SCMP Saturday, October 7, 2000

Bosses dodging MPF costs, says union


Unscrupulous employers are avoiding paying extra for the Mandatory Provident Fund scheme by slashing wages and making their staff become self-employed, union leaders said yesterday.
Legislator and vice-chairman of the Hong Kong Federation of Trade Unions Leung Fu-wah said the federation had received about 100 complaints from workers in the catering and construction industries, and said the number was rising.
Mr Leung said he would take the issue to the Legislative Council and press the Mandatory Provident Fund Schemes Authority to take action against the employers.
Under the scheme, employers are obliged to contribute five per cent of their staff salaries to the fund.
So far only 62,000 firms, or 20 per cent of all companies, have signed up with a Mandatory Provident Fund (MPF) provider even though the scheme is to be launched on December 1.
Mr Leung claimed restaurant groups were "playing tricks" to avoid their financial responsibility.
He said he feared other employers might follow suit.
But Liberal Party legislator Tommy Cheung Yu-yan, who represents the catering industry, hit back at the criticism, saying the industry had not recovered from the financial downturn and most restaurant owners still faced hardships.
"The MPF is an additional cost for employers. They only cut staff salaries to save costs rather than escape their responsibility to pay the provident fund," Mr Cheung said.
An estimated 500,000 people are working in the construction and catering industries, which account for about 17 per cent of the total workforce in the SAR.
Eating Establishment Employees General Union secretary Poon Tze-wan said some restaurant owners treated part of their staff wages as special allowances instead of basic salaries in an attempt to lower the employers' contribution. Others effectively cut salaries by imposing an unpaid holiday arrangement on staff.
"Housing allowances are no longer popular in the catering industry. So we are surprised to see some restaurant owners have created such an item all of a sudden," Mr Poon said.
Hong Kong Construction Industry Employees General Union chairman Choi Chun-wa said some construction firms had changed staff into self-employed contractors to avoid responsibility under the MPF scheme. The affected construction workers would no longer enjoy the benefits of MPF or other staff welfare schemes.
"Those unscrupulous employers are not only exploiting their workers, they also are undermining the efforts of the SAR Government to build a provident fund system for Hong Kong," Mr Leung said. The Hong Kong Federation of Trade Unions represents about 140 unions and about 300,000 employees.