Crown workers to start getting less income from this month

Thursday, December 4, 2008
Issue 547, Page 1 & 3
Word count: 1301
Published in: Macau Daily Times

By Poyi (Natalie) Leung

Local casinos may be driven to minimise operational costs under the global financial downturn by cutting staff salaries following the SAR government’s approval to Crown Macau’s proposal yesterday.

Director of the Labour Affairs Bureau (DSAL), Shuen Ka Hung, said in the press conference that the decision was made in order to prevent the operator, Melco Crown Entertainment (MPEL), from laying off any staff at its Taipa hotel and casino property.

“Between the two options we chose the one with less harm to local employees,” Mr Shuen said.

In the second half of November, MPEL submitted an application to the SAR government together with its 3,610 Crown Macau employees’ signatures showing their acceptance of either of the four pay cut proposals.

The first option was that operational staff and non-operational staff would work respectively 9.6 hours and eight hours less every two weeks until May 31, 2009, with salaries being paid pro rata.

The second option was staff could apply for a long holiday for up to three months while their positions would be retained at the company.

The third option was to change from full time to part time in which only a few work days would be required for a month.

The last option was only available for dealers and pit supervisors. They would have to reduce half of their normal working hours with salaries being cut accordingly. But at the same time the company would arrange for them to undertake training courses and they could be promoted to become pit supervisors or pit managers after completion of the courses.

However staff that chose the training option would need to be approved by the company.

All the four measures will be backdated and made effective starting December 1, 2008 as permitted by the government yesterday.

According to Mr Shuen, 98 percent or 3,610 employees at Crown Macau had all agreed on their employer’s proposal, while there was still 49 staff that had not yet made a choice as they were either on vacation or sick leave.

Among those agreed, the DSAL chief said more than 90 percent selected the first option which was to have about seven to eight percent pay cut for working two days less per month.

Meanwhile, “a few hundred” employees chose the training and promotion option, and “a very small number” chose to work part time or leave temporarily from their jobs.

Mr Shuen said it was “understandable” that MPEL had to cut dealers’ salaries in the shadow of the global financial crisis as no non-locals were hired for this position.

“It is not the operational problem of the company itself and hence we nodded for the proposal,” Mr Shuen said.

The DSAL had sent 3,610 formal letters to the Crown Macau workers on December 1.

They will be given 15 days to report to the authority if they were “forced” to accept the proposal, or otherwise their pay cut would become official after the period.

Although MPEL was given the green light to reduce Crown Macau’s staff salaries, at the same time they were still allowed to keep its imported casino workers such as in the position of pit managers.

Mr Shuen explained that it was because of the “fair policy” adopted in the listed company MPEL.

“If they sack the small number of imported pit managers in order not to cut the pay of the local pit managers, that means as a fair play they also cannot reduce the pay of all other staff which isn’t going to contribute effectively for putting down operational costs,” he said.

Hence, Mr Shuen said the SAR government decided to approve the proposal in order to replace staff layoffs, as a lot of casino workers who used to earn a “high income” would be in “life hardship” if then sacked.

“The income medium of casino workers had jumped to 10,000 patacas last month from 5,000 patacas about five years ago,” the DSAL director said.

“So even with a pay cut of less than 10 percent they would still make a higher amount of income than in the past,” he added.

At the same time, Mr Shuen said MPEL already reported that they had sacked some “excessive imported staff members” including from the senior level.

For positions which were only taken up by non-local labourers, Mr Shuen said the DSAL would not object to their plan to also reduce their salaries, but any changes had to be briefed with the Human Resources Office.

According to Mr Shuen, the approval granted to MPEL was both “reasonable and legitimate”.

“Before the decision was made, we obtained Crown Macau’s balance of payment records from the gaming inspection department, its hotel property’s occupancy report from the tourism board as well as data showing the slump of its stock values,” he said.

“At present the company is mainly tied to repaying bank interests for getting the US$900 million loan to obtain Macau’s gaming license and also to keep the City of Dreams construction on track,” he added.

Mr Shuen said usually a company’s stock value would jump after announcing staff lays off plan, hence companies in the US would “tend to sack employees” when undergoing financial hardships.

“However only Macau’s companies will opt for pay cut which is to show their corporate social responsibility,” the DSAL chief said.

When asked whether the government would impose any time limit for the four pay cut measures, Mr Shuen said there was “no need to be too worried” as “adjustments will take place automatically in the market”.

“When businesses restore companies will naturally need more human resources. The law also didn’t request gaming operators to increase staff salaries but casino workers’ salaries had been on a significant rise since 2003,” he said.

“The employees will also resign and go to work for another company if their pay isn’t adjusted according to the business environment,” he added.

The DSAL director also pointed out that in the proposal the mostly chosen option of two work days less a month had already set a deadline for half a year until May 31, 2009.

As for the other three options, no time limit was imposed as Mr Shuen said those staff must have some “personal reasons or constraints” or otherwise they would have chosen the first option.

On the other hand, Mr Shuen said no pay cut reports had been heard from MPEL in relation to City of Dreams or Mocha.

“For what I understood Lawrence Ho [the co-chairman and CEO of MPEL] and other senior executive also have their salaries reduced by some amount of percent,” he added.

Lawrence Ho commented in a press statement last night that his company would continue to invest in Macau’s gaming industry and to develop the next generation of industry management and leaders.

“I have always believed that our long-term success depends first and foremost on our employees. We have insisted on exploring ways to avoid large-scale redundancies and our primary hope is to keep our employee teams together in the best shape possible,” Mr Ho said.

“This will enable us to best deal with the current turbulence in market conditions, so that when the market revives, as it most surely will, MPEL will be best poised to benefit,” he added.

On the other hand, Mr Shuen said the situation of the local labour market was not as “severe” as that of Hong Kong as “a few thousands of Hong Kong imports have returned home from Macau amid suspension or slowing down of some Cotai Strip projects”.

“Imported labourers now exactly act as a ‘cushion’ in conditions like this,” he added.

Excluding Cotai Strip projects and the construction sector, the DSAL director said the number of non-local labourers in Macau had already dropped to around 90,000 after a reduction of about 6,000 in November.

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