Workers need something cogent, not empty threats

Public debate on the proposal to abolish the controversial pension fund offset mechanism has again flared up after an employers' association warned that such a move could lead to massive layoffs of workers by small- to medium-sized businesses.

The latest comments by the vice-chairman of the Business and Professionals Alliance for Hong Kong that pushed the issue back into public focus are old hat. Employers and their representatives in the legislature have used lay-off threats to fight any initiative to promote workers' rights.

They said the same thing in their campaign to block the government's plan to introduce a minimum wage. Having failed in that bid, they've been repeating the threat every time the minimum wage issue is reviewed.

Look what happened. Irrespective of what the employers said, there's no evidence that the minimum wage policy is killing jobs. On the contrary, Hong Kong's unemployment rate has remained at below 3 percent for several years. A few sectors, particularly construction and healthcare, have even seen acute labor shortages.

The offset mechanism that can save business owners a fair chunk of severance payouts was a compromise by the government in bargaining with employers to get them to agree to the Mandatory Provident Fund program. Employees widely deplore the mechanism because it hits retirees, who have no other source of income but their pensions, the hardest.

The government has said it favors progressive abolition of the widely hated mechanism. But, it has not set a timetable for drafting the necessarily amendments to be tabled in the Legislative Council for ratification.

Meanwhile, employers' representatives in the legislature have been spreading the fear that scrapping the mechanism would force many small business owners to hire workers only on short-term contracts to save on severance pay. They also predicted the added cost of abolition could drive some small shops and eateries out of business.

We have heard that many times before. The anti-abolitionists will have to come up with more convincing arguments instead of empty threats.

(HK Edition 05/12/2017 page9)