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LPA-CGR Avocats: Employment support measures for companies across Asia during COVID-19

While the COVID-19 pandemic affects wider society and economies across Asia, many companies face decreasing activities because of lockdowns imposed by authorities and are facing financial difficulties. Japan, China, Hong Kong and Singapore have implemented employment support measures to companies which are particularly vulnerable in order to avoid devastating impacts in the short and longer term.

LPA-CGR Avocats has put together a rundown of the various measures in these markets.

Read the full report.

A snapshot of the measures in Hong Kong:

Government Relief Measures

In an effort to help employers retain employees, the Hong Kong Government has announced an Employment Support Scheme (“ESS”) of about HKD 81 billion, the key features of which are:

  • all employers who have been making MPF contributions or have set up ORSO for employees may apply to a wage subsidy (except for the Hong Kong Government, statutory bodies and other bodies on the exclusion list);
  • employers will have to undertake not to implement redundancies during the subsidy period;
  • the subsidy is calculated on the basis of 50% of the employee’s month-ly wage (capped at HKD 18,000 per month per employee) for a period of 6 months;
  • the payment of the subsidy is to be made in 2 tranches: application for the first tranche is expected to start before the end of May 2020 with payment to be made in June 2020;
  • self-employed persons may be eligible for a one-off lump sum subsidy of HKD 7,500 if they have made MPF contributions in the past 15 months;
  • the Government stated it will publish details of employers who are provided with the ESS subsidy.

Hong Kong Employment Law

The potential impact of the ESS will depend on the terms and scope of the undertakings to be given by the employers. Employers who may consider dismissing their employees should be aware of the following provisions:

  • dismissed employees may not be selected on discriminatory grounds;
  • employees are in certain circumstances (e.g. pregnancy, illness) pro-tected against dismissal;
  • mandatory payments to dismissed employees depend on their length and terms of service;
  • variations in terms of employment such as reduction of pay, reduced working hours, unpaid leave etc. require the employee’s consent unless the employer can show a reasonable ground for the variation;
  • employers may ask employees to take annual leave on specified times subject to 14 days’ notice.

Useful links

Legal LPA-CGR Avocats: Guidance for Hong Kong employers during the Coronavirus crisis