500 to cope with the city’s rising prices.

The Neighbourhood and Workers Service Centre also led close to 100 workers at a separate rally from Chater Garden to Government House, the chief executive’s official residence, on Tuesday morning. A marcher was dressed in a panda costume and the group called for the establishment of standard working hours.

Meanwhile, about 30 members of a concern group for the disabled also staged a protest at Civic Square, urging the government to remove obstacles to employment for people with disabilities.

The group was accompanied by several pan-democrats, including former lawmakers Leung Kwok-hung, Edward Yiu Chung-yim and Lau Siu-lai.

Designer Rabi Yim, who uses a wheelchair, said people with physical disabilities had difficulty attending interviews, let alone finding a job. She added they were sometimes paid less and had fewer job options. “I have my professional qualifications for the career I want, but why am I treated differently?” she asked.

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Another rally saw about 40 migrant workers and refugees, led by the group Socialist Action, protest outside Civic Square against racism and the poor treatment of migrant domestic workers.

A government spokesman said the administration had been “actively following up” on scrapping the MPF offsetting mechanism and exchanging views with major stakeholders.

On calls to establish standard working hours, the spokesman said the Labour Department was working on sector-specific working hours for 11 sectors, and that there were “divergent” views on “contract working hours” proposed by the previous administration.

The spokesman also said the Minimum Wage Commission would submit recommendations to the chief executive by the end of October.

On foreign domestic workers, the spokesman said new regulations for employment agencies had taken effect in February to provide protection against overcharging of commission.