Employees (with the exceptions of some domestic employees, hawkers or those covered by existing occupational retirement schemes with exemption certificates, etc.) between the age of 18 and 65 are required to join MPF schemes.
MPF is generally mandatory for employers and self-employed persons. It is the statutory obligation of employers to join the scheme to cover their employees and any self-employed persons to join the scheme to cover themselves. Failure to do so would subject them to criminal liability.
My employer has not made any MPF contribution or contribution to other retirement scheme for me since the beginning of my employment. Has he violated the law?
According to the Mandatory Provident Fund Schemes Ordinance, employers must take all practicable steps to ensure that employees become members of registered provident fund schemes within the permitted period, and must pay contributions to the relevant schemes. This requirement does not apply to those employees employed for less than 60 days (except for casual employees).
Offence and Penalties
Employers who fail to comply with the above requirement are liable to:
- a fine at $100,000 and imprisonment for 6 months on the first occasion on which they are convicted of the offence; and
- a fine of $200000 and to imprisonment for 12 months on each subsequent occasion.
Can employers re-engage their employees under new contracts as self-employed persons in face of the implementation of the Mandatory Provident Fund Schemes to reduce the employees' benefits that are payable under the Employment Ordinance and other labour legislation?
Employers should not unilaterally change the status of their employees in face of the implementation of the Mandatory Provident Fund Schemes.
If the employer-employee relationship remains in essence, then subject to the Court's ruling on the actual circumstances of the case, the relevant employee may still be entitled to the benefits under the Employment Ordinance (and other labour legislation ), though that employee has been labelled as a self-employed person.
Under common law, if substantial and fundamental changes to the detriment of an employee have been made to the contract of employment arising from the employer's conduct without the employee's consent, that employee can claim for termination compensation from the employer on the grounds of constructive dismissal. An aggrieved employee with two years' service under a continuous contract can also claim remedies for unreasonable dismissal against the employer under the Employment Ordinance.