Employers’ representatives yesterday agreed at the Standing Committee for the Coordination of Social Affairs to have one of the severance pay limits revised. The committee comprises representatives of unions, employers and the government. At present the law entitles an employee whose contract is terminated without cause, to compensation calculated using a formula which takes into account the employee’s years of service and monthly pay. An employee is entitled to severance pay amounting to one-third of their current monthly pay for each year of service with their employer, if they have worked for the employer for between one and three years. An employee is entitled to severance pay amounting to two-thirds of their current monthly pay for each year of service with their employer if they have worked for the employer for more than 10 years. There are two limits. Any monthly pay above MOP14,000 (US$1,750) does not count, and severance pay cannot amount to more than 12 times the employee’s monthly pay. In effect, the maximum amount of severance pay is MOP168,000. That is how much a laid-off employee paid MOP14,000 or more a month would get if they had 18 or more years of service. Employers’ representatives say they are open to revising the monthly pay cap. But trade unions want all limits on severance pay to be abolished. Both sides are set to continue discussing this topic next month. Meanwhile, employers and trade union representatives again failed yesterday to reach a consensus for defining part-time work.
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