Facing grim prospects for the Hong Kong economy, the Employers' Federation of Hong Kong urged its member companies to keep workers in jobs while advising them to reduce salaries, shorten working hours, and abandon paid leave so as to cut costs, the Takungpo, a Hong-Kong based newspaper reports.

Established in 1947, the Federation has in past decades provided guidance and assistance to members on employment issues including minimum wages.

Fearing a salary increase will put additional pressure on its more than 500 member companies, the Employers' Federation of Hong Kong postponed releasing its annual wage guidelines until December 3, and the overdue guidelines did not give detailed suggestions on salary adjustments for the first time in 13 years.

The Federation said it is difficult to offer a scale for payrolls under the deteriorating economic conditions, since there are both high-performing and underperforming businesses.

Louis Pong, CEO of the Federation, painted a grim picture of the Hong Kong economy that previously faltered during the deadly SARS plague in 2003, urging members not to cut jobs, and suggesting fluctuating salaries instead of salary rises.

Speaking of staff reductions, Pong suggested that if job cuts are unavoidable they should be carried out as a single measure. "If an employer cuts 50 jobs today and 100 more jobs the following day, it will increase the fear of job losses among workers."

He also called on employers to show more concern for the workers as a hedge against sagging morale.

But there are doubts about Pong's suggestion. "The idea of 'one-off' job cuts is a misleading term," said Ip Wai Ming, a member of Hong Kong's Legislative Council who is a labor representative of the Labor Advisory Board of the Hong Kong Federation of Trade Unions. "Some companies will take advantage of the opportunity to sack more workers."

The Councilor also said that the employers should communicate fully with their employees before making any decisions.

(China.org.cn by He Shan, December 4, 2008)