Articles: Labour
Solving the MPF-LSP offset problem, again
The HK Government fails to identify the obvious solution and instead pursues a doomed approach of perpetuating MPF plus LSP. That will either result in taxpayers fully funding a windfall to existing employees or the Government losing a judicial review for overriding the implied terms of existing employment contracts and violating employers' legitimate expectation of not having to pay twice. (30-Mar-2018)
The HK Government fails to identify the obvious solution and instead pursues a doomed approach of perpetuating MPF plus LSP. That will either result in taxpayers fully funding a windfall to existing employees or the Government losing a judicial review for overriding the implied terms of existing employment contracts and violating employers' legitimate expectation of not having to pay twice. (30-Mar-2018)
The wrong way to pay civil servants
A new ICAC case reminds us that the Government and public sector get bad value for taxpayers and lose good people by paying time-limited benefits that are based on irrelevant factors rather than the value of their services. Scrap all the benefits schemes and pay people what they are worth. At the same time, remove the housing loophole from salaries tax, raise personal allowances and bring down the tax rate to compensate. (13-Jan-2018)
A new ICAC case reminds us that the Government and public sector get bad value for taxpayers and lose good people by paying time-limited benefits that are based on irrelevant factors rather than the value of their services. Scrap all the benefits schemes and pay people what they are worth. At the same time, remove the housing loophole from salaries tax, raise personal allowances and bring down the tax rate to compensate. (13-Jan-2018)
Submission to Public Engagement Exercise on Retirement Protection
We call for abolition of non-means-tested schemes, staggered subsidies for public healthcare and a deployment of the savings on a higher socal safety net and better healthcare. HK can't pursue a universal handout without breaching the Basic Law, and even if it could, the Laffer Curve may make it unsustainable as taxable profits and earnings would shift away. Finally, the MPF is a costly interventionist failure that should be scrapped, and if it is not, then LSP must be phased out to allow full portability of MPF assets. (21-Jun-2016)
We call for abolition of non-means-tested schemes, staggered subsidies for public healthcare and a deployment of the savings on a higher socal safety net and better healthcare. HK can't pursue a universal handout without breaching the Basic Law, and even if it could, the Laffer Curve may make it unsustainable as taxable profits and earnings would shift away. Finally, the MPF is a costly interventionist failure that should be scrapped, and if it is not, then LSP must be phased out to allow full portability of MPF assets. (21-Jun-2016)
PM ordered Lord Freud to apologise for remarks on disabled people’s pay
Guardian, 16-Oct-2014
David Freud is right - employers will not offer jobs to less productive people if they can get a non-disabled person for the same minimum wage. That is why places including Australia and Hong Kong allow productivity assessments so that mentally or physically disabled people can still work, with social welfare to top-up their incomes. The Tory and Labour parties, in a contest of political correctness, are ignoring economics and reducing the employment chances of disabled people.
Guardian, 16-Oct-2014
David Freud is right - employers will not offer jobs to less productive people if they can get a non-disabled person for the same minimum wage. That is why places including Australia and Hong Kong allow productivity assessments so that mentally or physically disabled people can still work, with social welfare to top-up their incomes. The Tory and Labour parties, in a contest of political correctness, are ignoring economics and reducing the employment chances of disabled people.
HK Chief Executive questioned about David Webb's article on MPF-LSP offset
HK Government, 23-Jan-2014
HK Government, 23-Jan-2014
Solving the MPF-LSP offset problem
We explain the historical context of the Long Service Payment and the offset against employers' Mandatory Provident Fund contributions, which is now an impediment to full portability, efficiency and lower costs in the MPF system. We provide a solution to this problem which, while not cost-free to employers, is better than the political alternatives, so they had better support it. (21-Jan-2014)
We explain the historical context of the Long Service Payment and the offset against employers' Mandatory Provident Fund contributions, which is now an impediment to full portability, efficiency and lower costs in the MPF system. We provide a solution to this problem which, while not cost-free to employers, is better than the political alternatives, so they had better support it. (21-Jan-2014)
Cathay Pacific Airways Ltd v Flight attendants
HK Court of Final Appeal, 23-Feb-2012
Cathay is granted leave to appeal to the highest court.
HK Court of Final Appeal, 23-Feb-2012
Cathay is granted leave to appeal to the highest court.
Peggy Leung Suk Fong v The Prudential Assurance Co Ltd
HK Court of First Instance, 30-Sep-2011
A former insurance agent claims that she was an employee and therefore entitled to certain benefits. The court upholds the decision that she was not. This is apparently the first time a HK court has ruled on this issue in detail. Following the principles therein, it may be possible for other industries to restructure the relationship with employees so that they become self-employed, risk-taking agents instead, avoiding the Government's increasing interference in private contracts via the Minimum Wage Ordinance and the Employment Ordinance.
HK Court of First Instance, 30-Sep-2011
A former insurance agent claims that she was an employee and therefore entitled to certain benefits. The court upholds the decision that she was not. This is apparently the first time a HK court has ruled on this issue in detail. Following the principles therein, it may be possible for other industries to restructure the relationship with employees so that they become self-employed, risk-taking agents instead, avoiding the Government's increasing interference in private contracts via the Minimum Wage Ordinance and the Employment Ordinance.
Medical officer jailed for $2.25m housing allowances fraud
ICAC, 29-Jun-2011
Another silly housing allowance case. The Hospital Authority should pay people what they are worth and not be concerned about how they spend it. He could have rented an identical home, and let out the one he bought, putting himself in almost the same economic position without breaking the rules.
ICAC, 29-Jun-2011
Another silly housing allowance case. The Hospital Authority should pay people what they are worth and not be concerned about how they spend it. He could have rented an identical home, and let out the one he bought, putting himself in almost the same economic position without breaking the rules.
Minimum wage will reduce some incomes
The road to intervention is paved with unintended consequences. We look at the conflict between the Minimum Wage and the MPF, resulting in some workers receiving less take-home pay and others having very little work incentive beyond 178.5 paid hours per month. We propose adjustments to the MPF threshold and contribution basis for low-income workers to address this. (2-Jan-2011)
The road to intervention is paved with unintended consequences. We look at the conflict between the Minimum Wage and the MPF, resulting in some workers receiving less take-home pay and others having very little work incentive beyond 178.5 paid hours per month. We propose adjustments to the MPF threshold and contribution basis for low-income workers to address this. (2-Jan-2011)
8 ex-employees v Compass Technology Co Ltd & William M Toledo
HK Court of Appeal, 17-Mar-2010
The Court of Appeal dismisses the action.
HK Court of Appeal, 17-Mar-2010
The Court of Appeal dismisses the action.
Eight sentenced for fraud over HK$85m government pest control contract
ICAC, 4-Sep-2009
Comment: this fraud was only feasible because of the Government's misguided "wage protection movement" which required contractors to pay more than the market rate for cleaners. Consequently cleaners were willing to pay rebates to corrupt bosses to get the work.
ICAC, 4-Sep-2009
Comment: this fraud was only feasible because of the Government's misguided "wage protection movement" which required contractors to pay more than the market rate for cleaners. Consequently cleaners were willing to pay rebates to corrupt bosses to get the work.
8 ex-employees v Compass Technology Co Ltd & William M Toledo
HK District Court, 20-Aug-2009
Summary: in order to get employment visas, the engineers and their employer lied to the Immigration Department and filed contracts for HK$18-21k/m, or twice the salary they had actually agreed to (because the Government doesn't like low-cost labour to be imported). Now the employees are suing for the difference between the two salaries. The judge declined to strike out their claims, which now go to trial.
HK District Court, 20-Aug-2009
Summary: in order to get employment visas, the engineers and their employer lied to the Immigration Department and filed contracts for HK$18-21k/m, or twice the salary they had actually agreed to (because the Government doesn't like low-cost labour to be imported). Now the employees are suing for the difference between the two salaries. The judge declined to strike out their claims, which now go to trial.
The Housing Lark
Why does the HK Government continue prosecuting civil servants and educators for maximising their remuneration by claiming rental allowances which, if they didn't own the property, they would be entitled to anyway? Surely people should be paid what they are worth to an employer, not based on what they own. We also look at the tax loophole which incentivises rental allowances in the first place. (9-Dec-2006)
Why does the HK Government continue prosecuting civil servants and educators for maximising their remuneration by claiming rental allowances which, if they didn't own the property, they would be entitled to anyway? Surely people should be paid what they are worth to an employer, not based on what they own. We also look at the tax loophole which incentivises rental allowances in the first place. (9-Dec-2006)
Submission to the Legislative Council Panel on Manpower regarding Commissions for Labour
The HK Government seeks to increase its intervention in the private contract between providers and purchasers of labour services, by imposing requirements to include commissions in holiday pay. In a submission to the Legco Panel on Manpower, we urge the Government to step back and let the free market function. (27-Sep-2006)
The HK Government seeks to increase its intervention in the private contract between providers and purchasers of labour services, by imposing requirements to include commissions in holiday pay. In a submission to the Legco Panel on Manpower, we urge the Government to step back and let the free market function. (27-Sep-2006)
Intervention in the Labour Market
We examine HK legislators' calls for a statutory minimum wage and maximum working hours, and the Government's move to put public bodies on this path resulting from a pact between Donald Tsang and the unions during his nomination campaign. He was making promises with your money. We also look at the proposed "1+1" labour importation scheme - a sop to politically-connected textile families, the job-for-life labour contracts of the civil service, statutory Severance and Long Service Payments, and the Protection of Wages on Insolvency Fund. (7-Oct-2005)
We examine HK legislators' calls for a statutory minimum wage and maximum working hours, and the Government's move to put public bodies on this path resulting from a pact between Donald Tsang and the unions during his nomination campaign. He was making promises with your money. We also look at the proposed "1+1" labour importation scheme - a sop to politically-connected textile families, the job-for-life labour contracts of the civil service, statutory Severance and Long Service Payments, and the Protection of Wages on Insolvency Fund. (7-Oct-2005)
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