City Life: HONG KONG: Sacking by blackmail is the latest corporate trend

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BEING SACKED is never pleasant, but Hong Kong employers are demonstrating a nasty ability to make a trauma out of a dilemma.

As the economic recession gathers pace, companies in the former British colony are resorting to increasingly devious ways to ensure that they do not have to fork out even the minimum sum for redundancy laid down by law.

A friend of mine had been employed by a publicly listed service company for more than 11 years. He worked his way up to a senior management position. However, the company is facing hard times, although the division he was running happened to be turning out healthy profits. Economies were having to be made and the number of more highly paid staff reduced.

Without warning, he was called in by the inappropriately named human resources department and told his performance was not up to scratch.

Moreover, the managers hinted that improprieties had been discovered in some of the goods-ordering for which he was responsible. "We want you to resign", they said. If he did, there would be no investigation into the alleged improprieties, nor would he face the ignominy of being sacked. They even said they would pay his last month's wages.

But they neglected to conduct some elementary checks, which would have shown that the alleged improprieties involved matters over which one of the company directors had given his explicit approval.

My friend challenged his accusers to provide evidence. A silence followed. Two weeks later he was told that in factthey needed to make him redundant. Would he be receiving his full entitlement to redundancy pay? Yes, off course. Would the company formally say that it was dropping all accusations against him? That was difficult, they said. How about a personal letter from the chairman written on a "no prejudice basis"?

This is not an isolated example. One very large company sought to avoid paying pregnancy leave by sacking the woman for theft of - wait for it - a cinema ticket. She won a small amount of compensation from a labour tribunal but she remained out of a job.

The trend in Hong Kong was started by the British controlled Hongkong Telecom company. This firm announced a pay cut for employees and the sack for those who would not accept it. Hongkong Telecom is so big that its actions attracted widespread attention and a storm ensued. The company was forced to back down, but not before it had replaced its ultimatum over wage cuts with another for cutting statutory bonuses, which amounts to much the same thing.

The telecommunications company opened the floodgates. An upmarket clothing chain, called The Swank Shop, ordered its staff to take a 15 per cent pay cut or be sacked. The hard-hit hotel industry is also busy laying off people and tearing up the contracts of those who remain, saying that they either accept lower pay and conditions or collect their cards.

A paging company demonstrated its communication skills by sending a pager message to all its staff, extending work hours and cutting their commissions.

Some companies have been solving the problem of paying for staff redundancies by closing the firm overnight and posting a notice on their front doors, saying the owners have gone away. These same owners soon reappear somewhere else and start up new businesses.

At the end of last week the Court of Appeal in Hong Kong finally passed judgment on the case of an employee who has fought a four-year battle forlong-service redundancy pay from a company that fired him one day before he was due to receive his long-service entitlement. Lower courts had found in favour of the employers but the appeal court did not.

There is no doubt times are tough, and that what is euphemistically known as downsizing has to take place. But the brutality with which it is being done is hardly conducive to the spirit of "pulling together", which the government is constantly urging on the populace.

Employment contracts increasingly look as though they are not worth the paper they are printed on. Unfortunately, environmentally minded Hong Kong citizens hoping to send off their redundant contracts for recycling cannot do so, as Hong Kong's only paper recycling company has just closed, throwing 400 people out of work without a moment's notice.