As a result of Covid-19, there was a significant economic decline in Hong Kong, with some businesses forced to close their doors or reduce their trading and services. The Hong Kong Government tried to ease the pressure put on businesses by introducing the Employment Support Scheme last year with the aim of helping employers retain their workforce and reduce redundancies; however, that scheme only lasted 6 months and, while helpful, did not solve the longer term issues faced by businesses.
The unemployment rate in Hong Kong has declined from 5% to 4.7% in recent months - the lowest level since March 2020 - and the economy is expected to grow by 6.5% this year, which is positive news and may indicate that the economy is slowly improving in Hong Kong. For many companies, however, the impact of the pandemic means that this slow recovery is not enough, and they must now consider restructuring their workforce to get back on track.
Those companies facing this challenge will undoubtedly have a number of questions. The first question to ask is whether a company can make redundancies if it is still a going concern.
From the processes to the costs, Kathryn Weaver of Lewis Silkin talked to me about redundancy procedures in Hong Kong.
For more information about HK employment law, please visit https://www.lewissilkin.com/hk
