Employment Disputes
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11. I am going to terminate the employment contract of one of my staff members. Can I use my previous contribution to his Mandatory Provident Fund (MPF) to offset part of the severance payment/long service payment payable to him?

If an employee is entitled to severance payment or long service payment and

  1. gratuities based on length of service or occupational retirement scheme benefits (excluding any part attributable to employee contributions) have been paid to the employee or
  2. an accrued benefit (excluding any part attributable to employee contributions) is being held in a MPF scheme for the employee, or has been paid to the employee,

then the severance payment/long service payment that is payable can be reduced by the amount of MPF contribution (employer’s share) to the extent that it relates to the employee’s years of service for which the severance payment/long service payment is payable.

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