Hong Kong congee chain Ocean Empire Food Shop informed all frontline employees that they will receive 80% of their original salary every month until further notice, in an internal letter of agreement for salary reduction issued by the CEO – which went viral this week.
The measure will take effect on 1 February, with about 300 staff will be impacted. Employees who accept the arrangement will have to give their consent to HR before 28 February. For those who haven't signed the agreement before the deadline will be considered as a refusal to the arrangement, and therefore will be dismissed according to the company's procedure.
The congee chain explained to the employees that this is a consequence of the nine month of anti-extradition bill protest – where some of its branch's revenue were halved – and a response to the pneumonia outbreak in January – which has dealt a significant blow to the retail, catering, and tourism industry in Hong Kong. The company holds a firm belief that all employees will understand the dilemma it is facing, and they are willing to ride out the crisis together.
The company's strategy sparked debate within the online community this week as some netizens are speculating whether the Ocean Empire is sacking employees if they do not sign the agreement.
A spokesperson of the Ocean Empire told Sing Tao Daily that it has never attempted to force any employee to sign the agreement and has never wished to lay off any employee. Since reducing their salary is a change of the existing employment contract, if the employee do not agree the update, the next step would naturally be a dismissal of employment relations. He admitted that the company's expression of the idea, which was rather blunt, could have been better.
Other than the frontline workers, the top management's pay check will also get a 20% cut, starting in February. And while the arrangement won't be applied to back office staff, they are currently taking three to six days of no-pay leave.