DRAFT LEGCO QUESTION No. 2(ORAL REPLY)
Date of sitting : 30 May 2001
Asked by : Hon James TIEN
Replied by : SEM
On 1 May, Labour Day, this year, some labour organizations criticized that Hong Kong's existing legislation on protecting employees' rights and benefits had remained unchanged for 30 years, and alleged that the stipulations concerned were outdated and even lagged behind those of some countries in Southeast Asia. In this connection, will the Government inform this Council:
- of the major amendments made to the legislation on the rights and benefits or the protection of employees, in the past 30 years, and the contents of the amendments;
- whether it has assessed the implications of these amendments on employers' costs; and
- how the existing major legislative provisions on the protection of employees' rights and benefits in Hong Kong compare to those in other neighbouring jurisdictions?
- In Hong Kong, the legislation on protection of employees' rights and benefits can be broadly divided into three categories. The Employment Ordinance protects the basic rights and benefits of employees in the course of employment. The Employees' Compensation Ordinance, the Employees Compensation Assistance Ordinance, the Pneumoconiosis (Compensation) Ordinance and the Occupational Deafness (Compensation) Ordinance are to ensure that employees are compensated for injuries, death and occupational diseases arising from employment. The Factories and Industrial Undertakings Ordinance and the Occupational Safety and Health Ordinance ensure that employees work in a safe working environment. All along, the Government has introduced and amended labour legislation to improve employees' rights and benefits in a way which is commensurate with our socio and economic developments. In reviewing and enacting labour legislation, the Government takes into account the needs of both employers and employees, with a view to striking a reasonable balance between the interests of both parties. Major amendments to the above three categories of legislation in the past 30 years are detailed at the Annex in chronological order.
- In short, considerable improvements have been made in the past 30 years to enhance the rights and benefits as well as the protection of employees. These cover various areas as follows :
- The scope of the Employment Ordinance has been extended from initially covering only manual employees and non-manual workers with a monthly salary of $1,500 or below to all salaried employees;
- Provision for leave has been increased progressively from initially only one rest day in every period of seven days to include 12 statutory holidays every year and 7 to 14 days' paid annual leave.
- The number of accumulated paid sickness days has been substantially increased from 24 to 120 while sickness allowance has been progressively increased from 1/2 to 4/5 of wages;
- Provisions on ten weeks' maternity leave and maternity leave pay at a rate of 4/5 of normal wages have been introduced.
- Provisions on severance payment and long service payment have been introduced. The ratio of such payments to wages has been gradually increased and the eligibility for such payments has been relaxed;
- Provisions against "unreasonable dismissal" and "unlawful dismissal" have been introduced. Employees who have been unreasonably or unlawfully dismissed may claim for remedies, including reinstatement or re-engagement, terminal payments and compensation. Meanwhile, employees engaged in union activities are protected from discrimination by employers;
- The Protection of Wages on Insolvency Fund has been set up to ensure that wages in arrears, payment in lieu of notice, severance payment, etc. are payable to employees upon bankruptcy of employers;
- Employers are required to take out employees' compensation insurance for employees. The Employees Compensation Assistance Fund has been set up to provide assistance to employees who fail to receive compensation from employers who have not taken out insurance or insurers who have become insolvent;
- Specific compensation funds have been set up for occupational diseases with long incubation period and the scope of compensation has been progressively extended to cover 46 occupational diseases;
- On many occasions, the amount of compensation for various employees' compensation items have been enhanced and their coverage extended.
- Statutory protection of occupational safety has been extended from initially covering only factories and industrial undertakings and employees employed therein to all employees and workplaces, including offices, commercial premises, schools, hospital, etc.
- The Mandatory Provident Fund Scheme has been launched to provide retirement protection for employees and the self-employed.
- As shown in the Annex, since 1970, we have been improving employees' rights and protection continuously. We have enacted a total of 31 new laws or regulations on the protection of employees' rights and benefits with 32 major amendments.
- In early 1997, the Government carried out an assessment of the impact of the protection of employees' rights and benefits on employers. The assessment covered 11 items of employees' rights and benefits under 5 labour-related ordinances. [The ordinances were the Employment Ordinance, the Employees' Compensation Ordinance, the Employees' Compensation Insurance Levies Ordinance, the Protection of Wages on Insolvency Ordinance and the Pneumoconiosis (Compensation) Ordinance. The 11 items of employees' rights and benefits were paid annual leave, statutory holidays, rest days, sickness allowance, maternity benefits, severance payment, long service payment, protection of wages on insolvency, pneumoconiosis compensation, employees' compensation and related insurance levies.] The assessment results showed that in order to comply with the above legislative requirements as at end of 1996, employers had to incur an additional total cost amounting to about 7% of the total wage bill, or about 2% of our Gross Domestic Product at that time.
- I have outlined the efforts made to enhance our employees' rights and benefits over the past few decades. It is difficult to compare directly local employees' rights and benefits with those in the neighbouring economies. It is because different places have different cultural backgrounds, social and political circumstances, economic structures, modes of production and per capita incomes. Moreover, different systems are adopted by different places in their provision of employment rights, benefits and protection. We are, however, certain that the benefits enjoyed by our employees are in general no worse than those in other Southeast Asian countries or economies.
- Madam President, in formulating labour legislation, the Hong Kong Government has been monitoring closely and making reference from the labour standards of the International Labour Organization and other economies (particularly those with comparable level of development as Hong Kong). We have to ensure that on the one hand, our labour rights and benefits are keeping pace with time, such that they are in line with the global trend and on the other hand, the overall employment conditions will enable Hong Kong to remain competitive in the face of globalization.