The Employees Retraining Fund was set up in 1992 to support the operation of the Employees Retraining Scheme (ERS). The Employees Retraining Board (ERB), with a governing body comprising representatives from the Government, employers, employees, training institutions and human resource professionals, is responsible for administering the scheme. In addition to regular income from a levy collected under the labour importation scheme, the Chief Executive announced in his Policy Address that the Government would provide recurrent subvention to the ERB from 2001-02 onwards, in order to provide the ERB with a more stable source of income. The subvention in 2001-02 amounts to $400 million.

The ERS focuses on assisting displaced workers who have experienced difficulties in finding alternative employment. The main target group of the scheme is displaced workers aged 30 or over with lower secondary education or lower. The scheme offers a wide variety of day and evening courses delivered through a network of over 60 approved training bodies. The courses broadly fall into six categories: job search skills courses, job-specific skills courses, general skills courses, courses for the elderly, courses for people with disabilities and tailor-made courses.

During the year, 36 772 retrainees attended full-time day courses and 41 947 retrainees attended part-time courses provided under the ERS. In order to reinforce the effectiveness of the scheme, two Retraining Resource Centres were set up in Yau Ma Tei and Lok Fu in December 1999 and March 2000 respectively to provide self-learning facilities, job market information and other supporting services to all graduate retrainees.