Hong Kong's economic downturn has had a serious impact on workers in the restaurant and catering industry. In addition to casualisation and wage cuts, a growing number of workers are left jobless and unpaid as employers close down and declare bankruptcy. Through protest actions and press conferences HKCTU's Catering and Hotel Industries Employees General Union has highlighted the growing crisis in the industry, with workers denied back wages, severance pay, Mandatory Provident Fund (MPF) contributions and other benefits. However, the union points out that even employers who are making significant profits are suddenly closing down restaurants and leaving workers without wages and severance pay. These same employers often operate other restaurants under different company names, allowing them to declare bankruptcy at one restaurant without affecting their other restaurant businesses.


September 7 -Unpaid workers from a restaurant that closed down picket
another restaurant owned by the same employer

An additional problem is the relatively small size of the workforce affected in each case. Recent cases involved 20 to 25 workers. This makes it difficult to organize effective industrial action against employers. Regardless of the numbers of workers involved in each case, the union has been effective in drawing media attention to the plight of restaurant workers laid-off without wages and severance pay.

In September the union assisted 25 workers at the Wan Chai branch of the Shun Tak Seafood Restaurant in fighting for unpaid wages and severance pay. The workers were not paid in August and for the first week of September, and were denied pay in lieu of 7 days' notice, annual leave pay and two to four months' worth of MPF contributions, totaling HK$700,000 (US$89,750). The employer closed the restaurant without warning, leaving the rent, electricity and gas bills, and suppliers unpaid.

On September 7, the union organized a protest at another restaurant owned by the same employer. Union organizers argued that the employer is able to pay the outstanding money owed to the workers since his other restaurant businesses are profitable. Even the restaurant that closed overnight was operating at a profit when it shut down.

A similar case earlier in the year involved more than 20 workers at the East-East Wonton Noodles Restaurant owned by YHY Food Products Ltd. The closure of the restaurant's branch in Shatin left the workers without wages and severance pay totaling HK$2.5 million (US$320,000). The workers had been employed at the restaurant for an average of 13 years, with one of the workers employed there for 20 years. (According to the law dismissed workers are entitled to 2/3 of their monthly wages multiplied by the number of years of service.)

To avoid paying severance entitlements the employer issued warning letters to the workers then dismissed them, claiming that their dismissal for misconduct (under Section 9 of the Employment Ordinance) made them no longer eligible for severance pay. The employer also forcibly relocated workers to other restaurant branches far away from their existing workplace in order to force them to resign.

In response the union organized protest actions at other restaurants owned by the same employer. The workers' cases were then taken to the Labour Tribunal by the Catering and Hotel Industries Employees General Union. In mid-September the presiding officer of the Labour Tribunal ruled that the employer had deliberately forced the workers to resign and was therefore required to pay their severance pay and other entitlements.