Labour chief brushes off layoff waves under new MPF rules

Secretary for Labour and Welfare Chris Sun Yuk-han dismissed concerns that the cancelation of the MPF offsetting mechanism would lead to widespread layoffs.

Speaking on a radio show on Thursday, Sun believed employers will not fire employees just to save money as bosses are no longer allowed to use staff pensions to pay severance and long-service payments.

When asked about the possibility of businesses letting go of long-serving staff to replace them with lower-salaried new hires, Sun pointed to the current tight labor market.

“If an experienced employee is already familiar with the business and contributes effectively, does replacing them truly save costs?” Sun questioned.

While acknowledging that employers might consider such cost-saving measures, he cautioned that hiring new staff comes with additional expenses, such as retraining and onboarding, which might make the strategy more burdensome than beneficial.

(Jamie Liu)