20 Jul 2020

SARS and H1N1 in 2003 and 2009 respectively may have given businesses in Hong Kong some experience in managing the workplace during outbreaks of infectious disease, but the COVID-19 global pandemic arriving at the tail-end of the city’s 6 month-long civil unrest has made for an unprecedented year of disruption.

By Adam Hugill, Hugill & Ip Solicitors

Extraordinary “special work arrangements” requiring employees to work from home were implemented across most Government departments as early as January 2020, and normal working arrangements only resumed in May. Private sector employers were also encouraged to allow flexible working arrangements for their employees to reduce the risk of spreading the virus, and many employees worked from home for weeks, if not months.

Employment Support Scheme       

With the unemployment rate in Hong Kong at the highest it has been in the last decade, the Government has acted quickly to minimise the impact to the economy in the coming 6-12 months. The Government’s prompt introduction of the HK$81 billion (approx. 8.3 billion GBP) Employment Support Scheme (“ESS”) attempts to reduce the number of redundancies.

Participating employers must undertake to not make redundancies during the subsidy period – promising that the number of employees on payroll between June and August will not be smaller than it was in March 2020, including employees on unpaid leave – and to spend all wage subsidies on paying wages to the employees. The ESS provides eligible employers with a wage subsidy to pay 50% of the basic salaries for 6 months, capping each employee’s monthly subsidy under the scheme at HK$18,000 (approx. 1,850 GBP). The subsidies are based on the wages recorded for any one month between December 2019 and March 2020. Employers are penalised if there is a reduction in employee headcount, and the penalty percentage is subject to the total amount of staff they have.

Comment

While it remains to be seen how practical and thorough the processes surrounding the ESS will be, it is a step in attempting to reduce the impact of COVID-19 and, indeed, the protests on employment in Hong Kong with the hope of quickly returning to normality in the near future.

© 2020 Hugill & Ip Solicitors

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