The EO provides for various employment-related benefits and entitlements for
employees. Apart from statutory requirements, employers and employees are free to
negotiate the terms and conditions of their employment.
Starting from December 2000, all employers have to enrol their employees in
Mandatory Provident Fund schemes in accordance with the Mandatory Provident
Fund Schemes legislation. The rate of employers' participation in the schemes, which
are regulated by the Mandatory Provident Fund Schemes Authority, stood at 98.5 per
cent at the end of the year.
The employment of children under 15 is generally prohibited by law. Subject to
stringent requirements, children aged 13 and 14 may be employed in non-industrial
establishments. Young persons aged 15 to 17 may work in industrial establishments,
subject to regulations governing their employment conditions. Specific provisions
under labour legislation protect their safety, health and welfare.
Labour inspectors conduct rigorous workplace inspections to monitor employers'
compliance with the various provisions of labour legislation to safeguard the statutory
rights and benefits of local and imported workers, and to ensure that employers
possess valid insurance policies covering their liabilities for work injuries suffered by
their employees. Labour inspectors also check employees' proof of identity during
workplace inspections and carry out intelligence-led operations with the Police and
the Immigration Department to clamp down on illegal employment. In 2006,
189 joint operations were conducted, 7.4 per cent more than in 2005. A total of
502 illegal workers and 231 employers suspected of employing workers illegally
were arrested in these operations. The department also publicised widely the
complaint hotline (2815 2200) to encourage people to report illegal employment
For government service contracts which involve tenders invited on or after April
2005 and which rely heavily on the deployment of non-skilled workers, the
contractors of those contracts have to sign a standard employment contract with the
non-skilled workers hired to do the contracted job. The standard employment
contract, which sets out the employment terms, helps safeguard the rights and
benefits of the non-skilled employees.
Stepping Up Enforcement Against Wage Offences
The Labour Department continued to step up enforcement against wage
offences. To this end, it secured convictions for 785 summonses on wage offences in
2006, an all-time high, or 34 per cent up on the conviction of 587 summonses in
2005. Two company directors and an employer were jailed for wage defaults. The
department has also strengthened its educational and promotional efforts to remind
employers of their statutory obligations to pay wages on time and educate employees
on the right to lodge claims and the importance of serving as prosecution witnesses.
In Hong Kong, the employees' compensation system adopts the no-fault
principle whereby compensation is payable irrespective of whether the injury,
occupational disease or death was the employee's fault. The Employees'
Compensation Ordinance (ECO) covers injuries or death caused by accidents arising
out of and in the course of employment or by specified occupational diseases. An
employer must be in possession of a valid insurance policy to cover his liabilities both
under the ordinance and common law.
The Labour Department launched the Voluntary Rehabilitation Programme on a
pilot basis for the construction industry in 2003. The programme aimed at helping
construction workers, injured at work, to have better and speedier recovery, and
facilitate their safe and early return to work. Later, the programme was extended to
the catering, transportation and manufacturing industries, with the participation of
more employers, insurers, and injured workers. The department will continue to
improve the programme to the benefit of all stakeholders.
The Employees' Compensation Division of the Labour Department, which
administers the ECO, assists injured employees and deceased employees' families to
obtain compensation from their employers and administers a scheme to provide
interest-free loans if they need financial assistance as a result of a work-related
accident. In 2006, loans totalling $160,000 were made to 11 injured employees.
The Employees Compensation Assistance Scheme provides assistance for injured
employees or family members of deceased employees in cases where employers
default payment of compensation for work-related injuries. The scheme is financed
by a levy imposed on all employees' compensation insurance policies taken out by
In 2006, the Labour Department organised seminars and broadcast TV and radio
announcements in the public interest to educate employers and employees on their
rights and obligations under the ECO.
Pneumoconiosis sufferers are eligible for compensation under the
Pneumoconiosis (Compensation) Ordinance administered by the Pneumoconiosis
Compensation Fund Board. Those diagnosed before the ordinance went into force in
1981 may receive ex gratia benefits from the Government under the Pneumoconiosis
Ex Gratia Scheme. By the end of the year, 2 158 pneumoconiosis sufferers were
receiving compensation in the form of monthly/quarterly payments under the
ordinance or the ex gratia scheme. Family members of 102 pneumoconiosis sufferers
who died as a result of the disease were also granted compensation.
The Occupational Deafness Compensation Scheme compensates employees
suffering from noise-induced deafness due to employment in specified noisy
occupations. It is administered by the Occupational Deafness Compensation Board. In
2006, the board approved 51 applications for compensation due to employment-related,
noise-induced deafness, and paid out $6.1 million in compensation. The
board also approved 298 applications for payments for hearing aids amounting to
Wage Protection Movement
The issues of minimum wage and standard working hours have been matters of
public concern. However, views within the community on whether statutory minimum
wage and standard working hours should be introduced are diverse. After taking into
account the views of stakeholders and having carefully considered Hong Kong's
socio-economic situation, the Government has concluded that the pragmatic
approach at this stage would be to provide wage protection for cleaning workers and
security guards through non-legislative means. As a result, the Chief Executive
announced in his 2006 Policy Address that the Government would join hands with
the business community and labour sector to launch a Wage Protection Movement
(WPM). Under the WPM, employers should pay their cleaning workers and security
guards wages not lower than the relevant average market rates, and enter into
written employment contracts with these workers. If the workers have to work
beyond contractual hours, they should be suitably compensated.
The Government will conduct a comprehensive review in October 2008, two
years after implementation of the movement, to evaluate the effectiveness of the
WPM. If the overall review finds that the WPM fails to yield satisfactory results, the
Government will set out to prepare for the introduction of legislation for a minimum
wage in the cleansing and guarding services sectors.
Minor Employment Claims Adjudication Board
The Minor Employment Claims Adjudication Board adjudicates claims under the
Employment Ordinance and in accordance with individual employment contracts. The
board hears and determines employment claims involving not more than 10 claimants
for a sum of money not exceeding $8,000 per claimant. During the year, the board
concluded 2 483 cases and made awards amounting to $6 million.
The Labour Tribunal is part of the Judiciary and provides a quick, inexpensive and
informal method of adjudicating disputes between employees and employers, which
are not within the exclusive jurisdiction of the Minor Employment Claims
In 2006, there were 6 524 cases filed with the tribunal, of which 6 443 were
initiated by employees and 81 by employers. Of these, 87.7 per cent were referred by
the Labour Relations Division of the Labour Department after unsuccessful
conciliation attempts. During the year, the tribunal dealt with 6 543 cases and made
awards amounting to more than $339 million, down by 27 cases and increased by
$4 million compared to 2005.