A “lai see” to settle severance? The Tseung Kwan O to Sheung Shui transfer trap

This article is a rewrite of a report from August 2012.

To dodge MPF severance top-ups, one employer ordered staff to relocate from Tseung Kwan O to Sheung Shui — knowing they would not go, aiming to force resignations. The cleaning-company case was the most outrageous among the employer tricks a union exposed in 2012.

What happened?

A government outsourcing contract ended, and the employer would not pay severance. With 20-odd staff, statutory severance meant HK$7,000–8,000 per head in top-ups. The employer refused, pleading trade custom — “paying would get me scolded by the trade!” — and instead ordered transfers to remote districts, effectively forcing resignations. Union mediation extracted only half the top-up as a “lai see” payoff.

What did MPF offsetting have to do with it?

Employer MPF contributions could be offset against severance and long service payments. Poor markets shrank MPF returns, so the top-up employers owed on dismissal grew — and rather than pay, some schemed. The union’s survey also found employers switching rest days to unpaid, scrapping meal breaks, clawing back wage differentials, even splitting eight-hour shifts into three — all disguised exploitation.

What would close the loophole?

Splitting the standard contract’s six zones into eighteen. The six zones were so broad that “same-zone” transfers could span the territory — the absurdity behind “Tseung Kwan O to Sheung Shui”. The union urged the government to redraw the map and block employers dodging MPF long service payment and severance duties.