Gov’t proposes raising termination compensation

The Standing Committee on Social Coordination has convened its third plenary meeting to review the maximum amount of monthly basic compensation used to calculate termination compensation under the Labor Relations Law.

The government suggested raising the cap on the monthly salary used to determine workers’ compensation from the current MOP21,000 to MOP21,500. Annually, this change would increase compensation from MOP252,000 to MOP258,000.

Wong Chi Hong, director of the Labour Affairs Bureau (DSAL), explained that the government’s proposal was made after taking into account the overall economic situation from April 2021 to April 2023, the fact that the median monthly salary of employees will remain at MOP20,000, and the development and affordability of employers.

He also factored in affordability for employers and that a MOP500 monthly compensation bump would cover over 60% of employees or more than 80% at small and medium companies.

“We have taken into consideration the overall situation, including the overall economic situation and the median wages in Macau, which remains at around MOP20,000. We have also taken into consideration the employers’ affordability. So after a comprehensive of factors, we have decided this time to propose a raise of MOP500,” said Wong, as cited in a TDM report.

Meanwhile, the government’s proposal has received mixed reactions from representatives.

Vice president of the Macau Chamber of Commerce, Wong Kuok Seng, did not agree with the relevant adjustments and hoped to maintain the status quo.

He pointed out that many small- and medium-sized enterprises still need the government to support the community economy through various channels to overcome difficulties, and the relevant adjustments may be difficult to win the sympathy of the industrial and commercial circles, especially small, medium and micro enterprises.

“We feel that amending the law to raise the upper limit of compensation at this time may not gain the resonance of the industrial and commercial community, especially small, medium and micro enterprises. Moreover, after the increase, the coverage rate of workers that will benefit from the measure will only slightly increase,” said Wong.

Fong Ka Fai, vice president of the Macau Federation of Trade Unions, recommended that the government enhance its efforts in reviewing the law to better protect the legitimate rights and interests of employees.

“The law states that there should be a review on the labor relations law every two years. As you can see, this review has been taking place for more than four years,” he argued.

Further, DSAL head stated that he hopes that the government will submit the text of the bill to amend the Labor Relations Law to the Legislative Assembly as soon as possible, hoping to pass it and implement it as quickly as possible. 

Victoria Chan