China's Greater Bay Area (the "GBA"), encompassing Hong Kong, much of Guangdong Province, and Macau represents a key economic, production and service platform for Asia and the rest of the world.
With a population of just under 70 million people and an estimated GDP of USD1.5 trillion, the GBA is an economic powerhouse of critical importance to many international businesses, be they manufacturers or service providers, with commercial interests in the region. However, with efforts being made by local Governments and private companies to contain the spread of the 2019 novel coronavirus "2019-nCoV" (now named "Covid-19"), business owners have faced unprecedented challenges with regards to a return-to-work of their workforce.
To provide businesses with a broad understanding of the current return-to-work situation, Vistra has looked at some key cities within the GBA and what all this means for employers in the region.
In Hong Kong, the region's main financial services and international trading hub, special work arrangements will continue to be applied for most Government departments until at least 16th February 2020 to reduce the potential for social contact and spread of the Covid-19 virus. This means that many Government departments in the territory will be limited to providing emergency and other essential public services. In some cases, such as the Inland Revenue Department, physical services (including the Business Registration Office, the Stamp Office, and the General Enquiry Counter) will operate on a limited-scale to allow for a degree of business continuity, however users of Government services are being encouraged to use electronic platforms where possible. Announcements are being made by the Hong Kong Government on a weekly basis as to how long it is anticipated these arrangements will be in place for.
In the private sector, many businesses, including banks and professional service firms have been encouraged to allow their employees to either work remotely from home or on a reduced and rostered basis. In the hospitality, tourism and food and beverage sectors, some firms have requested their employees to take periods of unpaid leave to alleviate the economic impact and reduce the potential spread of the virus.
There is no set policy enforced on the private sector by the Government to determine specific courses of action with respect to a return-to-work, thus each employer must determine its own best practice while balancing the health and safety of their employees with the need for some level of business continuity.
In Macau, where the Government response to the spread of the virus was quick and decisive, no new cases have been reported in the past week. The public service sector, with 32,000 employees, has been closed and is operating on a limited-scale basis through electronic services where possible. Similar to Hong Kong, the Government is releasing updates on a weekly basis but there is no firm indication as to when the public sector will return to work.
Unlike Hong Kong, the Macau Government has made direct intervention in determining the return to work policies within certain industries where there may be large assemblies of people. All of Macau's 41 casinos as well as many other venues in the entertainment and tourism sector have been closed by Government Order and will remain closed for at least another week. Schools and universities are also closed, although some private education employees have slowly started to return to work.
Guangzhou and Shenzhen
In Guangdong Province, where the impact of the virus has perhaps been most keenly felt due, in part, the sheer size, businesses have been advised by the Provincial Government to resume work but remain flexible to individual circumstances. After initially extending the formal Chinese Lunar New Year holidays through to 2nd February, authorities in the twin engine rooms of Guangzhou and Shenzhen have given the "go-ahead" for a return to work of employees in the private and public sectors on the basis of meeting a series of criteria:
- Prevention and control mechanisms are in place. An internal responsibility mechanism and emergency plan for epidemic prevention and control must be established;
- Employees' health monitoring systems must be fully in place and a "one person, one file" classification and screening mechanism should be established. Employees from or who have visited key outbreak areas must stay in the cities and not return to Guangdong Province;
- Hygienic protective equipment and isolation observation sites are available, and materials such as masks, thermometers, disinfection water and other epidemic prevention and control materials should be provided;
- Internal management procedures shall be in place to monitor the physical condition of employees daily and report the situation according to local regulations. Businesses must ensure ventilation, disinfection and sanitary management of the site, and control of the quarantine area.
In and around China's hi-tech hub of Shenzhen, a location in which many foreign businesses have operations and where approximately 65% of the labour force are migrant workers from other parts of China, local Government has delegated the decision as to whether to reopen to individual companies. With quarantine restrictions on travel in place between China and Hong Kong, as well as restrictive measures on migrant workers returning to the city, some companies have chosen to remain closed with employees operating on a work from home basis. For those businesses that have elected to reopen operations, the city's authorities have requested companies to report their plans for resuming production, and to access relevant advice and support from a newly released App.
The Shenzhen Government earlier announced a series of relief measures to support local businesses affected by the Covid-19 virus, including tax cuts and subsidised loans.
What are some of the implications?
While the high-level economic impact of the current Covid-19 outbreak is an ongoing topic of much media coverage, employers in the GBA are dealing with more practical and immediate issues such as ensuring their employees can actually work from home (and their productivity in doing so), the impact on supply chains given reduced scale of non-essential production and services, and how to handle their contractual and compensation obligations with regards to their employees.
For SMEs in particular who may be based overseas with subsidiaries in the GBA, there remains considerable confusion as to what is the right thing to do, what their obligations may be as an employer, how to best help their employees in the region, and how to stay in touch with a rapidly evolving situation.
With its global footprint and offices in Hong Kong, Shenzhen, Guangzhou, Foshan and Macau, Vistra is in a unique position to provide support across the Greater Bay Area. Vistra's HR Services team can help with guidance and execution on all manner of staff-related affairs throughout the GBA and advise on current practice and trends within the multitude of differing legal and regulatory jurisdictions that impact on employers and employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.